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| Volume 7, Issue 8
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In This Issue:
 Capital ideas
 Why the Fed has lost its mojo
 When turnover turns toxic
USPS's CFO delivers corporate mentality
Feds' financials flunk, again
A Christmas package for banks
Have passport, will travel
 How to look like a workaholic
Holiday party power play
 Create a very merry holiday season
The five causes of employee negativity
Rise above the fray: Options for dealing with difficult people at work
Holiday pay practices: Do you know your legal requirements?
Top 10 toys of 2007
 Liz Ryan: Five management traps
A better way to deliver bad news
Management time: Who's Got the monkey?
Performance reviews: Do's and don'ts for employees
 BofA Sees bad fourth quarter
We're from china. We're here to help.
Inside Goldman Sachs
Sarbox continues to bite
Unhealthiest holiday cocktails
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Capital ideas
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With the U.S. economy reeling from the triple threat of defaults among subprime mortgage holders, a housing market correction, and market volatility, most lenders
are tightening purse strings, if not running outright for the hills. But not GE Commercial Finance Corporate Lending, where the current market uncertainty is cause for celebration.
“Regional banks, hedge funds, CLOs [collateralized loan obligations]—all those lenders who’ve been popping up on street corners are going to the sidelines now,” says CEO Tom Quindlen. “But we’re wide open for business.” In fact, GE
Corporate Lending is on track to lend $20 billion by year-end. And why not? After all, as the corporate lending business of the GE behemoth, Norwalk, Conn.- based GE Corporate Lending has deep coffers and an even deeper bench of experienced risk
managers. Name an industry—steel, retail, timber— and chances are Quindlen has a lender on board who knows it inside out, who maybe even ran a steel, or retail or
timber company, before joining GE. That industry expertise is critical to...
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Why the Fed has lost its mojo
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The Fed isn't what it used to be during Alan Greenspan's tenure. |
The Board's clout isn't what it used to be. Does it matter?
The Federal Reserve Board's clout isn't what it was during Alan Greenspan's day. Back then the Fed looked and acted all-powerful (even though in the real world it wasn't). Now it's visibly failing to unfreeze key debt markets in which giant
institutions lend to each other. Those markets have frozen out of fear - no one knows what hidden toxic time bombs are on other firms' balance sheets, or even on their own. The Fed hasn't been able to thaw the markets with interest rate cuts or
by using its "discount window," and has been reduced to trying to bribe and cajole big players into borrowing from it as a substitute for borrowing from each other. Comedown City. It's not clear whether the Fed's recent creation, its "term auction
facility," will unfreeze things. The first of these new auctions was...
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When turnover turns toxic
Some tips for quantifying the cost of losing key employees and stopping critical departures. A consultancy sees CFOs as central to the process.
When key employees in critical roles begin to leave a company, the consequences can be devastating. And action has to be taken fast to find out why it's happening and how to stop it. But might there be a way to prevent it in the first place? According
to one recent report, prevention starts with identifying just what roles at a company are critical — something too few managements do in advance. Even fewer become adept at quantifying the value of a critical job position, and especially
determining the indirect, hidden costs of this toxic turnover. They settle for the obvious price of recruiting, hiring, and training, along with the amount to be paid in the interim, for overtime and for employing temporary workers. "Increasingly,
finance is asking for the numbers beyond those direct, straight-line costs," says Aaron Sorensen, who with Joel Rich co-authored a report called "How to Manage Undesirable Turnover" for Sibson Consulting. The human resources department "is
starting to catch up with finance" when those requests come in from the CFO — and to estimate such serious indirect costs as...
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USPS's CFO delivers corporate mentality
Years in the private sector primed Glen Walker for a government job where new requirements include a revamped accounting system, compliance with Sarbox, and massive cost cuts.
When Glen Walker accepted the job of CFO of the U.S. Postal Service more than a year ago, he said he was surprised at how much its systems, processes, and people were like those of a large corporation. In fact, it made him more comfortable with his
decision to become a public servant. But things have gotten slightly more complicated, Walker revealed in an interview with CFO.com last week. Four months after the former Whirlpool executive landed the USPS job, Congress sent him a
welcome basket in the form of The Postal Accountability and Enhancement Act of 2006. Some of the goodies contained therein: a new regulatory overseer called the Postal
Regulatory Commission, with enhanced powers; a stipulation that an accounting system be...
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Feds' financials flunk, again
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Our current deficit and debt levels are not unduly troubling as a percentage of our national economy." |
The GAO is once more unable to issue an audit opinion on the 2007 financial results for the United States.
The Government Accountability Office was prevented from rendering an audit opinion of the federal government's financial results, citing "serious" material weaknesses affecting the nation's financial systems, fundamental recordkeeping, and reporting.
