Category Archives: Human Resource Management and Supervision

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?

Understand the Four Steps of Learning

Think about the last time you tried something new. Perhaps you started a new job. Or maybe you took up a hobby that required a particular skill set, such as sailing.

Continually learning characterizes our growth and development throughout life. Early on we learn to communicate using gestures and language. We develop physical and cognitive abilities to overcome obstacles and accomplish our objectives. Especially in the modern world characterized by rapid change, we constantly have to adapt to new challenges and opportunities.

I was recently talking with someone about emotional intelligence and its contribution toward career success. Just as I had been ignorant of the topic prior to reading articles and delving into a study course recently, this person had never heard of EI or EQ.

After explaining emotional intelligence on a cursory level and sharing a resource about the topic, I mentioned the following four-step paradigm that I was exposed to in a training course:

  • Unconsciously incompetent – You don’t know what you don’t know. If you are ignorant about the existence of an area of study or a skill set, you are incompetent without even being aware. Someone who has never heard of accounting doesn’t even realize his ignorance of debits and credits, general ledgers, and account reconciliations. Or perhaps you mistakenly believe you are proficient in some area, so you don’t realize that you need further training and development. A person in that state is unwilling and unable to learn until progressing to the next level.
  • Consciously incompetent – You know what you don’t know. You have some depth and breadth of knowledge about the subject matter, but you remain ignorant of many basics and details. If you have heard of accounting and know about terms like debits and credits but are unaware of what they mean and how the concepts are applied, you are consciously incompetent.
  • Consciously competent – You know what you know, but you have to focus and think about the subject matter. If you have a working knowledge about the mechanics of debits and credits and can clearly explain the concept, perhaps while pausing to think about it, you are probably consciously competent. You can still progress one step further.
  • Unconsciously competent – Your mastery of the knowledge and skills has become “second nature.” You know the subject matter “like the back of your hand,” and you can perform “practically in your sleep.” If you can explain and apply concepts such as debits and credits, ledgers, reconciliations, revenue recognition, and more, without missing a beat, you are an unconsciously competent accountant.

To put this in perspective, consider someone who didn’t know about emotional intelligence and had perhaps unconsciously developed habits that ran counter to sound EI principles. Becoming aware of emotional intelligence could be the first step toward new levels of professional success.

Soon I will share some practical tips on applying the four stages of learning.

The Importance of Emotional Intelligence

How can you relate to people whose backgrounds and motivations are different from your own? How can you creatively tap into and channel others’ motivations for recognition and accomplishments beyond paying them more money? As a finance professional, should you primarily focus on numbers or people? How can you develop a reputation for being approachable and collaborative?

Developing emotional intelligence can help us become mentally active to recognize, analyze, understand, and manage intense feelings — whether our own (intrapersonal) feelings or the feelings of those around us (interpersonal).

Social and leadership skills can be developed over time, and they tend to become more important as a finance professional moves to higher levels within an organization. Technical skills and cognitive ability are vital, but don’t neglect emotional intelligence. Customers, employees, coworkers, and investors are among the groups with whom aspiring CFOs must learn to build relationships, channel motivation, manage conflicts, and develop win-win solutions.

I recently completed a Continuing Professional Education (CPE) self-study course on the difference between IQ and EQ (Emotional Quotient). The course helped me understand basic concepts and models of emotional intelligence.

Here is an outline of fifteen components of EQ organized under five major categories:

Intrapersonal Skills:

1) Self regard
2) Emotional self awareness
3) Assertiveness
4) Independence
5) Self actualization

Interpersonal Skills:

6) Empathy
7) Social responsibility
8) Interpersonal relationships

Stress Management:

9) Stress tolerance
10) Impulse control


11) Reality testing
12) Flexibility
13) Problem solving

General Mood:

14) Optimism
15) Happiness

Daniel Goleman, author of Working with Emotional Intelligence, divides EQ between personal and social competencies:


  • Self awareness – emotional awareness, accurate self-assessment, and self-confidence
  • Self regulation – self control, trustworthiness, conscientiousness, adaptability, and innovation
  • Self motivation – achievement drive, commitment, initiative, and optimism


  • Social awareness – empathy, service orientation, developing others, leveraging diversity, and political awareness
  • Social skills – influence, communication, leadership, change, conflict management, building bonds, collaboration and cooperation, and team capabilities

What are signs of a high EQ for a financial professional to recognize and develop? The course suggests several:

