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.

13 Ways to be Mentally Strong

What are your mental strengths and weaknesses? Below is a good list to thoughtfully ponder as you critically assess yourself.

Avoid the following habits of thought and behavior:

1) Wasting time feeling sorry for yourself.
2) Giving away your power.
3) Shying away from change.
4) Wasting energy on things you can’t control.
5) Worrying about pleasing others.
6) Fearing taking calculated risks.
7) Dwelling on the past.
8) Making the same mistakes over and over again.
9) Resenting other people’s success.
10) Giving up after failure.
11) Fearing alone time.
12) Feeling the world owes you anything.
13) Expecting immediate results.

Courtesy of Amy Morin.

Write Down Your Roles, Responsibilities, and Expectations

Most of us are probably accustomed to thinking about our work in terms of “job titles” and “job descriptions.” If someone asks me what I do, I tell them I’m a controller. If I were to create a description of my job I might start with the purpose, then list duties, and round it off with skills and qualifications.

Another way to think about jobs and work is with the concept of “roles, responsibilities, and expectations (RR&E’s).” These are explained in The Science of Success by Charles Koch, Chairman and CEO of Koch Industries, Inc.

RR&E’s are intended to “define general areas of responsibility and accountability.” Koch explains, “A person is accountable if he or she will bear the consequences (good or bad) of a decision. Both the person making the decision and the person delegating are held accountable” (p. 129).

Supervisors are expected to ensure that RR&Es maximize the employees’ contributions to the organization. Importantly, employees must take ownership to “ensure his or her RR&Es are current, accurate, and effective” (p. 129). No matter what type of management style exists in your organization, it is wise to take ownership of your role and your broader career development and progress.

Koch defines roles, responsibilities, and expectations, as follows:

  • “A role is a description of the position held and the functions performed by an individual” (p. 129).
  • “Each role has an associated bundle of responsibilities. These responsibilities clearly define the products, services, assets or processes for which we are accountable” (p. 130).
  • “Expectations are written statements specifying the results required of an employee if the business is to achieve its objectives” (p. 130).

A potential employer would expect to see your resume if you were applying for a job. Similarly, you should expect, at least in general terms, a written description of the potential roles, responsibilities, and expectations for the job you are thinking of pursuing. That way you can determine whether you have the appropriate skill sets and whether the role fits with your career plan and goals. New hires should work their their supervisors and take ownership of the job by documenting their specific RR&Es within the business.

Koch says, “Expectations should always be clear, specific, and whenever possible, measurable” (p. 130). They should challenge employees to take ownership, reach higher, and be creative.

Get it in writing. Just as agreements, goals, mission and vision statements, and policies should be documented in writing; an employer should come to a mutual understanding and document the roles, responsibilities, and expectations with each employee.

Four Pitfalls to Avoid in Decision Making

I first encountered Chip and Dan Heath’s writings when I listened to the audio book of Made to Stick several years ago. I was fascinated by their insights regarding influence and persuasiveness summarized by the SUCCES acronym: Simplicity, Unexpectedness, Concreteness, Credibility, Emotions, and Stories.

The Heath brothers also authored Decisive: How to Make Better Choices in Life and Work in which they lay out four principles with the WRAP acronym for avoiding pitfalls in decision making:

  1. Widen your options. This helps avoid the pitfall of “narrow framing.” It is all too easy to engage in the fallacy of “either/or” rather than recognizing a variety of potential approaches. Usually there are more than one or two choices. Rather than framing a decision as yes or no, either/or, consider small experiments and in-between steps to open a range of options. This reminds us of the insight from Getting to Yes regarding creatively inventing options that can satisfy all parties in a negotiation. Also, creativity and options can give you walkaway power to help you avoid bad situations and ripoffs.
  2. Reality test your assumptions. This helps to avoid the pitfall of “confirmation bias.” Rather than only seeking information that serves your preconceived notions, step back for a dose of reality. Make sure that you consider various scenarios, pros and cons, and sources of evidence. Even (and especially) if the evidence points away from your initial assumptions and inclinations, carefully evaluate and revisit your decision process.
  3. Attain some distance. Don’t let irrational feelings and short-term thinking lead you toward a wrong decision. You have to know yourself and understand your tendencies and weaknesses. Perhaps you are impulsive. On the opposite end of the spectrum, perhaps you suffer from fear or analysis paralysis. The Heath brothers recommend stepping back and asking yourself, “What would I tell my best friend to do in this situation?” I like to seek out counsel from others who are more experienced, or if I don’t have that luxury for some reason, I try to analyze what advice a “wise” person might give me.
  4. Prepare to be wrong. This helps to avoid the mental and emotional pitfall of overconfidence. Sure, we all want to be right. We want to “believe in ourselves.” However, if we’re honest, we have to admit that our decisions don’t always turn out like we were expecting. The authors suggest developing a “tripwire” that would trigger the decision-maker to reassess the decision and make appropriate adjustments. Actively evaluate decisions, make changes, and learn from mistakes.

