| If you are having difficulty seeing this mail or images in it, you can view it in your Web browser. |
|
| Volume 7, Issue 5
|
|
In This Issue:
 The great debates about 360 degree feedback
Performance management process checklist
 Why you can't get any work done
Running on an empty tank
Calling the policy police
Time off: The europeans do it right
 Are Americans too lazy?
Bernanke: The un-Greenspan
Housing woes hit high-end
 Accounting for good people
Trading [Analyst] favours
Five years under the [Sarbanes-Oxley] thumb
Collared [backdating options]
A Tiger [Woods] in the boardroom
 The hedge fund as activist
 [Video] CFO wanted. Controllers need not apply
What's your fraud score?
Tickling the keyboard: 10 spreadsheet tips
The [global credit] game is up
 Steve Player interviews Southwest's CFO, Laura Wright
Your shared services checklist
 Stop singlism!
|
|
|
 |
The Great debates about 360 degree feedback
Each of us wants to know how we’re doing at work.
We especially want data from our supervisor that tells us that we are doing well. We have a great need to know how others view our work but we want the information in a kind and
gentle fashion. When learning how to provide effective feedback, managers discover how to give meaningful feedback in a way that ensures the employee shares meaning,
my favorite definition for communication...
Read the article. Back to top
Performance management process checklist
Regular emails from readers ask hundreds of questions each year. Patterns emerge about the toughest situations you face in your organizations.
These are the ten toughest, but most frequent, questions you send my way.
Performance development planning in most companies should have concluded by now. The third quarter is underway and employees deserve a concise understanding of
their expectations for this quarter. They also like timely feedback about how their work was perceived during the second quarter.
That said, the best goals are measurable and employees should "know" how they performed. Still participating in an old-fashioned, traditional performance appraisal system? Your organization
needs this information...
Read the article. Back to top
|
|
|
|
 |
Why you can't get any work done
Workplace distractions cost U.S. business some $650 billion a year. Here's how managers can keep employees focused.
Sly Kodrin, vice-president for operations at a hinge manufacturing company in Alliance, Ohio, likes to maintain a shop floor that balances passion with productivity,
allowing his 75 employees to listen to music and socialize, as long as it does not interfere with their work. But when a stamping press operator brought golf clubs to work one day and began swinging at rolled-up work gloves while he was in charge of
an automatic stamp press, Kodrin's line had been crossed. "Most people, I tend to believe, thought it was funny at first," Kodrin says about the incident, which rose above the ordinary distractions of equipment noise, weather, blackouts, and news
of the day. But the humor dissipated quickly [It is estimated that American businesses lose around $650 billion a year through workplace distractions, such as]...
Read the article. Back to top
Running on an empty tank
We expend huge amounts of emotional and mental energy every day at work. You need to replenish periodically to avoid crashing and burning.
One time about 10 years ago, for no apparent reason, I broke out in hives. I couldn't for the life of me imagine what I'd eaten or drunk or rolled in that would have caused these awful red spots to appear. I asked my wise voice teacher, Winifred, for
advice, and she filled me in on the Barrel Theory of allergy. Your body is like a barrel, she said. We can only take so much exposure to allergens without any trouble. When the barrel is full, that's it: One more chemical in the dry-cleaning fluid on your suit or the wrapper on your ballpark hot dog, and you've got hives. Often, it's not
any one thing that does it, but the accumulation of toxic stuff that just fills the barrel to overflowing one day. At work, we have things to do and people to see and deadlines to meet all day long. And as we work, we expend tremendous amounts of mental and emotional energy. Some days are productive and empowering; others are
frustrating, boring, or crazy-making. The good news is that the energy doesn't all go in one direction; our work can fill our fuel tanks up as easily as it can drain them. Little things like praise and companionship and encouragement give us the energy
to keep going. Ever notice how there's one recurring meeting or event (often connected with budget time!) at your job that sucks the energy out of you—while other activities give you extra juice? It's good to pay attention to these energy-giving
and energy-draining aspects of your job. The truth is, you can't run a race on an empty tank, and if your job is taking more fuel than it's giving you, you're going to hit empty. There are a few ways to keep the needle on your fuel tank out of the red zone...
Read the article. Back to top
Calling the policy police
Sure, sometimes you have to write down the rules, but too many policies is a waste of time and makes employees feel you don't trust them.
