Monthly Archives: December 2013

To Get Good Advice, You Have to Ask for it the Right Way

One of my teachers once said, “I always think I’m right, but I don’t think I’m always right.”

Think about this for a moment.

Each of us tends to believe, at any given point, that our thoughts and actions are correct and justified. That said, we have to acknowledge that we have been wrong or mistaken at times.

I recently sought advice from several people on how to deal with a challenging situation. Gratefully, I chose to follow the advice of the person who essentially told me to be calm (rather than tense), objective (rather than making assumptions and jumping to conclusions), straightforward (rather than playing games), and proactive (rather than passive) in seeking a resolution. The advice was bound to work very well, and I’m grateful I followed it.

We can be wrong for various reasons — our judgment can be clouded by blind spots, tunnel vision, or negative emotions — and it is wise to seek a wide array of counsel. The more important the decision, the broader and more sophisticated the counsel should be. In business contexts, good counsel comes from attorneys, accountants, bankers, and other advisors. In career contexts, good counsel can come from professionals with more experience who have successfully navigated the path you are treading and avoided pitfalls along the way.

Word to the wise: I have avoided disasters by seeking and following advice. And yes, I have gone through painful “learning experiences” by foolishly presuming that I was smart enough and didn’t need to heed counsel.

That said, getting good advice is not merely a matter of asking. You have to do so correctly.

Overcome your counselor’s resistance to sharing candidly. Personally, I follow the simple rule of avoiding giving unsolicited advice. If someone does solicit my advice, I try to discern whether the person is serious about receiving my real opinion. Often people are seeking affirmation for what they have already decided to do, in which case it is counterproductive to share insights. I avoid entangling myself in pointless arguments with unteachable people who are already persuaded of their course of action.

I am not the only one who follows these simple principles of giving advice judiciously — they are commonsense for anyone who understands human nature — so make sure you convey sincerity in seeking advice. If you do not, the person you are asking will probably discern that you are not serious and will not give you real advice.

Give all the necessary background information. Do not succumb to the temptation to slant the scenario in such a way that the counselor is inclined toward giving the opinion you hope to get. Be sure to give all the relevant details so that you can get the most benefit from the opinions of an objective outside party. For example, if you are asking how to resolve a conflict and you only share about the faults of the other party in your conflict, your counselor will not be able to advise you appropriately on remedying your own faults. You have to demonstrate a level of humility, honesty, and integrity that conveys you are serious about getting to the truth — even if that means admitting you were wrong in the past.

Ask open ended questions and listen for answers. Be ready for surprising answers and words that you do not want to hear. You might have to reexamine your assumptions and change your course of action. If you are not ready to do this, don’t bother wasting your words and others’ time by asking for counsel.

Are You More Persuaded by What You See or What You Hear?

We all know the expression, “I’ll believe it when I see it.”

However, I used to operate on the assumption that verbal communication (the specific content of words and speech) was often more impacting than nonverbal. In other words, I thought, “I’ll believe it when I hear it.”

I now have a better understanding that we believe what we see, as the saying goes. There are good reasons to say “I believe what I see” rather than “I believe what I hear.”

A recent life experience helped “open my eyes” to this. I was sitting next to a friend who happens to share the same first name as mine. Another person in the room looked at him and said his name.

If that person had looked at me, I would have expressed that the person said my name. If that person had looked at neither of us, we would have simply been confused. However, what happened next did make us both confused.

Instead of looking at my friend, saying his first name, and letting us assume (correctly) that he was referring to my friend rather than me; this person tried to specify the person to whom he was referring by mentioning the last name.

The problem is that he used my last name on accident.

He was looking at my friend, but he used my last name to specify which one of us he was addressing.

At that instant I knew he was referring to my friend and that he simply slipped on the last name. Simple mistakes like that happen to the best of them, especially when someone has a lot on his mind.

The lesson I learned was that I believed what I saw. I did not believe what I heard. I actively doubted it. Sure, I was confused for a brief moment until the person cleared up the misunderstanding and we all simply smiled about it and moved on. But even in the midst of the confusion, my mind believed the sincerity of that person’s nonverbal communication — his expression and his eye contact with my friend.

Take notice of your nonverbal communication. Others are noticing, whether consciously or subconsciously. People believe what they see more than what they hear. We have all heard this demonstrated by various theories and studies of communication. My experience is just one example.