  • Express feelings with three-word sentences beginning with “I feel …”
  • Do not disguise thoughts as feeling by using “I feel …”
  • Do not be afraid to express feelings
  • Do not be dominated by negative emotions
  • Effectively read non-verbal communications
  • Let feelings lead to healthy choices and happiness
  • Balance feelings with reason, logic, and reality
  • Act out of desire, not duty, guilt, force, or obligation
  • Be independent, self-reliant, and morally autonomous

Among negative behaviors to avoid, the course lists blaming others rather than taking responsibility for one’s feelings, analyzing others when they express their feelings, trying to make others feel guilty, lying about feelings (or exaggerating/minimizing them), letting things build up, reacting strongly to minor issues, being unforgiving, acting on feelings rather than talking about them, and playing games and being evasive rather than direct.

Assess yourself based on the following questions that apply Goleman’s model from Working with Emotional Intelligence:

  • Do you understand both your strengths and your weaknesses?
  • Can you be depended on to take care of every detail?
  • Are you comfortable with change and open to novel ideas?
  • Are you motivated by the satisfaction of meeting your own standards of excellence?
  • Do you stay optimistic when things go wrong?
  • Can you see things from another person’s point of view and sense what matters most to him or her?
  • Do you let clients’ needs determine how you serve them?
  • Do you enjoy helping colleagues develop their skills?
  • Can you read office politics accurately?
  • Are you able to find “win-win” solutions in negotiations and conflicts?
  • Are you the kind of person other people want on a team?
  • Are you usually persuasive?

In summary, to develop EQ, the course suggests knowing your own emotions, motivating yourself, recognizing emotions in others, managing your emotions, and effectively handling relationships.

17 Principles to Safeguard Assets and Ensure Organizational Effectiveness

One of my favorite aspects of being a financial professional is knowing that others on the management team and in my organization are relying on me. I am expected to handle key functions within the business, and if I do my job well I can contribute integrally to the organization’s success. This can provide a constant sense of urgency but also a rewarding feel of satisfaction and significance.

Among the not so glamorous yet important features of an organization’s structure are internal controls. Accountants are expected to implement sound measures to safeguard assets and reasonably ensure that management’s objectives are achieved toward effective operations, reliable financial reporting, and legal and regulatory compliance.

Even if this sounds boring, take consolation in the fact that your organization’s survival and success depends on it.

The Committee of Sponsoring Organizations (COSO) first released its Internal Control-Integrated Framework in 1992. This document defined internal control and provided accompanying standards. Over twenty years later the framework is still highly relevant.

In May of 2013 changes were made that kept the core intact and added, among other things, seventeen principles to help with implementation of the framework in light of changes over the years. A recent article in The CPA Journal discusses these seventeen principles as organized under the five categories of internal control within the COSO framework.

    • Control Environment

1) Commit to integrity and ethical values – this largely entails setting an effective “tone at the top.”

2) The independent Board of Directors should oversee internal control – among other things, objectively evaluate managers and ask appropriate questions.

3) Establish appropriate authority, responsibility, and reporting structures.

4) Attract, develop, and retain the right talent to achieve objectives.

5) Hold employees individually accountable for fulfilling organizational objectives.

    • Risk Assessment

6) Be able to identify and assess risks by having first formulated objectives with sufficient clarity.

7) Identify and analyze risks throughout the organization to determine how they should be managed – choose whether to accept, avoid, reduce, or share risks.

8) Consider potential fraud risks, including misappropriation of assets and alteration of records, that could deter the organization from achieving its objectives.

9) Be ready for changes, including within the external environment, business model, or leadership, that could impact the internal control system.

    • Control Activities

10) Mitigate risks to acceptable levels by choosing and implementing appropriate control activities.

11) Technology is a special category of importance for implementing control activities that help enable the organization to achieve management’s objectives.

12) Policies establish expectations and procedures put these policies into action in order to deploy control activities.

    • Information & Communication

13) Support internal control functions with relevant and timely information – capture data, transform it into information, and protect its availability and accessibility to appropriate parties.

14) Communicate internally regarding internal control objectives and responsibilities.

15) Communicate with appropriate external parties regarding internal control, carefully considering the timing, audience, and nature of the communication.

    • Monitoring Activities

16) Have ongoing evaluations to determine whether internal controls are working effectively.

17) Communicate internal control deficiencies to senior management and the board of directors so that they can timely take corrective action.

In short, internal controls help management set a proper tone, define organizational objectives, and run the business effectively. A leadership-oriented financial professional who wants to be indispensably valuable within an organization should study and understand how to effectively choose, implement, and monitor internal controls on an ongoing basis.

