Tag: CFO

Response to a Reader’s Question: Take a Position Abroad or Stay Home?


One of my readers, a fellow female CFO, have sent me an email asking for an advice on the following dilemma she is trying to resolve for herself:

"Hi Frustrated CFO

Please advice.

I'm at a crossroad between choosing to work as a group cfo in overseas subsidiary in US or stay in home country (malaysia) and becomes a group cfo of a division.

Both has its merits and demerits but i'm a woman and study shows that most women do not end at top spot without sacrifice. My family and I would have to sacrifice more if i choose to go overseas. My husband need to put his business on hold and becomes a house husband for a while until we settle down. Its good for the kids as they will go to international school and gain mastery in english language.

Staying in home country is not bad either. I will be in a familiar condition, i will gain new exposure, nothing need to change and i can send my kids to good schools at a higher fee.

Most people will say that experience abroad will change how people perceive you as a leader and thus this will give you greater opportunities within or outside the group.

What do you reckon?

Thank you.

Rgds
Anonymous"

Honestly, it is apparent to me that deep in her heart Anonymous knows very well that, professionally speaking, the best thing to do is to take the job overseas. I always said that a career CFO or a Controller needs to view every job as a line on her resume. Nothing more and nothing less. And what can make a better resume entry than a position showing that your knowledge and expertise are viewed to be unmatchable by a local talent pool in a foreign location? This is a great stepping stone in anyone's career development.

Men don't even think twice about opportunities like that, family or not. But women are naturally more considerate creatures. Many of us try to achieve an impossible balance between professional careers and personal lives. This requires a lot of trade-offs – you cannot possibly have everything. You want spend more time with your kids than you can. You don't want to be too tired for your husband. But, at the same time, your career is a source of income and, more importantly, social independence. The last thing a strong woman wants is to give that up.

I am also a strong believer in exposing children to foreign cultures. It broadens their horizons and sets them apart. Most professional parents do it through traveling and student-exchange programs, but here is a fortunate opportunity of a complete immersion. It would be a shame to pass on that.

So, the only real difficulty is the husband. Is it fair to ask someone to put their business endeavors on hold for the sake of perpetuating your own career? It's really a very private issue that depends on individual personalities, and it can be blown into a very complex problem. However, in my opinion, at the end of the day, it comes down to two major considerations:

1. What will guarantee better financial future for your family as a whole? We are financial professionals – we know how to count. Estimate the future values of each possibility.

2. What will secure the psychological stability of your family? If you are excited about the overseas opportunity, but decide to stay home for the sake of your husband, will you subconsciously hold it against him? Will you let the resentment corrode your marriage?

If you can honestly answer these questions, it will ease your decision-making process. I promise.

I invite other readers to express their opinions on this subject in their comments.

Strategic Planning vs. Crisis Management


“Harry Potter and the Deathly Hallows: Part II” (written by Steve Kloves, based on a novel by J.K. Rowling’s):

HARRY POTTER

We have to go there, now.

HERMIONE GRANGER

What? We can’t do that! We’ve got to plan! We’ve got to figure out —

HARRY POTTER

Hermione! When have any of our plans ever worked? We plan, we get there, all hell breaks loose!

And that, my dear readers, in a nutshell, is the principal difference between the two action-plan extremists.

In the red corner, equipped by multipage projections with color graphs and tables, are those who believe that strategic planning is the only way of life and one must ponder and weigh every situational possibility before taking any step forward (or backward). In the blue corner, wearing their firefighting suits with confidence and valor, are those who are convinced that when the shit hits the fan they will be able to immediately assess the entire spectrum of life-threatening circumstances and successfully handle the crisis.

Any kind of extremism is bad, kids, m’kay? In religion, politics, personal views, and business management. Different situations require different approaches. Only a balanced combination of executive instruments, including long- and short-term plans as well as emergency-response methodology, can guarantee an enterprise’s ability to efficiently evolve and weather any dangers that constantly arise in the volatile commercial environment.

In my book, “CFO Techniques”, I have devoted an entire section (Part VIII) to strategies and planning as crucial components of CFOs’ and controllers’ functionality – the important responsibilities that change financial managers from bean-counters to CEOs’ executive partners. Participating in analysis of opportunities and construction of well-devised action scenarios offers us a possibility to affect companies in the most significant way. Remember, that those executives who let companies run their course without looking into the future and carefully plotting their steps for further development, leave the businesses vulnerable in the face of the fast-advancing competition.

On the other hand, crisis management efforts applied in situations that present themselves without any warning are of extreme importance as well, particularly in small and midsize businesses, which are highly susceptible to the slightest deviations in market, financial, economic, and political environment. Moreover, these companies frequently have less than sufficient reserves to tide them over tough times. Implementation of a disaster-rescue mission requires high level of composure and rationalization. Those who’ve read my “About” note know that I consider my “fire-fighting” skills to be the most valuable to my employers and clients.

It is a mistake to think, though, that even a very experienced CFO can wing it without contemplating some sort of advance “what-if” scenarios. In fact, a crisis management policy is just another form of a strategic plan. On top of that, proper preparation for emergencies requires broader expertise and deeper knowledge of various commercial, marketing, technological, financial, legal, and organizational matters.

The truth is that a successful executive must be capable of devising a carefully-weighed and calculated strategic development plan with all visual bells and whistles her digital arsenal can afford, but in her special folder she always keeps a set of comprehensive tactical procedures for effective extinguishment of fires and post-disaster survival.

