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"Back at home they drew the curtains and read with disapproval, with relish, with avidity and glee - even the ones who'd never thought of opening a novel before. There's nothing like a shovelful of dirt to encourage reading."
The Blind Assassin
Winner of the Booker Prize
The economy and the resulting miserable state of the job market forced many financial executives to downshift, i.e. take jobs way below their levels of expertise, authority, and adequate compensation. It's been almost a year since I wrote about the heartbreaking reality of first finding such a position and then accepting it for the sake of having food on the table and keeping the roof over your family's head. Yet, the painful topic is still relevant.
But let's look a little further. We have an opportunity to examine an interesting situation brought to my attention by an actual downshifter - a former CFO of a, now defunct, $500-million-dollar firm. After a year of a futile job-hunting he accepted, at 50% of his former compensation, a Controller's position in a young and small ($30 million) company, ran by two owners - a female CEO and her partner with a COO title.
How many times did I write about accidental bosses? And here we go again: this business has started because the two partners got lucky. They were in the right place at the right time with extensive connections and sufficient funding at hand. Neither of them actually needed it to survive, but the opportunity were too exciting to pass up.
Guess what? The CEO never led a company before. She never even worked in a commercial enterprise. Her partner has an MBA from an Ivy League school, but he only worked overseas. Neither have the chops to make good executives, yet both have undeniable talents and a lot of enthusiasm. She is a sales ace and the toughest negotiator you can find. He is incredibly detailed-oriented.
Not only that they managed to get the company off the ground eight years ago, they kept it growing with minimal labor resources, including a single bookkeeper. Hiring a senior financial person was definitely not among their priorities. Until... Some people are just born lucky. An even bigger opportunity presented itself. To implement it they needed more capital. The dogged COO wore down one of the major banks into providing them with a substantial trade finance line. Among bank's mandates was hiring a proper Controller.
Enter our former CFO.
Because both execs are not very clear on the leadership functions, the division of responsibilities is blurred. The COO was in charge of the Controller's hiring. The CEO never even saw the candidate's resume or salary history. When COO decided that this is their guy, the CEO was called in for a minute to shake the future Controller's hand.
Yet, once our downshifter started working there, he realized that the woman's word was the final authority on pretty much all other issues. Now, because she lacks corporate experience, she is not capable of assessing the Controller's performance. In her mind, any other accountant would provide the same input as this guy, who managed in the first three months to correct more procedural, systematic, recording, and administrative errors than he did in 25 years before this job. Moreover, he contributes into the company's strategic decisions. All that for a price of a low-brow peripheral Controller. The CEO has no clue that what she's got was a gift; that she got very lucky again and obtained an Hermes bag for the price of a Coach.
This is a big problem. If your boss doesn't understand your value, she cannot appreciate your contribution. The fact that someone with lower qualifications and less experience would not be able to attend to the sophisticated tasks you accomplish remains unnoticed. As a result, you are helping to better the company without a chance for a fair reward.
What to do in this situation? You are not the type to brag every time you do something extraordinary. The first thought comes to mind is to re-introduce yourself. The guy who hired you didn't share your resume with his partner, so give her one together with your salary history. You can say, "I understand you've never had a chance to look at it before and I think it's not fair for either of us." I know some people will say it's tasteless, but the options here are limited.
Secondly, you must propose a proper evaluation system for all staff members. Because these people have no idea how to go about it, they will turn to you. This is your chance! Provide them with the format that allows employees to list their own accomplishments. Then, make sure that reviews are actually conducted.
Finally, if you don't get satisfactory acknowledgement anyway, start looking for another job. Maybe you will be luckier this time around. It's like I always say, employment at will works both ways: they can separate from you at any time, but so can you.
I must've dozed off, or something... And I dream that I died and went to hell. There my soul is tortured by things I fear the most...
...I see the country that used to be a beacon of freedom for the oppressed being perverted into a security vault. I see cameras, metal detectors, x-ray machines, bag searchers everywhere. There are satellites looking straight at me. Someone always watches, hears every whisper, reads every word I type on my computer...
...I see that the notion of merit is dead. All that matters now is who you know. Connections and "club" memberships are the hottest commodities...
...I'm forced to watch people merging into two groups: millions of those who barely manage to eke out a living from whatever professions or trades they forced upon themselves and a small number of comfortable others - nothing in between. And on the top, there are a handful of secret billionaires who have been quietly buying up the world...
...Someone murdered the free competition. Small businesses fall down like slaughter victims. Banking conglomerates are being bailed out of their greedy fuckups through the ponzi schemes of international borrowing, but the treasury is empty. In horror, I look at the decaying corpse of the glorious industrialism formerly driven by the production of quality goods - now it's just a feed for the paper-trading worms...
