Category Archives: Professional Ethics

Three Ways to Keep Your Head Above Water

When was the last time you felt overwhelmed? We all have those days, weeks, or even longer seasons of life when we struggle to “keep our heads above water.” Having worked in public accounting, I am all too familiar with the tax time “busy seasons” when the work is piled up high.

During those times on the job or in other areas of life, we can either give in to feelings of stress and exhaustion, or we can intentionally conquer the workload with a plan of action. Here are three tips that can help:

      • Survey the Landscape — I once had a mentor tell me that he sometimes heard the criticism early in his career that he needed to more capably “see the bigger picture.” Over time he came to understand how to keep his communications with senior executives at a “high level” and focus on the larger strategic purpose rather than getting lost in the details. Whether you are a line employee, a middle manager, or the CEO, it is critical to understand the purpose behind what you are doing and how it fits into the larger context of the organization. If you don’t have bigger goals in mind than simply accomplishing the multitude of tasks in front of you, your work can be drudgery and you will find yourself burned out.
      • Determine Your Priorities — Once you understand the strategic purpose, you can translate this “bigger picture” understanding into a defined set of priorities for your day, week, month, and so forth. Your priorities will change depending on the needs of the organization. A finance professional might be inundated with day-to-day transactional details during a few months of the business’ busy season, and during slower months the focus might shift to careful cash flow management and longer-term strategic initiatives. Be clear on your priorities, and don’t get overwhelmed by trying to tackle everything of lesser importance at once when more pressing concerns loom large. 
      • Tackle the Details One at a Time — We might like to fancy ourselves to be great multitaskers who can jump from one project to another like honeybees in a clover field. However, staying focused on one detail at a time can lead to traction and momentum. Think of the difference in how you feel when you start ten projects and complete zero, versus seeing two significant tasks through to completion. Knock off your to-do items in bite-sized pieces.

I recently saw the effectiveness of this approach when I was working on a small piece of a larger project with my wife. We “surveyed” what was before us and decided how much of the project we wanted to “bite off” at that particular sitting. If we started to lose focus or feel overwhelmed with the details, we reminded each other that we would systematically handle one detail at a time until we saw the objective through to completion. That simple plan made the difference between frustration and giving up, versus the eventual satisfaction we felt in completing our task.

Four Key Standards for Ethical Finance Professionals

What do you think of when you hear the name Enron? How about Madoff? Other names and examples could be multiplied of infamously unethical businesses and individuals.

Finance and accounting professionals all aspire to avoid white collar prison, of course. At the same time, we hear stories and read numerous case studies and articles about those who play fast and loose with laws and regulations, thereby landing themselves in jail. Clearly, it is not enough to simply hope to avoid prison; an ethical professional must resolve beforehand to follow the highest standards of integrity, especially when times of testing come in the “real world.”

One key aspect of being in a profession is conducting oneself according to standards of professional practice. Doctors, lawyers, professional engineers, architects, and various other professionals are expected to master a body of knowledge, obtain experience and certifications, and pledge to perform their work with the highest level of integrity and competence.

The Institute of Management Accountants (IMA) is a highly regarded organization for accountants and finance professionals. Although the CPA designation is the most sought after credential within the accounting profession, the IMA’s Certified Management Accountant (CMA) designation is also well respected.

The IMA has the following four standards to which the organization holds CMAs accountable, and these are highly relevant and worthwhile for all accountants and finance professionals to consider:

  • Competence – The IMA’s standard emphasizes continual professional development, legal and regulatory compliance, effective decision support recommendations, and clarity in communicating limitations in performing work.
  • Confidentiality – The standard requires confidentiality except when disclosure is authorized or required, communication and monitoring of confidentiality standards, and refraining from using confidential information for unethical or illegal purposes.
  • Integrity – CMAs and other accounting/finance professionals should proactively avoid actual or apparent conflicts of interest, should avoid activities that would compromise ethical conduct, and should do nothing to discredit the profession.
  • Credibility – The IMA requires members to communicate fairly and objectively, disclose relevant information (i.e., information that could influence intended users’ understanding and decision-making), and disclose areas of deficiency or noncompliance with laws and policies.

Professional ethics has been and will continue to be a growing area of importance for finance and accounting professionals. We will explore this topic in more depth in future installments.

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.

The Future of Your Work

TIME ran a series of ten features regarding the future of work. In formulating a career development plan it is imperative to begin visualizing how work life might look in the future in light of rapid global changes. Here are a few summarized conclusions from TIME‘s articles:

