Career CFO vents her frustration over business, human capital, economics, social environment, culture, politics, and everything else; but always with a monetary twist

October 2013 posts

October 28, 2013

Synopsis of James O. Incandenza's short (16 min) film Wave Bye-Bye to the Bureaucrat, Latrodectus Mactans Productions, Year of the Whopper:

"A bureaucrat in some kind of sterile fluorescent-lit office complex is a fantastically efficient worker when awake , but he has this terrible problem waking up in the A.M., and is consistently late to work, which in a bureaucracy is idiosyncratic and disorderly and wholly unacceptable, and we see this bureaucrat getting called in to his supervisor’s pebbled-glass cubicle, and the supervisor, who wears a severely dated leisure suit with his shirt-collar flaring out on either side of its rust-colored lapels, tells the bureaucrat that he’s a good worker and a fine man, but that this chronic tardiness in the A.M. is simply not going to fly, and if it happens one more time the bureaucrat is going to have to find another fluorescent-lit office complex to work in . It’s no accident that in a bureaucracy getting fired is called ‘termination,’ as in ontological erasure, and the bureaucrat leaves his supervisor’s cubicle duly shaken. That night he and his wife go through their Bauhaus condominium collecting every alarm clock they own, each one of which is electric and digital and extremely precise, and they festoon their bedroom with them, so there are like a dozen timepieces with their digital alarms all set for 0615h. But that night there’s a power failure, and all the clocks lose an hour or just sit there blinking 0000h. over and over, and the bureaucrat still oversleeps the next A.M. He wakes late, lies there for a moment staring at a blinking 0000. He shrieks, clutches his head, throws on wrinkled clothes, ties his shoes in the elevator, shaves in the car, blasting through red lights on the way to the commuter rail. The 0816 train to the City pulls in to the station’s lower level just as the crazed bureaucrat’s car screeches into the station’s parking lot, and the bureaucrat can see the top of the train sitting there idling from across the open lot. This is the very last temporally feasible train: if the bureaucrat misses this train he’ll be late again, and terminated. He hauls into a Handicapped spot and leaves the car there at a crazy angle, vaults the turnstile, and takes the stairs down to the platform seven at a time, sweaty and bug-eyed. People scream and dive out of his way. As he careers down the long stairway he keeps his crazed eyes on the open doors of the 0816 train, willing them to stay open just a little longer. Finally, filmed in a glacial slo-mo, the bureaucrat leaps from the seventh-to-the-bottom step and lunges toward the train’s open doors, and right in mid-lunge smashes headlong into an earnest-faced little kid with thick glasses and a bow-tie and those nerdy little schoolboy-shorts who’s tottering along the platform under a tall armful of carefully wrapped packages. Kerwham, they collide. Bureaucrat and kid both stagger back from the impact. The kid’s packages go flying all over the place. The kid recovers his balance and stands there stunned, glasses and bow-tie askew. The bureaucrat looks frantically from the kid to the litter of packages to the kid to the train’s doors, which are still open. The train thrums. Its interior is fluorescent-lit and filled with employed, ontologically secure bureaucrats. You can hear the station’s PA announcer saying something tinny and garbled about departure. The stream of platform foot-traffic opens around the bureaucrat and the stunned boy and the litter of packages... The film’s bureaucrat’s buggy eyes keep going back and forth between the train’s open doors and the little kid, who’s looking steadily up at him, almost studious, his eyes big and liquid behind the lenses... The bureaucrat’s leaning away, inclined way over toward the train doors, as if his very cells were being pulled that way. But he keeps looking at the kid, the gifts, struggling with himself... The bureaucrat’s eyes suddenly recede back into their normal places in his sockets. He turns from the fluorescent doors and bends to the kid and asks if he’s OK and says it’ll all be OK. He cleans the kid’s spectacles with his pocket handkerchief, picks the kid’s packages up. About halfway through the packages the PA issues something final and the train’s doors close with a pressurized hiss. The bureaucrat gently loads the kid back up with packages, neatens them. The train pulls out. The bureaucrat watches the train pull out, expressionless. It’s anybody’s guess what he’s thinking. He straightens the kid’s bow-tie , kneeling down the way adults do when they’re ministering to a child, and tells him he’s sorry about the impact and that it’s OK. He turns to go. The platform’s mostly empty now. Now the strange moment. The kid cranes his neck around the packages and looks up at the guy as he starts to walk away: ‘Mister?’ the kid says. ‘Are you Jesus?’ ‘Don’t I wish,’ the ex-bureaucrat says over his shoulder, walking away, as the kid shifts the packages and frees one little hand to wave Bye at the guy’s topcoat’s back as the camera, revealed now as mounted on the 0816’ s rear, recedes from the platform and picks up speed."

