Tag: boss

CFO Folklore: My “Favorite” Questions


Ah, the Holidays!  They put you in the mood for remembrance.  Families get together and stories of past times and lives start pouring out.  My grandfather was a brilliant man of the WWII generation.  He died when I was a baby.  Hence, I cannot remember this myself, but I've been told quite few times about his main pet peeve: he couldn't stand what he called "idiotic" questions.   Apparently, I've inherited this familial trait.

His being the times way before the political correctness permanently  stifled us, he had the luxury to call things as he saw them.  Nowadays, I use more neutral words.  I call them nonsensical questions.  I even trained myself to ignore stand alone occurrences.  However, there are two questions that pervade my professional life.  As all pet peeves do, they cause undue frustration.

The first question is consistently asked by my subordinates and peers.  You see, unless I attend to a confidential business matter, I always keep my office door opened.  I believe it is good for employees' morale to see a CFO working as hard as I do. 

So, these people see me all day long attending to my scheduled tasks, addressing issues, solving problems.  I am consumed by work.  Yet, EVERY TIME one of them needs me and comes to my door, they ask me THE SAME question, "Are you busy right now?"  In response I want to scream, "Of course, I am busy.  Can't you see?" 

It doesn't mean that I am not available to discuss their problem if it is of higher priority, or scheduling them for a later time slot if it can wait.  But why do they have to ask that question?  At staff meetings, I teach them to approach this situation in a more sensible manner: come, don't ask the damn question, instead state your issue and let me decide if it requires immediate attention.  Some learn, but the rest just cannot help themselves.

The second question is similar but essentially different in its nature.  It's usually asked by the boss.  And, as we already discussed, there is nothing you can do, but to bite your tongue.  He has something on his mind, so he comes to your office.  Here it comes, "What are you doing right now?" 

The involuntary first reaction is, "What do you think?  I am doing nothing.  Just sitting here enjoying myself."  But he does not imply you are not working.  This is how their minds work: whatever is on his mind is the most important thing to him right now and in his opinion should be to you as well (even though you don't even know yet what it is).  This attitude renders your current preoccupation irrelevant.  Now, it is up to you to navigate the situation properly into the safe harbor.  Over the years, I've developed an arsenal of methods.  I am sure you have too, but if you need my help, please, don't hesitate to email.

Big Picture and Staff Training


Closely-held entrepreneurial companies always have some flair of secrecy.  The Owners' lives are intertwined with the businesses and because of that they apply personal privacy rights to everything, including the company's commercial and organizational matters.  This frequently leads to "need-to-know-only" modus operandi when dealing with employees. 

CFOs, Controllers, Directors of Finance are expected to act in the same secretive manner.  And I am not talking about non-disclosure of commercial secrets, compensation details, or owners withholdings – these matters are confidential by definition.  I am talking about organizational structure, commercial partnerships, new financial relationships, transactional details, new venture plans, etc.

The owners who insist on such covertness make a mistake of disregarding the natural human instinct of their employees to fill in the blanks.  In the absence of actual information they will cook up their own assumptions about concealed matters. 

You wouldn't believe what kind of wild baseless fantasies I sometimes uncover: non-existing silent partners, astronomical sales volumes, mythical lines of side business.  In one of my previous employments people even assumed that I was a member of the owner's family on account of my loyalty and strict work ethics. 

That's just laughable, but there are far more serious impacts of secretiveness: people don't understand the mission of the organization, the commercial scope, the structure, the value chain.  Most importantly, they cannot grasp their own place and relevance in the system.       

The unfortunate effect of this disconnect is mechanistic disinterested performance instead of meaningful work.  On one hand, the bosses insist that their employees are kept in the dark, and on the other hand, they would like to see high efficiency and productivity – impossible to coexist.

I have managed to convince most of bosses that while keeping the actual confidential information secret, it is absolutely crucial to provide my subordinates with the Big Picture and their place in it.  I consider this to be the most important step in staff training and development.  You will be wasting your time trying to teach your employees how to apply their expertise and education to the tasks you need them to perform if they don't know why these tasks are important for the company's, and consequently, their own prosperity.

When explaining their role and place in the Big Picture, I frequently tell the employees that the company doesn't employ them to pay salaries.  It is actually other way around: if the company could operate without the employees jobs done, we would gladly do so and save the money we pay as compensation . But it is crucial for the company that the jobs are done well and that is why the employees are retained and paid.  You will be surprised: it is not as clear to most people as you could expect.

CFO Folklore: Frustrating and Demeaning Mistrust


The “Hands-Off Micromanagement” style  so prominent in many business owners— and defined in my September 21, 2010 post —has a lot of implications in daily lives of CFO’s and Controllers.  One of the most frustrating facets has to do with petty mistrust. 

I’ve got volumes of stories illustrating this particular trait of a CFO vs Owner relationship.  Here is a compiled rendition of a rather frequently recurring Tale of Mistrust from the CFO Folklore.

AlphaOmega Inc. is a treasury-intense company and its CFO devotes big chunk of his time managing it.  He personally decides on daily basis whether the company needs to borrow to cover operational deficit or invest the excess of available funds.  He is singly responsible for signing financial instruments, including multimillion-dollar letters of credits and commercial loans paid directly to suppliers.  He electronically hedges foreign currencies, sometimes  as much as $1 million per transaction.  His discounting customers’ trade documents  on London Forfeiting Market frequently reaches $20 million per tranche.