The 2007 Financial Report of the United States was released by the Treasury Department on Monday morning, just hours before Comptroller General David M. Walker, who heads up the GAO, spoke to reporters about the audit at a National Press Club
luncheon. "If the federal government was a private corporation and the same report came out this morning, our stock would be dropping and there would be talk about whether the company's management and directors needed a major shake-up," said
Walker. He also noted this was the 11th year in row that GAO was unable to express an opinion on the consolidated financial results submitted by the Treasury Department. In his speech, Walker blamed most of the problems on three factors...
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A Christmas package for banks
This attempt to sort out the money-market mess has its uses. But don't expect too much.
If at first you don't succeed, try co-ordinated intervention. Leading central banks have each labored on their own to clear the logjam in the money markets — and all have failed. The spread between the cost of borrowing for governments and that for
banks has widened sharply in recent weeks. That suggests investors are warier than ever of lending to the banking system. The longer this goes on, the greater the fear that banks will drag the economy down by starving it of capital. Christmas, when
markets are closed and banks are tidying their year-end balance sheets, is always a time of sparse liquidity. This year confidence is especially fragile. The last thing the world needs is for some big bank to be scrabbling for cash on New Year's Eve.
Hence this week's decision by five central banks to redirect some $100 billion of funding to the banking system — and to ensure that it can be had in dollars. Markets were torn between hope that money will at last get to those that need it and fear
that the plan reveals how worried the central banks really are. They are right to be anxious: this is the authorities' best shot — and it is far from certain to work. The plan helps explain why the Federal Reserve decided to cut interest rates by a
quarter of a percentage point rather than a half (as many had hoped) on December 11th. Cuts in the official rate have proved...
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Have passport, will travel
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Selecting someone with discretionary trading power is a [wise] choice." |
How to secure your finances when on assignment abroad.
In the course of his 26-year finance career, Dean Gardner has lived in Europe, Africa, Asia and South America, for a total of nine years outside his native United States. Looking back, Gardner, CFO of horticultural company International Garden
Products, says he found the posts to be lucrative, in more ways than one. "My overseas assignments resulted in a much quicker learning curve," says Gardner, who worked outside the U.S. for both Schlumberger and Tektronix. Not only did he get
broader experience in treasury, tax and international accounting, but the experiences equipped him with "additional languages and the ability to live, conduct business and manage in multicultural environments." Gardner cautions, however, that
there are a host of decisions regarding current and future assets that must be addressed before accepting such an assignment...
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How to look like a workaholic
In a perfect world, we would be judged solely on our results—regardless of what others thought about how or when we got our work done.
But the good news is that this type of "results only" mentality is catching on. Some companies and managers are beginning to realize better ways to manage performance than by counting hours at the office. Organizations are responding to the changing
needs of workers everywhere by offering arrangements such as flex-time and telecommuting. The bad news is corporate mentality is what it is—like it or not. The 40-hour week is not just an expectation; it's the minimum, especially for salaried
professionals. Self-proclaimed workaholics advertise their twelve hour days like a badge of honor and wouldn't be caught dead leaving the office before 6:30. Just because it's the norm doesn't make it right. Ready to take a stand? You don't have
to defy your boss and coworkers in a dramatic five o'clock showdown. Here are some practical ideas that can help you on your way to regaining control over your time...
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Holiday party power play
Is there a holiday office party (or several) on your horizon?
If so, don't view your attendance as little more than a necessary evil—by playing your cards right, the ol' end-of-year shindig has the potential to launch your career into the stratosphere. What we're talking about, of course, is strategic
networking with your company's movers-and-shakers. For 12 time-tested tips on how to make the most of this opportunity, let's turn the floor over to John M. McKee, author of Career Wisdom—101 Proven Strategies to Ensure Workplace Success.
1. Determine the objective. In advance of an event, expert "schmoozers" think through what the best possible outcome would be relative to career growth. Think through a few...
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Create a very merry holiday season
You can thrive, not just survive, and create a wonderful holiday season this year. You just need to do four things:
* keep your expectations rational,
* take care of yourself,
* take control of your time and limit your commitments, and
* embrace your family and friends.
These tips will help you reduce stress, relax, and breeze through the holiday season feeling grounded and in control...
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The Five Causes of Employee Negativity
The typical workplace has its ups and downs in terms of employee negativity.
Many workplaces are trying to be employee oriented. But, even the most employee oriented workplace can shudder under the weight of negative thinking. When employers understand the causes of employee negativity and put in place measures to prevent
employee negativity, negativity fails to gain a foothold in the work environment. I’ve written about how an employer can prevent negativity from occurring at work. I’ve also written about
what to do about workplace negativity that already exists. The persistent question I receive from managers is: What really causes employee negativity?...
