Tag: CFOs

CFO Folklore: Defensiveness and Excuses


Coyote-Canis-Latrans-Puppy-28811856-0 It's funny how we, humans, manage to degenerate powerful natural instincts into regressive psychological traits. Look at that little coyote pup.  Something has attracted his attention.  He is in full alert, assessing the situation, deciding if its dangerous; ready to fight or flight – a perfect display of a healthy defense mechanism crucial for survival.  

People are granted the same insitincts.  Of course, those of us living in "civilized" conditions are rarely presented with real danger.  On the other hand, mentally we are constantly put to test.  The instincts are pushed into psyche, and there, they deteriorate into Freudian ego defense mechanisms, which can get neurotic and pathological.

CFOs and Controllers deal with defensiveness and rationalization (aka making excuses) all the time.  People become defensive at the slightest hint of criticsm, which frequently exists only in their imagination.  They don't understand that instead of helping them to survive, this degenerated mechanism makes them more vulnerable by exposing their insecuruty, fearfulness and anxiety.

A few years back I had an employee who was the best expert of trade finance documentation I've ever met.  At the same time, he was an incredibly difficult person.  Eventually I found out that this guy had a misfortune of being raised by an extremely critical adoptive father.  As unlikely as it sounds, in the early 80s, just 20 years old, he got hitched to a woman who hated everything about him.   As the result, he developed a severe case of defensiveness. 

Just invinting him to my office to discuss a business issue was enough to put him into a state.  Walking into my door, he already looked like an angry animal forced into a corner and ready to bite.  It would usually take me at least ten minutes of casual small talk to bring him back into normality, before I could address the matter at hand.

Of course, on few occasions I needed to point out a mistake or an inaccuracy.  What a nightmare! He wouldn't let you finish the first sentence: "I am swamped!  You gave me too much work!  It is impossible to deal with that bank!  I will not let you blame me for this!  " he would shriek, even though it was never about the blame.  His desire to shield himself from the imaginary threat was so strong – like a child, he would cover his eyes with his hand, avoiding your eyes.  He looked helpless, pitiful, and guilty.  Most importantly, the problems remained unresolved.  It was really painful.

Here is my advice: don't get defensive when you are criticised, justly or unjustly.  Listen.  Think.  Evaluate.  Maybe you will hear some constructive insights.  Maybe you could have done something differently and achieve better results.  Recognizing that will give you an opportunity to (1) disarm your opponent by owning up to your mistake and (2) find ways to avoid this situation in the future.  At the very least, you will save yourself from an emotional sparring match that cannot resolve anything.  Trust me.  I've been there – on both sides.

Bean Counters vs Breadwinners


I hope my fellow CFOs and Controllers don't mind my calling us "bean counters."  After all, I am one of them and, hence, it's Ok.  It's like with all derogatory terminology – if you belong to the group, you are allowed to use it.  And if that name-calling has upset you, beware – this is just a beginning.

The truth is, many of my peers are just that – the bean counters limited to their narrowly defined tasks, thus contributing to the frequently observed conflict between finance and accounting on one side and the revenue generators on the other.  Both sides have to tolerate each other, but it is a precarious armistice. 

CFOs and Controllers think that sales and operational people don't work too hard, while getting high performance-based compensation.  They are loud and overconfident, while not necessarily well educated and intellectual.  They are never in the office, taking long lunches with customers and prospects.  When they are in the office, they are on the phone most of the time.  They take paid trips to foreign lands and get car allowances for their domestic travels.  They jeopardize the company's well-being with their grandiose "strategic" deals that end up losing money.  Most importantly, they wouldn't be able to do anything without our funding their transactions, controlling their profits, calculating their commissions and reporting their results.

On the other hand,  VP of Sales and COOs think that they are the moving gears of the company.  They despise the bean counters for stifling their "important" deals with "useless" profitability criteria, for knowing how much money they make and for suspecting that there is nothing behind the confident appearance – just the rolodex and lots of air.  Most importantly, they feel that their unique ability to bring business is not respected enough.  Money is not everything, you know.      

