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Archive for April, 2008

What kind of business relationships are you developing?

April 29th, 2008 Comments off

     During the search for my current position, I found myself in a period of transition in which I could not offer a number of folks in my network any “revenue”-related benefits that might help them meet their quarterly quotas or generate them any personal commissions for their services.  However, my network has never been built on that premise, but it was an interesting situation to see how certain people in my network acted during my transition.  There’s no shortage or books on the topic, but it became the classic example of those that based relationships on the transaction versus those that developed long-term relationships without any promise of a pending transaction.

     Let me be clear, I know that there are a high number of professions that maintain their existence through short-term transactions and the associated commissions.  I acknowledge it and respect it since I know I don’t have it in my DNA to keep churning the leads and calls.  However, there should be a mutual respect in that when an individual finds themselves in transition, those “short-term agents” maintain the relationship knowing that when placement again happens that they will benefit.  As a result of my search, many of my prior allegiances have been reprioritized.  For those who I had always been loyal to while I was “in office”, they were nowhere to be found during my transition.  In a few troubling instances, I could barely get a return call or email.

     On the positive side, I met so many new contacts who took a sincere interest in assisting me in my search without any promise of a commission or placement fee during my search.  There were also many who would in no way benefit from my search but might possible benefit down the line after my placement.  With the support that was exhibited from these folks it was refreshing view from those who disappeared with the disappearance of a short-term revenue stream.  Once I was placed and I sent out my email letting everyone know that I had made a choice, it was almost amusing the number of calls & emails I received to “arrange a meeting/call to discuss the next steps”.  You mean….”how quickly can I get into your commission stream?”.

     Fortunately, I have always looked to develop long-term business relationships and have found that those are the ones that have always benefited me in the progression of my career.  Those relationships never started on the basis of a transaction but on the basis of the quality of the individual and whether they were a complement to my existing network.  These are the individuals that I enjoy supporting, endorsing, and sharing with other colleagues.

What types of business relationships are you developing?

Categories: CorpFin Cafe, CorpFin Careers Tags:

When SOX is undermined by the actions of management…..

April 25th, 2008 Comments off

     With only the best intentions, the Sarbanes Oxley Act was enacted in 2002 as federal law in response to a number of high-profile accounting scandals that rocked the financial markets and individual investor trust.  The Act also established the formation of the PCAOB, or Public Company Accounting Oversight Board, which is entrusted to oversee, regulate, inspect, and discipline the work of accounting firms regarding public companies.  The Act also provides guidance on major other issues such as auditor independence, corporate governance, internal controls, as well as enhanced financial disclosures.

     With almost six years since the passing of SOX, the vast majority of public firms have moved well beyond the implementation, testing, and validation phase to now begin working on new major projects.  Further, I have been seeing a shift in the demand for new candidates softening in this area since most implementations are complete and internal audit departments are established.        So all of this must be fantastic for the individual investor and trust must certainly be building exponentially in the public markets?  Right?  Not necessarily……      Let’s take a look at one company, who’s management seems to have undermined the effectiveness of SOX through ineffective forecasting, poor communication, and inattention to key corporate performance indicators.  My company of choice for this analogy is Crocs, Inc. (CROX).

 

Read my full commentary in Undermining Sarbanes-Oxley .

 

 

 

 

“Base Hits”….an effective tool for achieving goals.

April 24th, 2008 Comments off

     It seems that the more that I work with Managers in the different functional areas of a company, I have seen a particular theme in the approach to planning annual revenue and profitability targets.  The majority of the “players” are looking to have a new product or sales initiative to be their “home run” for the year.  With this approach, there is a significant level of risk in relying on a single initiative to achieve the annual plan.  Once that “home run” becomes a single or double, or perhaps a strike-out, you’re left scrambling in the last few innings of the year to come up alternatives, which will usually be a poor band-aid to the original plan.

 

Read my full commentary in Base Hits ….

Be ready to go International….even if you’re not traveling! Is IFRS on your radar?

April 15th, 2008 Comments off

     Americans have always viewed themselves as the professionals who have always set the standards for financial reporting and have historically taken the role of mentor and leader to the broader global finance community.  However, that role looks to be getting turned on it’s head pretty rapidly with the impending conversion to new emerging global accounting standards, which as a surprise to some, is coming out of Europe.

     For the last two years at my previous company we made the move to an IFRS (International Financial Reporting Standards) reporting format to conform to the requirements of our French-based parent.  This was a lengthy process as there was a very comprehensive rollout to all the international entities for the adoption of this new format, which was then followed up by “training camps” where all the entities converged for a one-week intensive on the new format.  As the reporting structures were further defined and rolled out there was the necessary dual reporting format where we submitted our standard historical formats, along with the new IFRS formats, along with all the appropriate bridges to outline the differences between the two formats.