October 17, 2013

Well, it varies from one boss to another, but one thing I can tell you for sure -nobody should ever expect a boss to bother learning who his subordinates are. I mean as people.

Yes, some overzealous HR pros in large companies paw through whatever material is made public by the social networking in pursuit of dirt, but that's just "fact-finding" and gossip-mongering. No, I am talking about a genuine human interest.

In most cases there is none. Watching all sorts of bosses interact with their employees I frequently wonder whether it registers in their heads that they deal with real people. I think they subconsciously block this tiny detail out, so that they wouldn't feel guilty for being assholes. So, how can you expect them to notice anything about your personality, if they see you as a cardboard cutout? They are blind even to the most obvious manifestations of your existence outside of the workplace.

You may belong to a weekend fight club and come to work every Monday with poorly covered bruises; or aspire to be the greatest drummer of all times and constantly bang your fingers on hard surfaces to some beats in your head; or know everything there is to know about existentialism and talk about it at length during office parties - none of it will be noticed: they see and hear it, but their minds reject it. For them, you are still just Steve from Logistics, or Mike from Customer Service, or that girl from Accounting.

Do I know for a fact that this sort of myopia exists? Yes, I do. My position as a financial executive and/or consultant allows me to observe various bosses in close proximity. Over the years, I've collected a huge body of evidence to support my statements here. But I can also vouch for their validity based on the incidents that involved me personally. I'm not going to dwell here on the fact that none of my employers ever learned anything of my true motivations, ethical standards, or even why I work so hard and care so much. Instead, let me share with you an instance of an inexplicable blindness.

I don't ever shove CFO Techniques into people's faces. Being a book's author barely has any impact on consulting deals and it definitely has nothing to do with my CFO job. But people do find out on their own: they connect with me on LinkedIn and see it on my profile, or they Google me, or whatever. Normal people, not bosses. A company's owner writes an email to one of his strategic financial partners with a copy to me: "Let me introduce our CFO M.G. From now on, she is taking over all our M&A negotiations." Apparently the fact that the three of us were at the same table during a corporate function has slipped his remembrance. As per usual, I simply ignore it. The external party doesn't: "Not only that I've met Marina already, but I also keep her book on my desk." The boss replies, "Oh yeah, I forgot, I introduced you, guys." You may think that he deliberately ignored the part about the book, but I swear, he is not that devious - he simply blocked it out, didn't see it at all.

And that's absolutely Ok. Attentiveness is not a prerequisite to being a business leader and a jobs creator. I'll take brilliance and perpetual drive to succeed over tact and personal involvement any day. And I have to be honest - I'm not quite sure if I personally would've been as aware of people around me and familiar with some aspects of their lives if I weren't such an avid, life-long student of behavioral science. At the end of the day, one can say that my interest is self-serving.

Of course, sometimes it hurts just a bit that the people, for whom you work so hard, don't even care to learn who you are, but in the grander scheme of things we should not care - as I always say, every job is just another line on your resume. Moreover, we should be grateful - we don't really want these people to know too much about us or our vulnerabilities.

That said, however, it is still pretty surprising when bosses are confused about most basic, most superficial facts about employees who worked for them for years. Sometimes it brings about ludicrous, almost sketch-like dialogues.

A tragedy struck one of my subordinates: her Mom, only 55 years old, died unexpectedly of a heart attack. The girl has been with the company longer than me; she was originally hired by the CEO at the time when there were no other executive managers in the company at all - just owners and staffers. The CEO shuffles into my office to reflect on the unfairness of life.

She said, "You know, it's so cruel: Shen's parents were the first-generation immigrants - worked so hard to provide for the children! And now, the kids are all grown up, married, educated - it was a time for her Mom to finally enjoy her life, and then this happened. Just terrible!"

I listened to all that and agreed, "Yes, it's totally fucked up. With respect to her Mom, it was Shen who was the first-generation immigrant. Her parents got divorced when she was a little girl. Shen came here 13 years ago with her farther and she didn't see her Mom for 8 years. They missed each other terribly. The girl was able to bring the mother here only after she herself came of age and became a US citizen. They were together for only 5 years. The Mom still worked 7 days a week to support herself, and now she is gone."