You might think that as a 25-year human resources leader, I'd be a big fan of policies. Lots of HR people are simply crazy for policies. They'll enact a new policy every day if you let them. I take the opposite view: The fewer policies, the better. What I've seen in my years in HR is that policies are expensive, in several important ways.
Policies spring from situations that arise in the workplace. We used to say in my old HR department, "Once is a fluke, twice is a pattern, three times is a new policy." Maybe it's how to handle an employee's request to be paid part of his tuition reimbursement in advance. Maybe it's a policy defining the kinds of slacks that must be worn beneath
the logo'd polo shirts in the company's booth at industry trade shows. You can write a policy for just about anything. And that's a problem, because policies come with costs...
Read the article. Back to top
Time Off: The europeans do it right
I applaud a whole continent shutting down for a month. The only way we can really shut down and enjoy time off is with our colleagues' help.
Ten years ago, I was living on the road—way more than was healthy. We expect to see 25-year-old management consultants living out of suitcases, but when you're in
your 30s and have small children at home, a heavy business travel schedule is a major encumbrance. Two weeks every year, if I was lucky, I'd get to pack up the kids and the gear and take a family vacation. But there was a problem: The work didn't stop.
Even when I was hiking in the mountains or sitting on the beach, counting heads bobbing in the waves, my phone would ring...
Read the article. Back to top
|
|
|
|
|
Are Americans too lazy?
|
We're enjoying our wealth. Sweating less and having more is the idea. |
|
|
|
|
U.S. workers can't compete globally unless they work harder, writes Fortune's Geoff Colvin.
We Americans pride ourselves on being a hard-working bunch, so here's a thought to spoil your Labor Day rest: By global standards, we're lazy. We've been getting lazier. And the days of the American dolce vita may be numbered. The surprising report of our relative
sloth arrives in new research from the UN's International Labor Organization, which looks at working hours around the world. When it comes to what we might call hard work, meaning the proportion of workers who put in more than 48 hours a week, America is near the bottom
of the heap. About 18% of our employed people work that much. That's a higher proportion than in a few other developed countries like Norway, the Netherlands, and even Japan. But it's actually lower than in Switzerland and Britain, and way lower than in developing
countries like Mexico and Thailand. It's drastically lower than in what may be the world's two hardest-working countries, South Korea and Peru, where the proportions are about 50%. It's bad enough to be told we're slackers in the world economy. What many Americans really
won't want to believe is separate research showing that we're working much less than we used to...
Read the article. Back to top
Bernanke: The un-Greenspan
|
|
Federal Reserve Chariman Ben Bernanke is unlikely to cut interest rates, many economists believe. |
|
|
|
|
The Fed may well end up slashing interest rates, but the Greenspan era of pumping up market bubbles with repeated cuts is over, predicts Fortune's Peter Eavis.
It may be the most important development to emerge from the recent market turbulence: The Federal Reserve, under Chairman Ben Bernanke, is going back to being a central bank. Judging by its cautious and finely-calibrated responses through a very ugly August, the Fed
appears keen to put the Alan Greenspan years firmly in the past and take a much more orthodox approach to monetary policy. While the Fed will probably cut interest rates as
early as next month, its behavior in August strongly suggests that Bernanke will avoid using interest rates to deliberately spark big increases in lending, the high risk strategy pursued by Greenspan from 2001 to 2004. "I think Greenspan would have cut rates already. So
I do think things are beginning to look different at the Fed," says Paul Kasriel, economist at Northern Trust. A change at the Fed would have far-reaching consequences for the U.S. economy and the stock market. Initially, a much less accommodating Fed will be perceived as
a reason for bearishness. But, over the longer term, market players may well see a less dysfunctional central bank as a good thing that could begin the process of cutting borrowing levels in the U.S., something that has to happen if the American economy is not
going to seize up every time interest rates rise. So what is the actual evidence that Bernanke, who helped formulate monetary policy under Greenspan, is not following the same approach as his predecessor? One huge change: Bernanke's actions have made it clear that...
Read the article. Back to top
Housing woes hit high end
The subprime mortgage collapse isn't just threatening the market for low-end homes; it's also afflicting luxury homes, reports Fortune's Jon Birger.
