Tag: CFO

Business Owners’ Favorite Style of Management


Some people are born with incredible natural aptitude for managing people.  Many years ago I observed a girl on a playground.  She was about 5 years old playing with a group of children the same age.  At one point some play rules, or another important issue, needed to be established, and I was amazed not only by the assertion of authority, but also by the uncanny logic exhibited by this extraordinary little person.  She started with a commanding, "Children, listen to me!" and continued laying out a proposal that nobody has any inclination to dispute.  I remember thinking to myself, "That's a naturally born leader!"

Unfortunately, people like that constitute a small percentage of general population and, strangely enough, they are even rarer among business owners.  Just because someone had a great idea and entrepreneurial drive to establish their own business doesn't mean that they also have sufficient managerial aptitude.  Only few of them had formal business management education and most of them never worked for anybody else long enough to gain on-the-job expertise.  

This pretty much leaves their leadership skills at intuitive level at best.  And if the sixth sense fails them… well, all kind of sad things occur: they cannot see the difference between a pompous phony with an impressive voice spewing well formulated lies and genuinely knowledgeable, but quiet workaholic; they have very little or no understanding of delegation of duties; frequently they cannot even figure out their own roles in the company.  

The most common executive management conundrum such Presidents/CEO's (especially first generation of business ownership) encounter after the enterprise reaches the "established" stage of development can be described as follows.  Their entrepreneurial talents draw their minds to further commercial improvements, to generation of new ideas that will help to expand and strengthen the business.  At the same time, the wonderful feeling of accomplishment plays dirty tricks on them: subconsciously they want to rest on their laurels – they feel that they deserve to work less, to take summers off, etc. etc.  Moreover, since the business is their child that they have born and reared applying their own talents and titanic efforts, they have incredible aversion to the idea of letting other people to completely take over vital tasks of the company's ongoing functionality and maintenance.   

(Side note: I am really tempted to state here that the majority of them are control freaks.  However, I don't have scientific evidence for that, just my own and my colleagues experience. More importantly, it does not make a difference, both obsessive and perfectly balanced CEO's display the same symptoms.) 

You have to agree that this position is absolutely psychotic.  What do they do?  They resort to their favorite style of management – what I personally coined several years ago as "Hands-Off Micromanagement."  

Let me show with this example how this control style may manifest itself. On one hand, the CEO can completely forget that you are working on establishing a $10 million credit line with a new bank, or that you have just upgraded your accounting system to a new version that basically made the entire budgeting function automatic.  But on the other hand, he keeps asking without a fail every month why the Federal Express bill is $2,000 – when he was starting the business it was never more than $100.

I am sure a lot of my fellow CFO's and Controllers have recognized the disease as they have to deal with it and the frustration it causes on daily basis.         

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.

New Job Hunting Secrets for CFOs and Controllers


All CFOs, Controllers, VP Finance and Financial Directors, especially in small businesses, are involved in recruiting process.  Most of them don't have in-house recruiters and nowadays not too many businesses can afford $25,000-$30,000 headhunters fees.  So, with hiring on one side and testing the market (or in the current economy actively looking) for themselves on the other (plus payroll, benefits, etc. management), their involvement with HR is pretty significant.

However, because they don't work for businesses with thousands of employees and are not professional recruiters, small and mid-size financial execs are not necessarily up to date on the talent-searching technology.  While going through hiring process they are still printing resumes, looking through them manually … – you know the process.  And when the tables turn around and some of these execs are forced to search for new employment themselves, they expect their resumes to receive the same treatment even if they apply for a job in a larger company with its own in-house HR department or reply to a recruitment agency's (such as Robert Half, Michael Page, Source Associates, Forum Group, etc.) ad. 

How could they possibly know, especially if they have been off the market themselves for several years, that today large HR department and recruitment agencies work with automated Applicant Tracking Systems (ATS) – software that in its sophistication goes beyond database matching and usually employs cutting edge data-warehousing technologies?

 I know plenty of financial execs who are so proud (rightfully so) of their accomplishments they don't even bother adapting their resumes to the nuances of advertised job requirements and keep sending them out "as is" regardless of the recipients specifications.

Please, do yourself a favor and read this recent article from TheLadders  The 24-Step Modern Resume.  Not only it is incredibly valuable on its own (an eye-opener for uninitiated, really), but in the text you will find links leading to further details and related subjects. 

