Respect – Page 8 – The Frustrated CFO

SOPA, PIPA and “CFO Techniques”

The inner conflict many intelligent people experience over Stop Online Piracy Act (SOPA) and Protect IP Act (PIPA), is an old problem for me. For many years before the pharmaceutical and media lobbies brought the issue of proprietary rights infringement in the Internet age to Washington DC, I've been torn between two firm believes of mine: (1) that content creators (writers, musicians, artists, designers, etc.) are entitled to get paid whenever their creative products are used for commercial purposes (i.e. to make money), and (2) that the information available on the Internet cannot be restricted by any means.

That's why more than 10 years ago, I thought of Napster as a violator of musicians' rights to financially benefit from their products. It was obvious to me that the whole purpose of the "file-sharing service" was Sean Parker's publicity stunt to show off the Fanning brothers' technological platform with a purpose of selling it and profiting from it (which is exactly what happened).

YouTube, whose owners obviously always intended to capitalize on the advertising, is also at fault when it lets the users to upload copyrighted material without paying the content owners royalty out of their revenues. On the other hand, I don't see anything wrong with YouTube being a promotional portal for young artists, musicians, filmmakers, and such (including the crazy exhibitionists catering to voyeurs), who upload their own creations knowingly in hopes of receiving the tangible benefits of being noticed.

Of course, the most conflicting entity is Google. On one hand, we cannot exist without their search engine (I am well aware that there are geeky alternatives out there, but let's face it – Google dominates); on the other hand, when it comes to the Internet advertising they are the closest example of a monopoly we've got in our screwed up economy. Moreover, Google attains its riches by using every single one of us, the information-seeking users. Ultimately, it's in their interests to tag counterfeiters and bootleggers, because users are looking for them. And I guess they know that their hands are not exactly clean. Why else would they settle with the Department of Justice to pay $500 million for allowing Canadian Pharmacies' advertisement?

Presently the issue of the online copyright infringement hits very close to home for me. A bunch of unlicensed eBook-hacking sites are offering "CFO Techniques" downloads for free. Neither me nor my publisher is getting a single penny out of this, while the sites' owners get advertising income, revenues on sales of their users' information, and ability to pollute the hapless freeloaders' computers with the spyware invisibly attached to the plug-ins required for viewing the books. They profit unfairly using MY PRODUCT. And that's not fair.

Still, even this wouldn't force me to support the half-assed anti-constitutional laws like SOPA and PIPA. Why? Because if these laws are passed, I could go to jail for offering my readers a clip from "So, I Married an Axe Murderer" within my post about The Best Boss in Cinematic History , even though I derive no material benefits from this blog (none at all). I'd rather people steal my shit than go along with freedom of speech violations in the name of copyrights protection.

Yet, I am all for fighting piracy in an intelligent way that doesn't take our civil liberties away. And the "financial benefit" criteria seems to my CFO mind like a sensible approach. If a site takes any form of payments or generates advertising revenue through deliberate peddling (not just illustrative usage) of unlicensed and unpaid for content, the enablers of payment processing and advertising portals should stop providing their services to this site. This would be not much different than YouTube's actions under the Digital Millennium Copyright Act (DMCA): they get a notice and remove the violating content.

Money is the key. I always said that the best way to fight terrorism is going after the financial sources. The now supposedly dead Osama Bin Laden without his multimillion wealth would've been just a thug on the street. Facebook without the advertisement revenue would be just a well-designed electronic hangout with no prospects for an IPO (expected in May this year).

Apple’s iAd Division Celebrates Christmas

December is still with us and so are the corporate X-mas parties. The holiday cheer is inescapable for the dogged blogger like me.

Did you know that large public corporations, with their in-house event planners working schedules way in advance, always manage to have their parties as close to Christmas Day as possible? I guess it signifies how "family-like" those organizations are.

Apple's latest branching out child, the iAd division, held its party just six days before Christmas – on Monday, December 19th. Constructed out of the body parts of a mobile advertising start-up Quattro Wireless, acquired by the maker of iPhones and iPads in 2010, iAd was not moved to Apple Campus in Cupertino, CA. Instead, it stayed in the advertising capital of the world – New York City, albeit swapping the original small office in SoHo for a 45,000 square-foot expanse on Fifth Avenue at Union Square.

Everything needs to project an intended image! And so, they celebrated the traditional combination of year-end holidays in a semi-trendy restaurant in Chelsey, which is themed to alleviate nostalgic pangs of transplants from more humble regions of the US, while entertaining other patrons with a taste of Americana not found on the streets of Manhattan.

The spirit-lifting intent, customarily reserved for such parties, acquired a somewhat militant hue as iAd's execs came to the microphone, each with his own discourse on the same topic: "They all want to see us fail! But we will show them! We'll distroy them all!" Underneath all that bravado, however, there were unmistakable notes of fear. It's understandable, of course. iAd is locked in severe competition with Google for the $630 million market of ads streaming through smart phones directly into the sensory system of general public, incapable of ungluing itself from the beloved devices. The things are not going too well, though.

