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Tech-Savvy CFO vs. Technologically Inept Owners: A Boardroom Chronicle


OstrichPremise:  

Based on true facts, this present-day farce unfolded right after the company at the center of the story signed a new office lease.  The entity's CEO, an infamous procrastinator and a successful decision-dodger, has delayed the execution of the document to the point when only 60 days remained before the moving-in day.

Up until now, the fairly young business always occupied a full-service furnished office suite, where everything from pen holders to receptionists is supplied by the landlord, including all telecommunications and IT administration.  However, by this point the successful business outgrew the little rooms and the shared common space of the suites – it was time for the company to obtain its own residence.

As all logical people know, lease signing is only the beginning of a relocation process.  A lot of work needs to be done before a company can feel at home and be fully operational in its new place of business.  And nowadays, the IT infrastructure becomes a prerequisite to everything else.

This flat-structured small business has a misfortune of having a board of directors that consists of three technologically clueless owners (the type who cannot connect a printer to a PC) and a CFO.  The latter has been combining her financial and accounting responsibilities with those of a CTO throughout her entire career.  Needless to say, she understands what needs to be done, knows how to go about it (nobody else does in this company), and is more than qualified to make all necessary decisions.  Yet, the Board has a rule: anything that involves spending money must be approved by all four members.

So, here is the chronology of making a single decision under the described circumstances:

Motion 1 – 60 days till D-Day.  Upon receiving the fully executed lease from the lawyers, the CFO writes an eMemo to the owners requesting a Board meeting in order to develop an action plan that would ensure successful and painless relocation.  The plan should assign responsible parties and establish deadlines for each task.

The owners don't acknowledge that the issue was raised and two weeks pass in a complete silence regarding this matter.

(Side Note: All four executives are actually heavily involved in their day-to-day responsibilities.  They communicate extensively every day discussing various commercial concerns, while avoiding difficult extraordinary topics.)

Motion 2 – 46 days till D-Day.  Recognizing that the owners have fallen into their typical pattern of pretending that the problem doesn't exist (this happens every time an issue lies outside of their comfort zone), the CFO makes another attempt to mobilize the Board to set up an action plan.  This time she speaks to each of them in person.  They all nod in agreement - "Tomorrow," they say.  The CFO squeezes a two-hour time slot into her crazy schedule.

Three days pass without anything happening. 

Motion 3 – 43 days till D-Day.  The CFO feels the time pressure – at the very least she must start working on IT components, regardless of the owners' ostrich behavior.  The business will be simply paralyzed without an adequate infrastructure.  She really has no room in her schedule for all research, comparison, and optimization of  various ISPs, telecoms, and IT administrators…  But who else is going to do it?  So, instead of pestering the owners again about the "action plan," she writes a very specific inquiry:  "Please confirm your agreement with my taking charge of the groundwork for obtaining the Internet service, telephony, and IT administration support."  Without waiting for replies, the CFO starts working on the subject of the highest priority, i.e. the Internet connection, by reviewing nine ISPs whose services are available in the new building.    

Motion 4 – 41 days till D-Day.  At different hours, the CFO receives messages from the owners – all three are worded very similarly: "Thank you for asking and forward thinking.  Please go ahead with the projects." She can almost hear their sighs of relief - somebody else has made the decisions for them!!!  The CFO closes her eyes for a second and thinks, "The same shit every time.  I wish at least once I would let things run their course - just to see what would happen if I didn't worry about all of this, if I didn't jump in."

By carving little chunks of time in her schedule to deal with this shit, the CFO manages to come to her final ISP conclusion in 5 business days: to accommodate all of the  company's needs (including VoIP) she needs a reliable fiber-optics broadband.  She narrows down her choices to two ISPs – the award-winning Cogent with dedicated connectivity and Verizon's newest product FiOS Quantum ran through communal cables shared with all other users in the vicinity. 