CFO Folklore: Audit Joke of the Month


Images-2It's time for CFOs to get in touch with their auditors and schedule preliminary work, field examinations, and so on and so forth.  Some diligently proactive CFOs send auditors estimates of their receivables, payables, and inventory balances even before the end of the year.

One such CFO receives a phone call from a middle-level auditor assigned by the CFO's primary contact John, the partner of the CPA firm, to do the preparatory legwork.

"Hi, my name is Luis, I work for John."

"Hi, Luis, nice to meet you over the phone."

"Based on your inventory levels John has decided that we must do a physical observation test at least at one location."

"That's fine.  Did you, guys, decide which one?"

"It's the one with the highest value of the stored product.  Hold on.  Let me see the name on your schedule…"

"Don't bother.  It's the Hudson Tank in Bayonne, New Jersey, near the port."

"That's right."

"Ok, I will make arrangements for the facility's management to escort you.  We have no activities scheduled for December 30th or 31st, so you can take the gauges' readings on the 30th as your year-end control."

"Well, will they be able to take the product out?"

CFO is silent for a few second, digesting the absurdity of the question and summoning her will power to prevent herself from laughing madly into the receiver.

"Luis, the product is a LIQUID chemical.  THAT'S WHY IT'S IN THE TANK.  The only way it can be taken out is if it's pumped out into another tank, or poured out onto the ground, or into the river, if you prefer that."

"So, I will not be able to actually see and count it?"

"Well, Luis, if you are really nice to the ladies who work there and bring them some Champagne for the New Year's celebration, they may let you climb onto the tank and dive in.  But I am warning you, Luis, it's over 40 feet tall.  Are you a good diver?"

 

A CFO’s Democratism Gets Tested


Worker Bee In most smaller companies, CFOs and controllers include general HR functions into their scopes of responsibilities – that's a given. The flat organizational structures, though, with their spatial and psychological proximity of top executives to the staff, play peculiar tricks on those in charge of the company's human relations.

Very frequently a CFO takes a role of a buffer between the owner/CEO and the rest of the company's employees. She feels obligated to soften the impact of the direct dealing with frequently harsh and hard attitudes of the boss.

I've said it before and I'll say it again: more frequently than not entrepreneurs don't have an experience of ever being in a position of an employee and, therefore, they have very little understanding of the staff's mentality. On the other hand, a CFO maybe a right-hand person now, but she is still just a salaried employee, most likely grown into her current status by climbing through the ranks. If she is a decent human with a conscience, she is sensitive to the needs of valuable employees and cares about their well-being (if they are useless, let someone else care about them).

It's likely that an excellent CFO would enjoy a comparatively preferential treatment by a CEO: more disciplinary leniency, nicer attitude, better perks, general amiability, etc. When it comes to other employees, their efforts and achievements may be remarkable, but they are not as evident to the boss, and that reduces their value in his eyes. I've had one CEO openly tell me that if I want a certain benefit (let's say flexible spending account) for myself, he would be fine with obtaining it, but he did not care about the rest of the "worker-bees."

So, the CFO takes it upon herself to protect other employees from undue tyranny and act as their speaker when it comes to betterment of the employment conditions, whatever they are: raises, bonuses, vacations, benefits, etc. Sort of like a representative of the XYZ Company's employees union. And when she discusses this situation with her friends and family, she expresses her disdain for the undemocratic ways of her boss, taking pride in her efforts to right the wrongs.

Now imagine such a CFO taking a position with a new company – small, young, still pretty much in development stage. The owners are very liberal and treat everyone like equals. Moreover, the CFO is the last person being hired. Those few other employees have been there from the start. Nobody needs protection. Furthermore, there is one person who has been there the longest, starting as a CEO's assistant. Not that she gets any special perks or something like that, but she definitely feels very secure.

This should make the democratic CFO very happy. After all, wasn't she fighting for equality of other employees all the time before? Yes, it's nice; wonderful, really; exactly what she hoped to find… Except that… Being "the chosen one" was kind of a guilty pleasure too, an enjoyable self-esteem booster. And the gratitude of others for all that blow-cushioning effort was very rewarding as well. As important as the democratic principles were to this CFO, the old tyranny is somewhat missed.

That's how we, humans, are. For various reasons and purposes, mostly subconsciously and without any malice, we create these little lies that alter our self-image and other people's perception of us in one way or another.

It reminds me of my UK friend of many years, Gerald Hamer's, revelation concerning his constant bitching and moaning about endless international traveling he had to endure throughout many years of his impressive career as financial broker and adviser. "In truth," he said, "deep inside I love the goddamn airports; the sub-par plane food; the inevitable delays; god-forsaken Yakutsk, the coldest city on Earth, with its diamond mines one week, and unbearable humidity of Bahrain another. I wouldn't want it any other way."

So, all you, democratic CFOs out there, work as hard as you can and fight for your employees' well-being with all you've got, but be honest with yourself: you enjoy being special, the Most Valuable Player in the field.

Joke of the Day


Based on an actual conversation.

New CFO: "Half of your in-transit inventory is not recorded on the books, because you have not followed the cost-recognition rules since you started this company six years ago."

CEO: "The books? Which books? Do you mean the Excel spreadsheet we call Order Book?"

New CFO (doesn't know whether to cry or to laugh): "Your books – your financial records! They are not in accordance with GAAP."

CEO: "GAP? What that cheap store has to do with our inventory?"