...I see special interests' money usher through the Supreme Court unconstitutional laws, re-directing average taxpayers' earnings right into the pockets of the paying monopolies...
...And I see young fools, with no prospects for decent lives and no understanding of underlying reasons for it, burning with desire for a change. They've been dumbed down to the point that they cannot formulate their purpose or devise an action plan. They huddle in a tiny space, called Zuccotti Park, near the place they assume to be the source of their distress, simply because they have nothing else to do...
...I stop by a newsstand strewn with tabloids covered by repulsive photographs of insignificant clowns. I manage to pluck out one "real" magazine. It excitedly screams into my face that Lena Dunham has received four Emmy nominations for her half-baked mediocrity. The well-connected and moneyed hipsters, she so skillfully represents, jump up and down like mad rabbits...
...And I see a 5-floor-high advertisement board of Katy Perry in 3-D, but I hear that Fiona Apple's The Wilder Wheel tour is not sold out...
...And I see the Redeemer, the young woman whose words and images have the power to alter people's consciousness. But nobody can hear her as she is sealed into a cell of fear built by haters... And I know that I contributed to her imprisonment. She is smashing her body at the see-through walls in exhaustive attempts to break free, and I am not able to help her. And those who can, refuse to do it... I feel impotent, paralyzed.
It hurts so much inside, as if somebody put a grenade where my heart is supposed to be and it's exploding. I scream in agony. I claw at my chest, trying to let the pain out. I whisper to myself, "Wake up, wake up!"
Only, I cannot wake up. This is not a dream and I am not dead. This is the hell of my actual existence.
"Do yourself a favor... don't have kids... Ruins you ambitions, keeps you from what you want in life... I'm not a good mother... Kids are like clients, they want all of you, all the time. Don't get me wrong. I love my son... Love's nothing, love's easy. They come out of you, you love them. What you do after - that's the hard part."
Damages, Season 1, episode 1
Written by Todd Kessler,
Glenn Kessler, Daniel Zelman
The Frustrated CFO's comments:
I watched this and thought, "Wow! This is hard core. You cannot dismiss the truth here." A couple of episodes later Patty ships her disobedient and rebellious son to a Reform Academy. He is snatched away kidnapping-style. She is all about efficiency and getting her way.
Can women have it all? No, they can't. Not, if they want a glorious career and "ideal" children. There is no such thing as an "ideal" child. They are humans, not dolls, and just as fallible as their parents. And the career? Please... there is always something.
What women can have are two zebras (if they are lucky!): white stripe is followed by the black one, and so on, and so forth. Ups and downs at work, good and bad times with kids - the hard life... and that's if no real tragedies happen.
Believe it or not, but a few of my readers actually complain that sometimes my posts are "too technical." I guess, they forget that, even though I manage to squeeze a ton of cultural references here, this is primarily a business blog and some of the topics will be amusing and/or relevant only to financial professionals, executive managers, and business owners.
Well, even though this may further aggravate the merriment seekers, I cannot pass on the opportunity to share the following 100% true episode that has occurred in one import/export company early last week. It's just so hilarious (at least to me)!
Here is the premise. English has become a common language of international business many years ago. Of course, there are other linguistic possibilities: if transacting parties are both Latin American, they will use Spanish; employees of a company in Shanghai will speak Mandarin to their counterparts in Guangdong region. But I guarantee that communications between, let's say, a Turkish manufacturer and a Dutch banker, or a Latvian banker and a Swiss financial broker, will be conducted in English.
Of course, a Korean supplier has no choice but to employ English to communicate her concerns about a Letter of Credit (LC) provided as a form of payment by an American importer. The document itself is prepared in English for crying out loud. Still, it's a foreign language - some linguistic pitfalls are unavoidable.
Those who work in international trade or read my book CFO Techniques know that LCs are very strict documents treated in a very literal manner by the banks responsible for making sure that a supplier gets paid only if and when it complies with conditions stipulated in the buyer's LC. For example, the shipping documents (most frequently these are Bills of Lading (BLs)) must be prepared in accordance with the importer's requirements.
Now, enter a young and anxious clerk at the Seoul office of the said Korean supplier. She is responsible for putting together all documents to be presented at the bank so that her employer can get paid $2,745,000 for 1500 mt of the product that just sailed away. She knows very well that the papers must be in full compliance with the LC. She is a novice and feels a lot of pressure to do it right. On top of that, it's all in English, and, even though she is pretty good with it, the stress makes her paranoid. Basically, she is a nervous wreck.