I also highly recommend The HR Capitalist blog.  It will provide members of financial executive talent brigade with an opportunity to learn what the other side – the hiring professionals – think.  I found particularly fascinating the insights into Social Recruiting and the important place it occupies in today's hiring in Why Social Recruiting Isn't About Having a Corporate Twitter Account. 

 

CFO Folklore: Why Do I Work So Hard?


People are frequently surprised by my dedication to the job.  And I have to admit, my level of commitment, loyalty and work ethics is quite high.  Some even think that I have a stake in the company or am related to one of the owners.  But no, even though a CFO, I am just an employee.  Moreover, I have advanced my career by moving from one company to another about every 5 years.  Hence, any particular company is just another line on my resume.  My compensation is not tied to any volume factor and bonuses are discretionary.  So, why do I work so hard?

I am definitely NOT doing it for the BOSS.  Those who read my posts know that I have deepest respect for entrepreneurial bravery and ingenuity of business owners (even when I address their negative traits as a source of frustration).  And I cannot really complain; most of my bosses have shown a lot of appreciation for my efforts.  But, unfortunately, they are capable to see only the superficial aspects – long hours, multi-tasking, etc.  The quality of the impact I make on their company completely escapes them.  Plus, unlike others, I don't run to report every single achievement.

So, no I am not doing it for the bosses or their recognition.  One can say that the reasons fueling my drive for excellence are selfish.  I do it for myself.  I simply cannot do it differently.  It doesn't matter whether anybody else acknowledges it, if what I do is not up to my own standards, I get extremely disconcerted. 

I have learned this about myself a long time ago – dissatisfaction with my own performance is the biggest source of frustration and anxiety.  So, the choice is simple: either apply your absolute best or suffer the psychological consequences.  That is why I work so hard.  It makes me feel at peace and, yes, proud.   

Few years ago I was flying with my boss to Amsterdam for meetings with our bankers.  I was outlining the important issues I wanted to address and touched on the impressive growth rates we have achieved.  I guess my excitement affected him and he felt compelled to tell me how much he appreciated my hard work.  This is what I  told him, "When I came, the company was doing $40M a year.  It did $80M a year after, $120M a year after that, $160M last year, and I guarantee $200M this year.  Knowing that I was instrumental to that growth is what drives me." 

You say, vanity?  And may be you are right.



 



First Impression Is the Most Lasting Indeed


They say that the first impression is the most lasting one.  And it is true even for those people who try very  hard to be fair and give people a chance to show their true qualities. 

I myself is one of those people who make themselves look past the appearance of a job applicant.  Few years ago I have interviewed a woman who was grossly obese and needed a cane to assist her in moving her body.  I knew right away that aside from possible health issues, there could be multitude of other problems: we would need to order her a special X-large chair, my CEO may not like someone like that to be prominently installed in the Operations Department, visiting business relations may be destructed by the sight, etc. etc. 

Nevertheless, I gave her a full interview, which she passed with flying colors, and ended up hiring her.  It never even occurred to me not to offer her the salary attached to the position.  She got paid the same wages anyone in her place would.

Turns out, I am a rare exception.  Please, read this post from Vault's Career Blog Does your weight determine your salary?  The statistical data reported in the article are appalling.

Weight issue aside, my opinion is that when it comes to hiring process the entire "first impression" concept is very unprofessional.  Time after time, hiring execs, recruiters and variety of HR professionals yield to their contrived, closed-minded, self-centered views of other people instead of thinking of what's best for their companies.

Two weeks ago my good friend MJZ, also a career CFO, went for a job interview to a company that provides services to children with learning disabilities and autism under the contracts with various government health agencies.  Since such programs usually become first victims of states and counties budget cuts, the company desperately needs someone who can strategize their way into more diversified revenue models.   MJZ has a vast experience of building such strategies and facilitating companies' growth. 

She has previously had a phone interview and communications with the CEO's personal assistant.  So when in-person interview invitation was received, she assumed it would be with the CEO herself.  However, she was interviewed by a middle-rank HR Manager.  

When she told me that she did not even make it to the next round – the actual interview with the CEO (the HR Manager sent her an email), I've asked for the entire meeting description.  Now, knowing all details, I am confident that the HR Manager's rejection had nothing to do with MJZ's professional qualifications.  It had to do with the fact that she was dressed for an interview with the CEO and instead was assessed by a sweater-and-tights-clad middle-manager. 

The sad result is that the company had missed an opportunity to hire somebody who could have brought them to the next level of development.  Their loss, of course, but nevertheless a disappointing experience for my friend.