The Frustrated CFO

Quote of the Day

"We don't know a millionth of one percent about anything."

                                    Thomas Alva Edison

"Hegelian Dialectic" and Human Relations

This famous triad, incorrectly attributed to Hegel and even called by his name, was actually developed earlier, in the late eighteenth century, by the Neo-Kantian Johann Gottlieb Fichte. It's an absolutely brilliant concept:

The thesis is an intellectual proposition.  The antithesis is simply the negation of the thesis, a reaction to the proposition.  The synthesis solves the conflict between the thesis and antithesis by reconciling their common truths and forming a new proposition.

This statement reflects the reality of human consciousness with a remarkable precision and can be easily illustrated with human relations.  We come to every moment of our life with some expectations of what reality around us is (thesis). When people, for one or another reason, act in unexpected way, a gap between our expectations and reality opens (antithesis).  Our impulse is to react to this gap in such a way that it closes:  we catch up to the new reality and act accordingly (synthesis).  Now, the new understanding of reality is formed (new thesis) - and so on, and so forth.

Understanding this dialectic helps to deal with unexpected changes of our environment as well as seemingly unpredictable and unexplained human actions.  Giving into an automatic reactions without understanding their reasons frequently results in regrettable consequences.  Reconciling the thesis and antithesis must be a thoughtful process. 

Fichte's primary philosophical interest was self-consciousness as a social phenomenon.  He argued that people can come to know that they exist only through reaction of others to them.  This is another fascinating subject of human relations.  If we move from philosophical sense of self-consciousness to the narrower psychological meaning of the word, we can say that people don't become self-conscious in isolation - it's the presence of others that makes us unduly aware of our appearance, behavior, speech and actions. 

Careers of many financial executives have suffered from acute social ineptitude rooted deeply in painful self-awareness.  The pervasive image of accountants as dull and uninspiring professionals, does not help the situation either.  Recognizing that it is not the people around you, but your own fear of them that cripples your advancement, may help you.  Alternatively, you can try what all acting teachers tell their theater students with performance anxiety - just pretend that everyone in the audience (or people around you) is a human-size chicken.

   

Woes of an Overwhelmed CFO

This quote has been attributed to different people, frequently (and erroneously) to even Andrew Jackson, but in fact it was John W. Raper who said,

"There is no pleasure in having nothing to do; the fun is having lots to do and not doing it." 

Oh, man, he sounds healthy!  What a laid-back guy!  No pressure gets to him?  Where do you get that kind of attitude?  I want some.

Because, in professional life of a frustrated CFO or Controller having lots to do and not doing it spells disaster, anxiety and depression, not fun.  As the matter of fact, "not doing it" is frequently a symptom of a psychological condition experienced by high achievers with multiple responsibilities. 

Have you been there, in that scary place?  There is so much to do, your subconsciousness tells you that there is no way all these things can be done by you.   Your entire being refuses to embark on all these tasks - you stop doing everything.  You are so overwhelmed you become paralyzed.  Everyday you tell yourself that tomorrow you will get on with it, and then you close your door and play solitaire all day.  In other words, you are on your way to a fully blown burnout.

And if you work in a small or mid-size company, no outside help is coming:  there are no Employee Assistance Programs or Stress Management Trainings.  Nobody will even notice that something is wrong.  You are on your own! 

But, wait a minute...  First of all, take a fucking Xanax and force yourself to use the moment of relaxation it gives you to not do anything at all, but think about your situation.  Do it NOW! 

Aren't you the self-reliant person who always handled your own problems and overcame all obstacles in front of you.  How did you get here in the first place?  How did you come to occupy this executive position?  Where is that person?  There must be some grains of him/her left in you.

Now, take your favorite yellow (or gray) notepad and write down all those tasks that terrify you so much - beats playing computer games.  This very long list is your basis.  Now start the next list. Title it "Delegate" and transfer here all those tasks you can delegate to your subordinates, or other departments.  Every time you list an item to delegate, cross it out on the main list. 

And don't tell me you cannot delegate anything - this is an emergency, you can and you must!  If you are a one-person show, this is the right time to talk to your boss(es) about hiring help.  Go to them with both lists - they might "surprise" you by saying they had no idea your were so overwhelmed.