Motion 5 – 36 days till D-Day.  She immediately gets quotes from both: Cogent values itself highly – $700/month with a three-year contract, plus $1,000 installation fees; Verizon's rate is only $129/month with a two-year contract.  Even with such a disparity in pricing, it's a simple choice as far as the CFO is concerned – she knows that Cogent will provide uber-fast, uninterrupted connection, and if something happens, she can be on the phone with an engineer within 30 seconds.  Verizon, on the other hand…  well, we all dealt with Verizon at one point or another.  Yet, for the owners all this technical staff is as difficult as Icelandic; the huge price difference, however, that's easy.   So, the CFO goes back to Cogent's salesperson and dangles FiOS Quantum at $129/month in front of his nose (virtually, of course).  He is taken aback – he had no clue that Verizon had started offering this brand new service in that building.  He cannot stop himself from uttering, "That's a compelling alternative."  The CFO doesn't dissuade him from this train of thought; she waits.  And he says that he would go to his director and try to get her a better deal.

Motion 6 – Same Day. Cogent wants the business – the salesperson reverts in two hours, dropping the price to $500/month with a three-year contract or $400/month with a four-year contract.  Both rates are exclusive of taxes and charges.  With this reduction in hand, the CFO immediately prepares a presentation for the Board, breaking down her selection process step-by-step and making a strong case for Cogent through detailed comparison and scoring of all providers.  She sends it out to the three owners and requests a board meeting to make the final decision.

Four days of silence passes.  The CFO understands: it's too fucking much for them, they don't want to deal with this, they are hiding.

Motion 7 – 32 days till D-Day. The CFO has no choice but to write to the owners again: "Let me remind you that installing the Internet connection must precede all other IT and telecommunication actions, including setting up the phone system, the computer network, etc. – basically everything that we need for the business's operations.  And it will not happen overnight!"  This gets CEO's attention.  She comes over to the CFO's office and says, "Let's decide by tomorrow the latest."

Two days passes.

Motion 8 – 30 days till D-Day.  One of the owners (already in possession of the previously distributed detailed presentation) sends an inquiry, "Can you make a comparison for me between Cogent and Verizon?" as if he just woke up to the issue. 

Motion 9 – Same Day.  The CFO prepares a simplified comparison chart intended for a 4-year-old audience.  Meanwhile, she tells Cogent that the decision is not settled yet and that she will appreciate if the provider gives up something else – like do away with the $1,000 installation fees and make rates flat, all-inclusive (taxes, charges, etc.)  The salesperson conferences in his Director and they yield.  The CFO simply cannot lose this deal: she goes around and collects the owners' consents in person. 

Motion 10 – 29 days till D-Day.  The CFO signs the contract with Cogent.

Curtains 

And this is just Act I.  Ahead, there are still decisions on a VoIP system, an IT Administration service, furniture, equipment… 

Quote of the Week: “The Blacklist” of Reasons to Go On


The-Blacklist-James-Spader-about-16x9-1"Raymond 'Red' Reddington:The concept of a Last Stand sounds so heroically romantic, doesn't it, Donald?  But there is a good reason why we didn't see what happened to Butch and Sundance – being riddled by bullets and left to rot under the scorching Columbian sun.  It's not a sequel maker, and if you surmise nothing about me by now, know this: I am going be around for the sequel.

Agent Donald Ressler: You really going to do a field transfusion?

Reddington: Oh, come now, Donald!  Just think how much smarter you'll be afterwards.

Ressler:Why the hell are you doing this?  It's pretty obvious I hate your guts.  I can't imagine you hold a lot of love for me… why save me?

Reddington:  Because that's what you do when someone is dying in front of you.  Allies today, enemies tomorrow – the world is a complex place, further complicated by men's fickle nature…

…Donald!  Donald!!  Feeling any wittier yet?  Any strange cravings for beluga caviar or Marcel Proust?

Ressler: I know you don't think much of me, but you don't get to be assigned to the case like yours unless you pass muster…

…We are not going to live through this.

Reddington: I think we will.

Ressler: How?

Reddington:Have you ever sailed accross an ocean, Donald?

Ressler: No.