You will be a more effective communicator if you make your nonverbal messages consistent with your verbal. We often think the most about the words we will use in communication, but we should spend as much time on the tone we will set through body language and nonverbal cues.

Be Considerate and Acknowledge Those Who Help You

A friend once gave me a gift card to a restaurant that he knew my wife and I enjoyed. This unexpected gesture meant a lot to me. He was acknowledging my help in referring some clients to his accounting practice.

I would still refer clients to him absent the gift card because I think he’s a competent professional who can serve his clients well. However, his kindness will help keep him toward the top of my list.

Doing “the right thing” and helping others in relationships isn’t always a quid pro quo proposition. Even in business contexts, we should often give, give, and give — even when we’re unsure when and if we will receive anything in return.

Don’t be like a narcissist for whom relationships with others are strictly utilitarian tools to get benefits for yourself.

On the flip side, if someone does help you, be sure to acknowledge this like my friend did.

Experienced executive search professional John Touey gives some gems of advice on networking and relationship maintenance: Stay in touch, be a source of information, provide referrals, and consider being a client for your contacts with relevant expertise. Don’t be one he describes as “that guy.”

““That guy” only reaches out when he’s lost his job. He’s eager to meet; he’s looking for referrals; he wants my knowledge of the market. He also seems to forget I exist the moment he finds his next job. I have a few of these in my network, but there is one who stands out. He’s a CFO who has been in transition three times over the last 15 years, and those are the only periods when he showed any interest in having a dialogue. In each case, we met, I helped and he landed, after which he didn’t return my calls or emails. He just landed again in the past few months, and the silence is deafening.”

Have you ever been guilty of this? I am afraid I have done so, and I am reminded that I need to reach out to friends and contacts in my network — even right now when I’m not actively needing their help.

Maybe I will contact one of them at just the right time when they need help from me. Maybe I will give them a helpful piece of info that can be useful for their profession.

Touey says, “My feeling is that if you put enough good things out in the world, good things will come back to you, often from unexpected sources. I don’t keep a scorecard when I help someone out. But I have to tell you, when I make a referral that leads to an employment opportunity, it’s annoying when I don’t get an acknowledgement of that fact. I’m not asking for business or a fruit basket. A simple “thank you” would suffice.”

I have seen this to be true from my experience. Give, give, and give. It’s the right thing to do. And be sure that your kindness will be rewarded in due time.

Which of your professional contacts can you reach out to today, unexpectedly, with helpful information? Look out for situations to provide knowledge and referrals to your friends. Everyone appreciates this, and you will reap what you sow in your relationships.

What I Learned from Tutoring a Friend in Accounting

I once had a friend contact me out of the blue to ask for help with an accounting class. Although I had not seen this friend in several years, I was happy to oblige.

He said he had to pass the class in order to graduate, and he had struggled with the class during a previous semester and decided to drop it. He said he would pay me anything if I would help him pass, and we agreed on a reasonable tutoring fee. (I wanted to help him, but I knew that charging a modest fee would conserve my time and give him motivation to make the most of our tutoring sessions.)

I was grateful that he did pass the course with a decent grade. However, I cannot take credit for his success. After all, my goal in our tutoring sessions was to work myself out of a job. I simply told him that he absolutely had to buckle down and work through the practice exercises in his textbook. He had to spend hours of study time on this. He had not previously been willing to do this, but I convinced him that this was the only way I had passed similar classes and the CPA exams on my first attempt.

Discipline was the key to his success. I was simply there to tell him what he needed to do. My advice was simple and straightforward, and he was sufficiently motivated to follow it.

My friend would ask me about concepts related to cost accounting. The exercises in his textbook would be “tricky” so as to test the student’s knowledge of the concepts. Rather than working a straightforward problem, the textbook would require students to solve problems upside-down and backwards. For example, the textbook writers would include irrelevant details in the scenario to test whether the student would be thrown off track or cut through the nonsense and stick to the point of the problem.

I would explain the concepts the best I could, and I would work problems with him. The bottom line is that he would not solidly grasp the concepts until he had worked through the problems on his own.

I must have sounded like a broken record when I would tell him to work the problems, and when he got stuck, refer to the appropriate portion of the textbook that explained the concept with which he was struggling.

He initially seemed to think that the concepts came naturally and easy for me (after all, I was a CPA) and that I could somehow mysteriously let him in on my secret shortcut to success. I convinced him that there was no shortcut. I had to spend hours upon hours trying to understand the very concepts with which he was struggling. I think this made him feel better about putting in the necessary long, hard hours of effort.

