How Not the Hire a Guy Like Me

by

The Top Trait Every CEO Must Have

You can’t run a successful company without it. I can’t do my job turning companies around without it. And once it’s lost, it can be almost impossible to get it back.

I’m talking about credibility. Every CEO must have that – with his employees, his board, his customers, his investors and his employees. And he must guard and protect it as a valuable asset.

As Warren Buffett said, “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.”

I urge every CEO I work with and every company’s senior management to maintain a high level of credibility. The consequences if they don’t can be catastrophic.

I once replaced a very smart man, who was CEO of a company that manufactured electronics parts. Despite the fact he had a PhD, he wasn’t too smart when it came to running his business. Upon reviewing his numbers one day he found some cost accounting discrepancies and realized he was selling his primary widget under cost. Instead of having a $1 million profit as anticipated, the company actually had a $2 million loss.

Rather than admit his mistakes, he just adjusted his prices. His customers weren’t thrilled with the unexpected and unexplained 50 percent price increase he put on that widget and fled. Faced with more losses, the bank soon noticed he wasn’t able to repay his loans and gave him the boot as well. We were brought in late in the process, and were able to sell the company and repay the lender and creditor. But the business lost $8 million in equity.

Had the CEO come clean about the mistake, been honest with his bank and his customers, he could have avoided the losses his ego cost him. He wasn’t. And he didn’t. His credibility was shot.

Through no action of my own, I almost suffered the same fate at a company I has hired to assess prior to becoming the director of reorganization. The president of that company didn’t like the fact I was doing an assessment of the company and wanted me to keep out of his business. So he decided to destroy my credibility.

How did he do that? The chairman of the board gave me specific people to speak with about certain issues. So the president told senior staff members I had already made up my mind about how I would restructure each of their divisions. That was untrue, of course, as I always speak openly with people and listen to their thoughts before making any decisions. But in their minds I was just wasting their time.

Thankfully, with the help of another senior staff member, I was able to salvage that situation.

An article in Forbes, “The Three Qualities a CEO Must Have to Success” addresses the issue of credibility and how critical it is to success.

“CEOs who lose credibility can never regain it. When you communicate, do people believe that you are telling them the objective truth? If they do, then you have credibility. To maintain credibility, you have to tell the truth 100 percent of the time. Telling the truth 90 percent of the time is not much better than telling the truth 10 percent of the time. It only takes a few instances of delivering non-credible statements to totally lose your credibility. Once you lose your credibility, you cannot lead successfully.”

My book, How Not to Hire a Guy Like Me: Lessons Learned from CEO’s Mistakes, is now available as an ebook.

by

5 Tips to Maximize Your Company’s Most Valuable Resource

 

You may be watching your company’s financial situation with an eagle eye, being careful to budget wisely and cut out waste. But what are you doing to maximize one of your company’s most valuable resources, one that is often overlooked on the balance sheet?

I’m talking about time. More specifically, time spent in meetings. Research has shown an organization spends about 15 percent of its time in meetings every year. According to “How Much Time Do We Spend in Meetings? (Hint: It’s Scary)” people in upper management can spend up to 50 percent of their time in meetings.

Here are a few scary facts from that article:

– There are 25 million meetings in the US every day

– More than $37 billion is spent on unproductive meetings

– Executives consider more than 67 percent of meetings to be failures

You may be reading this in a meeting right now, as 92 percent of people surveyed said they multitask during meetings.

So how do you stop wasting your company’s time and make those meetings more effective?  Here are some tips for making meetings add to your company’s bottom line, not take away from it.

  1. Make sure you need to meet in the first place

Does this communication need to be in a meeting, or can it be adequately handled with a group email or text? If you’re just looking for a status update or feedback on a project, you probably don’t need to meet. Have a clear purpose in mind. What do you want to accomplish with a meeting?w150317_saunders_shouldholdmeeting

  1. Always have an agenda

To keep meetings productive, focused and on track, always have an agenda. Decide what your goal is and what input you need from attendees to accomplish that goal. Send the agenda far enough in advance to let the attendees have time to prepare if necessary.

If you find the meeting getting off track, reign it back in by moving back to your agenda and tabling important issues that are raised for a separate discussion or follow up.