Apple first lost the edge when it couldn't outbid Google in acquisition of AdMob and had to settle for Quattro Wireless as a less desirable second choice. Advertisers have already rejected the original requirement of $1 million minimum commitment, which now has been slashed by more than 50%. And October departure of Quattro Wireless's founder Andy Miller, who originally accepted an Apple's VP position to lead the iAd team, only intensified the apprehension. This is public-company world – everything is about perception. The execs know their plight: today you are a big shot, but if you don't perform, you are out.

Booze and abusive behavior are traditional fear-drowning remedies for insecure males. The former was thoughtfully accommodated by the party organizers via the open-bar arrangement. Most attendees took advantage of the limitless supply; some with an enthusiasm of newborn calves, who need to be taken away from the udder lest they drink themselves to death. There was this one high-echelon specimen (let's call him The Boss's Boss) who was especially determined to stupefy himself, knocking down one gin after another. As he reached a certain condition, the desire to abuse could not be contained.

One of the waitresses serving the party was a remarkably attractive young woman (let's call her The Striking Girl). She had that star quality about her that causes double takes; something Nora Ephron once described as magnetism that makes a man across the room go, "Get me that!" An obvious target for a drunken bully.

He started by shoving a decorative tree onto her as she was passing. "I am pushing bush on bush," he sneered to other men around him. The Striking Girl didn't say anything – he was a customer. She remained poised and diligently went about her job.

You see, the thing about the hospitality industry in New York City is that a significant portion of waiting, bar-tending, catering, etc. staff consists of struggling writers, artists, actors, musicians – the creative hopefuls. Service jobs are usually divided into shifts and one can combine them into a flexible schedule that leaves time to attend to the true calling. The Striking Girl, as it turned out, happened to be an aspiring writer and a filmmaker, with her first short recently accepted to one of the New York's indie festivals. It explained her composure: she prepares herself to dealing with Hollywood and getting her ego bruised on daily basis.

So, she continued being friendly and pleasant to other attendees. When someone spoke with a Russian accent, she mentioned that she was born in St. Petersburg and was brought to New York as a baby by her political-refugee parents. The Boss's Boss, now never far away from her, heard that. "I have a friend," he said, "he just loves banging Russian pussy."

Next time he caught her in the tiny space of the service station. "Did you come to apologize?" she asked calmly. He thrust his drunken mug into her fragile cheek and responded with,"There is no need for apologies. It's that St. Petersburg love, baby."

Hey, I am a middle-aged broad. I know only too well that chivalry is dead, buried, its corpse rotted into dust long time ago. Still, it's shocking that not a single so-called "man" felt an urge to speak up on behalf of the young lady.

Is this the type of culture Apple Inc. cultivates? Of abusively unrestrained bosses and silent yes-men?

I wonder, how the parents of the Striking Girl felt, when they learned of this incident? Is this the type of democracy and liberty we offer here, in the United States of America, now? Any corporate honcho is free to behave like a dirty animal, while everyone else acts as if their mouths taped shut?

By the way, did you know that corporate execs in public companies get stocks as part of their bonuses? Well, I've sold my Apple stock after that party. The thought that my holding on to them may contribute to the further rise of share prices and one day make the Boss's Boss richer made me sick.

Insecure Business Owner/CEO

People write about insecure bosses all the time. There are blog posts, articles, book chapters, cartoons, movies, and TV shows devoted to the subject of dealing with a superior who feels threatened by his subordinates. Hey, bosses are people and a vast majority of humanity is plagued by insecurities of various forms and degrees. The authors usually predict two possible outcomes of having such a boss: you will either find a way to overcome the problem and turn this person into your ally, or you get fired. Curiously, in these writings "the boss" in question is usually another hired employee perched on a higher step of the hierarchy ladder. (It has always surprised me, why these advisers never consider a possibility of you finding the way of getting the insecure boss fired.)

However, when your insecure boss owns the company that employs you, it's a completely different situation altogether. Here he (or she, or they) was, the big boss with a business that he's built, thinking that he is the shit, the sharpest tool not just in some lousy shed, but in a suburban Home Depot… Until you came along, with your diverse expertise, broad fundamental knowledge, etc.

Now, you start discovering all kind of stupid stuff. If you are indeed an experienced person, you are not running around like an idiotic show-off screaming that everything is wrong. No, you tread lightly. At the same time you must do your job and, therefore, correct the stupid stuff. So, you say careful things like, "Excuse me, I mean no disrespect, but this and that is not done properly and will result in long-term losses; and, by the way, your accounting doesn't comply with prescribed rules." You have no choice but to reveal painful observations such as, "You know, that operating system you bought just before your hired me (couldn't you wait?) on recommendation of someone you know, sucks! You were misled – it's not an ERP, it's a retarded cousin of a real ERP twice removed."

