Tag Archives: business

Introducing Mr Red and Mr Blue, and the fight for Aphra’s Soul

I’m caught up in a doctrinal war at work.

Mr RedIn the red corner we have someone who is intensely delivery-focussed. (Forgive the jargon, it’s late and I don’t have the energy to translate). He likes to get in there, get stuck in, tackle the problem head on and just sort the fuckers out. He’s good at it. It’s a bull in a china-shop approach, but if what you want is empty shelves then it works.

Mr BlueIn the blue corner we have someone who is equally focussed on delivering results. However his approach is much more measured. He plans. He analyses the problem and works out how much time and effort is needed to deal with it. He discusses the options with the people involved to get their agreement. He looks at the risks and takes the same approach of planning, analysis, discussion, and so on fractally, until the thing is done. This way not only are your shelves empty, but someone else did the heavy lifting and the china is neatly stacked and sorted too.

And then in the middle there’s me. I was born a Red girl (ever the Scarlet woman) but experience has shown me the benefits of the Way of Blue. As the RAF so elegantly put it, poor planning leads to piss-poor execution.

On Wednesday I realised that this is a doctrinal issue; a matter of world-view and belief, that there really is no point in putting Mr Blue’s arguments to Mr Red or indeed putting my own azure viewpoints myself. Mr Red simply won’t countenance the unnecessary over complexity of what I propose, any more than I can accept the risky, dangerous, scarletness of how he wants me to work.

This leaves me with a problem. Do I do my work the Red way, in the belief that I will fail and the knowledge that my name is written all over it? Or do I fight Mr Red tooth and nail, even though he is my boss and ultimately what he says goes? Or, rat-like, do I leave the ship?

When I typed that I brought myself up short. The answer seemed pretty obvious. Look for a nice turquoise or aquamarine project to work on and stop banging my head against a red brick wall. So what’s stopping me?

The problem is I really like Mr Red; he’s fun to work for. We work well together when we do work together (he’s not just red, he’s invisible). He’s funny, supportive, energetic, helpful, positive, determined, optimistic, enthusiastic. The perfect boss in very many ways. Except for this foolish adherence to the Way of Red. (Mr Blue on the other hand is a dour bugger, and can be hard work to work for, but that’s another story). If I did leave the ship and scuttle off somewhere else in the harbour then I’d miss out on a lot of good things, including trust, by not working for Mr Red.

Interestingly, one thing I said on Wednesday brought him up short completely. I said “I don’t think I can fly by the seat of my pants for 6 months; I don’t think I can handle the adreneline”. There was an audible crashing of mental gears (we were on the phone – perish the thought we’d actually meet to talk these things through) and then he said “then I’d have to look at restructuring the team”.

He did soften that immediately, but I do find it interesting that we are both aware that the that task and the tool might not be best suited to each other.

Sorry about the over-flow of metaphors. It’s been a colourful week.


Had a meeting with Mr Red today. He pointed out that we are both itching to be able to turn round to the other and say “I told you so”. So we’ve each put down a fiver on it which we’ll drink when we know who was right, probably on an appropriate Friday in September. It is going to be an interesting summer. He seemed quite confused that I don’t view work as an extreme sport.

Podcast Reviews – 1

iCatA lot of literary ladies here review books. Well I am going to review podcasts and I may continue to do so intermittently.

Let me declare here and now that the podcasts I like fall into four categories: History, IT, Management and occasionally Science. I’m a geekette, and proud of it.

Aphra’s favouritest podcast series ever is Hardcore History from Dan Carlin.

Carlin describes these as “conversations around the water-cooler”; he picks up an historical event or theme, peers at it from all sides, pokes it a bit to see what gives and puts it back so we can re-consider it from a distance. There are some very pedestrian history podcasts out there at least one of which must owe serious royalties to Wikipedia, but Carlin shows everyone else how it should be done. Very strongly recommended if you like to have thoughts provoked, connections made and paradigms subverted. Carlin’s not made that many of them, so I have started listening to his riffs off American politics and finding them almost as compelling.

