Tag: CFO

The Distortion of Bill of Rights in Small Business Environment


Regardless of your position – CFO, Controller, operational staff, CSR, janitor -when you accept “employment at will” arrangement in a privately-held company, you inadvertently give up the majority of your rights granted to you by the US Constitution.  Since the Bill of Rights is automatically presumed, it is not necessary to include freedom clauses into Employee Handbooks, Rules of Conduct and other such documents.  Look through them again whenever you have a chance:  they primarily describe what the company expects of you, not the other way around.

Closely-held companies are not democracies.  They are owners’ kingdoms, absolute monarchies.  And most of the time there is nothing you can do about it.  Let us look at some of the Amendments.

1.  Free Exercise of Beliefs.  Having been always based in NYC precluded me from ever witnessing open discrimination of employees for their religious believes.  At the same time on many occasions I’ve observed explicitly expressed irritation about people’s taking their PTO to celebrate religious holidays.  Quite a few times I saw the candidates being rejected based on the unspoken possibility  of their observance.

2.  We do not have Freedom of Speech as employees.  We try to keep our political, social and cultural opinions to ourselves if we know they contradict those of our bosses. Frequently we are not even given an opportunity to retort abusive, accusatory, or unfair verbiage directed at us or at our subordinates.

3.  We cannot exercise Right to Assembly.  I myself as a supervisor is pretty strict about people congregating for reasons not related to their jobs during work hours.  At the same time I am not as obsessive about it as some business-owners who throw tantrums every time they see people talking.

4.  The Protection from Unreasonable Search is violated time and again in the workplace.  The business files, emails, etc. are rightfully belong to the company you work for, and if you are openly asked to follow established policies of information sharing, files locations and full disclosure, you should willingly comply.  But many employers use System Administrators to secretly look through their employees’ emails, files, etc.  They open doors with spare keys and look into draws containing personal affects.  They use special programs to record IM communications, etc, etc.

5.  Not a single right guaranteed by the Fifth Amendment (due process, double jeopardy, self-incrimination) is considered when you are judged, persecuted and punished by your boss.  Fairness is laughed at in business environment.  A lot of CEO’s, with whom I dealt over the years either as an employee or through business and social networking, considered my personal determination to be as fair as possible and judge people on their merits in all situations as one of my “strange” qualities.  

One right we, as employees, can enjoy under “employment at will” arrangement is the very special freedom it guarantees you: just as your employer can fire you without warning, you can quit on a moment’s notice.   That, of course, if you can afford to do so.

“Passive-Aggressive” CFO


One of my former CEO’s contacted me after reading my post on Bill of Rights in Small Business Environment (who knew they would be looking?). He’s been in business for 27 years with many employees passing through. Listening to his opinion on the Freedom of Speech, I came to realize that his point of view might be typical for a lot of business owners and should be shared here.

According to him, employees, including his current CFO, choose not to voice their opinions as a manifestation of a passive-aggressive attitude. In reality, he says, he would not mind listening to what they have to say on variety of business issues.

My first impulse was to laugh. I used to work for this person and, to put it mildly, he is not the friendliest of bosses. My policy, nevertheless, was always to express my judgement on all professional issues. This, I must say, received mixed reaction, depending on whether my opinion was in agreement with his or not. It was fortunate that our commercial views were nearly identical and we rarely had disagreements. However, on those occasions when my opinion differed, what I got back was the cold silent stare that could have discouraged someone less straightforward.

But I didn’t laugh, because I wanted to know more about the reasons he has classified his new CFO as passive-aggressive. So, I asked more questions. Actually, this was not the first time I asked these questions. Over the years more than a few senior execs have used that term to describe some of their employees to me. It always puzzled me how these business people recognized a behavioral (i.e. psychological) trait.

Let me tell you, most of the time, including in case of the CFO in question, it amounts to “sulking.” Instead of speaking out, the employee shows a “bad temper”: he is morose, with disappointment and annoyance written all over his face. In other words, unreleased frustration (my favorite subject), jumps from inside onto his face. And yes, that can be classified as a passive expression of aggression.

Yet, at the same time the CFO still works hard, diligently performing all his duties and making sure that the business continues to survive and prosper. And that’s actually the opposite of passivity.

Sulking on its own is not a sufficient symptom to diagnose someone as passive-aggressive. There are far more significant and damaging, especially in business environment, manifestations: procrastination, obstructionism, chronic tardiness, tendency to blame others for one’s own failures, making excuses for non-performance, deliberate creation of chaotic situations.

If you keep catching your employee shuffling papers on his desk every time you walk by, or even if he appears to be busy but never delivers any results; when a deadline of a project gets pushed further and further back, then you may have a passive-aggressive person in front of you.

