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Posts Tagged ‘finance blog’

The Unconventionals….Assessing Team Additions

October 10th, 2013 Comments off

One of the larger challenges of managing the Finance side of the organization, which includes A/P, A/R, Accounting, and in some cases, HR and IT, is the multitude of personality and skill sets needed for each position. In some positions, say in the case of Controller, there is a typically a defined educational or work history that is required.  In other cases, the position may allow some level of latitude in the candidate hire with respect to their work history or absence of certain credentials. I’ve had a number of these hires over the previous companies I’ve worked with and I call them The Unconventionals. Unconventional in the respect that if the sole qualifier was the content of their resume then they probably wouldn’t make it to the interview stage.

With respect to my background, I might have been considered an unconventional hire when I joined MGE since the majority of my experience was in the Retail & Apparel industries and not Technology. I was also going to be tasked with the implementation of the IFRS reporting for the North American operations, for which I had no previous IFRS experience. However, I had an executive team that saw past that and look at other accomplishments and my personality to know that I would get the job done. Not only did the job get done, but we excelled in our continued performance during the 3+ years I was with the company. Perhaps it was this experience that has prompted me to adopt a similar approach in the identification and hiring of candidates.

While working at MGE, I had an opening for a Financial Analyst position. This position would typically call for 2-5 years of experience. However, I was introduced to a potential candidate who really didn’t possess any substantial finance or accounting experience. However, what I recognized was that he was a Marine and had worked with munitions. What I saw was not a candidate, who didn’t have the requisite experience, but someone who had a great work ethic, an attention to detail, and a commitment to team work.  I knew I could bring him up to speed and could trust that he would be a great ambassador internally for the team. In the following years, I hired him into a separate company I had subsequently moved to as a Finance Director, and most recently, he secured his first CFO position with a small action sports company.

While tasked with the turnaround of a small footwear company in San Diego, I had the need to bring in a staff accountant that would also oversee A/P and A/R. I was presented with a number of well qualified candidates. However, the one candidate who had the least amount of experience, with predominantly tax preparation history, was an Olympic level track runner. Knowing the work ethic and dedication required for the athletic endeavor, I knew she was my candidate. Over the subsequent years she not only excelled at that small company of $30 million in revenues, but moved to a larger action-sports company overseeing all accounting for the Canada entities. During this time she also secured her CPA certification and has become the Assistant Controller for an OC-based manufacturer.

At my current company, I had a drastic need to hire a Business Operations Analyst that could support me in the implementation of operating systems, HR functions, and the myriad of other financial reporting I was responsible for. I had a candidate recommended to me, who had previously done some project work for me at DC. On paper, he was green and a recent graduate from UCSB. However, I knew that based on the project work he had done for me that he had a solid work ethic and would likely be a solid team player if given the opportunity. He also had great attention to detail, which was critical since he’d be working quite a bit independently and I couldn’t afford slips in this area. He’s not only done fantastic work, but become a respected member of the Cylance team as a result of his contributions and work ethic.

Ultimately, these candidates have a much higher burden to perform as they have to be willing to go the extra step to earn the respect of the surrounding team. They’re held to the same level of accountability, and if they don’t perform, are also subject to potential dismissal. Although there is a first for everything, and I’m prepared to, I have yet to hire a non-performing candidate I’ve had to dismiss.

While perhaps unconventional, these hires are a direct reflection on me and my ability to deliver on the commitments I have made to the rest of the Executive team or the Board. The hiring of these candidates are a reflection on my department and my effectiveness in assessing candidate potential. When I take this approach, I have to have a comfort that any candidate I’m willing to support will be able to deliver and excel after I’ve brought them up to speed. Not only deliver on my requirements, but also be resourceful enough to potentially support other members of the Executive team. While I do all I can to keep my turnover low and promote internal candidates, there’s nothing more satisfying then seeing these same folks depart into a more prominent position.

Thanks for reading…

Jeffrey Ishmael

Life In The Start-Up Lane: When “Standards” Keep Changing…

September 25th, 2013 Comments off

As I’ve mentioned in some of my prior posts, whether it’s just another day in Finance or within the life of a start-up, there is no normal day. Take that a step further and you’ll likely find that there is no level of “normal” reporting that you can rely on to measure what is happening with the business.  At least not the “standard” level of reporting that you would have relied on at a prior company, which was likely much larger and more mature. As we are about to kick-off our sixth fiscal Quarter, the reporting that we relied on two Quarters ago is far different than what we are using now, and what I expect to be using in another few Quarters.