Reddington:  On a sailboat, surrounded by sea with no land in sight, without even a possibility of sighting land for days to come.  To stand at the helm of your destiny – I want that one more time.  I want to be in Piazza del Campo in Siena and feel the surge as ten race horses go thundering by.  I want another meal in Paris…  I want another bottle of wine, and then another.  I want the warmth of a woman in a cool set of sheets; one more night of jazz at the Vanguard.  I want to stand on summits and smoke cubans and feel the sun on my face for as long as I can.  Walk on the Wall again, climb the Tower, ride the River, stare at the frescos.  I want to seat in the garden and read one more good book…  That's why I won't allow that punk out there to get the best of me, let alone the last of me."

                                            "The Blacklist", episode 1.9

                                              Written by Joe Carnahan

 

Quote of the Week: More on the Notion of Irreplaceability


"One of these types of executives is represented by people who rendered certain services in the past… These are the people who do not consider it their duty to fulfill the decisions of the Party and of the Government, and who thus destroy the foundations of Party and state discipline… They Presume that the Soviet Government will not have the courage to touch them, because of their past services. These over-conceited aristocrats think that they are irreplaceable… What is to be done with executives of this kind? They must unhesitatingly be removed from their leading posts, irrespective of past services."

                                                                                        Joseph Stalin (January 1934)

The Frustrated CFO's commentary:

Usually all my posts are accompanied by pictures, but not this one – I don't put up photos of mass murderers.  Yet, I think that this quote tragically confirms my observation that entities, organizations, and systems can survive even after the most valuable, irreplaceable individuals are removed.  In this speech, delivered during the 17th Congress of the Bolsheviks Party, Stalin has laid the grounds for the Great Purge that was about to exterminate millions of the best and the brightest Russian citizens – political, economic, scientific, military, industrial, and cultural elite.  In fact, the eliminations started with the members of the said Congress, nicknamed by historians the Congress of the Condemned because two thirds of the people present during the oration were executed within the next three years.  Without them and without the continuously murdered and imprisoned in camps workers, agrarians, engineers, doctors, scientists, poets, writers, musicians, etc. the country was getting darker, poorer, more corrupt, and less educated.  But it's still there, on the map.  Even after the break up of the Soviet Union it's still the largest damn country in the world.

CFO Folklore: The Illusion of Irreplaceability


Orange-is-the-new-blackThis is what always happens with severely responsible and talented people who take pride in the quality of their work and apply themselves hard, regardless of the rewards and recognition, material or otherwise: They do an extraordinary job in every function they are assigned, they show initiative and undertake tasks beyond their scope of responsibility, they set their own lofty goals and high performance standards, they pull off feats of creativity and miracles of ingenuity.  Truly they accomplish things that no one else would in their place. 

More frequently than not they don't run around screaming about their achievements – after all, they simply cannot operate any other way and they don't care that nobody asked them to be like that.  They themselves know that they are the best.  Plus, people around them acknowledge such efforts in one way or another – subordinates show respect, peers get testy, etc.  And the bosses?  They either don't notice anything, because their heads are usually up their asses, or they are too limited to appreciate the ace-level pilotage they are witnessing. 

As someone afflicted by this condition, I can assert that there is nothing healthy about it.  Privately wallowing in the knowledge that you are "simply the best" and that your work ethic is a cut above everyone else's, while not being adequately rewarded for your efforts, is nothing more than an addiction to one's own ego. It's vanity of the worst kind, because it violates the principles of objectivism and merit-based recognition.  And, like any addiction, it is accompanied by a couple of supplemental attributes. 

One of them is the inevitable development of passive-aggressive behavior: no matter how many times a person is going to say that she does it for the sake of her own self-satisfaction, something deep inside wants to be celebrated for the extraordinary abilities, efforts, and results.  This secret desire is in a constant fight with an extreme dislike of boasting.  Thus, the feelings and impulses get mostly suppressed and come out in the form of classic indirect hostility and resentment.

Another attribute is the illusion of irreplaceability.  The tormented crazies convince themselves that without them the company will not be able to survive; that everything will fall apart and go to hell.  They believe that there is no way somebody else could be found to fill their shoes.  And why not?  Nowadays, people like that are quite rare.  It's most likely that, if an employee in question leaves on her own accord or is let go for some reason (because she becomes unaffordable or her attitude becomes unbearable), the employer will never ever have someone that good in the same position.  But does it really mean that losing these truly invaluable workers is an incurable disaster?  Are they really irreplaceable? Let me answer this question by doing what I frequently do – relating the readers to an example from popular culture. 

