Tag: partners

Snippets from a Corporate Party: Disappearance of Secure Professions


Poor-doctorThe Frustrated CFO goes to a corporate party and during cocktails mingles with bankers, all kinds of brokers, execs from various industries, business owners, etc.  Everyone exchanges cards, handshakes, hugs, or cheek-pecks depending on the length and the warmth of the relationships.  Some people talk shop, some solicit business and/or advice, some boast about themselves and/or their children, some discuss the Super Bowl without much enthusiasm (it's NYC after all – we only got excited when we saw our very own Eli Manning in the stands watching the event turning miserably for his brother).  Many, of course, discuss the weather – it has been an appropriately cold winter, which makes the clueless schmucks unhappy.

The Frustrated CFO does her duty of actively participating in this business-social hubbub.  She doesn't even have her cards out, because in this room everyone knows her and she knows everyone.  This is great – no pressure, no awkwardness, no need for ice-breaking: she freely rotates herself around the space joining a conversation here and there, mostly listening to others chattering away. 

The party is not very large – just 60 people.  So, it is a testimony to the prevalence of the trend that  she catches two independent dialogues, which support one of her it's-only-gonna-get-worth observations: that there is no such thing anymore as a "secure" profession.

A VP of Acquisition and Investment from a Commercial Real Estate Brokerage humorously tells a story how at a recent RE conference she met a middle-aged gentlemen with a double-sided business card.  One side introduced him as a licensed commercial property broker and another… as a cardiologist.  He told her that he'd been a practicing heart specialist for 25 years before getting into selling corner delis, Korean restaurants, and warehouses.  People didn't know how to react and, therefore, they snickered – a typical response.  Someone said, "I wouldn't trust that guy with my heart."

Well, I've been saying for some time now that HMO's together with malpractice insurers did a pretty thorough job of downgrading the medical profession from one of the highest-earning trades to a regular struggling-to-survive occupation.  This is why it's so hard to find a good primary physician nowadays: the insurance pays $8-$25 monthly allowance for PP patients and the only appointment you are allowed to bill to the provider is the annual full physical.  Every single privately practicing doctor that I know, including specialists, feels obligated to tell me how he is about to lose everything and how he cannot afford his kids' tuition anymore.  But I have to be honest: A cardiologist going into real estate?  That was surprising even to me.               

In another conversation The Frustrated CFO's corporate attorney was explaining how they had to push one of the partners out because "he wasn't bringing enough business."  His arrangement gave him rights to share in the combined profits, while the other partners didn't feel that he was pulling his weight.  So, they simply didn't renew his contract.  Now, the attorney said, the ousted ex-partner went to work for a law firm that kept all attorneys strictly on the eat-what-you-kill basis.  No more sharing in each other's efforts – if you don't bring any business on your own, you don't earn anything at all. 

Well, this has been a shift in many partnership-based professions: not just law firms, but also accounting, managerial consulting, architecture & design, web development, advertising, and some-such companies.  It's not that important anymore whether you are a good lawyer – it's all about the salesmanship, the "rolodex," the ability to snatch a new client.  I keep waiting for the time when these entities start hiring sales execs without the required professional backgrounds and pay them humongous bonuses for selling services fulfilled by someone else.  

As recently as 10 years ago parents still thought that as long as they force their children into being a doctor, a lawyer, an engineer, or a money manager (regardless of the kids' actual talents and dreams), they did their "duty" of making sure that these young men and women were financially comfortable and could provide for themselves and their future families.  But it's not true anymore: there are no more cushy jobs, no security in any profession, no guarantees. 

CFO Folklore: “The Servant of Two Masters”


440940251img1_mediumTwo-headed bosses are common when people work for businesses founded by relatives, which, I am sure, can be a source of fascinating undercurrents and rivalries.  I invite my readers to share relevant stories.

I, on the other hand, worked (more than once) for equal partners who were not related.  Each of the duos consisted of individuals so different, it was a miracle they stayed in business together.  As a CFO, forced into the middle of the co-owners dynamics, I was able to observe common behavioral tendencies in the bosses themselves and people around them.

Business partners' alliances are usually symbiotic.  One is an idea generator, the other is an implementer.  One is brains, the other is money.  One can close a deal in seconds, the other makes sure the company performs.  They always complement each other, or they wouldn't be in the trenches together. 

Either will squeeze all juices out of you, and yet their personalities differ just as much as their abilities.  One is usually more diplomatic, better with people, logical, frugal.  The other is brash, careless, erratic, a lavish spender.  They don't see eye to eye about the majority of business issues and frequently talk to their CFO or Controller separately, presenting contradictory positions.

260 years ago, in "The Servant of Two Masters," Carlo Goldoni depicted the delirium of working for two employers who try to find each other without knowing they live in the same hotel.  Sounds familiar?  Poor Truffaldino is so anxious, he develops a stutter.  Imagine the hilarity!  Well, at least he got double wages.  When your single-salary job depends on maneuvering two conflicting bosses, you don't feel like laughing. 

Most people end up aligning themselves with one of them.  Sometimes, it works out in a natural way: if one owner oversees Production, while another spearheads Sales and Marketing, it is obvious where VP of Ops and VP of Sales allegiances will lie.  

Even when it's not clear-cut, people have a tendency to navigate with their issues toward the boss who is perceived to be "nicer," regardless of his preparedness to make relevant decisions.  As the result, you may end up with a wrong solution, or the issue is brought to the other owner's attention anyway; only now he knows that you tried to bypass him.   Either way, you are screwed.

CFOs and Controllers should not form any alliances when they work for two partners.  When monetary matters are concerned, both must be kept in the loop.  In super-important cases, get them into the same room, whether they like it or not.  I am known for bringing bosses into the office from their summer residencies in the middle of July, when I had to.

Of course, you have to earn your right to do so with hard work and authoritative success.  You also need to be very diplomatic with both of them – either must think you prefer deal with him and inform the other out of courtesy.  It takes Machiavellian skills to boss the bosses.  Otherwise, you will end up stuttering, like poor Truffaldino.