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If you are having difficulty seeing this mail or images in it, you can view it in your Web browser. Volume 6, Issue 2      In This Issue:   Enron: Something a jury can see   Toting a Trademark   People skills deserve more respect   CFOs set to unleash spending   Under Patriot Act Feds could bug Boards   What’s wrong with Finance training   The new human-capital metrics   When gender changes the negotiation   Managing social distance in “Flat” companies   Best Buy’s supply chain transformation   Four strategies for making concessions   Continuous Auditing is here to stay   The changing face of treasury investments   Records Management: A sleeping giant   The route to better procurement   Receivables processes remain reactive   Keeping it quiet   The boss and you   Ten diets that work   The biggest obstacle to a better bod: your brain   Ouch! With sex injuries, love really hurts Get ahead with a BlackBerry Solution Sure, you probably see our devices in people's hands all the time. But have you ever seen BlackBerry as a solution for your company before? Or maybe you thought it was only for larger businesses. Truth is, more and more businesses of all sizes are turning to a BlackBerry Solution to quickly gain a competitive advantage. >> Register to learn more Register for a chance to win 1 of 8 BlackBerry devices and find exclusive, limited-time BlackBerry offers! Enron: Something a Jury can See The Global Galactic agreement could be a smoking gun for the government's case. Now it may depend on whose version of the pact the panel accepts. Courtroom testimony about you can hurt. But it's often the stuff that's in writing that can really kill you. In countless cases it has been egregious e-mails, malevolent memos, or other damning documents -- not testimony -- that has sent a defendant's case down in flames. In the federal prosecution of Kenneth Lay and Jeffrey Skilling for their role in the collapse of Enron, that kind of documentary evidence has been lacking. Until, perhaps, now... Read the article.  Back to top Toting a Trademark Coca-Cola's (KO) hourglass-shaped bottle. Absolut Vodka's widebodied, slim-necked vessel. These iconic silhouettes serve as distinctive symbols of their brands and are protected by registered trademarks. Such recognition by the U.S. Patent & Trademark Office is relatively rare. But in January a small Manhattan startup won the same protection. Built NY, now two and a half years old, successfully trademarked the shape of its first product: the Two-Bottle Tote... Read the article.  Back to top People Skills Deserve More Respect A survey finds that 35 percent of internally hired leaders fail, usually because of a lack of interpersonal skills, and that companies with strong leader-development programs enjoy better business results. The quality that leaders respect most in other leaders is the ability to bring in financial results, according to a recent report by talent-development consultancy Development Dimensions International. In DDI's fourth annual survey, nearly 5,000 "leaders" and human resources representatives around the world ranked decision-making ability second and vision for success third among qualities that garner their respect. Notably, people skills and the ability to mobilize a team ranked lower, and ethical behavior was close to the bottom. Do these responses suggest that all the people-focused talk in recent years — of emotional intelligence and people as "a company's greatest asset" — has been lip service? Is the "people side" of leadership just a soft topic that "real" leaders don't have time to address? On the contrary: Considering the survey's other findings, it may be that there's a gap between the kinds of leaders who win respect and the kinds who actually succeed... Read the article.  Back to top CFOs Set to Unleash Spending Optimistic finance chiefs are planning capital spending and employment increases, according to the most recent Duke University/CFO Magazine Business Outlook survey. Optimism about the U.S. economy among chief financial officers has reached its highest level in a year, as cash-rich companies stand willing to withstand an increase in inflation and pay over $70 per barrel of oil to reduce U.S. dependency on Mid-East oil. Those are some of the findings of the Spring 2006 Duke University/CFO Magazine Business Outlook survey, which asks CFOs from a broad range of public and private companies worldwide about their economic expectations. The latest quarterly survey was concluded March 5 and generated responses from 571 CFOs, including 323 from the United States, 153 from Europe, and 95 from Asia. (The survey of European CFOs was conducted jointly with RSM Erasmus University in the Netherlands. Results cited here are for U.S. companies unless explicitly stated otherwise.) Detailed results are available at www.cfosurvey.org This quarter, 42 percent of U.S. CFOs are more optimistic than in the previous quarter... Read the article.  