What could the collapse in the subprime mortgage market possibly have to do with whether Dr. Jeffrey and Madeline Stier get full price for their four-bedroom house in the wealthy New York City suburb of Larchmont? Not much, you would think. After all, the people who
live in Larchmont tend to be lawyers, doctors, and Wall Streeters. Generally speaking, they aren't the credit-challenged borrowers who must resort to subprime mortgages to finance their homes. And yet talk to the Stiers about the tepid demand for their home -- a lovely
Tudor on a tree-canopied cul-de-sac near the local elementary school -- and it's clear that what's happening in the subprime market is reverberating all the way up the real estate food chain. Not only has the collapse driven up rates on many kinds of mortgages, but fear
of a stock crash -- one perhaps sparked by the bursting of the credit bubble -- has for now prompted many high-end homebuyers to either trim their offers or stop shopping altogether...
Read the article. Back to top
|
|
|
|
 |
Accounting for good people
 |
Surprising as it might seem, the Big Four accountancy firms have lots to teach other companies about managing talented people.
BEING interesting can be overrated. Accountants became suddenly intriguing in 2002 with the spectacular collapse of Arthur Andersen, because of its involvement in the scandals surrounding the fall of Enron. This added unwanted colour to a grey profession. Since then
the surviving titans of accountancy—Deloitte Touche Tohmatsu, Ernst & Young, KPMG and PricewaterhouseCoopers (PwC), also known as the Big Four—have mostly retreated back into the shadows of public awareness. But interesting they remain, above all for the way they
manage their people. It is not just that they collectively employ some 500,000 people around the world. Many companies are as big as they are. Unlike most, however, the Big Four really mean it when they say that people are their biggest assets. Their product is their
employees' knowledge and their distribution channels are the relationships between their staff and clients. More than most they must worry about how to attract and retain the brightest workers...
Read the article. Back to top
Trading [Analyst] favours
IN HIS long campaign against Wall Street shenanigans, Eliot Spitzer's biggest coup was the “Global Settlement”.
This forced a group of banks to build sturdy walls between their equity analysts, who offered opinions about stocks, and investment bankers, who were keen to sell them. But did New York's wily attorney-general (now the state's governor) miss a trick? A new study*, to
be presented at the Academy of Management's annual meeting in Philadelphia next month, suggests Mr Spitzer might have done better to investigate another cosy relationship: between the analysts and the people who run the companies they cover. The authors canvassed
several thousand analysts and executives over two years. The research lulled its subjects into revealing more than they should by burying the nosiest questions in a much bigger, largely feel-good survey. As a result, almost two-thirds of the analysts admitted to
receiving favours from the firms they cover. And those favours appeared to sway their recommendations to their clients. According to Regulation FD (for Fair Disclosure), adopted in 2000, any company information given to one analyst must be made available to all. But
many other questionable perks remain perfectly legal. The study uncovered lots of popular favours, such as...
Read the article. Back to top
Five years under the [Sarbanes-Oxley] thumb
 |
FOR the leaders of corporate America it has been five long years. The Sarbanes-Oxley Act, widely known as SOX, was signed into law on July 30th 2002 by George Bush, who called its tough new rules the “most far-reaching reforms of American business practices since Franklin Roosevelt was president”.
The hope was to restore public confidence in American business, which had been badly shaken by huge corporate scandals, such as those which led to the bankruptcies of Enron and WorldCom. The act created a new regulator for the accounting industry: the Public Company
Accounting Oversight Board. To address some obvious conflicts of interest, auditors were prohibited from doing a variety of non-audit work for clients. Firms had to establish independent audit committees, company loans to executives were banned, top executives had
to certify accounts and whistleblowers were given more job protection if they reported any suspicions of fraud. In the act's now notorious section 404, managers were made responsible for maintaining an “adequate internal-control structure and procedures for financial
reporting”. Companies' auditors were required to “attest” to the bosses' assessment of these controls and disclose any “material weaknesses”. Failure to comply could result in tough new criminal penalties. Controversial from the start, SOX came to be despised by many
businessmen in America (and beyond, where it has touched big foreign firms). Even its authors have reservations...
Read the article. Back to top
Collared [backdating options]
A conviction for backdating options may be the first of many.