In case you have not had a chance to check out the Netflix/Lionsgate's co-production Orange Is the New Black, I urge you to do so – trust me, you will not regret it.  The show's creator, Jenji Kohan (widely known for her Showtime offspring, Weeds), is a member of a still rare breed of entertainment developers, who is able to focus on female characters without reducing the finished product to gender-specific genres.  Orange is the New Black takes place in a women's federal prison, and its ratio of male to female characters is about 1:10.  Yet, 47% of IMDb users who rated Orange is the New Black (8.5 stars overall) were males.

One of the primary characters in the first season of the show is an inmate of Russian origin, Galina "Red" Reznikov (Kate Mulgrew).  This formidable woman runs… no, she rules the prison's kitchen and has an influence on pretty much the entire social canvas of the place.  By the show's start she has apparently been there for years and assumed a role of a Godmother for a tight circle of her "daughters."  She can be a real bitch, and a newbie should think twice before contradicting her.  But the truth is she is doing a remarkable job, keeping her fellow convicts and the staff fed and even rewarded with treats under the conditions of ever-shrinking budget, broken fridge, and oppressive hostility from some nasty guards.  As early as the 5th episode, it is impossible for the audience to imagine the kitchen without Red.  Obviously, she herself thinks she is irreplaceable.

Guess what?  Towards the end of the season, the combination of some people's foolishness and others' unsavory scheming gets her kicked off the throne and out of the kitchen.  So, what happens?  Do the lights go out in the mess hall forever?  Do the prisoners get shipped to another facility to be fed?  Nah ah!  Another head cook is found right there in the general population and installed in front of the range; she brings in her own crew; the cooking continues somehow.  True, there are no more yogurt favors, the menu is severely skewed towards Latin-American cuisine, and even the oatmeal comes out spicy.  But the plates are not empty, people are not starving.  Life goes on, while Red is driving herself insane with displacement anger.        

So, the answer to the above question is: No, you are not irreplaceable.  It may take a whole team of less adequate and more expensive people to pick up your tasks.  And collectively they will accomplish less and it will not be brilliant, but it will be just good enough for the business to continue, at least in the short run.  Let me assure you that nothing will fall apart, because doing things half-assed and with little care has become a widespread norm.  Everyone accepts poor quality at a higher cost nowadays, and so will your bosses.  And you, with your talents, skills and unsolicited attempts to jump over the high-standard bars, are just an ego freak.      

Social Networking May Still Redeem Itself as an Instrument of Commercial Quality Control


 YelpToday, our minds automatically go to facebook, Twitter, Instagram, etc. when someone uses the words "social network." The Rudin/Sorkin/Fincher team made a movie about Mark "I-violate-your-constitutional-rights"  Zuckerberg and used those words as a title!  

And it's absolutely ridiculous, because establishing and maintaining connections with friends and "the right people" have been vital for the human species since, like, forever.  Folks have always built their settlements, villages, towns, and cities with designated places for meetings.  Back in the day (and I don't mean the 1980s), households accepted visitors on certain days of the week; and even on a random day one could come by and leave a calling card with the family's help.  And who can deny that, ever since the first Industrial Revolution, the patterns of commercial and financial developments were determined by the who-knows-who principle.  It's just that the outreach was far more limited.   

Of course, the magnitude of Internet networking is breathtaking.  In the early 1990s, when the Internet has connected all seven continents, the miracle of instant world-wide access to knowledge, culture, entertainment, or people was the most important and alluring aspect of this new technology for me.  I still experience a thrill every time I look at this blog's dashboard and see that during the last 24 hours my posts have been read not just at home, but also in Denmark, Canada, Germany, South Africa, UK, Vietnam, Australia, Portugal, Spain, India, France, and Taiwan.  I love it.