To Confront or Not to Confront?

Would you rather confront or appease someone in a conflict situation? Do you prefer to fight for a cause and for what you believe is right or try your hardest to avoid a clash?

Depending on the decisions you make and the roles you choose to fill, you might be able to navigate through life with a minimum amount of conflict. However, if you plan to take on a significant level of leadership over projects and people, such as the role of Chief Financial Officer, you will quickly find that conflict is inevitable. Customer complaints will find their way into your office. You will have to negotiate over defective products from suppliers. You will spend large portions of your day handling conflict and drama among your team members and among others within and outside of your organization.

Business leadership expert and blogger Michael Hyatt says he used to prefer to stay out of conflict by keeping his opinions to himself and going along with the system: “This was a pretty good strategy for a while. But it didn’t really work once people were counting on me to lead.” Furthermore, Hyatt notes: “Courage is not the absence of fear. Courage is the willingness to act in spite of my fear.” If you fear conflict because you want to maintain your personal comfort, you still have to be willing to step outside of your comfort zone by acting for the good of your team and those who rely on your leadership.

John Maxwell advises leaders to keep two points in mind during confrontation:

  • Be honest and realistic – don’t try to deceive people into going along with your position, or you will lose credibility and damage relationships.
  • Be sincere – have the right motives, and truly try to help the other person you are confronting. The person you confront might not like what you tell them, but if they sense that you have the right heart behind your words, they are more likely to accept your confrontation.

Doug Van Dyke encourages leaders to confront problems in order to set the right tone for both the troublemakers and the team members who rely on you for leadership. As with the book on negotiation that I am reviewing, Van Dyke advises being tough on issues but soft on people. He also says to focus on controlling your own behavior while you influence others, be specific and detailed about the problems you are confronting, and build collaboration with people to solve problems.

Finally, since business relationships rapidly continue becoming more international, Erin Meyer shares tips to manage confrontation cross-culturally. For example, understand the distinct approaches toward conflict and negotiation among various cultures, and learn to work with a variety of people who are different from yourself. Prepare for your confrontations. Develop tactics for depersonalizing conflict and emphasizing the problems and solutions rather than the parties involved (again, separate the people from the problem). Set a proper tone by asking open-ended questions rather than making direct statements of disagreement.

Like it or not, confrontation is inevitable for finance professionals who wish to become key members of their organizations’ management teams. Set the right tone and have the courage to lead. Be honest and sincere when you confront others. Tackle problems rather than attacking people. Prepare for the different types of people you will confront, and be solutions-oriented the whole way through the conversation.

What is Your Employee Retention Strategy?

Any accountant will tell you that employee costs are some of the most significant routine expenditures that companies make. Payroll has a big impact on cash flow and the bottom line, but so do employer payroll taxes, state unemployment insurance, workers compensation insurance, retirement and health benefits, vacation, and so forth.

Although it costs a lot to hire and retain employees, don’t underestimate the costs when they leave. Either existing employees have to pick up the slack, which can cause stress and resentment when not accompanied by a pay increase (as is often the case), or new employees have to be hired and trained. This takes time, interrupts progress, and in the process of training, a new employee can make mistakes that cost the company money.

Talent is a key constraint for a growing business. Companies cannot grow without the right people on the team. A senior management team that is serious about growth and strategy makes sure to effectively manage the risk of employee turnover. When management has a well-defined vision for company growth and can articulate the potential long-term upside that employees have in the business — coupled with nearer-term incentives — the organization can be positioned well to attract and retain good talent.

Last year the Journal of Accountancy provided a summary of a WorldatWork survey. Among other findings, 65% of respondents said senior managers were concerned about retention. Even as opinions of the economy continue to be mixed, it seems that employees have felt more confident exploring options for “greener pastures” in the marketplace.

The survey found that employees leave for more money, better promotional opportunities, more equitable pay in line with market rates and in recognition of personal contributions, less stressful workloads, more work-life balance, better leadership, and more training and development opportunities.

The strategies employers use are not surprising when one considers the basic desires of workers, namely money and freedom: “Companies that have retention programs tend to keep key talent by offering above-average pay and benefits such as flexible scheduling, the survey showed.” Also, the survey showed that managers are careful to communicate future opportunities with key employees.