However, if the employee does his best, but looks upset, maybe you should just let him exercise his constitutional freedom to speak his mind.

CFO Folklore: Watch Out for Sudden Meetings Behind Closed Doors


Proximity%20hotel%20-%20acoustical%20harmony%20wallcoveringIf you are an executive employee (i.e. hired help, not an owner) in a small business,  you know what I'm talking about. 

Everything used to be pretty transparent: The owner(s) dropped by your office and discussed strategic issues sitting in front of your desk.  They ran their ideas by you, stealing yours in the process, which you didn't mind, because you've learned to think of it as a sign of their appreciation.  You were a mandatory participant in tactical meetings with various third-parties and considered a welcomed member of the Board of Directors.  You were copied on all email exchanges, etc.

Then, BLAM! All of a sudden everything is hush-hush.  And it's not like you did anything wrong or have been slacking.  No, you are still your highly professional and ingenious self.  Yet, when the owners meet (without you now), they close the doors.  You know that there are meetings going on without you.  You know that there are important matters that your general business acumen could've helped to resolve, but the owners don't seek your opinion anymore.  From what you can see (and if you are a CFO, you see more than anyone else)  they need your help, but they don't want it.  You are excluded from anything outside of your direct professional responsibilities. 

And this is unpleasant, to say the least, because, let's face it:

(a) It's a negative change – it would be better not to be included in the first place, then experience rejection for some unknown reason; one minute you were special, an equal, and another (this is how you feel) you are not different from the receptionist, and

(b) The whole damn thing forces you into a guessing mode, which is a direct way to anxiety and depression.

While this situation is definitely common, I will allow that reasons behind it could vary from business to business, and from one owner's personality to another.  Yet, I bet that the following four scenarios, crystallized from years of close observation of various business owners, are applicable to the majority of cases:

1.  The owner(s) feel intimidated by you. This happens very frequently.  Many businessmen have superiority complex and think that they are the smartest people in any room.  And then you enter the picture.  At some point the owner realizes that you know more, catch faster, and handle things better than him. 

Most hired execs (including yours truly) think it's unfair that We, the brilliant and the laudable, are forced to work for "some schmucks," but the person on the other side is hurting too.  No, no, no, I'm not going to feel sorry for the poor millionaire boss, but just think for a second – he is caught between the understanding how important you are for the company and his desire to stop feeling like an idiot in your presence. 

This sounds like a difficult situation, but rationally speaking this is the best case scenario.  IF the boss is a logical person, who cares for his company's (and his own) well being - he will come around; the doors will be opened again.  Of course, if he is a self-centered asshole on an ego trip and nothing else matters… see Scenario 4b. 

2.  The owners fucked something they are responsible for and the business is not doing well (you, the CFO, may not even know it, because the commercial errors didn't translate themselves into fiscal events  yet, but it's coming).  The last thing they need at this point is you judging them with your I-told-you-so eyes.  They feel so awkward that they'd rather hide away than use your help.

3.  The troubles are even worth – to the degree that makes them loose sleep and keeps them in a state of perpetual panic.  The problem may not even be caused by the business that employs you.  For example, one of the owners just got an audit notice from IRS; he knows that some shit could be found in his other businesses that will destroy everything.  Or an owner got busted with large quantities of cocaine on him.  Stuff like that.  Well, you should consider yourself lucky that you are not invited inside those conference rooms with closed doors - you are better off not knowing anything about it for the sake of plausible deniability.

4.  The worst case scenario - the meetings are specifically about getting rid of you, while minimizing the impact on the company. We can further subdivide this one according to the underlying causes:

(a)  You are too expensive and the owners, while knowing very well that you worth every penny they pay you, don't think the business can afford you anymore, not even with a 30% base reduction.

(b)  That owner in the first scenario simply cannot deal with your superiority any longer.  He doesn't care how good you are, you've got to go, so that he can forget about you (and he will) and start feeling good about himself again.  I have to say, this one is your own fault – if you needed that job, you should've curbed your attitude.  (Oh boy, don't I know how incredibly difficult that is!)       

Oh yeah, I almost forgot!  There is a possibility of a fifth scenario (also straight from my experience with rampant business owners): If the boss starts having frequent (and kind of longish) meetings behind closed doors not with other execs or third-party relations, but with his secretary, you probably need to read my post When Your Boss's Secretary Becomes His Girlfriend, written 2.5 years ago.  It is, by the way, one of The Frustrated CFO's Top 5 most popular posts to date.  So, I know that this particular scenario is very common. 

While the reasons for the closed doors vary, your course of action is limited two just two options: (a) suck it up and continue doing your job for the sake of your paycheck, or (b) look for another job and, if you get lucky (real tough for CFOs nowadays),  get out.  Take my advice: don't lower yourself to passive-aggressive stance, or seek an open confrontation with the owners, or attempt to "ask around."  You will not achieve anything this away and it will only make you feel worse.  