I enjoyed tutoring. I saw my role as that of a coach. My friend had to be ready for the game. I could not score the touchdowns or make the tackles for him. I was there to make sure he exercised and practiced sufficiently so that he would be prepared.

I essentially explained this to him. If he was looking for someone to hold his hand and make it “easy,” it wasn’t going to work. I was there to help him learn how to learn on his own. He caught on, and the experience was a success for both of us.

Exercise Your Knowledge to Develop Strong Habits

We have opportunities to access information like never before. No matter what topic, just type in a few search terms in Google and you have a wealth of resources. However, I have noticed that it’s challenging to turn this knowledge into practical success.

After all, anyone can get the information because it’s so readily available. Very few are able to turn their knowledge into something truly significant.

I can read a book or website about exercise. That’s great. But it’s not until I do some “heavy lifting” that I can achieve the objectives of exercise. Learning about exercise is not the same as doing it.

Similarly, I can read great books on leadership. Or I can find resources on sales and negotiation. But unless I find creative ways to put my knowledge into practice systematically, I see only minor changes and successes.

This is because of the principle of inertia. My habits of thought and behavior kick in, and unless I take control of changing my habits, my development only will happen sporadically and randomly. Sometimes the development will be for the better — after all, I will learn and grow through new situations and experiences. Sometimes the development could be for the worse if I allow my skills and knowledge to get “rusty.”

The way to achieve success is to balance attaining knowledge with practical application. Do this systematically and incrementally. Build small pieces at a time.

Here is an example: I once went to a four-day training course that was designed to teach a specific skill set. I thought I knew something about the subject matter, but I found out that much of my time initially had to be spent unlearning bad habits that I had developed.

I found that I gained a reasonable grasp of the “basics” relatively quickly, but this only came through intense repetition. Before I was an “expert” at these “basics,” I had to move on to more advanced concepts and techniques. In the process I kept ingraining and reinforcing the “basics” that I learned.

At the end of four days I was amazed at my level of proficiency due to the knowledge-based training (lectures and demonstrations), as well as much practical hands-on, real life experience.

We shortchange ourselves when we do not find ways to put our learning into practice. One effective strategy for securing knowledge retention is to lecture to a wall. That’s right, make sure you understand the concept so thoroughly that you can articulate it coherently, even if no one else is listening. Another effective strategy is to write. While you’re at it, you might as well share what you are learning and writing online with a blog.

Beyond explaining what you know, you have to practice it. This requires creativity. But start small, and build more advanced concepts upon your grasp of the basics. Be systematic about this, and do a little bit each day. If you set yourself on the right trajectory and stick with it you will be amazed at the long-term results.

Four Tips for Career Blogging Success

Financial professionals can set themselves apart from the pack by having their own blogs or websites. Just as a successful business marketing strategy typically involves websites and social media, a successful personal branding and professional development strategy requires a website.

I have written several posts about the importance of writing. In addition to writing down agreements, goals, mission and vision statements, policies and procedures, roles, responsibilities, and expectations; systematically and routinely writing down personal reflections and lessons is invaluable.

In the future I will write about job interviewing tips, including using the STAR method for answering behavior based interview questions. For now, it is helpful to reflect on the type of characteristics that potential employers seek in candidates. Then use your professional blog as a platform to detail your understanding and attainment of the knowledge, skills, and abilities required for the job you desire.

Here are four types of posts to write on your professional career blog, as recommended by personal branding and career development expert Pete Kistler:

  • Growth – Kistler says, “Write a story about a class, a project or a job where your thinking shifted. Where you learned something that changed the way you think, behave, manage teammates or solve problems. Always portray the experience in a positive light. Then, concretely describe how you will apply what you learned to your next company.”
  • Expertise – Kistler recommends, “Relate the lessons you’ve learned to specific projects or experiences you’ve had, so employers will see that the expertise listed on your resume is grounded in reality. Then, describe how you will apply this knowledge to your next company.”
  • Knowledge of current events – Kistler recommends reading experts’ blogs within your industry. Summarize the knowledge you gain and how you can benefit your next company with it.
  • Ability to deliver – Kistler says, “The point is to give proof of your past performance. Provide the background story about each project and only upload your absolute best work.” Share Youtube videos, Powerpoint presentations, and other tangible evidence of your accomplishments.

