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Archive for February, 2010

CorpFinCafe.com Going Dormant….

February 28th, 2010 Comments off

     When I first started this forum I launched it with the intent of having a forum that would allow for a collaborative and a relatively non-technical corporate finance forum. When I mean “non-technical” I’m referring more to not having a constant focus on recent GAAP or FASB developments, or similar topics.  It was really more intended to provide additional insights into the Finance department, it’s work with other areas, and shed a bit more light on what motivates and drives the Finance group. It’s as much a forum for my non-finance colleagues as it is my direct peers.  During the 2-years+ I’ve been updating this site I’ve made some great contacts, have had some great discussions, and received great feedback.  As I’ve continued to build the resume with companies I’ve worked with, it has provided me with a wealth of situations to review and compare against the “standards” and how I can continue to improve my own personal performance. Since I’ve always tried to keep the scenarios generic, it would be easy enough to associate them with any company I’ve worked with, including my current. For this reason, I’m going to refrain from posting until further notice.  I obviously need to be keenly sensitive to the fact that I work with a public company and any perception of scenario association needs to be avoided. In the mean time, there’s plenty of great things ahead for the 2010/2011 FEI season, mentoring of staff, and potential Alumni involvement with USC. I look forward to the point that I can again resume my contributions to the site.

Thanks for reading . . . .

Jeffrey Ishmael

Ken Tudhope on Making Miracles….

February 26th, 2010 Comments off

     Anyone who knows me knows these two things:   I have a passion for networking, and I love Jeffery Gitomer’s books.  I have given out literally hundreds of copies of his Little Black Book of Connections, which I happen to think is the best networking book available.  I am such a good customer at BuyGitomer.com that all my books arrived signed by the author and I receive a nice discount.  Mr. Gitomer is smart, his books are excellent, and I look forward to the day when I can say that he is part of my personal network.

     Recently I read Gitomer’s Sales Bible.  Given my situation as a small business owner and a salesperson in this tough economy, I try to read at least two Bibles!  In it he writes that he loves sales because “you can make your own miracles.”  I know from experience what he is talking about.  One of the best parts about the profession of selling is that your success is limitless.  Of course, so is the possibility for failure…  For people who have never been a salesperson it is hard to describe.  Before I entered the accounting profession and went to work at Price Waterhouse, I was in sales and every year my income was different.  The unlimited possibilities were exciting and motivating!  Indeed though, that kind of uncertainty doesn’t work for everyone’s temperament, but there are still lessons to be learned from it – even for accountant types like us.

    Now when I read Gitomer’s line about making miracles in sales, I instantly think about networking.  My personal mantra is:  “Through networking everyone has the opportunity to make their own miracles.”  Every day I see people go into the job market and through networking create miracles by finding fantastic jobs with great companies.  People solve unsolvable problems by asking the right person the right question at the right time.  I established a new career in my forties and started a successful company during tough economic times through relationships with great people.  In fact, I didn’t know anyone in Orange County when I moved here 10 years ago, yet I’ve created “miracles” through opportunities I seized as a result of a strong network.  

     My advice for you is to make your own miracles by creating relationships with the people out there who can and will help you.

Ken Tudhope

Project Pro Search

ktudhope@projectprosearch.com 

San Diego FP&A Summit Follow-Up….

February 25th, 2010 Comments off

     In my prelude post yesterday, I gave a brief overview of my intended presentation for the San Diego FP&A Summit hosted by the IE Group ( www.theiegroup.com ), who is a global summit organizer. As expected, I had some great conversations with both attendees and presenters, as well has having the opportunity to meet up with colleagues I hadn’t seen in a while. Unfortunately I didn’t have the opportunity to stay for the entire event, but they clearly had a strong line-up of speakers, which also included Oakley, AMD, Juniper Networks, Disney, HSBC, and a host of others. Below is the full presentation I delivered today at the summit.

KPI Presenation – San Diego FP&A Summit

Thanks for reading . . . .

Jeffrey Ishmael

San Diego FP&A Summit – A Prelude….

February 24th, 2010 Comments off

            Tomorrow I’m being given the opportunity to speak at the San Diego FP&A Summit, which is sponsored by the IE Group ( www.theiegroup.com ). I was a bit hesitant in the beginning, but once I spoke with Richard Bracchi and realized the line-up he was putting together there was no way I could decline. We also started talking about what subject I might be tasked to speak on. It didn’t take long with I saw the topic of KPIs on the list. A subject that is near and dear to my professional heart! Besides, how in the heck do you drive improved performance without have metrics in place to measure all the triggers you need to pull?

