Labeling Co-Workers

"He is always goofing off."
"She never gets it right."
"He's always late for meetings."

People get labeled: the office clown, the slacker, the flirt. My spider senses start to tingle whenever I hear the words "always" or "never" applied to someone else on the team. It usually indicates that an unsubstantiated accusation is about to follow. As quickly as I can, I steer the conversation into specifics:

• What actually happened?
• When was the last time it happened?
• Is there any documentation?
• Were other people involved?
• What behavior do you want the other person to change?
  

As a young manager, I was put in charge of the accounting department after a downsizing. As part of the restructuring I promoted an older clerk so that a younger one reported to her. What I didn't know was that the two women didn't like each other, to the point that what had once been an uneasy truce turned into open warfare. I tried to solve the situation by working it out with both women in the same room. Big mistake! First there was a stony silence, then the accusations started to fly. I ended the meeting and sent the combatants back to their corners. In desperation, I appealed to my father for help. His advice was, "there are some problems you just can't solve." The problem eventually solved itself when the younger clerk quit.

What did I do wrong?

As I look back at the situation, I let it escalate to the point where neither party was willing to negotiate. If I had to do it again, I would talk to the people individually. I would get them to stop using labels and be specific by continually asking for more details. Instead of "that old [censored] is so controlling, she won't let me do my job", I would encourage something like "when I proposed we move to issuing payments once a week, I didn't get any response". Instead of "that young [censored] never gets anything right", I would want to hear "the last two times she reconciled accounts payable to the general ledger she left an unexplained difference." They might never have become friends, but maybe we could have preserved the uneasy truce.

Another place where you see labels is the press. The article's title was Lost boys: Are we raising a generation of Peter Pans? and it was based on the research of Dr. Leonard Sax. Dr. Sax identified five reasons why young men seem to lack motivation:

Video games. These addictive activities disengage boys from the world. Some young men even seem to prefer online porno to the prospect of sex with another human being.

Teaching methods. Girls develop intellectually up to two years ahead of boys. Boys in grade school are naturally rambunctious. They need ways to express their native energy. They are being taught to read and write too early. Their mostly female teachers prefer compliant, dutiful girls.

Prescription drugs. Hyperactive, frustrated boys are increasingly being medicated. This we all know. What Sax claims is that these drugs shrink the motivational centres of the brain and that the effect of this lasts years, well after these kids stop taking their meds. I hadn't heard this before but if it's true, it is truly frightening.

Endocrine disruptors. Chemicals from plastic bottles, canned food linings and some shampoos mimic natural estrogen, the female hormone. Boys' testosterone levels are half of what they were in their grandfathers' day. Also, their bones are significantly more brittle.

The devaluation of masculinity. Boys don't know how to become men. They no longer have appropriate rights of passage. Once Father Knows Best was the paternalistic model but now he has been replaced (and mocked) by a dopey Homer Simpson. Sax likes the old virtues of courage and temperance, with a good measure of intelligence.

These are all observations based on study. They are unbiased and objective. The writer of the article, however, leaps from these observations to the emotionally loaded label, Peter Pan. Let's say you read the above article and have a young man in your department who seems to fit the mold. Use the information, but resist the label. Your job is to help one person, not save a whole generation.

In my experience, when people behave irrationally, the reason is probably emotional. Viewed through their eyes, their behavior makes sense. As a manager, your job is to understand the situation as your team member sees it, even though you may disagree with him or her. As Stephen Covey says, "Seek First to Understand, Then to be Understood."

• The person who keeps making mistakes may feel they're stupid. Try walking them through the procedure and getting them to make their own notes instead of following material prepared by others. That will help you understand where the problem lies.
• The person with no ambition may feel there is no hope of promotion. When reviewing their performance, try to give them a sense of where they could progress to from here.
• The person who can't meet deadlines may feel overwhelmed. Help them learn to prioritize and to work with their supervisor when they have too much on their plate.

When your team feels understood, then you have the opportunity to show them your view, and you're well on your way to re-energizing the department.

Loblaws Needing Re-Energizing

Maybe I should say that I need re-energizing after the monster grocery shopping trip I just returned from, but I noted two things at my local grocery store that made me pause. The first was minor. The cashier didn't know the name of some fennel I bought. When I told her she couldn't find it in the system. Luckily, her system also had pictures so we were able to determine that it was called "Anise" by the computer. While that isn't wrong, clearly both names should have been available to the cashier.

The more troubling issue was that for the first time I saw little mauve signs scattered through the store telling someone to order more product. While it's not unexpected to have some shortages just before Christmas, I was surprised that the inventory system was apparently not smart enough to catch the shortages and produce the necessary orders automatically for review by a purchaser. In a company the size of Loblaws, having to check stock levels manually is a waste of the employee's time and the employer's money.

