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| Volume 8, Issue 5 |
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In This Issue:
 The cure for [CFO] burnout: Go nonprofit
What's missing in controller education?
Big pensions slash stock investments
 Off the shelf: Some mutual fund numbers look great, but for whom?
 Management score card: Rating your supervisor
10 steps to conducting stress-free, lawsuit-free termination meetings
 New managers need to learn assertiveness
 The wackiest interview blunders
Presenting smart: What's the worst presentation advice?
What employees want
 Making sense of the world's biggest market
Kung Pao Chicken for the soul
Eight guilt-free, good-for-you snacks
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The cure for [CFO] burnout: Go nonprofit
Three years ago, Usha Chaudhary was deep in the doldrums.
After 20 years at the same company, she was working about 80 hours a week, and she needed a change. In less than month of job searching, she received an offer from the United Way of America to become the nonprofit's CFO. Soon, her finance career took a
dramatic shift. Shedding the familiarity of her job at Freddie Mac as a vice president for the mortgage lender's investments and capital markets division, she became the overseer of a significantly smaller budget and staff — and an entirely different business model...
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What's missing in controller education?
The subject was Bear Stearns. The audience was controllers and aspiring controllers.
Out by Chicago's O'Hare Airport at the American Management Association Center, a dozen of them — from lines of business including healthcare, retailing, banking, and the garment industry — were engaged with veteran instructor Robert Rector in a discussion
about the investment banking firm's problems, and what controllers could learn from them. Over five modules in the three-day training, the class delved into how to apply information in a range of areas, from reporting to IT to time management to leadership.
On numerous occasions, Bear Stearns came up. And class questions, along with Rector's answers, helped explain how the firm got in so much trouble: "They went into a particular product line, and it became too big a part of their portfolio," says the
teacher. "The market looked good at the time, but it didn't have sustainability."The course, called "The Controller's Job in Today's Environment"... [The timeliness of Bear Stearns's problems presented itself as an example. Its concentration on the subprime
market, he says, exposed the bank far beyond what most competitors faced. Plus, the bankers "got far too exuberant, and failed to respond to their clients." It is "a perfect example of putting too many eggs in one basket," he adds. The point has
relevance far beyond banking in the hands of an instructor with his 35 years of management, consulting, and finance teaching experience. With a number of health-care
employees in this class, hospital analogies came easily, as those institutions, too, can expose themselves to risk by being too narrowly based...]
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Big pensions slash stock investments
Instead of trying to gobble up big gains on the stock market, increasing numbers of the corporate sponsors of traditional pension plans are adopting a lower-risk strategy of only going for returns that match the plans' liabilities, according to a recently released study of pension funding.
For years, companies have taken their cue from bull markets and tried to parlay the assets held in their defined-benefit pension plans into big market gains. Now, however, some are resetting their investment targets to "market-based liabilities," says pension-investment consultant Paul Morgan, "not an expected return of 8 percent" or thereabouts. After years of warnings from more conservative pension experts, employers are starting to change to a more...
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Off the shelf: Some mutual fund numbers look great, but for whom?
THE public stock markets are in the throes of one of the biggest and most egregious financial scandals in modern history, according to Louis Lowenstein.
The scandal has little to do with highly publicized abuses like market timing or insider trading. It is not directly related to the current credit and subprime mortgage crises. Instead, it involves the $10 trillion in life savings that 90 million individual
investors in the United States have entrusted to mutual funds. This unprecedented scandal is documented in succinct but gory detail by Mr. Lowenstein in
The Investor’s Dilemma: How Mutual Funds Are Betraying Your Trust and What to Do About It. Mr. Lowenstein is a lawyer, a former business executive and a professor emeritus of finance and law at Columbia Law School. Like Warren E. Buffett, he is a
proud disciple of the “value investing” principles outlined by Columbia professors Benjamin Graham and David L. Dodd in 1934. Mr. Lowenstein is also a heck of an investigative reporter, as well as an astute financial adviser. Here’s the nut of the
mutual funds industry scandal, as summarized by Mr. Lowenstein: “There is a profound conflict of interest built into the industry’s structure, one that grows out of the fact that the management companies are independently owned, separate from the funds
themselves, and managers profit by maximizing the funds under management because their fees are based on assets, not performance.” As a result...
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New managers need to learn assertiveness
In another installment from the True Story files, Joanne was listening to a manager from another department getting snippy with her over the phone.