Another must-listen podcast in Aphra’s car is The Reduced Shakespeare Company Podcast

A bunch of likable actors from the West Coast of the US shoot a themed breeze each week on some subject relating to their present and past touring shows. A particular favourite was Let it Snow. Gentle and amusing fun. I’m growing rather fond of them, and will of course go and see them next time they are in the Literary Festival in Little-Wittering-on-the-Wold.

I also enjoy the Business Week Cover Story

These are cheerful interviews between one of the editors of Business Week and whoever wrote the cover story that week. They’ve not made me go out and buy the magazine, but they are interesting, informative and sometimes illuminating.

Alt.text from Wired Magazine is good for a quickie

Running to 5 or 8 minutes or so, one of Wired’s columnists casts a flippant and frequently surreal eye over whatever catches his attention that week. Geeky. Silly. Witty. Worth 8 minutes of anyone’s week.

The National Archives Podcasts

Informative and interesting British history from real live academic historians. The lecturers are specialists and really know their stuff, working from primary sources. The slides they refer to, which one cannot of course see, show original documents. No wikipedia here. So understated it’s cool.

Old English in Context

These are undergraduate lectures from Oxford University which provide background information on the Dark Ages for students studying English Literature. They are detailed, funny and fascinating, and – woo hoo – you and I can listen to them and know we don’t have to write an essay or sit an exam. How bloody jammy is that?

There are several podcasters I am trying out to get a feel for:

Dan Klaas does laid-back essays about whatever strikes his fancy. They are classed as comedy, but I find them thought provoking.

The Cranky Middle Manager seem to have quality interviews on business-related subjects without pretending its aimed at the directors of plcs.

Occasionally the HBR Ideacast has interesting interviews with the authors of academic papers or books, but I overdosed on them early on and now I shake nervously when I hear their theme music.

There was one outstanding podcast from The University of Bath Public Lectures by world-class academics and politicians. These are frustrating because the original lectures were illustrated and the podcasts are audio only. Even so “Dead Sexy – the corpse is the new porn star of popular culture” is an exceptional lecture in an exceptional series.

It’s gotta beat Terry Wogan on the way into work, eh?


I download all my podcasts from i-Tunes. However, it has not escaped my notice that you are going to be looking at this at a PC so the links go to web pages and you can download the podcasts directly and listen to them on your PC. Isn’t that helpful of me?

You can’t believe what you read in the news

You can’t believe what you read in the newsNarratives take such an odd variety of forms.

Some years ago I owned and ran a business, but since those days I have moved on professionally and domestically. This evening I was going through post that I had collected and I found a final demand from a provincial newspaper group for £1600 or so.

The last time I placed an ad in a provincial newspaper would have been over 12 years ago. Cute.

Then a couple of envelopes later I found a notice of Legal Proceedings saying that a court claim would be issued on a certain day a while ago. Ho hum.

I carried on opening my mail, and sure enough, there was an envelope containing the original invoices for however many months before. And finally a credit note, dated almost two weeks after the claim was supposedly issued by the court.

No letter. No apology. No nothing. Just a credit note.

I am trying to remember how long an organisation is allowed to keep information about customers under the Data Protection Act. I am going to ring the provincial newspaper tomorrow and ask them very sweetly if they know. Since I am a nice person most of the time I’ll ring the accounts department not the news desk.

As an odd little coda, there are no individuals’ names on any of the documentation other than the first name of the sales person and the first name of the person who placed the order. Now I am sure that our credit control letters went out over our credit controllers name.

Enron – a case of moral bankruptcy

Enron Logo - “The Crooked E”I’m currently reading a couple of books about Enron and fascinating they are too, if you like that sort of thing, which I do.

What happened with Enron then?

Very briefly: they borrowed from the future to make themselves look profitable in the present, but no-one can do that indefinitely. Astonishingly, for most of the time they were within the letter of the law. Remember, a company’s Annual Accounts are supposed to be an account or an explanation presented to the owners which explains what their officers and employees have been up to during the previous 12 months. However, by the late 1990s there were many different ways of accounting for any given set of facts.