In short, senior management can either define and implement an effective retention strategy, or it can let others in the marketplace demonstrate a superior ability to hire away good talent. Some very effective methods of retention can be low-cost, such as giving employees a sense of empowerment and ownership. Rather than just paying more money, partner with employees in tangible ways to help them advance with the business and make progress with their career goals.

In addition, while employees will always want more money, there might be ways to implement flexible scheduling to help them feel like they have more freedom and ownership of their work and schedule. Rather than micro-managing their work and schedule with an iron fist, treat them like grownups and expect them to act as such; the results can be remarkable.

Think Twice Before Mixing Personal Relationships With Business

Have you ever tried to mix personal family or friendship relationships with business? How did it work for you? Some people function very well in a context of mixing work with friendship or family life. Others struggle with many inherent pitfalls. Whether you choose to rush in or avoid these arrangements, it is wise to be prepared. More than likely, even if it’s not of your own making, you will someday be in a position to deal with a scenario that involves the mixing of personal with business relationships.

In my experience as a finance professional I have seen business situations in which the participants’ actions were heavily impacted by relationships with family or friends who were involved. Even the savviest businessperson can struggle to make decisions at “arm’s length” when the personal relationship is clearly not arm’s length.

Personal finance guru Dave Ramsey advises, “I do a lot of business with friends. But I make sure that the specific requirements of our relationship are laid out very clearly, in writing.” In addition, “Just be straightforward, and make sure the rules are understood by everyone involved. Then, when you have to enforce the rules, do it gently but firmly.”

Of course, the tendency when working with friends or family members is to avoid solidifying details or getting anything in writing, let alone seeking legal counsel. After all, this can wrongly be perceived as demonstrating a lack of trust.

In reality, the best way to preserve relationships is to manage expectations. Talk through the relevant deal points, and solidify your agreements in writing. No exceptions really means no exceptions: Get your agreements in writing, even (or perhaps, especially) when dealing with family or friends.

Blogger Ron Edmondson provided some cautions on working with friends, including risks for both the organization and the relationship between friends: “The bottom line is that doing the best thing for the organization often involves making hard decisions. Leaders should not be held back because of the level of difficulty.”

Doing business with disinterested third parties is more straightforward in some respects because both parties are clear that the relationship is business, not personal. Attorney and CPA Mark Kohler recommends a simple test to determine whether to enter a business relationship: “Bottom line: if you feel you can’t ask for thorough documentation, or could never sue or send a nasty letter to the person you are going to be in business with, this is probably a project you should walk away from to hang on to the relationship.”

Rob Weinberg gives insight on his approach: “So if I’m doing business with a friend I find it’s critical to insist at the outset that the friendship is the priority. If there’s ever a question of the business tainting the friendship, we both agree to walk away from the business relationship. Furthermore, any indication of uncertainty at the outset eliminates the possibility of our working together.”

Harrison Barnes provides perspective on why organizations do not allow managers to hire their friends or relatives: “Reducing corruption and increasing efficiency are the primary reasons many organizations have anti-nepotism policies. Corruption has always been a concern in this realm. If individuals who are friends or relatives work together, organizations fear that these individuals may collaborate to advance their own interests rather than the interests of the organization.”

In future installments we will look at how finance professionals can position themselves to help navigate their businesses through tricky scenarios, and one of these would be a personal-turned-business relationship that goes awry.

Five Reasons to Implement Written Policies and Procedures

As with putting goals in writing and getting agreements in writing, successful organizations follow the best practice of documenting policies and procedures in writing. Here are five reasons to put time and effort into documenting policies and procedures:

  • As with writing down goals and agreements, the process of documenting policies and procedures forces senior management to step back and carefully think about how they run their business. Rather than spending days “putting out fires” that are often created by having no formal standards, management can work toward smoother operations by documenting policies and procedures for every area of the business that requires judgment and discretion or involves risk.
  • New hires will quickly get up to speed on how management runs the organization. To be sure, documenting policies and procedures takes some thought and effort on the front-end. However, in today’s world of high employee turnover, the initial new hire training process will be more effective when supervisors have a standard approach to bringing employees up to speed.
  • Employees will appreciate knowing what is expected of them and what they can expect from management. No one appreciates rule-makers who “make it up as they go along.” Take time to systematically document clear answers to implicit questions that every employee asks. Never assume that employee assumptions — absent clear and documented guidance — about organizational policies and procedures will align with management’s intentions.
  • Employees, investors, customers, vendors, regulators, and other stakeholders will have the perception that the company is well-managed by people who care.
  • Implementing consistent and predictable processes will facilitate company growth. Putting out fires all day long is not a scalable management style; the organization can only grow so far until one of the fires gets big enough to finally burn it down. Enhance scalability by standardizing processes, policies, and procedures. The constantly changing marketplace provides more than enough uncertainty for every senior manager that I know. Consistent policies and procedures provide a welcomed oasis of stability and predictability in today’s business world. This is often more than a luxury; it is a requirement for growth and survival as the organization adapts to external challenges.