     Never did I think that the work that we were doing on behalf of our French parent might become the standard for North American reporting.  Our initial view, along with the view of many of my colleagues, was why don’t the Europeans roll out GAAP in Europe since this is already a standardized form of reporting, has numerous boards to address the constant market changes and update reporting, and a format that was respected globally?  Why invest such a huge volume of labor and monetary resources to something that already exists?

     If you’re not already familiarizing yourself with the new international standards that are dominating current discussions it’s probably about time you start.  I’ll spend some more time in the coming weeks discussing this topic in more detail and the differences between GAAP and IFRS, along with the additional changes that are being considered.

Be ready to go International….even if you’re not traveling!

Thanks for reading.

Jeffrey

Categories: CorpFin Cafe, IFRS, International Tags:

How are your Networking skills?

April 15th, 2008 Comments off

     Until recently, I would have classified my networking skills as better than average, especially for a guy that works in Corporate Finance.  However, as I was put into my first forced search due to a merger, I soon realized that the network that I had built was not nearly strong enough to carry me through what would be my biggest career challenge to date.  I found that much of the network was tied to my previous position and that the majority of those connections were transaction oriented.  While not a bad thing in itself, it can’t be the sole foundation for those you look to for support or look to endorse to your trusted friends.

     At the start of my search I was fortunate enough to have a few folks steer me in the direction of FEI, FENG, and the McDermott & Bull Executive Network.  Although I am very close to making a decision on which company I will be working with, I don’t believe that I can trace it directly to any one of these groups.  However, it’s what I have learned from each one of these groups, along with my efforts, that has helped me secure my new opportunity.  But in hindsight, what is clear, is that my network was not nearly strong enough to look to for support in this endeavor.  I have spent a very hard 6-months building that network and meeting some tremendous people along the way.  Some folks that are very talented at what they do and I feel fortunate to be included as a peer within their network.

     Only now will the hard work begin as I decide which company I will be working for and the effort that it will take to MAINTAIN the network that I have put so much effort into.  On a recent drive to Las Vegas to solidify an offer, I was given a copy of a networking CD by Hank Blank.  Hank Blank is an O.C.-based expert on networking.  His insight can absolutely help someone increase the scope of their network, the productivity of that network, and help develop a network that will extend and last beyond the current position you might have.  While my approach to networking is endorsed by much of what I heard on the CD, it’s the intensity and passion where Hank excels in this area.  For him, as I believe, it’s about helping others and the benefit will come back to you at some point in the future.  It’s not about the hard sell.  To learn more about Hank, check out his site at www.hankblank.com .

 Thanks for reading……

Categories: CorpFin Cafe, CorpFin Careers Tags:

Are you a Master Educator or Dr. NO?

April 9th, 2008 Comments off

     I’ve worked in a variety of companies and the role of the Finance department, specifically the CFO, has been equally varied in their approach to dealing with the other functional areas and defining the flow of financial information. 

     All of these individuals have played a role in defining my approach on leading the Finance role within a company.   With this in mind I heard one of the better questions in a while at a recent FEI function from one of the guest speaker….”How would you characterize your role….are you a Master Educator or are you Dr. NO?”  What a great question to ask and one that prompts self reflection.

 

Read more of my comments in “Master Educator / Dr. NO”

Backwards looking commentary….

April 2nd, 2008 Comments off

It seems that the recent trends in commentary, stock analyst reports, and industry roundtables has been to take a critical eye of “what you should have been doing” and to state was is now so obvious as if to take the position of the new oracle. 

However, as a Finance leader, one should be proactively identifying areas of risk that might adversely affect the results of the company and prevent the achievement of financial goals.  In the companies I have been in, there has always been a focus on mitigating the risk in all areas.  From credit insurance on receivables, to increasing quality demands to avoid warranty issues, to identifying single source vendor risks, or ensuring that all employee issues are appropriately resolved. 

With some of the recent commentaries, we are hearing that companies should now be casting a critical eye on receivables and looking at areas of risk.  This should not be a view taken now and only in a poor economic environment, but in the good times as well.  One of the CFO’s that I had previously worked for identified the risk of a significant customer who was increasing order volume, had great momentum, and in a fantastic economy.  No need to worry, right?  Wrong….the company ended up going BK when they ran into financial issues themselves with customers and it happened extremely quickly.

More great backwards looking commentary….what about the volume of stock analysts following stocks who have promoted certain companies, watch prices fall over the last 6-months, only to now come out with a revised report and issue a downgrade on information that is already in the public markets.

The question we all need to ask ourselves on a daily basis is….“What value am I creating or adding in my efforts today?”

You need to ask yourself this question everyday, and in hindsight, you’ll find that you’ve accomplished a tremendous amount.