Of course, after a while the actions they took were definitely outside the law. In some cases corporate officers defrauded Enron itself in a complex game of financial cups and peas, in others they defrauded Enron’s owners by lying to Wall Street, and a huge number of senior executives quietly jumped ship during Enron’s last year of trading cashing in tens or hundreds of millions of dollars worth of Enron stock in the process, walking and quacking like insider traders as they pocketed the cash and “retired”.

Reading the various books on the subject, it’s clear that most of those involved either had no sense of right or wrong or let it erode over time. The question always seems to have been “is it legal?” not “is it right?”. These were people who had ferocious intellects but who had no moral sense and no internal breaking systems. Some of them saw laws and lawmakers as opponents to outwit. Others among them didn’t take laws that personally – they just thought the law applied to other people.

Reading the books though, I find myself wondering how such seriously intelligent people could be so stupid. How could they think that they could operate the company on a giant Ponzi scheme forever?

They separated out economics from accounting, and separated cash from profit. The economic reality – the truth of the cashflow – was that they frequently cut unprofitable deals. You see, they booked all the future profits of a deal when it was struck regardless of when or whether the cash flowed in by using what is called “mark to market” accounting. Worse than this: executives were rewarded regardless of how profitable the deal turned out to be because they got their bonuses when the deal was signed.

As time went by, and a deal proved itself to be less profitable than they had said that it would be, Enron should have shown that as a loss. But they were immensely reluctant to do that, and of course the bonuses were long spent.

An example (please skip this bit if your eyes glaze over whenever you see numbers)

Let’s say they built a power-station at a cost of perhaps $1bn and that they struck a 20 year agreement to sell the power at a rate of £100m a year. By normal accounting methods, the power-station would show a cash income from year one, but would take 10 years to pay for itself. What Enron did was to show £1bn as profit in the first year, on the basis that this was how much profit they thought they’d make over the whole 20 years of the deal.

There are lots of problems with this, but here are two to start with:

It is much harder to show an increase in profits if you book all your profits in the first year. Using normal accounting rules, the power station would not clear its building costs until year 11, but from then on if you want to show $2bn profits, you only have to make $1.9bn because you’ve already got $100m coming in from the power station. But using mark-to-market accounting rules you are starting from zero every single year.

This effect is exacerbated if your power station does not in fact have an income of $100m every year. Say it only makes $75m. Then if you are using mark-to-market rules you should actually declare a loss on your your books of $25m every single year even when you’ve cleared your building costs and are actually in profit.

Ok, that was very technical thank you Aphra, but what makes it interesting?

The focus on the here and now, on the deal and not on its fulfilment, was the nub of Enron’s problems. But you cannot run a business not serve your customers, you cannot run a business and ignore the cash.

It seems simple doesn’t it? Simplistic even. And that’s what I find fascinating about Enron: how so many very clever people (and they were very clever – they came from Harvard and McKinsey and Arthur Andersen) how so many very clever people could be so incredibly stupid. If you have no cash income, you’ll have no business.

The second thing I find fascinating about Enron is how many people outside Enron happily pocketed the consultancy fees and commissions that Enron paid them to hold the cups and hide the peas in my previous metaphor. Enron asked the banks and other institutions to “invest” in “assets” which Enron would then “buy back”. That sounds like a securitised loan to me. Doesn’t it sound like a securitised loan to you? But Enron called it a sale, and booked the first half of the deal accordingly though I’ve no idea how they booked the second half. The banks and other investors were paid handsome fees for these transactions. Again, these are very bright boys indeed so it is no surprise that some of them worked out that the deals were not entirely as Enron was painting them, but as Kipling puts it “them that asks no questions isn’t told a lie”. There was money to be made.

The third thing that I find fascinating is how many of Enron’s corporate officers came from relatively humble backgrounds. Kenneth Lay (Enron’s long-term CEO) grew up on a mid-western farm. Rebecca Mark (who dashed around the world, riding on elephants, building power stations and running Enron International) was from the Midwest. Jeff Skilling (who was the inside guy to Lay’s outside guy and was briefly CEO) came from a blue-collar background in blue-collar towns. These were not decadent second- third- or fourth-generation American aristos, not Hiltons or Bushes or Kennedeys. The guys that ran Enron liked the part of the American Dream which gets very rich indeed, but ignored the part that learns all it needs to know at kindergarten.