I once heard a senior-level manager communicate his preference for leaving policies and procedures unwritten so as to avoid legal ramifications in case the organization diverged from them. This is a good strategy for managers who are unwilling to put thought and care into formulating good policies and procedures and maintaining effective enforcement mechanisms. However, it is a bad policy for an organization that plans to significantly scale operations over time. There are plenty of reasons why large organizations take time and exercise care to document and communicate their expectations for consistent, reliable operations and behaviors within formal, written policies and procedures. Finance professionals can contribute needed professional judgment toward every area of the policy-making process.

Create a Company Wiki

Knowledge sharing is crucial for organizational success in the Information Age. Knowledgeable, dedicated employees are often eager to add value and contribute to the organization’s success by sharing what they know. Finance professionals are fundamentally information workers who give and receive valuable insights to contribute to the success of the organization. There is not always a clear line of distinction between the finance and technology groups because tech tools are integral for the finance professional’s work.

Fortunately, in an environment that relies upon systematic information sharing, wisely deployed technology can facilitate the free flow of knowledge. CIO Magazine provided some best practices for implementing a company wiki:

  • Initially, what is a wiki? The article says it is “a software application that allows groups of users to create, edit and comment on online documents.” Wikipedia is undoubtedly the most popular example.
  • Companies use wikis for collaboration and employee communication, among other reasons.
  • The first implementation step is to define why the organization wants a wiki. This sets the direction and defines the parameters of the wiki’s purpose.
  • The second step is to choose a software platform. Options vary from free to fee-based, open-source, hosted, or deployed on the organization’s own system.
  • The third step is for the wiki implementation team to define the structure: “These include defining to what extent end users will be able to edit wiki pages, setting standards for how administrators will respond to updates from users, and setting rules around uploading text files or videos.”
  • The fourth step is to put someone in charge for maintenance. A wiki “gardener” can help the project grow, root out “weeds” (i.e., old information), and bring contributors on board.
  • The final step is to promote the wiki to end users. Start uploading useful content, refer to the wiki in communications, and encourage employees to read it and contribute what they know.

One helpful website referenced in the article for comparing wiki options for different purposes is

Bottom line, wiki implementation and maintenance is a good tool for finance professionals to consider adding to their skill sets.

For Best Results, Avoid Drama

We have all known people who have a flair for the dramatic. Some of them end up in Hollywood, while others might end up in our workplaces. The gossip, petty arguments, political maneuvering, and other extracurricular activities of these dramatists have nothing to do with creating value in the marketplace. Depending on your personality and proclivities, you might have no problem avoiding such office place dramatics. That said, it never hurts to carefully think about how to position yourself professionally in the midst of office place drama:

  • Stay above the fray – Make a decision to simply go to your desk and not participate in the drama. If coworkers are gossiping about one another, cutting down the boss, or complaining about the latest item of discontent, demonstrate by your actions that you don’t participate in such antics.
  • Don’t gawk – It’s human nature to enjoy a good drama. But if fellow employees are putting on a show, don’t stick around to watch. Find something productive to do that will build up the organization.
  • Contribute professionally – Sometimes it is hard to draw a fine line between office drama and legitimate matters that need handled. Sometimes the dramatists themselves need to be brought into line, which requires professional handling. If you are in a supervisory or HR role, you have to deal with drama as part of your job. The key is to do this professionally while, again, staying above the fray.
  • Be warm and personal but not dramatic – We’re not recommending being dour. Develop a reputation for being approachable. But position yourself as a professional, not a dramatist.
  • Bring calmness and stability to the office place – Some people bring constant commotion to their surroundings. Others tend to calm down everyone. It takes all types to have an effective team. Regardless of our natural tendencies, the best approach is to actively discern what is needed. When everyone is riled up, it is best to have a calming presence. Be steady and dependable, someone who can be relied upon to perform well under pressure.

Unless your career path leads toward Hollywood, you are unlikely to gain any professional advancement by being a dramatist. Position yourself as a leader who can resist the clever attempts of coworkers to drag you into the fray.