One thing in particular bothers her the most. So, she writes the following email to the customer's CFO:
"LC request is 'FREIGHT PAYABLE WITHING 7 DAYS OF SHIPMENT DATE' but the shipping line put on Bill of Lading 'FREIGHT PAYABLE WITHIN 7 DAYS OF SHIPPING DATE'. Please urgently ask the shipping agent to revise the BL."[sic]
The American CFO, who has dealt with the international trade issues for many years, had a good laugh reading it, thought that the girl needs some Xanax, and replied:
"Relax. The difference between the words 'SHIPMENT DATE' and 'SHIPPING DATE' will not be construed as discrepancy by ANY bank as these phrases mean EXACTLY THE SAME."
Hey, it's all good. At least she didn't have to gesture and guess.
I cannot really call myself a comics fan just because I am familiar with the names and overall stories of the most famous characters. That's just popular culture saturation. I know some real devotees, and those people can discuss different genres, know the names of artists, aware of obscure series, and dissect the aesthetics of comics with the same depth I apply to theater, cinema, or literature. Yet, I do appreciate the idea of a superhero, a human with extraordinary abilities and skills. In a sense, Ayn Rand's John Galt is a superhero. Some of the stories written by comics' authors are just as dark and prophetic. And, I've seen the original drawings of the best creators: there is no question in my mind - it's art.
On the other hand, cinematic interpretations of graphic novels, the money-making machines of Marvel and DC Comics, rarely measure up to the original sources. I don't even remember when was the last time that I saw a comic-based movie on a big screen... Until this summer's release of Joss Whedon's The Avengers.
I've always had a weak spot for Joss Whedon's creative powers. His visions, both phantasmagorical and futuristic, yet so human, are among my guilty pleasures. Amazingly, the man is capable of making all sorts of creatures sexy and soulful. After all, he brought vampires with various personality traits into our lives way before the recent wave of the blood-sucking hype. He is to current supernatural TV programming, what Nirvana is to contemporary Rock.
Stephenie Meyer may list Shakespeare and Jane Austin as influences for her deplorable writing all she wants; and the story how the idea of love between a human girl and a vampire came to her in a dream on June 2, 2003 is a great PR ploy. But isn't it uncanny that Joss Whedon aired the last episode of Buffy the Vampire Slayer series on May 20, 2003. Maybe the young Mormon wife and mother was simply missing Buffy's heat.
So, because it's written and directed by Joss Whedon, I went to see The Avengers... And it was very entertaining, exhilarating, sufficiently layered for those who want to look beneath the surface, and accessible to those who just want to have fun - in other words, it was very Joss Whedon. I mean, who else would be able to take the Incredible Hulk and not only accentuate the character's original traits, but make him even more tragic, brilliant, powerful, soulful... and funny?
Yeah, the Incredible Hulk as interpreted by Joss Whedon - oh boy, do I relate to that character, or what? I mean, "That's my secret, captain. I'm always angry," - it's like he went into my head and read it on my cerebral cortex. Always angry, but in control most of the time. Well, in my case, practically all the time, trying to channel the frustration through writing, cursing at the toilet bowl, or stomping on a piece of paper; only wishing that I could unleash the anger for real.
When I just started this blog, I took time to explain in several posts my take on frustration and its management. In one of them, I nominated John McEnroe as the frustration release hero . And, he definitely is that, but if I were to expand my search pool beyond mere humans... Joss Whedon's Dr. Banner/Hulk definitely takes the first prize - reserved, humble, unstoppable when angered by bad guys, and with a sense of humor regardless of his physical/mental state.
Watching him handling Loki's arrogance was probably one of the most satisfying therapeutic experiences I've had in a long time. For a hot second I felt avenged. Oh, how I yearn for an ability to do that to some people! In fact, I think it would work for me even better than Darth Vader's management style.
"The Idler Wheel Is Wiser
Than the Driver of the Screw
And Whipping Cords Will Serve You More
Than Ropes Will Ever Do."
Fiona Apple
For those who, like me, focus only on the foremost aspects of the federal government's new legislative moves and don't pore over every single detail, on the premise that we cannot do anything about it anyway, here is a follow-up to my last week's post on the subject. A few "minor" details that may directly affect many of my readers and the rest of the fast-disappearing middle class (maybe we should start studying the minutia more carefully after all):
1. Effective January 1, 2013 (never mind that the main conditions of this reform are intended for 2014), employee's Medicare tax goes up from 1.45% to 2.35% for all wages over $200,000 a year ($250,000 for joint filers). The employers' portion remains to be 1.45%.