Part of the challenge within a start-up is balancing the integration of new systems while developing the rest of the business. This is not a sequential sequence of events, but a series that run parallel, often forcing business decisions based on experience and gut instinct. This is probably where I highly value the time that I spent in equity research covering 20 different retail and apparel companies. Monthly comp sales unleashed a flurry of data that had to be quickly assessed, reported on, and subsequently disseminated to clients. It had to add value, and above all, it HAD to be correct. Making business decisions in the absence of data, or at least incomplete data, is a very uncomfortable position for most folks.

So how do you measure the business when the standards are constantly changing? The absence of standards is not indicative of an absence of accountability or transparency, but part of the evolution that naturally occurs within a start-up. Yes, there is a Budget that is developed and based on certain assumptions, but it’s not long before that Budget becomes a distant reference point as you begin compiling data and assessing the potential trends that are developing within the business. However, one to two Quarters of data certainly is not a “trend” within a start-up, but it sure helps in refining the assumptions used in the Forecast. As with our business, while we are cognizant of the metrics that we will ultimately be using to measure our performance, some of those metrics are simply meaningless at this point since the business is still young and there isn’t enough data yet collected. That doesn’t mean that we’re not tracking our bookings, revenues, margins, and other macro indicators, but the detailed view is in a bit of a holding pattern at the macro level until we can drop down to the next level for more meaningful reporting.

As our business continues to grow and prosper, I absolutely expect a fundamental shift in our reporting abilities as we collect more data. We’ll move from the “spirit” of building the business to “fine tuning” the engine and driving increased performance through the data distributed to our key internal stakeholders. In these early stages of a start-up, it’s a delicate balance between giving the teams the latitude they need in developing the business, tracking their activities to the Budget, and determining whether their invested time and expenses will deliver an ROI in the immediate future. In the initial phases, that ROI may come in the form of customer satisfaction, referrals for new projects, potential new hires, and if all are executed properly….bottom line profitability.

Living the day-to-day life of a start-up is not the black & white mechanical structure most are used to working under. It necessitates the development of comfort in change and knowing that will be the case for quite some time. However, at the end of day, just take a step back, look at the evolution of your bottom line results, the trend in customer engagements, customer feedback….and you’ll know exactly how well you’re performing.

Thanks for reading…

Jeffrey Ishmael

Investor Relation efforts – Not just for Public companies.

April 7th, 2009 Comments off

     I was talking with a friend over the weekend and telling him about I group I would infrequently attend meetings for, NIRI, or the National Investor Relations Institute. They have a fantastic Orange County chapter and a number of the members have become friends over the years.  I was asked why I attended the events since they typically catered to the I.R. position for public companies, or those heading down the IPO path. True, the meetings are targeted to those individuals, but the investor relations effort isn’t confined to a delegated / dedicated position or solely public companies. In fact, I tend to believe the effort needs more focus for a private company since public information isn’t readily available and if banking, vendor, and other key relationships are to be fully leveraged, then there needs to be some level of transparency for them to base their decision making on.

     More specifically, I make a point of maintaining active discussions with our bank to keep them updated on our monthly & quarterly results, as well as any material changes to our Forecast. While there’s a certain built in level of accountability (& risk) in starting these conversations, the benefits gained from delivering on previously discussed plans is invaluable. Not to mention the credibility that will be built over time. It’s a message constantly delivered in the market place…”Relationships need to be developed before you need them”, or in this case credit lines, but it’s absolutely true. No, I’m not undertaking this exercise because I have covenants that need to be managed or our company is in some level of distress, it’s merely good business practice.

     I’ve had some great folks that I have been able to work with and for, who have provided some great circumstances to learn from with respect to investor relations. More importantly, the investors in your company are not only those who have contributed working capital, but those who are investing their time and corporate resources to help your company succeed. Whether they are getting a return as an investor on the sidelines or securing returns working as a corporate agent, they should still be viewed as investors?  How do you view your key relationships and manager your IR efforts?

Thanks for reading . . . .

Jeffrey Ishmael