  • “We will see a more flexible, more freelance, more collaborative and far less secure work world. It will be run by a generation with new values — and women will increasingly be at the controls.”
  • Not surprisingly, one of the best sectors into the future will continue to be technology. Entrepreneurs will set the tone for which specific areas thrive and dominate within the broader tech landscape.
  • Debate rages about the role of business schools in inculcating managerial ethics. One way or another, the importance of business ethics – and the consequences for diverging from paths of integrity – will not wane into the future.
  • As a cost-savings measure, companies will increasingly expect employees to contribute more toward paying for their benefits. Many companies started their benefit plans when the ratio of young workers to retirees was much higher. Now that the ratio is reversing, companies have to adjust accordingly and trim back benefits expenditures for employees and retirees alike.
  • Rather than the old traditional “up or out” model of career advancement, some companies are adopting a “lattice” model. Employees can “dial up” or “dial down” to different roles and enjoy more flexibility. Implementing telecommuting and other forms of flexible work arrangements can even be financially compelling for companies.
  • Baby Boomers will have to keep working longer than anticipated rather than retiring due to not having enough retirement savings. This can have both positive and negative effects for the economy.
  • Women will continue to extend their influence in the workplace. Women have a distinct style focused on collaboration, managing risk cautiously, and looking into the future, as compared to their male counterparts who thrive on risk. With more women comes more emphasis on work-life balance and flexibility. Furthermore, “When a company gives employees freedom, it doesn’t just feel good or get shiny, happy workers — productivity goes up.”
  • Green jobs geared toward various environmental objectives will likely continue to gain traction.
  • Generation X management styles will increasingly emerge. Gen X will have to manage Gen Y. “Companies already want more short-term independent contractors and consultants and fewer traditional employees because contractors are cheaper. And seniority matters less and less as time goes on, because it’s about the past, not the future.” Collaboration among workers from various backgrounds who are spread all over the world will become increasingly common. Cross-cultural communication and motivation strategies will become paramount career skills to develop.
  • Manufacturing productivity continues to vastly increase, coupled with less domestic demand for manufacturing workers. “Highly skilled workers creating high-value products in high-stakes industries — that’s the sweet spot for manufacturing workers in coming years. … Ultimately, what’s endangered is not U.S. manufacturing. It is our deeply ingrained cultural image of the factory and its workers.
  • “In order to understand what your workplace is going to be like in five or 10 years, you need to think about what your work is going to be like. Here’s a clue: employers no longer need to pay you to drive to a building to sit and type. In fact, under pressure from an uncertain economy, bosses are discovering that there are a lot of reasons not to pay you to drive to a central location or even to pay you at all. And when work gets auctioned off to the lowest bidder, your job gets a lot more stressful. … So, are you essential? Most of the best jobs will be for people who manage customers, who organize fans, who do digital community management. … Some people will embrace this new high-stress, high-speed, high-flexibility way of work. We’ll go from a few days alone at home, maintaining the status quo, to urgent team sessions, sometimes in person, often online. … Work will mean managing a tribe, creating a movement and operating in teams to change the world. Anything less is going to be outsourced to someone a lot cheaper and a lot less privileged than you or me.”

What other trends for work and careers can we expect in coming years and decades? How should we respond? This is a significant theme I plan to explore in many future installments. Whether we like trends of rapid change, reality is reality. We can either complain about emerging patterns, or we can learn to work them to our advantage. The choice is ours. Let the planning and action begin.

Zero Nag Threshold: Four Tips for Developing a Reliable Reputation

One of the constant frustrations for many professionals is having to follow up again and again to resolve matters. None of us like to be nagged, and I doubt too many get pleasure out of nagging others. Constantly following up wastes time, consumes mental energy that can better be allocated elsewhere, and can damage trust and collegiality. Tempers can run short on both sides of a dysfunctional relationship when nagging is the mode of operation.

Here are some tips for setting your nag threshold at zero so that coworkers, bosses, vendors, customers, and others can rely on you to handle matters the first time:

  • Communicate – Listen to the concerns that are expressed by your business counterparts. Ask open-ended questions to get to the root cause of the matter. Don’t jump to conclusions or seek out quick and easy fixes, but recognize the variables and ambiguity of each scenario. Sometimes the problem solving process takes time, and it is important to communicate all along the way.
  • Provide updates – Along with the previous consideration, be sure to proactively let others know where the issue stands. If you do this before they ask, by definition no nagging will ever come into play. Perhaps you are waiting on information from another person or organization. Let your counterparts know that you have followed up, that you have so far handled the matter to the extent that you could, that you will keep pressing for answers, and when they can expect the next update.
  • Don’t dish off – I recently had a representative from a well-known national managed services provider tell me several times that she had passed my matters off to different groups in her organization. Evidently those groups had the same lack of excitement to handle my problems as she had. She had not previously demonstrated a satisfactory level of understanding about the problems I brought up, so I asked to speak with members of one of those groups. Her response was that the group did not have a “call center” to interface directly with customers. So I pointed out that she was the only contact I had with the organization, and as far as I was concerned, it didn’t matter which group was supposed to solve my problem. She was the person I had access to speak with and was relying on to handle client concerns, so the problems were squarely on her plate. She did not give a good impression for her organization because she did not take ownership of my problem that I was relying on her to solve. She did not follow the steps of communicating, following up, and working the matter to full resolution.
  • Manage expectations – If you tell someone you intend to have information to them in three days but that becomes impossible for some reason, don’t wait until day four or even day three to mention this. Manage expectations all along the way as soon as new information is available. Your counterpart might be relying on you for the information on day 3, but if you can provide an update on day 2, the counterpart might be able to readjust in time to avert a crisis. Anytime we can know what to expect so as to avoid problems, even if it means making adjustments to previous plans, we’ll take it.

Showing a consistent pattern of taking responsibility will enable people to rely on you. Because reliability is a rare commodity, you will be that much closer to making yourself indispensable in your key business relationships.

The Number One Way to Gain Your Employer’s Trust

All of us have seen or heard of situations in which an agent (e.g., an employee) abuses the trust of his principal (e.g., the employer). Business theorists refer to this as an “agency problem,” the conflict of interest that exists when an agent looks out for his own interests above (and to the detriment of) the interests of his principal.

One of my mentors, a finance executive, once explained that he tried to manage the company’s money “as if it were my own.” He set a good example: Just as he would watch his own finances with eagle eyes, he paid careful attention to his employer’s money. By demonstrating a pattern of due professional care, he clearly demonstrated that he took his fiduciary responsibility seriously.

The best way to gain your employer’s trust starts with your own mindset: Treat your employer’s resources as if they were your own.

Your employer will trust you if you demonstrate a pattern of careful analysis and decision-making. You must exercise due diligence in small as well as large areas. Wisely manage resources that have been entrusted to you and areas of oversight that have been delegated to you.

Your ability to negotiate for a better stake in the future of the enterprise will be enhanced if you prove that you have the organization’s best interests at heart, not just your own best interests.