Back to top Under Patriot Act, Feds Could Bug Boards The new amendments will enable prosecutors to use electronic surveillance of executives suspected to be involved in such misdeeds as price fixing and bid rigging. Intellectual property could also be at risk. When President Bush signs the Patriot Act amendments into law later this week, the civil liberties of people targeted in terrorism investigations will be strengthened. That's not the case, however, for corporate executives and directors under investigation for antitrust crimes. For them, the amendments will enable the government to wiretap phone conversations and bug boardrooms and offices if there's probable cause that antitrust violations are being committed. Up until now, the Department of Justice has used wiretaps and bugs mainly to gather evidence against suspected mobsters, drug runners, terrorists, and other "blue collar" criminals, as prosecutors like to refer to them. But the USA Patriot Improvement and Reauthorization Act, which was narrowly passed by the House Tuesday night after sailing through the Senate last week, should change all that... Read the article.  Back to top What's Wrong with Finance Training And how some companies are finding ways to make it work. Like most companies, General Mills Inc. didn't always devote the resources to employee training that it should have. "There was always some training, but it was haphazard, not consistent or actionable," says Lisa Kline, director of finance and supply chain at the $11.2 billion food company. "People didn't learn skills or techniques; they just got information."That information tended to be parsed out during brown-bag lunches or simply when time and circumstance permitted. Minneapolis-based General Mills has since adopted a much more effective approach to educating its finance staff, but many companies haven't. "If you're asking what's wrong with finance training, my answer would largely be, what training?" laments Mark Beckstrom, a human-capital-management consultant at IBM Business Consulting Services. That's an exaggeration, but not by much. Training experts say companies continue to repeat old mistakes... Read the article.  Back to top The New Human-Capital Metrics Hard Choices How finance executives are confronting rising benefit costs, the aging workforce, recruiting, and other human-capital concerns. A sophisticated crop of measurement tools could take the guesswork out of human-resources management. The human-resources department is in survival mode. As outsourcing the function becomes a more-prevalent option for companies, HR managers know that if they are going to endure, they have to deliver strategic value, and that value has to be measurable.With that in mind, many companies are forging ahead on efforts to create a new set of metrics that tie traditional HR functions like recruiting, training, and performance review to overall corporate goals — including fattening the bottom line. The old HR measures, such as head count, the cost of compensation and benefits, time to fill, and turnover, no longer cut it in this new world of accountability. They don't go far enough to create shareholder value and align people decisions with corporate objectives... Read the article.  Back to top When Gender Changes the Negotiation Gender is not a good predictor of negotiation performance, but ambiguous situations can trigger different behaviors by men and women. Here is how to neutralize the differences and reduce inequities. From Negotiation. These differences can create huge inequities over time. Competitive negotiations can act as gender triggers... The last few months have been trying for Maureen Park, the managing director of a small portfolio management firm. The firm's parent company, a large financial services concern, was performing below forecasts, and morale among Park's understaffed, overworked team of research analysts was low. To make matters worse, Park's two best analysts both requested significant raises after their annual reviews. Both women expressed their belief that they were earning substantially less than analysts at comparable firms and probably less than lower-achieving members of their firm—including a male colleague who had been lured away from a competitor. Park went to bat for her star performers, though management had instructed her to offer only cost-of-living raises. To her surprise... Read the article.  Back to top Managing Social Distance in "Flat" Companies Organizations may have become flatter, but leaders still need social distance in order to take the big-picture view. Here are ways to combine friendship with leadership. Excerpted from Why Should Anyone Be Led by You? The balance for any leader is forever changing All leaders possess an inbuilt, maybe hardwired preference for either closeness or distance. The concept of social distance derives originally from the German born sociologist Georg Simmel. Writing in the early twentieth century, Simmel conceived of social distance as a complex interpretation of sociability, as forms of distance in both a geometric and a metaphoric sense. In modern social science, it has increasingly been seen as a measure of intimacy between groups and individuals. In turn, the degree of intimacy directly affects the degree of influence that one individual may have over another. There are good reasons for believing that the skillful management of social distance is becoming even more important for leaders. Hierarchies, for example, are becoming flatter, partly for cost control reasons but mainly to increase speed of response to customer desires and market changes. Hierarchies have always been much more than structural devices. They have also been sources of meaning for people. Moving through stable hierarchies gave the illusion of becoming more of a leader. Indeed, the "lazy" senior executive relied on the crutch of hierarchy to establish social distance, jealously guarding their status privileges as a way of establishing their difference. Those days are gone. Leaders now need distance to establish perspective, to see the big things that may shape the future of the organization, and closeness, to know what is really going on inside their business; and they cannot rely on hierarchy to supply the former... Read the article.  