Decision making can stretch us to our mental and emotional limits at times, but understanding the pitfalls and applying the Heath’s sound advice can make the process more smooth and enjoyable.

Five Ways to Develop Business “Street Smarts”

Are “book smarts” or “street smarts” more important? Although there is a place for both, we can tend to err on one side or the other. Young professionals with high GPAs tend to be noted for their “book smarts.” Several years into their careers they discover the necessity of developing “street smarts” that some of their peers might have come by more naturally.

Early in my career I tended to trust people and share a lot about myself. Perhaps, I reasoned, if everyone laid all their cards on the table, it would be easy to figure out how to create win-wins.

Do you notice any problems with this approach?

For example, in one of my early jobs I played a team-based game of business strategy that involved negotiation, sharing information, and trading. Much to my unpleasant surprise, I learned that not everyone shared my approach of making helpful information readily available. (Imagine that!) I learned that, although win-wins are often needed in order for people to advance, ultimately people are more interested in their own success than in mine.

Gratefully, getting a dose of reality can shake deluded idealism from a person fairly quickly.

Over time I learned that some of my assumptions, behaviors, and habits were flawed or at least needed tempered with a dose of realism. There is a place for being savvy or “street smart” — for example, “knowing how to close a sale, when to walk away from a deal, when to remain silent, and how to select winners as employees or colleagues.”

Whether street smarts are skills or attitudes, learned or inborn traits, a financial professional who aspires to a position of organizational leadership should seek and develop these attributes.

Here are five categories of street smarts drawn from Dr. Tony Alessandra:

  • Heightened awareness – Understand your surroundings and don’t allow yourself to be blindsided. Military and law enforcement personnel utilize a “color code of mental awareness” that ranges from “condition white” (total oblivion) to “condition red” (all-out fight). In the context of business, finance professionals do well to routinely maintain “condition yellow” (comfortably alert to one’s surroundings). To put it simply, don’t be paranoid but do watch your back and maintain situational awareness.
  • Confidence – I wrote previously about the importance of confidence, the role of preparedness in boosting confidence, and seven ways to develop confidence.
  • Healthy skepticism – Take measures such as getting your agreements in writing so that people don’t take advantage of you. I wrote previously about professional skepticism, which is an officially recognized and required mindset within the audit profession.
  • Resourcefulness – Be quick, persistent, prepared, flexible, adaptable, and connected.
  • Risk-taking – Choose when to accept, avoid, reduce, or share risks. Don’t let fear hold you back, but learn from you mistakes.

Learn the theories. Develop “book smarts.” But never underestimate the importance of lessons from the “school of hard knocks.” Develop discernment and become increasingly savvy by carefully analyzing your experiences for lessons learned.

You Will Gain Credibility if You Manage Expectations

Think about a time when you were disappointed. Someone promised but did not deliver. Perhaps you had even made plans around your expectation that the other person would keep a promise.

What did you think of that person afterwards? Obviously, you could no longer trust the person.

Timely and accurate communication is crucial toward developing and maintaining trust in business relationships. Conversely, misleading or nonexistent messages engender distrust.

I experienced both the good and the bad in a recent situation. A supplier promised to quickly provide documents once I made a payment. I needed to provide these documents to a customer. Upon receiving my payment, rather than fulfilling the promise, the supplier said he would wait a few more days. I communicated this clearly and promptly to the customer, and I said I would provide an update as soon as I had one.

This conveyed to the customer that I was “on it,” and the customer’s response was one of gratitude even though the message I had conveyed was negative.

On the flip side, I have no trust in that supplier because I know in hindsight that I was misled by someone who lacked integrity.

Building trust requires a long-term pattern of delivering on the promise. Conversely, destroying trust is as easy as promising and not delivering.

Most of all, if you want to build trust, you must manage expectations. Do not induce people to “play ball” with you by misleading them about what they can hope to accomplish from dealing with you.

Some people will see right through your empty promises. Less savvy people might initially be impressed, but once you disappoint them, they will start to spread the word that you cannot be trusted.

How do you manage expectations? Again, one of the keys is communication. Convey relevant information in a timely manner. Filter information before you pass it along to make sure it is reliable. For example, even though I had been “promised” that I would receive information from the supplier, I had to temper my “promise” to the customer because I did not know whether the supplier would make good on his promise.

Become a reliable person. Listen more than you speak. This will help you know what you can legitimately promise. Don’t promise unless you know you can perform. If you have done all you can but an unexpected contingency materializes, the bad news will get worse with age. Quickly communicate the relevant details you know, along with your action plan for fixing the problem.

Don’t be like the supplier who promised but had no intention of delivering. Also, even if you do have the intention of following through, make sure you really have the capability to do so before you make a promise. This means you have to honestly assess and come to terms with reality, not mere delusions or wishful thinking.

Take Ownership of Your Career

One of the themes of this site is taking ownership of your own career.