Carrying all these monetary responsibilities makes him especially meticulous about the separation of duties and internal controls.  None of the transactions he personally conducts are recorded by him.  He deliberately never cuts any checks.  He has a designated treasury operator setting up all the wire transfers.  The companies books and records are regularly audited by lenders.  And his quarterly and annual accounting audits are always clean and produce unqualified opinions.

And yet…  he has no authority to sign a $1 check or execute a $10 wire transfer release.  Only the Boss can do that. 

And this Boss is not available for you whenever you need him: the business frequently takes him abroad; May through September he is in his summer house; he has to spend holidays with his kids; and he has a girlfriend (you know, afternoon delight and all that). 

Moreover, he hates signing checks and keeps ignoring that thick folder the AP manager put into his in-box two days ago.  And every time the CFO sends a “pleeeease-release-wires” email, the Boss acts like he is asked to grant a personal favor.  And it is the CFO who has to deal with the frustration of vendors and suppliers waiting for their payments. 

The situation drives him crazy and causes perpetual frustration and anxiety.  Swallowing his pride and ignoring the insulting pettiness of such mistrust, the CFO addressed the issue many times, sticking strictly to the damage the situation causes the business.  He explained on numerous occasions that the way his internal controls are set up, it would require his entire stuff to be part of a scheme to steal even a dollar from the company.  He also explained that their treasury systems allow to set up limits of execution authority and that the Boss shouldn’t be bothered with $2,000 wire transfers.  

All falls on deaf ears.   So, the poor CFO still chases his boss somewhere in Hong Kong, begging him to release today’s wires before the banks’ cutoff time of 5 pm EST, which is 6 AM tomorrow over there.


Further Scientific Evidence of the Entrepreneurial Bug


Over a month ago, in my post Your Boss: Value & Madness of an Entrepreneur I wrote about quirkiness and impatience of people who have brilliance to come up with original start-up ideas and guts to build a company from scratch – people who provide us, CFO's and Controllers, with new job opportunities beyond "Big Business." 

I also discussed how their peculiar and difficult qualities are the main source of our frustrations.  I called the sum of these character traits the Entrepreneurial Bug.

As if to support my point of view, September 18th issue of New York Times featured this article in their Business Day section – Just Manic Enough: Seeking Perfect Entrepreneurs by David Segal.  I highly recommend that everyone interested in the subject of entrepreneurship, start-ups and venture capital investment should read it. 

Of course, my own primary interest was the excursion into psychology of the indicators so characteristic of our bosses difficult behavior.  Needless to say, the article confirms that not every subject is afflicted with the entire spectrum of symptoms and displays them with the same intensity.  Nevertheless, the author clearly states that only "a thin line separates" an entrepreneur from a psychiatric candidate with a hypomanic syndrome.

One of the article's subjects, Seth Priebatsch, echoes my post from 08/19/2010, when he "describes anything that distracts him… even for minutes, as 'evil.'"  No surprise here – I've heard this before many-many times from various CEO's.  The difficulties of working with people like that on daily basis, especially for CFO's and Controllers, whose job is to keep businesses in order and under control, is basically one of the main themes of this blog.

Mr. Segal goes out of his way explaining that the degree of craziness is what matters: some Venture Capital firms give personality tests to their prospects in order to determine if they are not completely bonkers.  But I couldn't help myself thinking that these tests may be also designed to weed out people who are not crazy enough to be satisfactory material for future transition from idea generators into screw tighteners.

Strangely enough, the New York Times' confirmation that my extrapolation of personal experience dealing with business owners to the rest of the entrepreneurial world is completely justified, did not bring any intellectual satisfaction.  It's kind of discouraging that if you choose to build your career in dynamic growing businesses, you will always have to deal with bosses who cannot help themselves not to be assholes.  

The Ethicist Randy Cohen Talks About Your Boss


You worked real hard day in and day out.  You applied yourself to the very best of your abilities.  Finally, you have reached the senior/executive management position.  Now, you are the CFO, the Controller, the Director, "the right hand," "the most important person in the company without the title" – it doesn't matter what they call you: you've achieved it.  And it's irrelevant that the business is small – in this small pond you are a big fish.Does this mean that now you can tell your boss, the owner of the company, to stop watching porn on your computer after work and leave it on overnight?  Even my favorite columnist Randy Cohen, cannot give you a clear answer in his response to one of our peers' query in June 27th New York Times Magazine - The Ethicist: Porn in the Office.He is trying, though: yes, it is not right that the boss doesn't close the browser, that he leaves it for the next user to see, but he doesn't really do anything illegal either, etc, etc, blah, blah, blah… 

The point is that our dear entrepreneurs do not separate themselves from their businesses.  They treat their place of work as their second home: watching porn, meeting with their friends, letting their kids and pets run around.  This could be a $200 million business you helped to build, but THEY REALLY DON'T CARE WHAT ANYBODY THINKS.  It wouldn't even come to their minds to consider the possibility that somebody may be offended, or simply surprised, by the images on the computer screen.  And it is not about porn.  It's one thing today and another tomorrow – the principal (pun is always intended) attitude is always the  same.

And the unfortunate truth is that no matter how important you are to the company, you cannot criticize them, because they will never forget it.  They will hold the grudge forever, because subconsciously they feel that they are untouchable royalty in their little kingdoms and NOBODY dares to point out their shortcomings.  And if you are experienced and shrewd enough, you will not say a boo (neither would I).

So, here you are, frustrated out of your mind by the unbalance between your professional achievements and organizational position on one side and inability to exercise your personal freedom on the other.  All I can advise you to do at this point is to pick your favorite from my list of coping devices listed in One CFO's Personal Tools for Frustration Relief. That's all you can do.