Blogging will help you document what you are learning and experiencing. As you write you will ask questions, think through issues, and be sure you understand them as you write them down for others to read. You will then be better equipped to converse about the topics at work, in job interviews, during networking events, and so forth. In fact, blogging will provide a platform for networking, reaching people, and enhancing the expertise of others within your industry.

If you commit to blogging long-term, you will systematically force yourself to always learn and discipline yourself to constantly write. Much like having school assignments that you must complete whether you like it or not, having a blog gives you an opportunity to put pressure on yourself to grow and develop.

Use the four topics as a springboard to reflect on past experiences and lessons. Start summarizing your lessons learned and how you will apply them to your future job. It is not hard to set up your own blog to share this information and set yourself apart in your professional career.

How an Accountant can Add Value Beyond Number Crunching

Recently I was describing the job of an accountant to a friend. I explained that many people view accountants as “bean counters” or “number crunchers.” Tracking transactions and reporting on a company’s financial condition are certainly important aspects of an accountant’s job. However, accountants have many more opportunities to add value.

To illustrate, consider a situation involving a hypothetical Acme Co. transacting business with Supplier Co.:

  • Supplier Co. typically purchases any raw materials needed to fulfill orders and then converts them into finished goods. However, due to unique economic factors, Acme agrees to pay for raw materials to be delivered to Supplier. In essence, Acme’s payment (though not directly to Supplier but to a company that supplies Supplier) functions as a type of “deposit” or “prepayment.” Acme fronts some of the expense of the goods prior to taking ownership of them.
  • In turn, Supplier is to convert the raw materials into finished goods and deliver them to Acme.
  • As part of the arrangement, Supplier has agreed to reduce its selling price per unit (which originally included the cost of the raw materials) in order to compensate for Acme having paid for the materials up front.
  • Suppose that Supplier encounters problems producing the finished goods. Perhaps some of the raw materials were defective or wasted. For whatever reason, Supplier delivers fewer units than Acme’s original order. 
  • This presents several challenges for Acme. First, Acme must determine how much it recouped of the cost of raw materials and how much it expended but did not recoup due to the shortage. Second, Acme must clearly detail to Supplier how the shortfall of units delivered hindered Acme from recovering its costs for the raw materials. If Acme paid for enough raw materials to produce 1,000 widgets but only 800 were delivered, Acme missed out on recovering 200 widgets worth of costs.

Enter the accounting and finance group. By staying alert to the ramifications of the short shipment — i.e., the failure to recover the cost of the raw materials that were paid to produce 1,000 rather than 800 widgets — the accountants can prepare analysis to detail the effects of the shortfall. The accountants can also work to negotiate with Supplier to provide a credit on a future order or to send payment to help Acme recover the shortfall.

Assuming Supplier values Acme’s ongoing business and wants to avoid legal problems, a clear and detailed analysis by Acme’s finance and accounting group could help Acme recover the “lost” funds.

I was once involved in a circumstance very similar to this. It was very rewarding to see the fruit of my efforts when the business I worked for received a payment from its supplier due to the shortage of units shipped.

Note that I would advise, whenever possible, avoiding prepayments and deposits or paying for supplies up front. However, sometimes these commercial arrangements are difficult to avoid depending on the nature of the industry and a host of other factors. When a company gets into a situation like Acme’s, the accountants need to exercise “situational awareness” and understand the ramifications for the business. The accountants can create value by driving the process of analyzing the shortfall and helping to negotiate for recouping funds from the supplier.

Recovering funds that rightfully belong to the business and avoiding wasteful spending can add value in much the same way as making sales and bringing in revenue for the business. This goes beyond traditional “bookkeeping” or financial analysis and reporting. The key is to exercise good stewardship and fulfill fiduciary obligations by treating the business’ money as if it were your own.

Don’t Abuse Trust and Discredit Your Profession

We have all heard of disappointing scenarios when leaders abuse trust, fail in their fiduciary responsibilities, and discredit themselves and their professions. Financial professionals who commit fraud certainly fall into this category. Other examples include religious leaders who deceive trusting and devoted followers through fraud or abuse. Doctors, lawyers, teachers, and other professionals are not exempt from abusing trust and discrediting themselves.