            After the presentation tomorrow I’ll post my full presentation, but I had a great time assembling what I hope will be a valuable presentation for those in attendance. I get a sincere kick out of discussing this topic with my peers….

Ask most Finance professionals how they measure their business and they’ll cite our typical tools….

      Income Statement

      Cash Flow Statement

      Balance Sheet

       These are merely reporting mechanisms for the true tools that we use to measure our respective businesses.

 

       What are the KPIs that help you make your business decisions?

       How do you create value for the Company in the absence of such critical reporting?

       How do you price a Service Offering when you don’t know your costs?

       How do you formulate staffing decisions when you don’t know how hours are consumed?

       How do you drive improvements when you don’t even know where the waste is?

These are only some of the questions we’ll be addressing tomorrow….

Thanks for reading . . . .

Jeffrey Ishmael

One Of Those Comments To Share….

February 20th, 2010 Comments off

     I’ve never really taken the time to share a comment any further than posting them in a side column on this site. However, I received this comment from a Sales person in my direct network, and needless to say, was a bit floored that I received this kind of comment from a Sales professional. One of the main goals for my site has been to bridge the communication gap between Finance and the other functional areas in the organization. I’m very pleased that this seems to be the case….although I’m not sure the facilitator at this meeting would endorse the reading of my blog!

OK- I have been sitting in my very boring all day business review today and have been reading your blogs..I just wanted to tell you that I love them and found myself really surprised at how much I enjoyed them. 🙂  I know your target audience is more than likely your financial peers ~ but I must tell you that as a total outsider to finance (who admits total naivety) I really feel like I get a great grasp of not only Finance, but how Finance is kind of the window to the world of business when reading them.  You do a really good job of not only describing the Finance piece, but sharing how the finance piece is so relevant in every facet of business and how it all interconnects- not to mention really calling people to the carpet to challenge themselves to be better professionals with a real “think outside the box” strategy. 🙂 
Just wanted to tell you that….definitely attracted to your writing and the way you are able to paint a picture and connect with your intended and even non-intended audience. 🙂  Kudos to you! 

Success Story – Manager of FP&A

February 19th, 2010 Comments off

     One of the more satisfying posts I can make is when a direct introduction within my network results in an offer letter. Whether it’s a Senior Accountant, Controller, or even a Sales or Marketing position, it’s great to see one less open job on the market. This week I was extremely happy to see a former colleague receive an offer letter for a Manager of FP&A position within a consumer products company. Knowing how this individual works, his skillset, and his commitment to the development of his career, he was well deserving.  It looks like there might be a few more in the works right now as I continue to see more opportunities opening up in the market. Funny….I haven’t spoken to a single person in the last few 6-months or more that secured their job through an online posting….hmmmm.

Thanks for reading . . . .

Jeffrey Ishmael

Ken Tudhope on Networking: Focus, Focus, Focus!

February 12th, 2010 Comments off

            Did you ever notice how kids love to create fire with magnifying glasses?  If given the chance, my kids sure do!  Why, you might be wondering?  First, fire is basically pretty fascinating.   Years ago when I attended Indian Guides camp outs with my three young boys, I was always amazed that nearly every boy there would attempt to burn anything from paper plates to plastic cups – just to watch in amazement at fire’s intense power.  Second, using the magnifying glass is like a science experiment, and I never stopped them from using this scientific method to generate fire in a safe and controlled environment. 

            The patience and persistence it takes to generate fire with a magnifying glass is a great metaphor for success.  Imagine that tiny intense white beam of light coming through the magnifying glass that is hot enough to start a fire.  If that beam of light wasn’t focused, there is no chance for fire.

            In my work every day, I talk to people who are novice networkers looking for work.  They know that they need to “network” to find their next job, but they aren’t skilled yet.  Continually, I encourage these job seekers to be persistent because, in my opinion, the people they are calling should return their calls! Who among us hasn’t been looking for work at one time or another – and maybe even very recently for some of you.  The average life span of a CFO is now 3 years!  