And here you have it, ladies and gentlemen: a boss's "reality" vs. truth.

October 13, 2013

There are
quite a few optimistic economists out there who convinced themselves
that, even though the Industrial Revolution, which was responsible for the unprecedented economic development of the United States since the 19th century, is pretty much over, there is no need to panic and envision impending doom. According to them, we are yet to pull through. Do you know what will save us? Artificial intelligence and 3D printing, i.e. fucking robots and compressed plastic powder.

Ok, let's leave the 3D printing alone for now. I'm quite impressed with the replication capabilities of the so-called printers: the manufacturing of complex forms, moving parts and all directly from scanned or modeled images looks like magic; and I do think that this innovation will revolutionize toy-making and change sculpture forever. However, because the "printing" powder recipes are kept secret, I cannot really say anything about the quality and/or safety of the household items, tools, auto parts, etc. made this way. I hear the plastic guns shoot people dead pretty well, but what else is new?

I am more curious about the robotized future though. From the vantage point of the economists in question, 65% of American employees are engaged in tasks that they classify as "information processing" (sounds pretty arbitrary to me, but let's go with it) and these poor "dehumanized" worker bees will be replaced with super-efficient highly intelligent machines, who never get depressed because information is what they do. And it doesn't matter that the damn toasters will never be able to look at a plant and pick an appropriate tool to trim it (it's just something that cannot be programmed).

In case you are wondering, the other 35% will be occupied in professions and functions that require superior intelligence and talent: executive management (you wouldn't believe how many executive dumbasses I know, but whatever!), strategic planning, creative work, and of course, gardening (on account of the robots' deficiencies mentioned above).

Seriously though, I hope you agree with me that defining ALL tasks performed by office employees as "information processing" essentially turns these people into some sort of robots already, which creates an illusion that replacing imperfect human tools with slick intelligent machines is an efficient, easy, and necessary process. And yes, some of the office routines can be tedious and dehumanizing. Yet, the reality is that only in large companies, marked by narrow specialization, standardization, and redundancy, work can be likened to the repetitive conveyor operations. Everywhere else people multitask!

Ever since my doctoral studies of economics (many year ago), I had a problem with the pervasive tendency of theoretical generalization; with the application of the macroeconomic approach to microeconomic systems. Again, maybe such abstractions are somewhat pertinent to giant enterprises, but you and I know that every small business operates differently - none of them will fit into an artificially constructed etalon. It scares me to think that these pseudo-scientists possibly envision the future without any entrepreneurship at all - just fucking GMs, GEs, Microsofts, Starbucks, Smithfields, Apples, Googles, COSTCOs, and Carl's Jr. (Wait a minute, doesn't this ring a pretty loud bell?)

But what if this nightmare doesn't come true? (Call me a fucking optimist!) Imagine that 20 years from now small businesses still exist, but now they can be outfitted with highly efficient (and affordable!) intelligent machines available to step in as your trusted office workers. Let's conduct a mental experiment and see how a robot will deal with three (could've been 100) straightforward issues customarily handled by one of my most reliable and teachable subordinates of all time (I call her "my Paige"). In other words, let's see if a robot can really replace my Paige.

#1. A commercial customer has a $300K credit line. The total of the customer's open invoices is $265K. A $51K order for the product your company really needs to move is transmitted for the robot's credit approval. Of course, a discretionary flexibility is programmed into the algorithm (robot designers are not stupid) - it's 5% above the limit (remember, standardization is unavoidable with machines), making the total allowable credit exposure $315k. But approving the order would exceed it by a mere $1,000. The robot rejects it, denying its employer an opportunity to move the product, increase the revenue, make a nice profit. In addition, the relationship with a long-time customer is at jeopardy over a thousand bucks; and the salesperson is mad because he lost his commissions. And what are you going to do? Fire the robot? It cost the company a fucking mint!

#2. The operations department (also robots) needs to make sufficient room in the storage facility to accommodate the upcoming delivery of 5000 mt of a product from overseas. They transmit a message to Sales to start pushing the shit faster. Sales plea and beg customers to take as much product as they can - discounts and all kinds of other tokens of gratitude are flowing. One customer says that he can take a delivery on September 29th, but he doesn't want the inventory on his books just yet and the invoices must be dated October 14th (the "I do something for you, you do something for me" principle). This information is relayed to my accounting robot. It's perplexed: It's programmed to record sales according to the order terms; the terms in this case are Delivered; the proof of delivery transmitted into his system by the trucking branch states September 29th; yet, somebody is overriding his algorithm and forces the wrong date! SCREECH! SYSTEM FAILURE!