Back to top Best Buy's Supply Chain Transformation Best Buy has transformed its supply chain from a high-volume distribution mechanism to a customer-facing operation that drives strategy as well as product. From Supply Chain Strategy. Rarely has a major shift in a company's strategy relied so heavily on the supply chain. Best Buy is reimagining its big-box retail concept to focus intensively on customer needs, and the company's supply chain is an integral part of the new vision. No longer will the supply chain simply push high volumes of product out of the factories and into the stores—a task at which it excels, by the way. Now it will emphasize agility, responsiveness, and accuracy, pinpointing smaller, sales floor-ready deliveries to meet the changing desires of specific customer segments. In effect, the supply chain is becoming a customer-facing unit. Best Buy's move is a measure of just how far the supply chain has evolved in its relationship to corporate strategy. But this story offers lessons that go beyond how supply chains can drive vast shifts in strategy. The Best Buy transformation shows how supply chain executives from a range of industries can look beyond cost savings to make sure they're not missing opportunities to satisfy customers, can structure the supply chain to allow customer-facing units to "pull" product from consolidation centers, can help to relieve frontline workers of responsibilities that aren't essential to sales, and can make sure that supply chain decisions are fact driven—that they're based on evidence gleaned from customer experiences.So how did Best Buy go about this transformation?... Read the article.  Back to top Four Strategies for Making Concessions "Concessions are often necessary in negotiation," says HBS professor Deepak Malhotra. "But they often go unappreciated and unreciprocated." Here he explains four strategies for building good will and reciprocity. From Negotiation.. Your concessions will be more powerful when your counterpart views your initial demands as serious and reasonable. The strategy of demanding and defining reciprocity plays out in a variety of contexts... When trust is low or when you're engaged in a one-shot negotiation, consider making contingent concessions. Most people understand that negotiation is a matter of give-and-take: You have to be willing to make concessions to get concessions in return. But the process of making concessions is easier said than done. Consider how events unfolded in the following management-union negotiation, adapted from Richard E. Walton and Robert B. McKersie's book A Behavioral Theory of Labor Negotiations: An Analysis of a Social Interaction System (ILR Press, 1991). The head of a manufacturing firm was preparing to initiate talks with the leadership of the employees' union. The biggest issue on the table was a wage increase. The union was asking for a 4 percent increase, while management wanted to raise salaries by only 1 percent.The executive considered the situation. During past negotiations, weeks were lost as each side jockeyed for position, feigned willingness to walk away, and eventually compromised on an unsurprising outcome. In this case, a deal at 2.5 percent, the midpoint of the two parties' opening positions, seemed likely to be agreeable to both sides. This time things would be different, he resolved... Read the article.  Back to top Continuous Auditing Is Here To Stay Now that the need for transactional efficiencies, fraud prevention and real-time financial reporting is acute, mainstream finance is finally jumping on the bandwagon. Continuous auditing's surprisingly long gestational period is nearing a conclusion. For software vendors, academics, consultants and a handful of practitioners at early-adopter companies, the primary question is: Why has it taken so long for corporations to embrace it? The delay can't be justified by claims of high cost. A $200,000 to $300,000 investment in a continuous auditing (CA) software application that sniffs out errors in masses of A/P, travel and entertainment (T&E), or general-ledger transactions is routinely recouped in less than a year. And that saving is based solely on the dollar amount of the errors that the application identifies. Further, more focused, downloadable CA applications are available for well below six figures. Whatever the reasons companies have advanced for inaction, regulatory demands, the push for real-time financial reporting and resource-sapping manual audits are propelling them toward adoption of continuous auditing. Ultimately, though, larger forces will provide the biggest boost for change. "How do you maximize value and how do you manage and mitigate risk? ... My personal view is that continuous monitoring and continuous auditing can help to make progress towards both," said David M. Walker, comptroller general of the United States and chair of the Center for Continuous Auditing (CCA) at Rutgers University in New Jersey, in his keynote presentation at Penton Media's BPM Summit in November of last year. "I think this concept of both continuous monitoring within the organization by management, as well as continuous auditing by either internal and/or external auditors who are going to be dealing with test and assurance issues, is going to become much more important."