The remainder of the base list needs to be further divided into four parts:  

1. Top priority (today and next three business days)
   
2. Short-term plan (next two weeks)
3. Long-term plan (next six to eight weeks)
4. Tentative plan aka the back burner (next 4 months, or so).

The only list you are going to look at now is that much shorter Top Priority list.  Calculate how many tasks you have there - let's say 8.  If you work like me, your working day is at least 10 hours.  The 4 business days allotted to this list is 40 hours.  This means you have 5 hours for each task.  That's it - start working on the first one.    

Still cannot do it?  Then you are in need of serious help - find yourself a good doctor.

You can find more advice in this post Time Organization as Anti-Frustration Tool.

Quote of the Day

" You can't measure time in days the way you can money in dollars because every day is different."

                                                                Jorge Luis Borges

Futurenomics of Higher Education

People laugh at me when I talk about higher education in negative terms.  And I understand - it sounds hypocritical coming from someone with multiple academic degrees.  But times and environments change.  For my generation, higher education was far less expensive, more intellectually challenging and somewhat more rewarding than it is for young people today. 

Now colleges lower their educational values, so that the degrees seem more intellectually accessible.  The individual thinking is not cultivated anymore and slowly disappears together with independent studies.  It became all about mechanistic skills of test-taking instead of true intellectualism.   

Except for a few institutions still adhering to their academic values, most colleges' coursework does not require any reading beyond the textbooks.  This is how we end up with scores of degreed "professionals" who never read.  My famous pet peeve is having young subordinates with accounting degrees who don't understand the fundamental principles of double-entry bookkeeping. 

So, for $200,000 you get a low-grade minimal intellectual input and the promise of... What?  Nowadays, nothing.  Ok, so wealthy parents may be willing to pay this kind of money in order to delay their children's exposure to the doldrums of the adult life - as far as I am concerned, not a bad idea if you love your children and can afford to do so.  But other than that - it's really just nothing but a bad investment.  

Yet, more and more children continue entering colleges, ending up with unbearable debts.  Some are locked forever in terrible jobs, others are not capable of getting a job at all.   And people still insist that the degrees open some highly desirable doors?  Why is that? 

Because, of that stupid club mentality that pollutes every aspect of our lives.  Hiring managers and recruiters, themselves college graduates, will look down on those without the degrees, regardless of their abilities and knowledge.  This idiotic pattern has to change.  Not to boast or anything, but I always look for a spark of an intellect in a candidate's eyes before I look at the Education section on his resume.     

At the same time, we cannot deny the fact that having graduate and post-graduate degrees inhibits entrepreneurial potential of many bright and capable people.  I have been saying for years that the possibility of being paid good wages prevents people from entering the entrepreneurial route.  It's too scary to gamble on your business success if you have a steady job.   Thus, instead of building small and midsize businesses that could revive our economy, kids "all go to the university, and they all get put in boxes, little boxes, all the same." 

But this point becomes even less relevant now: those highly paid jobs opportunities will not be there in the near future.  Young people, please, you don't have to follow the rest of the sheep.  Think for yourself; let your creativity take you on the self-fulfilling journey.  And you don't have to strive to be rich and famous overnight either - not everyone is meant to be Gates or Zuckerman.  There is nothing wrong with building your own small business that will provide you with middle-class living, while creating jobs for other people on top of that. 

 

 

Arnold Schwarzenegger: Just Your Average Opportunistic Boss

Who can resist this?  The Governator has cheated and lied?  Noooo, you are kidding!!! I am sure millions of bloggers hit the keyboards running.

But wait a minute, I already wrote about this - just little over four months ago: CFO Folklore: When Your Boss's Secretary Becomes His Girlfriend.  Well, not about Arnie per se, but about bosses having affairs with their employees. 

Obviously, it was based on incidents I have witnessed in business, as a financial professional.  I wrote the piece from the inside perspective of frustrated CFOs and Controllers, who are forced to deal with that.  Yet, I used very generalized terms, because it is the most typical type of infidelity. 