Turn Arounds: 1. Stop the Bleeding

This is an occasional series about the accounting side of business turnarounds, where a company makes a serious effort to get back on its feet.

Two things that all turnarounds have in common: high stress and low money. Even if you are backed by someone with deep pockets, you have to prove your worth first.

Clearly the first step is like triage in a war hospital: determine what injuries need to be examined first. Start with the cash inflows and outflows. What cash needs to be paid immediately, what deferred and what cash can be collected? Ensure that the procedures are in place to update those lists daily.

The next priority for the accountant should be information: who needs what reports when? Ensure that operations (e.g. the warehouse, the factory, the sales locations etc.) are getting what they need, so that the business can continue to run. Check that the other stakeholders are getting what they need, particularly the funders such as the bank and active shareholders. Make an appointment to see each funder personally, particularly if you have been parachuted into the situation. Your goals are

1. To establish or maintain a good relationship,
   
2. To demonstrate that the situation is under control and
   
3. To establish a line of communication so that the stakeholder knows when to expect updates on the situation.
   

Don't forget financial reporting, particularly to the government. Companies in trouble often have poor internal financial reporting. Set a target, such as having the monthly financial reports available in 5 business days after the month end. Setting and meeting targets will go along way to re-establishing trust in the financial statements.

Equally important is the accounting team. They will need to be re-energized. Accounting is often the unsung hero of the company: if you drop in late at night and there is one light on in the office, chances are it will be the accountant. To the extent that you are able, tell the accounting team on what the plan is. You want to fight rumors with facts. Create a calendar of all the tasks that need to happen in accounting each week, month, quarter and year and ensure that someone is responsible for each one. Look for chances for people to take on additional responsibilities. You may not be able to pay them more, but you can certainly recognize and praise their efforts. One failing many accountants have is the tendency to take too much on ourselves and burn out.

Next installment: Technology Triage.

Nortel Re-Energized?

In the July 30, 2007 Toronto Globe and Mail Report on Business, Mike Zafirovski, the CEO of Nortel Networks Corp, was asked, "What was the old Nortel's big mistake?" He responded:

Nortel used to have some of the best processes in the world . . . . A lot of Nortel's old processes were thrown away. . . . Many acquisitions were made and the systems were not integrated. Lots of accounting issues came out of manual processes on top of manual processes.

It's true: having an excellent accounting system will not create a successful company, but a bad system can sure turn an excellent company into a failure! Nortel is an extreme example, but ask yourself if you could make better decisions if you received better financial and operational reports faster. That's what re-energizing a system is all about.

Read the whole article here.

Energizing your GL

Signs your GL needs re-energizing:

1. You have accounts with the letter A after them, e.g. 1200A (There was no room at the inn!),
2. In order to prepare certain reports, someone has to analyze transactions in an account line by line (as if they don't have better things to do),
3. When creating financial statements you have to pick an account here and an acount there (cherry picking without the pie at the end), and
   
4. Transactions are posted to "Other" because there is no specific place for them to go.

Do you feel stuck with a system that can't be changed? Consider a re-implementation of your existing software. We download all the transactions you need, reformat them given your current needs and upload them into a new company. Then:

1. Not only will we get rid of the "A" accounts, but we'll also have space for new ones,
2. The chart of accounts will be detailed enough to handle all your reports,
3. The accounts will be in logical places, making it easy to create new reports, and
4. Every transaction will have a home.

How does that sound?

How Things Look

In a restaurant, good food is what's important to me. I don't care what the place looks like or how the food's arranged on the plate as long as it is a quality meal. My wife, on the other hand, says, "Presentation is half the meal." She wants the pressed linen, the flowers on the table, and the waiter to be attentive. If you're presenting financial statements to the Board of Directors, you should listen to my wife.

Case in point: I was working with a not for profit trade association to re-energize their accounting system. The accountant said that the Board was always criticizing the amount that was spent on consultants. We looked at the financial statements and there it was: a single line called "Consulting" with a large number beside it.

"It's so unfair," the accountant continued. "The Board knows that most of that expense is for the speakers we bring in to do seminars and their cost is covered by participant fees."

"Then let's get the financial statements to tell the same story," I said.

So we separated Participant Fees from Conference Revenues and Speaker Costs from Consulting (as well as the other costs of running seminars) and all of a sudden the cost of consultants looked more reasonable. It was also clear that the association was earning a small, but important amount from its seminars.

The other important change we made was to synchronize the financial statement formats. Previously the President and Treasurer had a detailed income statement and the Board members had summary statements. But the formats were different, making it difficult for the Treasurer to answer questions quickly. With the new format, the detailed statements had the same subtotals as the summary ones, so questions could be answered with more confidence.

My wife is trying very hard not to say, "I told you so."