... Read the article.  Back to top The Changing Face of Treasury Investments Treasurers are using technology to optimize returns on their cash, looking for investment opportunities outside the United States and tightening control over their trades. Internet-based trading technologies together with shifts in the economy and the business environment are transforming treasury investing. To paraphrase the famous Oldsmobile commercial: These are not your father's investment strategies. After several years of hype, online trading platforms are making significant inroads into cash management functions; treasurers are increasingly relying on these tools to find and execute the best trades. Key benefits of this technology include significant time savings and access to a wider range of investment options. More and more U.S.-based companies are buying and selling products and services beyond the United States' borders, prompting treasurers to seek reliable investment vehicles for their organization's overseas subsidiaries. These days, "even midsized and small companies are much more global," says Bob Deutsch, managing director and head of global cash with JPMorgan Asset Management in New York City. "They need global solutions."... Read the article.  Back to top Records Management: A Sleeping Giant Companies that have neglected documenting and recording the right information are waking up to the fact that it's a must-do for Sarbanes-Oxley compliance. Not long ago, most CFOs regarded records management as a minor administrative function, and not one that finance should particularly be concerned about. Finance executives were usually content to let company records gather dust. These days, though, CFOs are brushing the cobwebs off their organization's records systems and taking a hard look at the data they contain and their ability to secure it and deliver it on demand. The Sarbanes-Oxley Act is a big reason for the shift. "Records management is a sleeping giant" of compliance, observes Lee Dittmar, principal and leader of the enterprise governance consulting practice at Deloitte Con-sulting LLP in Philadelphia. "There's a tremendous amount of data to manage, and most companies don't have the policies or tools to find what they need when they need it. That represents one of the biggest compliance risks any company can have." The initial impact of Sarbanes-Oxley had most businesses scrambling to bring their internal controls up to scratch and shopping for compliance management software that could help them do so. At many organizations, the records management imperative never emerged from the background. Now, though, there's a growing awareness of the importance of that mandate for compliance efforts... Read the article.  Back to top The Route to Better Procurement Improvements in purchasing systems transcend cost savings, and companies are seeing the benefits extend to every corner of the business. Managing procurement has never ranked as a glamorous endeavor. It doesn't elicit the excitement of a new technology rollout or the satisfaction of landing a new customer with deep pockets. Yet in today's cost-conscious and productivity-driven business environment, efficient procurement can serve as an engine for economic gain. Brett Mauser is well aware of that fact. Five years ago, the director of global procurement for Dayton, Ohio-based NCR Corp. faced a mountain of paper, disparate systems, overlapping requisition processes and costly buying patterns. For an organization that spent $3.3 billion annually and conducted business in more than 100 countries, "there was an enormous opportunity to drive improvement," he explains. Today NCR, a provider of transaction and data warehousing products, is a model of efficiency. By linking order management, inventory controls, warehouse management, contract management, purchasing, travel and entertainment (T&E), accounts payable, and other activities, NCR has created visibility and accountability. Moreover, the Web-based invoicing and electronic data interchange (EDI) system that the company put into place has helped streamline buying. More than 70 percent of the company's suppliers now use this mode. The switch to online invoicing lowered costs from $14 per invoice to near zero. At the same time, the number of invoices flagged for review or manual handling has plummeted from 70 percent to 20 percent... Read the article.  Back to top Receivables Processes Remain Reactive Nine times out of 10, the customer is right. That is, in terms of accounts receivable disputes. This according to a survey sponsored by Aceva Technologies Inc. of more than 100 financial, collections and receivables executives at midsize to large companies. Researchers discovered that many organizations still take a reactive approach to collections and receivables management. Related results show that... Read the article.  