I don't think I have to remind you about all political scandals with exactly the same premise.  I never thought that the only reason these incidents ignited public attention was people's relishing the dirt.  It is the relevance of these situations to every-day life that attracts people: "Oh, he is just like that dick I work for."  As the matter of fact, that January post is the third most popular item on this Blog - people relate.

There is always an enterprising (rarely smitten) young and ambitions intern/staffer/secretary/page (she or he) in the office of a powerful older man, who,  driven by desire to excel in life without too much effort, will pursue the boss with all her (his) youthful enthusiasm.  And of course, the older person is weakened: his male nature already has a propensity for imprudence; his morals are corrupted by power; he is ridden with temptation to taste something 20-25 years younger...  "What a poor man to do?"

As the matter of fact, small business owners have it better than more powerful public figures like Arnold Schwarzenegger or Bill Clinton.  The latter risk public humiliation and popularity votes; the former have almost nothing to fear in their little absolute monarchies.  

The truth is, I liked Mr. Schwarzenegger up until he went into politics.  I admired his drive to rise above his muscles.  He actually always seemed liked a pretty decent man to me - someone who, if he fell out of love, would just come clean, divorce her and then go on making babies with another woman.  I should have known that as soon as "political reasoning" kicked in, lying would commence.  That they kept quiet, so he wouldn't loose his supporters - it's just disgusting.  

It is uncanny, but the former action star's news of an out-of-wedlock child, hit much closer to the real-life prototype of Boss and His Secretary story I wrote in January - I've just recently learned that the secretary in question is actually pregnant, while the boss is still legally married to his wife of twenty years.  

I would like to propose a little contest.  My readers, if you know of a single male business owner over 50 year old, with the staff of more than 20 people, who never had any indiscretions, please let me know.  I will sing praises to him in these virtual pages.

Quote of the Day

"Forgive your enemies, but never forget their names."

                                            John F. Kennedy

The New Economic Reality of Unemployment

A couple of weeks ago New York Magazine used  The Hiring Gap chart (see picture) as their Intelligencer topic.  It compares domestic employment powers of ten "most valuable" ( in terms of their market capitalization) public companies in America in 1964 (converted into 2011 dollars) and now.  Even though the numbers on their own are very striking and Andre Tartar's few-lines of commentaries and footnotes cut right through the fact that 

"being a top American business no longer... means employing lots of American workers,"

the data left my calculating mind somewhat unsatisfied; it begged for further interpretation.

First of all,  it's the damned "market capitalization" crap, which nothing more than a perceived value of the company by investing public - the very same public that cannot evaluate companies on its own and follows the leads of their brokers, WSJ analysts, CNBC (especially if they are doled out by sexy Maria Bartiromo or engaging Jim "Mad Money" Cramer), etc.  Thankfully, there is an instrument we can employ to make these numbers somewhat more real - Price-Earnings Ratio:

  Here is the new ranking of the 2011 listing, based on the companies' earnings.

  Only three giants retained their places in this modified view: Exxon, Berkshire and Google.  And, by my standards, those three are overpriced anyway: any stock with P/E ratio higher than 11 is overpriced.  Google with 20 - ridiculous.  Of course, it's not as bad as some other stocks, like Wynn Resorts, for a example, with a preposterous 60.  It always shocked me that people buy stocks like that and then act all surprised when their savings go, "Bye-bye." 

Another interesting angle of the chart is its reflection of the fundamental changes in industrial mix of Large-Cap companies, which speaks volumes about this country's economic and social environment.  The only two companies present on both lists are GE and IBM.  In 1964 we did not have any financial institutions big enough to claim not just one, but two spots in the top 10.  The three tangible goods manufacturers that drove the US to its economic dominance in the 60s are gone off the list - GM, Dupont and Kodak.  So, is the telecommunication super-power of the time - AT&T.  Now, we have Apple and Microsoft, dividing the world into two camps of PC vs. Mac users.  And isn't it comforting to know that as far as our OIL-dependence is concerned, we are still at the same point as we were nearly half a century ago?