#3. The payments-to-suppliers program kicks in. The robot tallies all invoices that need to be paid - the total is $3.3M. Now, funds-sufficiency program kicks in: there is only $300K available on the account and the robot transmits a funding request to the CFO's all-in-one communication device installed into her left ear's diamond stud. The borrowing and investing functions are still done by the human CFO, because the risk of some crafty thief hacking into a fucking toaster is, as you can imagine, pretty high. The problem is that the CFO is in London dining with a Financial Director of a company her employer targeted for acquisition. She is trying to pump the stiff for some information beyond the official reports, and she just got him talking, and there is no way she can lose this opportunity on account of some payments. But the robot must do his job - he must be timely, the payments must be made. Yet, he sees that, if he actually makes the payments, the account will be overdrafted by $3 million. The conflicting algorithms are tearing the machine apart, literally - it short-circuits.

What? Are you telling me that the economists don't have these tasks in mind; that these are semi-managerial-somewhat-analytical duties? Guess what, Mr. Big-Shot-Futurologist? That's what's going on in small businesses with flat structures: Every sector of the value chain is manned by one executive/manager and a handful of her direct reports aka the "the information processors." No middle management. You cannot possibly reassign these minute but essential issues to CFO's and Controllers - that's just too expensive in terms of the compensation, wasteful in terms of the time taken away from more strategic obligations, and demeaning in terms of the moral incentives. And if I have to buy robots AND keep my subordinates for the semi-managerial-somewhat-analytical work, what kind of progress is that?

According to the US Census data, there are over 6 million companies in this country with less than 100 employees. Obviously, they are too small to see from the top of the theoretical mountain. So, in articles for academic magazines and thick manuscripts for Wiley publications, their diverse office workers first get bundled together with the narrow-niched redundant zombies of large bureaucracies, and then replaced by robots in one sweep of a Montblanc pen.

Just for argument's sake let's get back for a second to the scary possibility: The economists, politicians , and the big businesses paying for them actually erase small companies from the national map. The intellectual flexibility is ignored in the interest of standardization, and all of the "information processors" in the remaining giant conglomerates are replaced by machines. What kind of plans do the movers and shakers have for these 65% of American workers? How about their children, lately multiplying at the three-per-family rate? Considering the dramatically falling IQs of the general population, it's unlikely that they will be viable candidates for high-level managerial or creative work. So, how is the robotization going to make the whole nation wealthier in the same way the Industrial Revolution did? I see a more polarized society with hordes of people pushed below the poverty level.

But the biggest question I have for the big-time big-picture economists is: Where the fuck are you going to get the energy to power all those robots and their managing network servers?

October 11, 2013

I fucking LOVE how every time you give small business owners, who are usually personally responsible for commercial side of the business, bad news about the company's performance (i.e. report losses), the first thing they do is start looking for faults in accounting instead of strategically correcting their own buying/selling practices.

"Are you sure no extra/double costs were somehow recorded by accident?"

What the fuck is that even supposed to mean? And yes, I am fucking sure! I've only been doing this shit for 25 years!! You, on the other hand, found out that accounting exists only 2 years ago, and I was the one who told you!!!

The same shit - company, after company, after company... It's like a fucking natural instinct - the goddamn knee jerk.

October 07, 2013

I wasn't planning on dignifying this new chapter in the government's bullshit with any words at all, but yesterday, during my news-reading self-torture, I came across the short bit cited below. I don't always agree with this journalist's points of view. However, in this instance she appears to channel my own libertarian position on several key issues. I couldn't say it better myself, so here you go:

"This week was dominated by the shutdown.
It's as much a shutdown of the executive functions of the brain as it
is of the government. A monument to monumental stupidity, it's also a shutdown of possibility, and of whatever residual trust the public still has in the American political system. Even those doing the right thing by fighting it were reduced
by the sheer absurdity of the situation. All to try to reinstate a
sequester-level budget that is itself horrifically self-destructive
(note to media: the Affordable Care Act and sequester are the compromises,
and bad ones, at that). That's right -- we've now sunk to a level in
which the merely horribly self-destructive is a goal that seems out of
reach. So our leaders play games instead of even attempting to address
the real problems, like the roughly 20 million unemployed or underemployed Americans. That's for August. The September numbers weren't released on Friday -- because of the shutdown."