Back to top Keeping it Quiet The largest U.S. companies spend more than a third of their revenues on human capital, according to New York-based Mercer Human Resource Consulting. But few of those firms are keen on telling shareholders just how those dollars are spent -- and how employees are helping the organization, according to a recent study. According to Mercer's ongoing analysis of the 100 largest publicly traded U.S. companies, only two in 10 (20 percent) companies address human capital and its contribution to business success in their annual reports. About 25 percent provide "limited references" to the workforce, while others don't acknowledge their people at all. The study also found most companies that do report on human capital typically focus on payroll or wage statistics. There are a few potential explanations underlying that reluctance to provide concrete, useful human-capital information to investors... Read the article.  Back to top The Boss And You Write this down: Your boss isn't your best friend, a babysitter or an ogre. If you're lucky, your boss is competent, a mentor interested in your advancement and confident in your abilities. A good boss depends on you. The reward for good work is challenging assignments in the future. In return, make your boss look good to The Grand Pooh-Bahs who inhabit the executive suite and the corner offices. If nothing else, boosting your boss will advance your career. (See: "I Pledge Allegiance To My Company.")"The relationship with your boss is a partnership," says Jane Boucher, author of How To Love The Job You Hate: Job Satisfaction for the 21st Century. "It takes effort to built the relationship and nurture it. You have to communicate well, avoid confrontations and resolve differences in a positive way." That sounds simple enough, but many employees get bogged down in small details and lose sight of what's important... Read the article.  Back to top Ten Diets That Work There are two eternal truths about diets: One, if properly followed they will result in weight loss; and two, most people will cheat. Only an iron will, an in-house nutritionist or numbed taste buds can guarantee a successful diet. But this isn't just a question of discipline. It's also boredom, timing and preconditioning. For example, an athlete accustomed to consuming large amounts of food will find it hard to reduce his or her caloric intake when no longer in training. Even if the foods are tasty--the Atkins diet actually encourages people to eat bacon and butter--people will hunger for the forbidden. The reason is that many diets are too restrictive and are not designed to be sustained over time. For example, go to a spa, drink lots of water, go for hikes, do yoga, eat 1,000 calories a day and lose weight. Within a short time of coming home, though, the weight that had been lost, like the prodigal son, has now returned... Read the article.  Back to top The biggest obstacle to a better bod: your brain Exercise psychologists want to change the way you think about fitness. How’s your New Year’s fitness resolution coming along? If your exercise plan is still on track, congrats! But now into the third month of 2006, plenty of people who rang in the year with a commitment to shape up are probably sitting it out instead. With statistics showing that more than half of people who embark on a new exercise plan drop it within three to six months, many who resolved to work out more this year will have fallen off the fitness wagon by swimsuit season. “Motivation and commitment can rapidly evaporate,” says sport psychologist Jim Gavin, who reviewed the latest findings on exercise psychology in the February issue of the IDEA Fitness Journal, a publication targeted to exercise instructors and personal trainers. In our overscheduled world, lack of time is often cited as a key reason for not exercising. But Gavin, a professor of applied human sciences at Concordia University in Montreal, says that changing the way you think about exercise can help you to work it into a busy lifestyle.Some mental strategies can even train your brain to enjoy — or at least not totally loathe — physical activity... Read the article.  Back to top Ouch! With sex injuries, love really hurts The British erotic retail chain Ann Summers recently released a poll asking people if they had ever been injured during sex. One in three said they hurt themselves somewhat routinely, though the injuries were about what you might expect: rug burns (to, ahem, the knees), muscle pulls, a conk on the noggin from, say, banging into the headboard. But at Sexploration we hear stories, sometimes from emergency room doctors in bars. By the third martini, the stories often begin with, "You wouldn’t believe what I saw last night…" And so I decided to call around to emergency rooms and ask sober ER docs about the things they see, and, more importantly, what advice they might have based on their experiences, not only how to avoid the damage, but how to handle the delicate task of seeking help once the damage is done... Read the article.  Back to top Forward to a Friend: Do you have a friend that would like to receive FinanceWatchsm? Perhaps you know a peer within your organization, or associate at a partner company that would benefit from applying to receive this publication. Inviting a friend to experience the benefits of joining the BusinessWatch Network is easy! Just FW: this newsletter to the person you know who may have an interest and ask them to click here http://www.businesswatchnetwork.com Your friend will be glad you did! DISCLAIMER: FinanceWatchsm and the BusinessWatch Networksm are service marks of DMS. 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