Moreover, from time to time, things come out of your boss's mouth that are not just silly, they are embarrassingly incorrect. Of course, you can ignore it, and yet you cannot, because if you don't clarify his confusions and educate him, he may say something stupid in front of your bankers, or investors, or auditors. So, you have no choice but to find an appropriate way to straighten him out, raise his sophistication.

And even though you openly express due respect for his entrepreneurial abilities and acute commercial intuition, he cannot avoid feeling inadequate, insecure. It's unpleasant and he doesn't like it at all. Yet, unless you become rude and inappropriate, your job is secure. The idea of firing you wouldn't even come to his logical conscious mind. First of all, he knows that the company (i.e. his wallet) needs you and your improvements. Secondly, you took over quite few tasks, freeing him for business development. Finally, he doesn't have time or desire to go through the search process again.

Still, from time to time the subconsciousness feels pangs of wounded ego. When that happens, he'll do anything to make himself feel better. He will find one or another way to get back at you. If you have an accent (Irish, Italian, Slavic, French), he will interrupt you in the middle of a meeting and ask the outsiders if they understand at least 30% of what you were saying, even though your English is fluent. Your writing skills are likely to be far more superior than his, but he will make you run drafts of emails to important people by him, claiming their "political importance." He may get into habit of reminding you that, considering your compensation, he expects a lot from you, even though you have exceeded all his expectations already. And so on, and so forth…

This behavior is childish. The mere knowledge that it's rooted in his insecurity should help you to brush it off. Don't let yourself to be hurt by it. Don't think, "This is not fair, I am helping his business." Don't take it as an insult. Accept it as a testimony to your superiority.

Quote of the Week: “What Do You Do?”

"If you were a member of Jesse James's band and people asked you what you were, you wouldn't say, 'Well, I'm a desperado.' You'd say something like, 'I work in banks,' or 'I've done some railroad work.' It took me a long time just to say 'I am a writer.' It's really embarrassing."

Roy Blount, Jr.

The Frustrated CFO comment:

The reason I think this quote belongs in this blog is not because I consider myself a writer. No. I find that it is just as difficult for financial executives of small companies to explain who they are, as it is for gangsters or for writers. The general public is not very educated about organizational structures. They associate the title of a CFO with sinister characters of newspaper articles targeting troubled public companies. If you say, "I am a CFO," the next question is usually about the name of the company. It's like they expect a household name in return. People don't realize that there are millions of companies in this country. And even less people understand the essence of the Controller's position. So, when the new manicurist (plumber, mover, mechanic, taxi driver, etc.) asks the obligatory question, "What do you do?" many of us resort to answers like "Corporate finance," or something of the sort, in order to avoid additional explanations. Who cares if the person you are talking to assumes right away that you work on Wall Street?

Bean Counters vs Breadwinners

I hope my fellow CFOs and Controllers don't mind my calling us "bean counters." After all, I am one of them and, hence, it's Ok. It's like with all derogatory terminology – if you belong to the group, you are allowed to use it. And if that name-calling has upset you, beware – this is just a beginning.

The truth is, many of my peers are just that – the bean counters limited to their narrowly defined tasks, thus contributing to the frequently observed conflict between finance and accounting on one side and the revenue generators on the other. Both sides have to tolerate each other, but it is a precarious armistice.

CFOs and Controllers think that sales and operational people don't work too hard, while getting high performance-based compensation. They are loud and overconfident, while not necessarily well educated and intellectual. They are never in the office, taking long lunches with customers and prospects. When they are in the office, they are on the phone most of the time. They take paid trips to foreign lands and get car allowances for their domestic travels. They jeopardize the company's well-being with their grandiose "strategic" deals that end up losing money. Most importantly, they wouldn't be able to do anything without our funding their transactions, controlling their profits, calculating their commissions and reporting their results.

On the other hand, VP of Sales and COOs think that they are the moving gears of the company. They despise the bean counters for stifling their "important" deals with "useless" profitability criteria, for knowing how much money they make and for suspecting that there is nothing behind the confident appearance – just the rolodex and lots of air. Most importantly, they feel that their unique ability to bring business is not respected enough. Money is not everything, you know.

The fact is, however, that a sales (or procurement, or operations, or trading,) ace does possess a truly unique ability to generate revenue with skills that frequently have nothing to do with education, professionalism, or intellectual expertise. There is a reason you don't need a college degree to obtain trading, brokerage, insurance, or real estate licenses. You definitely don't need an MBA to become a VP of Sales. These jobs require intuitive abilities and social skills of a very special sort. Trust me, not too many people are born with those talents. The real great ones are quite rare.

It must be said that I am one of the few CFOs who always support the people responsible for bringing business to the company, even if they don't like me. Many of my colleagues forget that all our functions are secondary and subservient. Everything that we do either facilitates the breadwinners' success (and failure) or reports it. That's all.

Without them I wouldn't have my job. They are the ones responsible for generating enough dough to cover my salary, benefits and bonuses. And if I could do what they can, I would have.

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