            So many people think of networking as something you do when you’re out of work.  And while I regularly espouse the benefits of networking while in a job or out of one, job seekers in particular need to be as focused as the beam coming from the magnifying glass igniting the paper.  People can’t help you if you can’t tell them what you are looking for.  The worst offenders are the most experienced and talented people looking for work because they can do anything and everything.  Your network of contacts can only help you if you have a specific goal.  When you are networking for a job, you need to know the answer to the question, “How can I help you?”  So my advice to both the novice and experienced networkers who are in a job search is to call, call, call!  Get those meetings, talk about your specific goals, and watch them lead to job opportunities.  Focus, Focus, Focus!

 

Thanks for reading . . .

 

Ken Tudhope

FEI/Woodruff Saywer Panel: Securing Your First Board of Directors Seat

February 11th, 2010 Comments off

            Last night I had the chance to attend another great FEI dinner for what has been a great 2010 season. Although the events have all been memorable this year, last night provided another opportunity to revisit the topic of securing your first Board of Directors seat. It was a repeat of the panel hosted earlier in the year by Woodruff-Sawyer, which also happens to be a sponsore of the Orange County Chapter of FEI.  Also a good opportunity to catch-up with Ron Pakhouz and Jared Pelissier and hear about their great start to this year and the new clients they’ve been signing.

            For the panel last night, we were also fortunate enough to have the same high-caliber panel, which include Paul Folino (Chairman of Emulex), Priya Huskins (D&O expert extraordinare of Woodruff-Saywer), and Bruce Lachenauer, who specializes in Board member recruitment. I’m not going to go into a full overview of the panel, since much of what was discussed at the earlier one was repeated here. However, below are some of the key takeaway points by the panel members last night.

 

– More HR positions relative to the Comp committee.

– 40% of current new Board members are brand new vs. 16% previously.

– Last 4-months Board activity is up 40%.

– Large increase due to need for financial expertise.

            A. 25% are CFO’s

            B. 25% are from Audit firms

            C. 25% are from Investment Banks.

            D. 25% from other functions.

– “The days of the Generalist on the board are dissipating…” – Folino

– Develop a Board that has broad-based strengths and can contribute to all areas… – Folino

– Regardless of your functional area of expertise, you better be able to have a valuable point of view/position on all Board issues – Priya Huskins

– What can you do to make yourself a more attractive Board candidate? – Bruce Lachenauer

– There is no on-the-job training for a Board…you need to hit the ground running – Lachenauer

– How do you leverage Private or Non-Profit Board experience to Public? Typically there are Public individuals sitting on the former. – Folino

– I can’t think of a better time for individuals to be looking for Board seats than now. – Folino

– It’s not just about D&O insurance, it’s about the conduct leading up to questionable events and the quality of due diligence. – Lachenauer

– It moves beyond more than just the financial risk, but the risk to your personal reputation – Folino

– There’s an absolute need to scrutinize your fellow Board members & their reputations – Huskins

– What are the opportunities to interview the Executive Team of the company before making a decision? – Lachenauer

– I can’t imagine not having someone w/ a strong legal background on the Board when it comes to M&A activities. – Folino

– Participating as a Board members vs Advisors involves a much higher level of accountability. – Huskins

– This is the first year that Brokers will not be able to cast votes for Board members, which may create a very interesting environment for Board retention. – Huskins

– The Nominating Committee is now usually headed up by an outside Director as opposed to the CEO. – Folino

Due Diligence: Sometimes Even The Best Miss….

February 10th, 2010 Comments off

            One of the things that I love about what I do is the opportunity to continue learning, whether that’s during the course of my day:day activities, or through the actions of others….good or bad. One area I have a real interest in is that of acquisitions and the manner in which they structure and strike their deals. What’s even more interesting is how those same folks approach the due diligence process. For some, it’s about speed, trying to capture 90% of the key data, and hedging the other 10% in one form or another. For others, it’s about a slow and methodical approach, turning over every rock, and scrutizing every report, employee, past employee, vendor, and service provider. I’ve seen both approaches….and I’ve seen them both fail as well.

            In a recent dinner conversation with someone in my network, we were discussing a recent acquisition and the manner in which the due diligence was conducted. The entire due diligence process lasted all but a handful of weeks before the investors came rushing in. What was unfortunate about the situation is that the corporation had a real estate loan that was not reflected on the balance sheet, and the mortgage payment that was being made was reflected as a lease payment. A further unfortunate discovery was that the building was purchased only in the last handful of years when real estate was approaching a fully valued scenario and is now valued significantly less.