The fact is, however, that a sales (or procurement, or operations, or trading,) ace does possess a truly unique ability to generate revenue with skills that frequently have nothing to do with education, professionalism, or intellectual expertise.  There is a reason you don't need a college degree to obtain trading, brokerage, insurance, or real estate licenses.  You definitely don't need an MBA to become a VP of Sales.  These jobs require intuitive abilities and social skills of a very special sort.  Trust me, not too many people are born with those talents.   The real great ones are quite rare. 

It must be said that I am one of the few CFOs who always support the people responsible for bringing business to the company, even if they don't like me.   Many of my colleagues forget that all our functions are secondary and subservient.  Everything that we do either facilitates the breadwinners' success (and failure) or reports it.  That's all. 

Without them I wouldn't have my job.   They are the ones responsible for generating enough dough to cover my salary, benefits and bonuses.  And if I could do what they can, I would have. 


Writing Angry Letters Is Therapeutic, Sending Them Out Is Foolish


I remember reading Dale Carnegie's How to Win Friends and Influence People when I was about sixteen years old.  Early in the book, he talks about dangers of criticism and gives examples of written but unsent letters: by Abraham Lincoln, Theodore Roosevelt, Mark Twain.  It made a great impression on me.  I cannot avoid being critical entirely – the tongue is difficult to control.  However, I made a rule of letting stinging letters to stew for 2 days.  Then I re-read them.  If I still think it necessary, I send the letter.  90% of the time it doesn't get sent.

This is a recurring topic for management training gurus, self-help writers and bloggers.  They say,"Write an angry letter, if it makes you feel better, just don't send it." Unfortunately, no matter how many times people hear that advice, they write and send flaring mail, causing commercial and social damage.  If the problem was not persistent, there wouldn't be any demand for products I have described in the Cautionary Tale About Artificial Intelligence Progress.

As CFOs and Controllers, we deal with a lot of irking and ireful people.  With my firm believe in therapeutic qualities of writing, I always advise to let the paper or the monitor to bear your negative emotions.  As supervisors we also have to manage the anger of our subordinates.  How do we prevent hostile writing from going out?

In the times of hand-written letters, it took longer to complete them.  Plus, you had to stuff, seal, stamp and post the envelope.  By the time you were done, you might have changed your mind about the whole thing.   Dictating a letter worked even better.  Saying the angry words out loud had a potential of making you sound ridiculous even to yourself,  leave alone those girls in the typing pools.

Emails made us more vulnerable to our impulsiveness.  In the beginning, at least the ISPs were slow enough for you to recall the unwanted message.  Nowadays, soft keyboard, easy mouse, and fast internet create a volatile combination.

Here are few preventive measures I can recommend:

1.  Always leave "To", "Cc" and "Bcc" fields of the email header blank until you are absolutely positive you need to send it.

2. Re-read your letter at least three times right away and then yet another time later.

3. I have previously described my habit of putting stick-ons, stating "Please re-read all your emails before sending them out," on the sides of employees' monitors.  If you know that you suffer from the short writing fuse, then stick one on your own monitor as well.

4.  Whether for my electronic or conventional mail, the 2 days stewing rule works very well.  You should try it too.

5.  The Frustrated CFO actually offers a healthy alternative allowing you to go a step further than just writing your message.  Sharing your stories here lets you spill your frustration onto the virtual page and actually send it.  Not to the object of your anger, but to me – an understanding and compassionate reader.    

CFO Folklore: The Home Front


Images-1 I touch on the gender inequality among financial execs once in a while – an obligatory topic for a female CFO/author/blogger.  I mean, everyone writes about it.  Entire institutions and organizations compile sociological studies dealing with these issues.  None of it seems to be creating any changing momentum, but hey, at least someone is willing to pay the researchers their salaries. 

The interesting thing, though, that most of the time these topics (including my earlier posts) deal with the social, rather than practical, aspects of the phenomenon.  People talk about advancement rates, compensation levels, female-to-male executives proportions, etc.  In a very scientific way, we say: all things being equal (education, achievements, intelligence, etc.), women still don't get a fair shake.   And nobody talks about the fact that, on a practical level, things are never equal between men and women, who strive for, or already achieved, top job positions.