Yet, I hate facebook and Twitter.  Okay, push your eyebrows back down and let me explain. I don't hate social networking per se: It's convenient to receive updates on your favorite artists and it's important for business: I've been on LinkedIn since the times it operated exclusively on the basis of professional invitations.  But I abhor the contemporary "social network" phenomenon and what it represents: the unrestrained hunger for attention, the vile combination of pathological exhibitionism and a sickly kind of voyeurism; the violation of privacy and the desire to be violated.  I cannot stand the stalking by exes, the spying by employers, the snooping by the government agencies – all that shit.

That said, there are some companies with one or another form of social networking at their cores, which I consider not only healthy, but also greatly important due to their positive impact on the commercial environment, especially the consumer sector.  I'm not naive and I don't think that any of the entrepreneurs behind these businesses consciously elected to influence the quality of goods and services.  Most likely they simply shaped their business models utilizing the exploding patterns of collective participation in the Internet experience, but in the process they unwittingly created an influential force that has a power of strengthening and weakening businesses.       

In 1979, Tim and Nina Zagat started imploring their friends into scoring restaurants they visited, eventually turning their social pastime into a ranking business, which was bought by Google in 2011 for a reported $151 million.  Being an old-fashioned medium from the start, however, it remained the same under the new high-tech ownership: It's still unclear how the rankings are formulated.

It was Pierre Omidyar's hobby-project turned international conglomerate with an annual revenue of $14 billion, aka eBay that pioneered the concept of building market-place reputations based on the fully-disclosed opinions of the "community members," i.e. users of the eBay services.  While everyone was screaming (understandably so) that people will cheat, lie and steal, eBay founders stuck to the most fundamental of the commercial principles: in order to succeed you need to keep your ratings high, because one unresolved accusation of unsavory practices may kill your future transactions for good.  It's like what G.W. Bush said, "Fool me once, shame on you.  Fool me – you can't get fooled again."

Today, thanks to rating algorithms utilized by various online businesses, we came to rely on communal ratings and individual opinions whenever we buy electronics, computers, household appliances, books, or select entertainment on Netflix, or order food delivery on Seamless, or pick a hotel on TripAdvisor, or make decisions about telecommunications providers.  Many of us not only peruse the viewpoints of others, but also actively participate in the polling process by sharing our own thoughts about this or that product, service, establishment, thus affecting a new system of commercial quality control.     

It is safe to say, in my opinion, that Yelp has become a flagship of the communal marketing model.  Again, not because the ideas of commercial quality control and merit-based rewards are so important to them, but for the sake of the advertising income ($138 million in 2012).  Nevertheless, assessing performance and assigning rewards (aka ratings) is exactly what "yelpers" (members expressing their opinions) do.  

A few unique traits place Yelp, Inc. in the avant-garde of this movement.  They encompass a wide spectrum of consumer services.  Right now you can find referrals on businesses in 20 main categories – from restaurants to religious organizations, further subdivided into specialties.  In less than 10 years they have achieved an international magnitude.  The listings are essentially combined efforts: detailed information about the business is provided by the commercial participants themselves (for a fee) and consumers supply their reviews, photos, and ratings.  The search engine is geographically oriented allowing users to find what's around them on the map. 

Also, Yelp, Inc. claims that they use an "aggressive" reviews filter, which rejects posts that are suspected to be biased or false.  As a result, according to their public releases, about 25% of entries are being dismissed.  And I can appreciate that. Like I said, rendering communal judgments on commercial establishments is a serious matter: ultimately it has a power of affecting the livelihood of individual businessmen.  So, the filtering is great as long as Yelp conducts their selections, rejections, and other manipulations fairly and without prejudice. 

Unfortunately, as with everything touched by greed, the communal quality control as executed by Yelp, Inc. may be seriously misused.  While I was writing this piece, TypePad's "related-posts" function has presented me with a few reports (including the one attached below) accusing Yelp of manipulating reviews in exchange for business clients' participation in the site's advertising programs (you can also read about it on Wikipedia).  And that's criminal.  Not only because it's nothing short of blackmail, but also because, by using individual consumers' personal and freely expressed opinions in this unsavory process, Yelp corrupts the participants' intellectual property and constitutional rights.  I sure as hell hope that these accusations are not true.  If they are, yelpers should file a class-action suit to bar Yelp, Inc. from using their reviews as the means of racketeering.    

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