            Unfortunately, in the haste to conduct the due diligence, it appears the reviews went no farther than system generated financial statements, banking records, and reconciliations of vendor payables.  Yes, there was a review of stated assests, but only those reflected on the balance sheet. Although it was likely that there was not any ill intent in the actions of the incumbent owner, it was an unfortunate discovery. The omission on the balance sheet was, in further review, likely attributed to the fact the during the 10+ history of the company, there was never a CFO or other key financial figure. Keep in mind that the investor group leading this effort were seasoned professionals and had generated significant wealth in their execution of prior transactions.

            So how do you avoid such a predicament in your own future transactions? It goes without saying that the itemization below is not an exhaustive view of approaching an acquisition, but merely a start to analyzing every element of the situation…

·         Who are you really dealing with…have you conducted background checks on key stakehoulders?

·         Have you run a full credit review / D&B on the corporation to identify all loans, liens, and other considerations?

·         Are there reconciliations available for all material balance sheet items? Reviewed?

·         Has the existence of all material assets on the balance sheet been confirmed?

·         Have a review of banking statements, vendor purchases, A/P balances, and A/R balances confirmed figures reflected within the income statement?

·         Have all tax returns been submitted on time & correspond to the income statement?

·         Are there contingencies built into the agreement to hedge against any unforeseen risks, unknown off-balance sheet liabilities, or any other non-reported liens?

            Like I said, this isn’t even close to an exhaustive list, which should ultimately be an extensive punch list of data to review, forecasts to be developed and riddled with considerations, and ultimately, considerations given to the respective cultures and other intangibles. Truly a complex jigsaw puzzle to consider….

 

Thanks for reading . . . .

 

Jeffrey Ishmael

When Skillsets & Application Separate. How Do You Qualify Those That Need to Quantify?

February 9th, 2010 Comments off

            Over the last 2-years+ I have come across some very talented Finance folks who have been forced to the employment sidelines as a result of mergers, corporate bankruptcy, or in most cases, downsizing at their respective companies. I have also had a chance to interview some of these same candidates and have come across what appeared to be some very good and talented individuals….at least on paper. However, in a number of cases, I have seen a drastic divergence between the skillset that is shown on a resume and the application of those skills in an everyday environment. The more I talk with companies about the hiring of Finance talent, the more I see a challenge for companies to really look beyond a resume and qualify those who need to quantify.

            A good example is the candidate that has come from an Audit background, has large company experience ($1 billion+) and is on the job hunt. You receive dozens of resumes and all seem to be very well qualified at first review:

·         CPA

·         Good company history & tenure

·         Summaries about efficiencies & controls.

·         Recommended by a trusted recruiter

·         Interviews well with the team

            So you finally make your choice and extend an offer to the Controller behind door #1. Great, that opening is now filled and you can check the box. Wrong. This is where there is often a divergence between the skillsets that are presented by a candidate and the actual application in an everyday environment, as well as their ability to effectively function with the rest of the staff. Have you just hired the candidate that you really wanted, a partner, collaborator, and someone that will help drive value for the company, or a candidate that will just create busy work and consume the time & resources of those around them? So what am I really talking about at this point….?

·         Is your new hire someone that would be inclined to zero in on a expense report form when there is no issue with the travel spend?

·         Is your new hire someone that wants to keep information silo’d and on a need to know basis because it’s “not your function”.

·         Is your new hire someone that wants to put in controls and processes that are only effective in a large company environment with larger staff?

·         Does your candidate understand the differences between working in a large company environment vs. a micro-cap or small privately held?

·         Does your candidate really have the ability to work effectively with others when the daily regiment really does mean “being in the trenches everyday”?

            This is where I tend to believe that many financial professionals, while accomplished and credentialed, really do not have a handle on the dynamic between their knowledge base and it’s application in the environment that they are potentially hiring into. That most candidates have not put forward the proper effort to not only run a diagnostic on the company, but one on themselves to truly understand their skillset and what they can offer a prospective employer. There is also the difficulty posed to the prospective employer when they need to qualify those who quantify. Show in the interview that you can deliver value, as you’ll be expected to do daily….

 

Thanks for reading . . . .

 

Jeffrey Ishmael