2. The 3.8% levy, imposed on all passive income, including interest, dividends, annuities, royalties, rents, and capital gains of individuals with adjusted gross income over $200,000 ($250,000 for joint filers) in order to subsidize health benefits for unemployed and low-income population, goes into effect as of January 1, 2013 as well. Some of my readers may be interested to know that under this ruling even the private equity moguls with over $50 million in annual income will end up dropping $2 million into the subsidy purse.
[Side note: I could never understand why royalties and license fees one receives for the book or song she wrote, or a video game she programmed, or the invention she patented are classified as a passive income. Trust me, creating intellectual property is hard work. I always believed that these earnings should not be categorized as passive as long as the property is still in the hands of the original creator. If it's sold away (like the rights to The Beatles' songs), that's a different story.]
3. 2012 will be the last year when the limits of employees' contributions into Health Flexible Spending Accounts (FSA) will be determined by employers. Starting with January 1, 2013, the federal government will limit these pre-tax wage deferrals for out-of-pocket medical, dental, and vision expenses. While employers historically used the percentage-of-salary method, the government established the ceiling of $2,500 per year, regardless of the person's earnings and/or medical needs.
So, if your estimated annual expenses, not covered by the insurance policy (including all co-payments, glasses, root canals and crowns), are $6,000, you will pay the $3,500 with the after-tax net earnings. And, unless your total household income is less than $46K, you will not be able to deduct a penny of it on your tax return (due to the 7.5% medical deduction floor).
What can I say to you, my dear well-educated and hard-working middle class? Good luck surviving!
Believe it or not, but we've already passed the mid-point of 2012. While the foretold Armageddon is not upon us just yet (most likely due to the inaccuracy of our calendar), the immediate future of many CFOs can be predicted with a confident certainty: the second quarter financial results will be due in a couple of weeks.
Let's face it, this was not an easy fiscal period. Whether large or small, businesses were affected by the volatility of the international markets, the slowdown of commercial demand, plunges in both commodities' prices and consumer confidence. Even the bigwigs at Goldman Sachs and JP Morgan, the conjurors of "facts" that prevent trading markets from falling apart, had to admit today that "the recovery slowed in the second quarter" and downgrade their projections.
What recovery, you clowns? Anyway, those of us running actual businesses know: the quarter was mostly downsloping, choppy, and unhealthy. This will translate into smaller revenues, narrower profit margins, and, for many, losses.
The Frustrated CFO always feels doubly agitated about subpar performance results (obviously, antsy enough to talk about herself in the third person). On a big-scale, as a small-business crusader, I am worried that with every difficult fiscal quarter the possibility of our economy getting back on the right track, with entrepreneurship reclaiming its rightful status as a backbone of capitalism, becomes less and less real.
And then there is an apprehension of inevitable consequences for all financial chiefs of privately-held companies (myself including), who cannot avoid playing the part of the bad-news heralds.
Regardless of the nature and the size of a company, the main recipients of its performance results are owners/investors. For public companies these are millions of faceless institutional and individual stock-market gamblers. The publication of financial information by these companies is mandated by law and governed by SEC.
When the picture is bleak, the Boards of Directors, terrified by the possibility of a sell-off and devalue of the stock (first and foremost, their own holdings), frequently spring into action to show the world that they are "doing something about it." This usually amounts to moving the pawns on the corporate chessboard: we regularly hear about dismissals of CEOs and COOs perceived to be responsible for the failures. At the same time, unless they are caught together with their auditors cooking the books, the big-time CFOs are rarely publicly flogged.
Private businesses operate in an entirely different universe. Here, people responsible for financial reporting, CFOs and Controllers, daily face their owners/investors. The entire chain of delivering the message is reduced to a single step. Here you are with your perfectly accurate, yet unpleasant, reports and there, on the other side of the table, or on the other end of an email link, are the owners/executives.
And, even though everyone in the room understands that you cannot possibly be singly responsible for the business's poor performance; that it is a result of many contributing factors; that the CEO herself disregarded your loud warnings and fucked up several crucial deals - the bosses invariably follow their first impulse to lash out against somebody. At that initial moment of disappointment, there is no better a scapegoat than you, the news-bearer. As if on cue, the bosses turn into cranky babies and throw pointless tantrums. The funniest thing that ever happened to me was when the President wanted to see the general ledger details and "check the numbers."
Eventually, of course, they come down, and become reasonable. If you've earned their respect and got their ear, they would listen to your analysis and accept your improvements proposals. The thing is, though, we are human too and no matter how well we hold it together, the hurt of that initial heraldic punishments stays with us.
The Queen's Herald
Download 05 X-Files Theme (Dado Paranormal Activity Mix)
"Mulder, the truth is out there... but so are lies."
Agent Scully, The X-Files
Created by Chris Carter