Your employer does not own your career. Your parents do not own your career. Your friends do not own your career. Your teachers do not own your career.

You own your career.

Think about the cares and concerns that you must deal with on a daily basis. Work is certainly one of them. Also, you might have a family, pets, a house or apartment, a vehicle, relationships, and so forth.

All of these (and much more) require daily care and maintenance.

Guess what? Everyone else I mentioned — even your friends and relatives who love you and want to see you be successful — have their own list of items that take up precious time out of their day. Their primary vested interest is in themselves and what can benefit them.

The last thing you can expect them to worry about is the long-term progress of your career. If you sit by and wait for someone else to “hold your hand” through the ups and downs, challenges and threats of your career development, you will be in for disappointment.

Maybe you have never considered that your career is yours. Maybe it is time for a wake-up call to start thinking and acting like an owner.

How does an owner process decisions? What are the behavior patterns of an owner? Here are a few thoughts:

  • Long-term thinking – As compared to a short-timer who is here today and gone tomorrow, someone who takes ownership is in it for the long haul. If short-term challenges arise, don’t immediately cut and run. Evaluate the prospect of long-term upside potential to decide whether to press on or change course. Either way, when you own your career, you make decisions that will benefit you in the long-run.
  • Vested interest – As compared to someone who will just use up and wear out valuable resources and capital, an owner seeks to maximize return on investment. This means an owner is willing to make sacrifices to obtain a greater reward in the future. Effective career development takes time, thought, energy, and even money. Someone with a vested interest — ownership — is more likely to undertake these sacrifices.
  • Protective and responsible – An owner is not reckless, but wise and thoughtful in stewarding resources. When you take ownership of your career you are more likely to make good choices to maintain your integrity and guard your reputation. You will desire to seek ways for self-improvement to be the best you can be in your chosen field.
  • Active vs. passive – An owner is goal-oriented and aggressive. Rather than letting life and work happen to you, be the one who makes things happen.

Much more could be said about the motives, goals, and enduring success of someone who takes ownership. What is one specific change you can make today to shift your thinking and actions toward taking ownership of your career?

Apply the Four Steps of Learning

I wrote previously about the four stages of learning. We progress from unconscious incompetence (“you don’t know what you don’t know”), to conscious incompetence (“you know what you don’t know”), then conscious competence (“you have a solid grasp on the subject matter, but you have to think about it”), and finally unconscious competence (“you know the subject matter like the back of your hand”).

How does one apply this paradigm to learning?

Consider a person who is unaware (i.e., unconsciously incompetent) of the concept of emotional intelligence. Perhaps this person has a measure of EI without consciously realizing or understanding it. Or perhaps this person has developed habits of thought and behavior that discourage self-assessment of blind spots and drive away others.

What should a person do in this situation?

  1. Survey the landscape. Become aware of what you don’t know so that you can progress beyond unconscious incompetence (a.k.a., “utter ignorance”). Google and Wikipedia can make this initial process quite easy. It’s not that you’ll become a subject matter expert from reading Wikipedia articles, but you will at least have a place to begin digging deeper. Perhaps the impetus behind your pursuit of learning is a challenge or weakness you want to overcome, or an opportunity or strength you want to develop. For instance, if you are trying to figure out why your relationships are failing or if you want to get ahead in your career, perhaps you will stumble across the concept of emotional intelligence. You are now beginning to become conscious of your incompetence (or “areas for improvement,” to put it euphemistically).
  2. Outline the core concepts that you need to learn, and make a plan. This will set you on the path toward conscious competence. As you progress in your learning, you might discover that areas you initially thought were important turned out to be peripheral. This is part of the process of graduating from conscious incompetence to conscious competence. For example, perhaps you discover the importance of knowing yourself (intrapersonal skills), as well as developing interpersonal, communications, and relationship skills. Instead of unconsciously “floating along” with your habits that run counter to sound EI principles, you are ready to overcome your weaknesses and challenges.
  3. Consistently and systematically pursue the discipline of learning. This will get you to the level of conscious competence. You will learn how the different areas of the subject relate to each other, as well as how the subject relates to other fields and disciplines. You will overcome your ignorance and unlearn bad habits that were setting you back in ways that you had not previously realized. You will replace these bad habits with positive patterns of thought and behavior.
  4. Recognize where you came from once you reach unconscious competence. Though it’s thrilling and rewarding to know your subject matter so well that it’s “second nature,” the danger is becoming unapproachable. Guard against talking over people’s heads, patronizing or insulting them, or being impatient with them due to your perception of their ignorance. Chances are, if you can gently help them toward attaining conscious incompetence (so that they start to acknowledge what they don’t know), you will be the first person they will ask for tips on how to reach conscious competence.

Finance professionals should never stop learning. We have to constantly apply ourselves to develop and grow. We can routinely progress through the four stages and apply the paradigm of learning whether we are developing technical skills, knowledge of our field and industry, social and relational skills, or more.

In what areas could you benefit from working through the four stages of competence? How can you help others achieve success in the process?