AMERICA'S war on corporate crime has been going well lately, with the convictions of Conrad Black, Joe Nacchio and now Greg Reyes. Indeed, a jury's decision on August 7th to find Mr Reyes guilty on ten counts of securities fraud is expected to trigger a new surge of
criminal prosecutions of top executives, perhaps even including the iconic boss of Apple, Steve Jobs. The charges against Mr Reyes, a former boss of Brocade Communications Systems, represented the first criminal prosecution to result from the options backdating scandal
that made headlines last year. Various academic studies had found a suspiciously strong correlation between the issue dates of share options awarded to employees and low points in the awarding company's share price. Subsequent investigations, led by the Wall Street
Journal, uncovered numerous examples of firms which had apparently picked the issue date of options retrospectively to get a good price, and then failed to account for it properly. The government has investigated some 140 firms for alleged backdating. So far 16 executives
at eight firms have been charged with criminal offences. Prosecutors claim that Mr Reyes used the corporate equivalent of...
Read the article. Back to top
A Tiger [Woods] in the boardroom
Why golf is the sport of bosses? His firm may have been flirting with disaster, but that did not stop James Cayne from playing his usual round of golf.
Last month, as the boss of Bear Stearns pondered launching the biggest-ever hedge-fund rescue, which ultimately cost the investment bank $1.6 billion, he did so from the fairways and greens of the Hollywood Golf Club in Ocean Township, New Jersey. According to the New
York Times, during the summer he regularly flies there from New York in a helicopter that has permission to land at the club. At key moments during the crisis—during which Bear Stearns says he remained in “constant contact” with his office—Mr Cayne shot rounds of 96,
98 and 97, reports the newspaper, citing scores posted on an online database, GHIN.com. That is impressively consistent, although given his handicap of 15.9, “his scores during that stressful time certainly ballooned a bit higher than normal”, says law and golf
blogger, Tom Kirkendall. “But think how bad this could have gotten for Bear Stearns if Cayne had not been able to get his golf therapy.” Indeed. Golf Digest has published a 200-strong list of the top golfing chief executives in the Fortune 1000. Perhaps, to add
value to this, every chief executive should be required to post his or her golf scores, for unusual volatility could be a useful indicator of trouble at work. On the other hand, a relatively calm performance like Mr Cayne’s might reassure investors that though things are
worse than usual, they are not getting out of hand. The central role played by golf in business life is under-reported...
Read the article. Back to top
|
|
|
|
 |
The hedge fund as activist
Managers of public corporations sometimes need to be reminded that they work for shareholders. Without proper monitoring, managers may receive excess compensation or perks, or misuse free cash flow.
Historically, poorly performing managers have had little to fear. If a manager leads a firm to poor performance, most investors have found it easier to vote "with their feet" by selling shares, rather than making formal complaints. Large shareholders, however, have
stronger incentives to monitor management. The conventional wisdom is that because these shareholders have large positions, they keep a larger fraction of the gains that they produce by keeping watch over management. "Shareholder activism" refers to the practice of
holding managers accountable for the performance of their firms. Shareholder activists have been known to ask for...
Read the article. Back to top
|
|
|
|
|
[Video] CFO wanted. Controllers need not apply
A new study says companies don't want to hire controllers for the CFO slot. Executive recruiter Chuck Eldridge of the Financial Officers Practice of Korn Ferry tells CFO.com why and who companies are hiring instead
...
Read the article. Back to top
What's your fraud score?
Receive the wrong grade on this test, and your auditor may be scouring your company's financial statements for evidence of earnings management.
A new research report contains formulas to help auditors and investors predict the likelihood that a public company is playing earnings management games. Sponsored by the Big Four accounting firms, the report, "Predicting Material Accounting Manipulations," explains
how to calculate a "fraud score" for public companies, thereby identifying which corporate books deserve further scrutiny. A fraud score that exceeds 1.00 is a "red flag" indicating that a company may be toying with how it accounts for cash and accruals so that it can
ultimately boost stock prices, says study co-author Weili Ge, an accounting professor at the University of Washington. The mathematical model, presented in the paper released in late June, hunts for abnormal patterns in five key areas...
Read the article. Back to top
Tickling the keyboard: 10 spreadsheet tips
Basic shortcuts to smooth the use of Excel. It may not be one of the seven wonders of the digital world, but for CFOs, nothing compares with Microsoft’s Excel for performing calculations, tracking a variety of business items, and making forecasts of what the future might hold in store.