This step can actually help with step #1. If you are trying to create an agenda and find there isn’t much you need to meet about, cancel the meeting and send an email.

  1. Make the meeting the right size to accomplish your goal

Only invite people whose attendance is necessary. Ask yourself who will have the input necessary for you to achieve the stated goal of your meeting. Who would be most affected by its outcome? Who do you need to implement the decisions you make?

You can also invite people to the meeting if their input is needed for just one part, then allow them to leave when that section of the meeting is over.

Some people use the 8-18-1800 rule to decide how big a meeting should be.

  • To solve a problem or make a decision, invite no more than eight people.
  • For brainstorming, go as high as 18 people.
  • If you need status updates, and everyone present is providing an update, go as high as 18.
  • If you’re meeting for a pep talk or morale booster, bigger is better. Go for 1,800 or beyond! 
  1. Phones down, heads up

You’ve carefully determined your goal, planned your agenda and invited the necessary people to the meeting. But now everyone has their heads down, looking at their phones.

Consider asking all personal devices be switched off and put away. Sounds drastic, I know, but you need people’s full attention and concentration.

  1. Follow up with key decisions made and action items.

We’ve all attended a meeting and started a discussion only for someone to ask, “Didn’t we already make a decision on that? Who was following up?”

To make sure the meeting is productive, have someone send a follow-up email with what key decisions were made and what is going to be accomplished by what date and who is doing what tasks.

That email will serve as documentation of the decisions you made and hold people accountable for what needs to be accomplished.

 

 

by

“Nice People” Commit Fraud

“Bernie would never do that. He’s my friend,” said one potential investor who lost everything.

“He seemed like a nice person and not concerned about answering my questions at all,” said the reporter.

These were a few comments made about Bernie Madoff in the movie “Chasing Madoff” that I saw recently. It’s a documentary about whistle blower Harry Markopolos, who spent 10 years trying to get action taken on what he had quickly recognized was a massive fraud when his company asked him to come up with a competitive product and he ran the numbers.

Those comments struck me because that is often the case when I’ve uncovered fraud at my clients’ companies. Management and co-workers say, “Why, he is the nicest person in the office.”

He was such a nice guy, some people commented about Bernie Madoff. He would never steal money.

He was such a nice guy, some people commented about Bernie Madoff. He would never steal money.

I’ve seen everyone from owners’ best friends to grandmothers to the kindly old lady in the church office commit fraud. It’s been my experience that most of these people have no prior offenses, which was backed up by a report generated by the Association of Certified Fraud Examiners (ACFE) a few years ago. Here were a few other key findings from that report.

• More than half of the offenders were between 31-45 and slightly more likely to be male. The older the offender is, the bigger the loss.

• More than 80 percent of offenders work in one of six departments: accounting, sales, operations, sales, executive/upper management, customer service or purchasing. No big surprise there — these are the people that have access to money, can write off on purchases or have expense accounts.

• Only seven percent had been previously convicted of a fraud offense. I believe that low percentage is partly because most fraud offenders are let go from previous companies and never prosecuted. This is just one of the reasons I always advise my clients to prosecute those who commit fraud.

In the ACFE’s 2012 Report to The Nations on Occupational Fraud and Abuse, it was reported that the median loss suffered from fraud cases was $140,000. But more than 20 percent of the cases involved losses of more than $1 million.

Small business owners especially need to be concerned as they are more likely to be hit, primarily because they have fewer internal controls.

Want to take a guess how long the fraud goes on before it was detected? A median of 18 months.

Most people don’t go to work for a company with the idea of stealing from it. Most of them see an opportunity and then seize it. And that person is often the nicest person in the office.

I write a lot about fraud and how to prevent it in this blog and also in my new book, “How Not to Hire a Guy Like Me.” I tell the story of sweet Aunt Tess, a payroll clerk that everyone at the office loved. And she was so dedicated she had never missed a payroll in 25 years, even dragging herself to the office hours after an appendectomy. Bless her heart!

Well, old Aunt Tess was there, fresh surgical bandages and all, because she had a whole army of fictitious employees that allowed her to steal up to $100,000 a years.

Fraud does, and can happen to anyone. If you don’t have fraud controls in place in your office, make it a number one priority to do so. Maybe the nicest person in the office can stay that way.