Now, the focal point of the piece - the dwindling number of the jobs infused by these companies into American economy.  In accordance with proper statistical rules, let's explain away the two companies with the highest and the lowest number of workers.  Walmart employs 2.1 million of people, but it is irrelevant, and not because their average salary rate is one of the lowest in the country, but because their expansion put out of business smaller chains and thousands of independent retailers.  Google, on the other hand, generates the majority of its revenue without any human participation, so I am surprised even by the 24K number.

Look at our beacons of stability, though - GE's number practically did not change and IBM employs nearly three times more people now than they did 47 years ago.  Holla to that!  The rest of them... well, we all know the story - there are three reasons for jobs going away and never coming back:

1. Technological advancements contributing into increased efficiency.
2. Outsourcing = jobs going abroad.
3. Globalization of manufacturing and support services = jobs going abroad.   

At the time this issue of New York Magazine came out, the unemployment rate was at 8.8%.   Now it's 9%, and I believe that unless something changes fundamentally in our economic structure, it is only going to get worse.  The new reality is that we cannot look at the giants whose operations financed through their publicly-traded stocks as the source of new jobs.  

As long as investors listen to analysts' opinions and follow the "trends," the large companies' executives will continue applying their hardest efforts to minimization of costs in order to preserve their multi-million compensation packages.  The workload will continue being exported abroad and jobs will disappear.

At this point, we can only rely on small and midsize American business for the influx of new jobs.  That's where the efforts must be concentrated: helping the existing smaller companies' survival and stimulating creation of new entrepreneurial businesses.

Those who read this blog consistently know that I am developing a product that will help small and midsize businesses in their daily struggle for success, assuming I manage to solicit sufficient venture capital.

How to Read People Through Their Communication Styles

If you are a business executive, CFOs and Controllers included, you cannot avoid the necessity of being able to grasp people's motivations based on external behavioral indicators.  Every person we encounter has his own hidden agendas and incentives, which we must decipher in order to be successful.  I previously talked about the effect people's priorities have on their attitudes (see Priorities and Attitudes).  It is a proven fact that humans' motivations can be read from the way they move, talk, look at you, even from the poses they strike. 

Filmmakers frequently speak about the subtext.  One of the basic rules of screenwriting is "show, don't explain."  Some theorists attribute the importance of this aspect to the visual nature of cinematic art. But the truth is exactly opposite: the ability to read subtext is natural.  This is what makes a movie believable and real to the audience: people watch an actor perform (especially, if he is a good actor) and pick up on the little clues of the character's inner-workings, because this is what we do in real life too.  

Subconsciously, we are all capable of recognizing particular body movements and voice intonations as expressions of motivations and intents.  The trick is to find this innate ability in yourself, isolate it, bring it into the prefrontal cortex, perfect it and use it to your advantage.  Start by observing people's communication styles - the fastest way to identify their intentions, to read into their primary concerns.

When people speak in a staccato style and quickly move from one subject on to the next one, what can we tell about their intentions?  Wouldn't it be reasonable to assume that they are determined to minimize the time consumption of every task they undertake or direct, that they driven by desire of accomplishment?

On the other hand, someone who apologizes for expressing his opinion three times within the same sentence and asks to be corrected if he makes mistakes, obviously is striving for amicability.  The ones who wait for your cues or keep quiet all the time are obviously unsure of themselves and don't want to be noticed.  Yet, if someone doesn't say anything, but flares his nostrils and drums his fingers on the desk, don't mistake him for anything else but the passive-aggressive about to explode.  And so on, and so forth.

So, let's go back to the movie-making.  Of course, I had a good reason to bring it up.  Films provide us with an enormous cache of visual references familiar to millions of people.  I have chosen a trailer for Mike Nichols's "Regarding Henry" to illustrate this topic because the 24-year-old screenwriter J. J. Abrams (yes, that very same J. J. Abrams who screwed us out of a satisfying "Lost" ending) used a dramatic turn in the plot that fundamentally affects the protagonist (played by the great Harrison Ford).  His life, attitude, tastes communication style- everything changes within the same movie.  It's a stark example of how a person's inner life affects his behavioral traits.

 

Quote of the Day

"The higher the buildings, the lower the morals."

                        Noel Coward