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Rise above the fray: Options for dealing with difficult people at work
Some People Are Difficult People. Difficult people do exist at work. difficult people come in every variety and no workplace is without them.
How difficult a person is for you to deal with depends on your self-esteem, your self-confidence and your professional courage. Dealing with difficult people is easier when the person is just generally obnoxious or when the behavior affects more
than one person. Dealing with difficult people is much tougher when they are attacking you or undermining your professional contribution. Difficult people come in every conceivable variety...Are you convinced that in almost all cases you need
to productively deal with your difficult coworker? Good. Then here are ten ways to approach dealing with difficult people...
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Holiday pay practices: Do you know your legal requirements?
Questions and Answers About Holiday Pay Practices.
The end of the year is a good time to review your company’s holiday pay practices. This article answers common questions regarding holiday pay-related issues in the United States.
Must an employer provide employees time off on holidays?
No. There is no Federal law that requires an employer to provide time off, paid or otherwise, to employees on nationally recognized holidays.
Must an employer accommodate an employee’s observance of a religious holiday?
An employer is obligated to provide reasonable accommodation for the religious practices of its employees, unless it can show that the accommodation would result
in undue hardship for its business. Many employers offer a “floating holiday” in addition to the regularly scheduled holidays. This allows an employee to take time
off for religious observances that are not covered by the employer’s established holiday schedule. Courts addressing the issue of religious accommodation generally
agree that...
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Top 10 toys of 2007
The 2007 List is out! Our Top Ten Toy list for 2007 includes some of the best and most innovative toys of the year.
The best toys were judged based on several criteria like enjoyment level, uniqueness, ease of use and toy safety. It's also interesting to note that, once again, electronic toys seem to dominate the the market! There are only a few hot toys like the Barbie Princess Rosella doll which are non-electronic. All things considered, 2007 seems to have brought out some great toys. Have a look!
1. SmartCycle Physical Learning Arcade System
The top 10 toys of 2007 list would be incomplete without Fisher-Price's SmartCycle . The Smart Cycle is a stationary bike meant for preschoolers which plugs directly into your TV's A/V jack. The little ones pedal their way through various adventures on the TV screen. The included software, Learning Adventure, has three options...
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Liz Ryan: Five management traps
Is your organization really equipped to deal with knowledge workers? Make sure you're not hung up on outmoded concepts that don't serve today's workforce.
Remember the phrase "Atomic Age?" Sounded so modern and zippy at the time—and sounds so hopelessly retro now. With the workplace becoming more global and more virtual by the femtosecond, atoms are out and electrons are in. As every working person knows,
we can create more value electronically in a few minutes now than our grandparents' generation of workers could do in a week. But organizations haven't caught up to the knowledge-worker reality. Way too many employers still manage their troops as though
it's 1945. Is your organization clinging to any of these leftover Atomic Age leadership mechanisms? Ditch them now. They're slowing you down, and you won't get access to your most talented team members' gray matter by managing them like
old-fashioned worker bees.
Atomic Age Vacation Rules
It made perfect sense in 1950, when my dad was hired straight out of Georgetown, to give each newbie two weeks of vacation and let him work his way up to three and four weeks' vacation. But today, when the War for Talent is in full swing, how can a
hiring manager offer a talented midcareer pro two weeks of vacation with a straight face? We should key vacation allotments to years in the workforce, not to years spent within our walls. When I think about Atomic Age vacation rules, I think of
those electric fences people plant in the ground to keep their dogs in the yard. Here's the problem...
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A better way to deliver bad news
Is your critical feedback building up employees—or tearing them down?
That dreaded moment has come: You're delivering critical feedback to an employee. Despite your best efforts, the conversation is a disaster: tempers flare, the employee gets defensive, your relationship grows strained. What happened? Like most
managers, you probably inadvertently sabotaged the meeting—preparing for it in a way that stifled honest discussion and prevented you from delivering feedback effectively. In other words, you most likely engaged in restrictive framing—a narrow, binary, and frozen approach to feedback: You initiated the conversation without considering...
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Management time: Who's got the monkey?
Solving your employees' problems for them? Teach them new skills instead.
You're racing down the hall. An employee stops you and says, "We've got a problem." You assume you should get involved but can't make an on-the-spot decision. You say, "Let me think about it." You've just allowed a "monkey" to leap from your
subordinate's back to yours. You're now working for your subordinate. Take on enough monkeys, and you won't have time to handle your real job: fulfilling your own boss's mandates and helping peers generate business results. How to avoid accumulating
monkeys? Develop your...