Hard-Working CFO Is Not a Don Quixote


As we already discussed, people like me (not only CFOs and Controllers, but anyone of the same makeup) work hard because they cannot operate any other way.  We do it out of self-respect. If we undertake a job with its multitude of functions we try our best to adhere to our own high standards of work ethics.

Does this mean that we are idealists of the Don Quixote persuasion?  Will we sacrifice merit-based rewards for the sake of doing the job that makes us proud?  Will we let our bosses to take advantage of our self-drive and pay us peanuts?

No, no and no.  If that what you gathered from Why Do I Work So Hard?, you grossly misunderstood me.  Don’t forget that we first accept a job, but once we do, we start working hard.  And the compensation should be adequate.

The thing is, though, we know this about ourselves.  We know that we will do our best for the employer and we know that, unless something we cannot control ourselves happens, the company will benefit from our efforts tremendously.  So, don’t forget that: reflect it in your resumes, your cover letters, your conversations with hiring managers.

And if you made a conscious choice of working in a privately owned business, you actually have an opportunity to present yourself to the people who care about the company’s well-being the most – the owners.  Let them know that you adhere to high level of work ethics.  It will make a difference and it can be used as a negotiating point.

{Side note: my experience shows that stressing these points with recruiters or HR managers will be wasteful and frequently detrimental to your ability to move to the next level of interviewing process.  These people are employees, you don’t know their attitudes towards the job and they may feel threatened.}

A quick word of warning: never say, “I am the best thing that will ever happen to your company.”  First of all, you cannot guarantee that because there are a lot of circumstances that can negate your diligent efforts.  Secondly, I was told by many a psychologists that these types of statements are classified as “over-compensating” and usually signal lack of confidence.  Instead, present your case based on your prior achievements and relate them to your dedication.

Of course, the salary negotiations are tricky and influenced by many circumstances: the job market conditions, whether you are currently employed, whether this job is a real stepping stone in your career, etc.   Nevertheless, that would be true for all applicants, but if you are indeed a naturally hard-working person like me, you have an edge.

Hopefully, by the time a raise and/or a bonus discussion comes up, your reputation will be solidified and you will be rewarded for your efforts.  If you still need to negotiate, you will have a chance to talk about your present, not past, achievements.

And here I would like to refer you to the following The Ladders article, which directly addresses the issue of Salary Negotiation.

 

 

Priorities and Attitudes


I’ve been predominantly focusing on specific issues and situations lately, thus ignoring the general topics of behavioral patterns in work environment.  So, today I would like to discuss how people’s priorities affect their attitudes and how important it is to recognize that connection not only in yourself, but in people around you as well.

Depending on circumstances, we switch from one mode of operation to another and focus on different priorities. This affects our behavioral patterns, our attitudes towards the tasks at hand and people around us.  For most of us, it is difficult to dissect and analyze our own motivations and actions.  However, to succeed in business and in life we need not only understand ourselves, but go further and develop an ability to recognize the behavioral patterns in others as well.

The good news is that we can apply a certain level of standardization to the seemingly limitless array of human demeanor.  Let’s look at some of the most common priority/attitude correlations.

Remember my post about Economic Triangles?  What happens if the highest priority is speed – to get a task accomplished in the shortest possible time?  Frequently that pushes the quality of the result to much lower level on the priority ladder.  At the same time, for someone like me, for example, it is highly important that no half-baked crap leaves my desk.  It is most likely that while trying to balance speed and quality I will display signs of agitation and frustration.  And so will anybody else in this position.

Here is another one.  Sometime ago you gave one of your employees a complicated assignment.  It’s not just complex, but it’s a crucial piece in your decision-making process concerning viability of a new line of business.  Now, he stands at your door shining like a well-kept copper kettle.  You are busy (when we are not busy?) – you raise your head and snap, “If you have something, send me an email.”  What was the guy’s priority?  Economy of time?  No, it was the desire to show you his accomplishment and be rewarded by your recognition of his success.  Next time you pass him you see him slacked back in his chair sourly moving his mouse.  Whose fault is that?     

So, next time a perfectionist under your supervision starts acting like an irritable child, ask yourself whether there is a conflict between the quality requirements and the deadline imposed on him.  And if an enthusiastic and talented person starts displaying passive-aggressive symptoms, see if you can give him a mid-term performance evaluation and express your appreciation.  

Over the years of self-training and experience, I have become an expert in prioritization and optimization of my personal standards against requirements of the moment.  It takes years of conscious efforts to develop these abilities.  People around us, including our subordinates, peers and bosses don’t necessarily possess them.  Understanding the conflict of priorities that dictates their attitudes gives us an undeniable professional edge.