The problem is that the program is so complicated that few busy finance chiefs can ever use more than a handful of Excel’s many capabilities. When things get complicated, it may be most helpful to start simply—and when it comes to computing, you can't get much simpler
than the keyboard. Following are 10 essential keyboard shortcuts that have the power to streamline how to use Excel. While the focus is on using Excel 2003, most of the shortcuts apply to older and newer versions as well. One thing is for certain: the bigger the
spreadsheet, the more time the shortcuts can save...
Read the article. Back to top
The [global credit] game is up
How trouble in the credit markets has led to a crisis of confidence in global finance.
The old-fashioned financial system was like Old Maid, a parlour game once beloved of small children. The banks were like players, dealt hands from a pack of cards, which they swapped among each other. At the end, one player was left holding a lonely queen—a bad debt, if you
will—and lost. Over the past few decades the game has changed. Securitisation has snipped the old maid into pieces; new faces, such as hedge funds, have joined the party, enabling the banks to distribute those pieces among a larger number of players. When the game is
over, lots of players are left holding small losses instead of one player holding a big one. During two exceedingly prosperous decades, that theory seemed to work just fine. But the swings in almost all financial markets this month have made dispersed risk suddenly
morph into dispersed mistrust. The uncertainty has been magnified by the way that bad risks have become so hard to value. Investors have bought asset-backed securities that use shaky subprime mortgages in America as collateral, but as defaults have risen...
Read the article. Back to top
|
|
|
|
 |
Steve Player interviews Southwest's CFO, Laura Wright
First in Flight
As discovered through apprentice programs centuries ago, you can learn a great deal by studying successful leaders.
I have greatly valued my ongoing dialogue during the past two years with the planning department at Southwest Airlines, which has provided an instructive window on how the finance function can enable a company to be great. This month's interview with Southwest Airlines CFO Laura Wright shows us how finance can help to build and sustain a great company.
Steve Player: The success of Southwest Airlines is so well known that it seems like you have always been flying. Laura, please give us a quick recap of where Southwest stands today.
Laura Wright: We have just celebrated our 36th birthday. We like to describe ourselves as being in the customer service business -- and we just like to say that we happen to be an airline. Our customer service is enabled by...
Read the article. Back to top
Your shared services checklist
At no time over the past ten years has the dialog with CFOs concerning shared service models been more energetic and amplified than it is today.
Our sense is that outsourcing and offshore solutions have reached a new level of maturity, allowing CFOs to more confidently embrace the concept of shared services as they pursue aggressive cost savings across multiple back-office functions. Meanwhile, CFOs are now
presented with the chance to "leapfrog" early shared service models and achieve a cost structure that may have been beyond their company's grasp only a few years ago. So what does a company need to consider when adopting a shared services strategy? Here's a short checklist:...
Read the article. Back to top
|
|
|
|
 |
Stop singlism!
|
|
|
Listen up, singletons. If you've given up on the dating scene and resigned yourself to a lifetime of solitude culminating in a fatal fall in the shower and subsequent consumption by starving house pets, here's something else to fret about:
You're a member of the only minority subject to officially sanctioned discrimination--call it singlism. As one of our nation's 90 million unmarried citizens, I've become inured to the social pressure to couple up--the backhanded insults and armchair psychoanalysis meted
out by friends, co-workers, and well-meaning strangers at the bus stop whenever my marital status comes under scrutiny. And, believe me, I've heard it all. Selfish? Check. Immature? Check. Emotionally unstable? Check. Too picky for my own good? Check, check, and check. But
I've never bought into the prevailing notion that a perfectly fulfilling singular existence is little more than a karmic consolation prize. As far as I'm concerned, there's no more unfulfilling existence than one spent trapped with the wrong person...
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!
|
|
|
If at any time you would like to unsubscribe from FinanceWatchsm
simply change your status,
or send a letter requesting opt-off to:
The BusinessWatch Network Privacy Mailbox, 1321, Marblehead, MA. 01945
DISCLAIMER: FinanceWatchsm and the BusinessWatch Networksm are service marks of DMS.
All other trademarks or service marks contained in this email are the property of their respective owners.
At the time of publication, all links in this e-mail functioned properly. However, since many links point
to sites other than businesswatchnetwork.com, some links may become invalid as time passes.
DMS Inc. supports the DMA Privacy Promise and
Guidelines for Ethical Business Practice. We are committed to the proper use of
email and to protecting consumers from fraudulent or inappropriate
offers. Privacy Policy
|
|
|
| |