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Performance reviews: Do's and don'ts for employees
It may seem like just a pain, but it’s smart to work as hard on your review as you do on your job.
It's time for your annual performance review. Why, it seems like it was just yesterday that you wrote out those goals for 2006—you know, the ones you promptly
forgot and can’t find right now. But much as you may dread this annual ritual, you shouldn’t. Here are some tips for getting the most out of it.
Do Take It Seriously
For many of you, this is the one chance you get every year to communicate with your manager about...
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BofA Sees bad fourth quarter
Another massive write-down is on the way in the financial sector, this time from Bank of America, but help is coming.
The Federal Reserve announced a plan Wednesday to help banks that have watched their capital plunge this year. Shares of Bank of America (nyse: BAC - news - people ) fell $1.19, or 2.7%, to $43.46, after the company revealed it expects to set aside
$3.3 billion during the fourth quarter to protect itself against the sinking value of some of its holdings...On Wednesday, the Federal Reserve announced a plan to set
up a temporary auctions facility for banks. Qualified banks would be able to...
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We're from china. We're here to help.
Former Chinese President Jiang Zemin termed it "going out"--an investment policy setting Chinese companies on a global scavenger hunt for the natural resources and raw materials needed to fuel its fast-growing economy.
Last year, fully a quarter of China's $21.2 billion in outward investment went to the mining sector, particularly in Africa.
Now the focus is broadening, as evidenced by a number of high-profile overseas moves by China's banks and financial services firms, of which China Investment Corp.'s $5 billion stake in Wall Street's second largest investment bank, Morgan Stanley, is only the latest.
This follows hard on the heels of Ping An Insurance's purchase of a 4.2% stake in...
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Inside Goldman Sachs
For the past two decades, there has been no greater prize on Wall Street--no position that has carried greater status, riches, and entrée into the halls of power--than an invitation to join the Goldman Sachs (nyse: GS - news - people ) partnership.
Though management responsibility was diffused a decade ago with the addition of a "managing director" title, a sort of junior partnership, it is the Goldman Sachs partners, the top 1% in a company of 25,000 overachievers, who run its businesses
and reap the greatest rewards. But these rewards come at a price: There is no partnership without face time. Doing a good job will get you nowhere. Doing a superb job will get you noticed, but unless a managing director is willing to continue to
put in hefty hours at the office and commit to a travel schedule that includes missing more than a few bedtime stories and regularly spending Sunday evenings heading out to Kennedy Airport, a partnership may be just beyond reach. For years,
men have made these sacrifices for their success, and in small--but growing--numbers, women are doing the same. It was not until 1986 that Goldman Sachs invited the first woman to join the partnership. In my book, Goldman Sachs: The
Culture of Success (Knopf, 1999), I argued that the firm has a culture uniquely suited to its industry. Rising through the ranks at Goldman Sachs is one of the steepest and most challenging corporate climbs. As a managing director, if you are
to leave your peers behind, you must have a visceral understanding of this culture, which on its face is rife with contradictions. Yet somehow it works. A few
observations on getting to the top...
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Sarbox continues to bite
The day is upon us when the act of corporate compliance isn't as cumbersome as saying the actual words.
It's been slightly more than five years since the law was enacted (but enforced three years ago) and finally more U.S. public companies are reporting fewer weaknesses in adhering to Sarbanes-Oxley (SOX) compliance than ever before.
Compliance Week magazine unveiled its "2007 Financial Reporting & Internal Control Benchmarking Reports," to show that across all industries, companies' Section 404 compliance, disclosed annually, is almost squeaky clean relative to previous years.
Citing the latest industry data that complements this study, Compliance Week said that the researcher, Audit Analytics, reported internal control weaknesses down nearly
45% in the three years since SOX went into effect. Meanwhile, weaknesses reported under Section 302 of the law--where companies must disclose every quarter what errors they've found and corrected--are rising. This actually makes sense...
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Unhealthiest holiday cocktails
Forget about honey hams and apple pies. What's really going to widen your waistline this month is the booze.
Americans drink more hard liquor in December than any other time of the year, according to the Distilled Spirits Council of the United States, a national trade association. That extra alcohol not only packs on the pounds, it encourages us to
eat more, says Marisa Moore, a registered and licensed dietitian and a spokeswoman for the American Dietetic Association, a Chicago-based professional organization of those in the food and nutrition industries. "Drinking alcohol definitely lowers our
inhibitions, making us concentrate less on what we're eating," she says, "causing us to indulge further than we should." On top of that, many holiday-party drinks are loaded with refined sugar and cream. The biggest culprits?...
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