"What's wrong with you people?" he said, his voice rising in anger. "You pretty much do nothing all day long! All I'm asking is that you do your jobs. Why can't you get my simple request processed?"As a new supervisor, Joanne was unaccustomed to such brash
confrontations. But it was just this morning his request for work came in - and without all the proper paperwork. Moreover, other work had been flagged as higher priority. To make matters worse, the manager on the other end of the phone had a lot of seniority,
and he was famous for yelling without anyone challenging him. Getting on his bad side was not something she really wanted to do. Perhaps you've been in Joanne's position. When you're not experienced, such heated conversations can be tough. A good skill for
new supervisors to acquire early on is tactful assertiveness. Notice I didn't say "sugarcoat the truth" or "roll over." Nor did I say "be demanding." Maintaining a professional demeanor is an extremely valuable skill, but it doesn't come easy. Getting
there requires a lot of reasoned thinking. According to the book Asserting Yourself, you can teach yourself ways to remain professional when the pressure is on, but it takes practice.The book also teaches that when disagreements occur, it doesn't mean one person
has to win and the other person has to lose. The two do not have to be mutually exclusive. A main tenet in assertiveness is not simply to "win," but to find a way for both parties to have a win. There is no perfect, magical way to do this, but letting the
other person know you understand his/her position usually sets a good foundation. The real trick is avoiding the bait of any personal jabs while identifying the real issue.
Key In on the Real Issues. So lets' review what the manager said to Joanne [and how she should respond]...
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The wackiest interview blunders
What's the most unusual thing a candidate ever did in a job interview?
Fall asleep? Disappear? Bring his/her mom? CareerBuilder.com released its annual survey of the most outrageous interview mistakes candidates have made, as related by more than 3,000 hiring managers and HR professionals nationwide. Among this year's top 10 dubious occurrences:...
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Presenting smart: What's the worst presentation advice?
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John Windsor, an online columnist for Sales & Marketing Management, and president of Creating Thunder, a Boulder, Colo.-based communications training and consulting company. As author of the popular YouBlog, John offers a unique mix of innovation,
communications, sales and marketing ideas. An award-winning marketer, John has held vice president positions in marketing, sales, and business development and has worked with companies like American Express, Reuters, Staples, and Knight-Ridder.
Countless books, seminars and gurus preach how to give an effective presentation. Some of the advice is outstanding, but some of it is less so. But what is really shocking is that the most common piece of advice is perhaps the worst piece of advice:
- Tell them what you're going to tell them
- Tell them
- Tell them what you just told them
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Now, this approach is not without value. It helps presenters be clear about their message so the audience won't leave thinking, "What was that about?" And repetition and reinforcement can aid retention, provided the repetition is not simplistic. But the
potential for mediocre-to-poor results from following this formula is HUGE. It's much more a recipe for disaster than a clear path to success. Why is it so bad?
What Do We Do Instead?...
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What employees want
Tough times? Don't cut the coffee; perks matter
Though the tiniest perks might seem expendable during tough economic times, when they get taken away it’s ‘like throwing salt in the wound.’ Little perks make people feel like they want to go the extra mile to get the job done.
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Brady Wilson is a co-founder of Juice Inc., a Guelph, Canada-based solution provider for leaders who want to boost their organizational energy level and employee engagement.
It's not money or flex hours. Rather, employees want to feel they are a good fit in the organization, are clear about their job, are supported in their role, are valued, and are inspired.
Getting the very best from employees has become the holy grail of the training and human resources industries. Millions of training dollars are spent to determine how to achieve a state of "flow" where workers are functioning at a high level of productivity,
efficiency, and engagement. But can this be sustained for more than a few days? And is it even possible? The answers to both questions are a resounding "Yes." And the benefits lead to bottom-line results. We've seen organizations boost their employee engagement
and report a year-over-year doubling of their sales growth; reduce their returns and credits by 50 percent; set new safety, productivity, and customer service records; and save millions on their bottom line through increased efficiencies. In fact, when
employee research and consulting firm Towers Perrin-ISR conducted a 2006 study of 664,000 employees worldwide, it found a 52 percent gap in the one-year performance improvement in operating income between companies with highly engaged employees versus
those with low engagement. However, the path to getting there is not the one most of us would think of taking because it's right in front of our eyes.
Stairway to Engaggement. The first step is to know...