October 06, 2013

Every time the proverbial wool is pulled over the masses' eyes, this question materializes in my mind in a very specific way: Can't you see? Pumped with drugs, submerged into the water, and literally attached to a supposed crime-fighting machine, the main precog Agatha (Samantha Morton) pleads with Tom Cruise's John Anderton to see the truth: to clear his mind and look behind the foggy wall of deceit; to figure out what is right and what is wrong, who is a victim and who is a real criminal, where is the true justice and where is the pure greed for power and domination?

Can't you see? With their latest search-engine revamp (aka the Hummingbird offensive), Google is trying to deprive you of your basic rights (particularly those guaranteed by the First and the Ninth Amendments) and turn the last bastion of freedom, the Internet, into the same corrupt mess our tangible world has become - the wasteland, where the bigger your teeth and claws are the larger the piece of the pie you will grab.

Even though the implementation of the "hummingbird" algorithm was publicly revealed on the day of Google's 15th anniversary, it had been enacted several weeks ago. I noticed something new a month back: Like everyone else who writes, from time to time I go online to look for the best choice of words. For years, Thesaurus.com has been the first-listed result. It still is, but right above it (above everything) appears a lightly-bordered box with a Google-provided selection of synonyms, word origin, etc. Even on the 21" screen it dominates most of the initially visible space - you have to scroll down to see other results. If all you need is basics, you don't need to go to any other dictionary site - it's all right there, in the box.

Now, try to google, for example, Advil and you will see the same (only larger) box at the top, filled with medical information on this over-the-counter drug. Type 3D Printing in the search field, and you will get featured ads (powered by Google's AdSense) at the top and the hummingbird's box on the right with the top four choices for 3D printers from Google's Shopping. And don't be deceived by the fact that many of your searches don't bring back the ghostly box just yet - the knowledge base will self-educate and expand with incredible speed, just you wait.

They are not too shy about it either: In the midst of listing all the "innovative" features of the hummingbird algorithm, they freely speak about their strategy to squash the other online information purveyors. During the unveiling ceremony, Google's search executive Tamar Yehoshua constructed his demonstration specifically around queries related to nutrition. The first results were long lists compiled by Google and shown on Google's own site. No need to go to WebMD - one of thousands of online businesses dependent on the Internet users' ability to "find" them.

Wow! First, they started tracking your web patterns in order to "suggest" ads and rank search results according to your "tastes" (how are you supposed to find, buy, learn anything new, if Google keeps polluting your visual field with old, familiar shit all the time?), and now this?! They want to monopolize the Information Superhighway; they want to own your mind and hinder your psyche! This is much worse than anything Snowden has revealed about Big Brother. Can you imagine the breadth of opportunities for manipulations?

How about the unlimited possibilities for murky dealings? Just think of the fees you can charge a company for the right to be a part of Google's knowledge database, to be included into that top-of-the-page box. Judging by the experience so far, we will never know how much exactly: While making the basic AdSense pricing available to everyone, Google makes sure that it is impossible to find out how much it costs to guarantee that your ad or product always appears in the featured boxes, bypassing hundreds of others.

What happened to Sergey Brin, who came here from the Soviet Union in 1979, at the tender age of 6? Didn't his parents teach him anything about the importance of personal freedom and the dangers of totalitarianism? And why? What, $24.5 billion is not enough?

I don't really know if the algorithm's nickname is an unabashed display of gall and an inside joke hinting at Google's true intentions, but I find its selection uncanny: Hummingbirds, pretty and quick, are essentially omnivores - sucking out flowers's nectar and praying on insects' protein, all in the course of one meal.

I sold my Google stock as soon as they monopolized the online advertising, and I wish I could tell you that I plan to stop googling, or use Maps. Unfortunately, I am not able to take such a pledge: no matter how hard other search engines try (and I would like them to try harder), as of this moment they cannot match Google's speed and range. Yet, I refuse to give into their tricks: I will not be boxed out neither by the AdSense tracking my Internet movements nor by the hummingbird's hijacking the top spot of the informational ladder. I will continue to exercise my freedom of going to the search results that I believe are relevant. What about you? Can you force yourself not to be lazy and bypass Google's conveniently positioned traps? Can you brush off that wool and see?