First of all, women by nature are more conscientious and responsible than men.  That is why we have higher percentage of female straight "A" students both in high schools and colleges (yet, there are more male valedictorians!).  Secondly, women know only too well that they are at disadvantage due to the simple fact that they are not men.  That makes them work ten times harder than any man in their position would.  So, in truth they get rewarded at lower rates not for the equally good work, but for the job done much better.

But the biggest practical inequality occurs on the executive's home front.  I remember having a friendly airplane conversation with my CEO, on our way to a meeting in Germany.  At one point he said that I was the hardest working person he knew besides him – he honestly believed that he worked as hard as I did.  Of course, he was talking about the job itself.  Well, I thought that even at that I worked much harder (I did not take Friday's off during summers), but I chose to turn to more obvious facts of life.

I asked, " Who prepares your suit, shirt and tie for tomorrow every evening?"  "My wife," he said.  "We frequently work until 9 or 10 pm, is the dinner ready, when you come home?" "Yes."  "Who writes checks?  Who deals with repairmen?  Who talks to teachers?  Who buys groceries? Who takes kids to the doctors'?"  "The wife" was the answer to all the questions.  "Now, who do you think does all that in my home?"  

He knew the answer, of course.  So, every day I was working my executive job, let's say, just as hard as he did, plus his wife's job.  And that's true for most of female CFOs, whether married or single, with or without children. 

Look, how many unmarried male CFOs or Controllers you know?  I don't know any.  Even if their wives leave them, they get remarried very quickly – someone needs to take care of the home front.

On the other hand, a woman expected either to give up her personal life for the career, or hide it away, as if she does not have any.  It is especially true for those female executives who work in small and midsize companies – the salaries are not large enough to afford a Mr. Mom of a husband.  So, we are talking inequality cubed: the majority of women work harder, plus cover the home front (or give up life outside of the job), and still get paid and promoted on a much smaller scale. 

Here is the funny part.  At the end my boss asked, "How come you still read more than I do and go to the theater all the time?"  "Because I don't sleep," I answered.

Job Search: Out of Work for a Long Time


The media, politicians and economists are trying to convince everyone that recession has ended many months ago.  Well, good for recession, but from what I observe, a lot of folks are out of work.  There have to be a reason why unemployment benefits are extended up to 72 weeks in most states. 

Let's face it, the "employment gaps" are far longer now than they have been in many years.  It is especially true for CFO's and Controllers whose small and mid-size employers went out of business or contracted to the level of not being able to afford senior management.  Even though I never believed the old recruitment fable that every $10K of your desired compensation translates into one month of job hunting, the basic rules of statistics prove that it takes longer to find a high level position simply because there are less of them.  Now the available openings are further reduced by the economic contraction.  There are government aid packages designed specifically to stimulate hiring by small businesses, but it will take long time before we will see significant impact.

Knowing all that, nevertheless, does not prevent recruiters and HR managers from asking you point blank, "Why you have been out of work for such a long time?"  They know why.  They ask because they want to see how you handle the question.  Your ability to present yourself in the best light during an interview and explain the employment gap on your resume in the most appealing way is a very sensitive issue.

That is why I highly recommend that everyone, even those who are not actively looking at the moment, read The Ladders' article Why Have You Been out of Work So Long?

I don't always agree with their material, but what I like about The Ladders' advice pieces is that they give us the point of view of the hiring professionals, the very people on the other side of the table.   Those on the job market need to cater to their expectations and their mind-set.  This particular article has the most straight-forward advice on the employment gap issue I have ever seen.

I have to say, however, that almost until the end they got me worried because it seemed that the article practically recommended to make up a story to fill the gap: say whatever,  except that you were just looking for a job.  Only in the last paragraph the actual activities are implied.

And I would like to elaborate on that.  Please, don't make up stories – you never know where that may lead you.  Nobody looks for a job for 12 hours every day.  So, use your spare time to occupy yourself with one of those recommended activities, and then you can tell people about them.  Even if you buy a SOX manual and study it on your own, you can say that you have significantly expanded your internal control compliance horizons.