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Making sense of the world's biggest market
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Changes in interest rates can wreak serious havoc on a business plan. Imagine agreeing to pay 6% interest on a loan for the next 10 years only to watch prevailing rates fall to 3%--ouch!
One way companies limit their exposure to interest rate fluctuations is by entering into a financial contract called an interest-rate swap. While individuals don't use swaps, plenty of companies and institutions do: At roughly $270 trillion in "notional" value
(the size of the underlying assets being traded), this market is far and away the largest on the globe--dwarfing the $70 trillion worth of bonds outstanding and the $51 trillion in market value of all stocks. While not nearly as opaque as some of
the dicey mortgage-backed securities that have gotten many of the big banks in hot water recently, swaps can still get tricky--even for skilled finance types who preside over billion-dollar balance sheets of municipalities, hospitals and other institutions.
Be-suited bankers from the likes of Goldman Sachs, Morgan Stanley and other marquee firms are happy to help, though transparency is hard to come by. Into the breach steps 56-year-old Robert Fuller. Call him a swap consultant. Launched in 2001, Fuller's
one-man shop, Capital Markets Management in Hopewell, N.J., aims to help large institutions deal with their interest-rate risk by setting up trades in the swap market. Fuller sells objectivity--or at least the sheen of it. Investment banks have an inherent
conflict of interest: They have an incentive to push products in order to generate fees rather than offer the best solutions at the lowest price for their clients. Fuller plays the role of an objective third party helping companies choose the best strategy. Why
would you use a swap? Matching the timing of cash flows generated by assets and demanded by liabilities is one big motivation. Say a company borrows $50 million to be paid over the next 10 years at a 10% interest rate. (That $50 million is the "notional" amount.)
This means the company agrees to pay $5 million a year for the next decade plus a "balloon" payment of $50 million 10 years from now. Say, too, that the company offers financing--meaning it lends money--to help customers buy its products, but that the
interest it charges for that credit tracks prevailing interest rates. In short: The company's revenues move up and down with interest rates, while its costs (the interest
it pays on its debt) remain constant--a potentially toxic mismatch. Here's the problem...
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Kung Pao Chicken for the soul
At Panda Express the secret sauce is employees who are mellow and enlightened
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Andrew Cherng had heard enough nervous chatter.
During a restaurant tour the chairman of Panda Restaurant Group listened impatiently to a rambling monologue by Mark Liu, who manages nine Panda Express restaurants in Orange County, Calif., then called him outside. There Cherng told Liu his jitters were
unacceptable. Troubling, even. He needed to rid his life of anxiety in order to succeed at Panda Express. Then Cherng stared directly into his eyes. Start meditating, he ordered the underling. Panda Express serves heaping $8 plates of sweet-and-sour pork and
crispy shrimp in 1,117 sit-down restaurants in 36 states. But Cherng will tell you the special ingredient at this company, where sales totaled $1.1 billion, a 16% increase last year, doesn't come out of the kitchen. He says Panda Express restaurants are
successful because he cares about the emotional well-being of employees. Cherng and his managers inquire about employees' personal lives, hobbies, spiritual beliefs and relationships with family. "I want to fix my people from the inside," explains Cherng,
60.Cherng, who says he can't expect people to do a good job at work if their lives are a mess, preaches self-improvement through meditation, education and fulfilling hobbies. (Cherng, who meditates regularly, is an avid hiker.) His monthly Saturday-morning
personal wellness seminars draw 100 or so employees to hear about nutrition, intimacy and self-awareness. He encourages managers in the company's L.A. corporate office and in company-owned restaurants to forge personal bonds with their employees by devoting
several hours a week to chats about spirituality, effective parenting and personal ambition. Cherng's managers are encouraged to come up with...
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Eight guilt-free, good-for-you snacks
Hours have passed since your lunch meeting, and it'll be several more until you can sit down for dinner.
It's 4 p.m. and, no surprise, you're hungry for your "fourth meal" of the day--your daily snack. If you're hoping to curb your hunger without losing control of your waistline, you're in luck. That's because the snack food industry is continuing to
increase its focus on producing healthy, or at least healthier, products. That means more low-calorie snack packages are hitting supermarket shelves, along with labels touting organic and all-natural contents. "Consumers, overall, are more concerned with
the kinds of foods they're eating," says Susan Fussell, spokeswoman for the National Confectioners Association. "They're asking, 'Where did it come from, how did it get to me and what's the nutritional profile?'"...
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