In circumstances that involve abuse of trust, it is appropriate for such professionals to reap the consequences of their actions (legal, financial, and otherwise) and to find other lines of work that don’t involve fiduciary responsibilities. It is one thing to “mess up” and to learn a lesson from mistakes due to incompetence. A professional career might be salvageable in this situation. It is another matter altogether to actively use deceit and manipulation to abuse the trust that others placed in you.

Particularly troubling in these abuse of trust situations, the fraud and deceit go beyond ordinary commercial transactions in which the buyer and seller are expected to beware as a matter of course (i.e., “caveat emptor” and “caveat venditor“). It’s one thing for a buyer to “pull the wool” over a seller’s eyes (or the other way around). However, professionals who deceive actively abuse trust that others formally place in them due to their positions.

Financial professionals are expected to be competent and trustworthy. Credentials such as the Certified Public Accountant (CPA), Certified Management Accountant (CMA), Certified Financial Analyst (CFA), and Certified Treasury Professional (CTP), require training and compliance in ethical codes of conduct.

The word “credential” implies credence or trust. A credible person, whether certified by a professional body or not, follows ethical standards and consistently performs competently to demonstrate reliability and gain trust.

Moreover, financial professionals have fiduciary responsibilities to their principals. This means that professionals must guard their principals’ interests and exercise due diligence as if the resources they are stewarding were their own.

CPAs are required to avoid “acts discreditable to the profession.” These include, but are not limited to, acts such as breaching confidentiality, illegally harassing or discriminating in employment practices, negligence in financial record keeping and reporting, and failing to follow proper accounting and tax standards. Additionally, fiduciaries are expected to avoid actual or perceived conflicts of interest.

Take your professional ethical and fiduciary responsibilities seriously. Many people are relying on you. You don’t want to give yourself and your profession a bad name by breaching this trust. Know the rules of ethics, and resolve to live by them. Be prepared in advance to appropriately and decisively respond if you ever receive pressure to diverge from the ethical high road.

The Day I Learned a Valuable Lesson about Responsibility and Communication

During a recent discussion I remembered an experience from several years ago. The results of my situation could have been much worse, but I was able to mitigate the damage and learn hugely valuable life lessons.

I had signed up for a few college classes but had not paid the tuition. Subsequently, I decided to drop the classes and focus on other priorities, including a demanding temporary job assignment. However, rather than going to the trouble of cancelling my enrollment, I simply did not pay or go to class and foolishly assumed that I would automatically be dropped. At the time I thought that was the university’s policy.

Of course, it was unwise to assume that I would be dropped from the classes. I should have simply taken a few minutes to log in to my online account at the university and click “cancel” for my enrollment. As it turned out, I was not “automatically” dropped. By the time I figured this out it was too late to cancel without consequence, and I was told that I would need to pay the fees and a large portion of the tuition for the classes.

I was more than a little upset and concerned, and I sought input from a faculty member who I trusted and respected. He told me about a situation with another student who had a similar circumstance. This other student’s approach was to write a nasty letter and to demand that the university fully see the situation according to his own perspective.

The faculty member told me that this other student’s approach led to an unsuccessful outcome. He counseled me to try a tactful, humble approach.

I wrote a letter and asked that the university please forgive my obligation to pay the tuition. I certainly was not demanding but simply laid out the facts truthfully, fully acknowledged my fault, asked for mercy, and thanked them for their service to our institution.

Here was the most significant and memorable part of the experience: At one point I had to talk with an administrator at the university. She was somewhat sarcastic with me and said something along these lines: “So you just assumed that you didn’t need to drop the classes and that you would automatically be dropped? Is that what you’re saying?”

I’m sure she expected me to defend myself, shift blame to others, and demand that she remove the hefty tuition and fee bill. However, instead I simply looked her in the eye and calmly said, “Yes, that’s right.”

She was bewildered. Her demeanor completely changed, and she simply said, “Oh, okay.” She told me what I needed to do, and I am fairly confident that she and the faculty member went to bat for me before the special committee that had to decide whether to remove the tuition bill.

As it turned out, the university decided to extend mercy, and I got off by paying a relatively small administrative fee.

I learned valuable lessons from this situation. Don’t assume that you can be passive and that everything will be alright. Be proactive, communicate, and manage your situations and relationships. Also, don’t be hard-nosed, but be willing to admit your faults — especially when the facts are clear and you have no inherent leverage in the situation. Be genuine in a way that disarms people who are braced for a brash, arrogant demeanor that so many others display.

My outcomes are always more satisfying when I follow these lessons.