The fourth thing I find fascinating is that every single person involved seemed to think that someone else was checking up on things. Enron blamed its auditors, Arthur Andersen, for letting them get away with it. Andersens blamed Enron’s financial officers for pushing the line too far. Wall Street was told that “Risk Assessment and Control” stopped risky deals from being cut. But the RAC employees claimed that they merely there to advised and could not veto. The fascinating thing is not that everyone blames everyone else, it is that everyone genuinely seems to think that they themselves were not in any way to blame.

And finally, and this is what really gets me, they were a bunch of fucking amateurs. Highly educated amateurs, admittedly, but none of them had actually run anything. Kenneth Lay’s CV comprised academia and a little bit of government work until he got given a company to run. He was a supreme politician and played good cop to Skilling’s bad cop. One cannot call Skilling an amateur: Harvard MBAs and McKinsey consultants are not amateurs, but he was a dangerously brilliant and lop-sided specialist who should never have taken on general management by becoming CEO of various subsidiaries and ultimately of Enron itself. Andrew Fastow, who became CFO, was not even an accountant: his background was financial instruments.

I think it’s the lack of self-awareness that fascinates me; and integrity is the sternest form of self-awareness. Were they venal or just un-reflecting? I don’t know.

So there you go. If you want a quick rattle through Enron’s last 200 days then read “The Anatomy of Greed” which was written by an outsider on the inside, an Enron employee who was kept in the dark and fed the same bullshit as everyone else. If you want to get down and dirty with the detail read “The Smartest Guys in the Room” which is fascinating and dispassionate especially where the authors’ shocked incredulity occasionally breaks through. If you want something online that’s more informative than Wikipedia go to Risk Glossary.

The second book is particularly thought-provoking, and I guess the thought it provokes the most is “just how unusual was Enron?”

Black dogs and super-heros

The black dog came around sniffing on Wednesday.

I’ve been working in hero mode for a while now, and I don’t like being a hero. All I want from my job is to be entertained and to be able to pay my mortgage. I don’t want glory or promotion or any of the other testosterone-fuelled hierarchical crap which goes with corporate life. But Aphra has been standing alone against the ravening hoards, fighting them off, and displaying rather a lot of gleaming breast and thigh in the process.

Worse. Not only was I being a hero. I was being trusted to be a hero.

I hate being trusted.

(There’s an aside story here – an acquaintance once said “you do know I can never trust you again, don’t you” to which my silent reply was “good – I never asked to be trusted in the first place”. Please, don’t trust me, I’ll never let you down).

Anyway. Wednesday. There I was. Ravening hoards all around me. Lightsaber in one hand, broadsword in the other. There were even backing singers:

Aph – ah-hah – saviour-of-the-universe

and a scantily clad lovely chirruping

Aph, I love you, but we’ve only got 14 hours to save the universe

Now I don’t know about you, but whenever a scantily clad lovely chirrups “I love you, but we’ve only got 14 hours…” the temptation to make them 14 hours very well spent and let the rest of the universe go hang seems overwhelming.

In my dreams.

So. Aphra the super-hero, with attendant black dog and backing singers.

Fortunately the real super-hero of the piece stepped in and said “there is No Fucking Way that can be done by Tuesday”, so we rebelled and made a stand for sanity.

“Deadlines? Just say ‘no'”.

The thing is, the really truly infuriating thing is, that I still can’t be that voice of sanity for myself in my own life. It always has to be someone else who says it, and the problem was that for the last month or so there’s been me and my imaginary friends and that’s it.

It turns out that the scantily clad lovely has always wanted to be a kennel maid so she’s put on some waterproofs and Sensible Shoes and is taking the dog for a Long Run. The backing singers were just session artists anyway. So I am left – glory be to the goddess – with my entertaining job and my mortgage.

Just call me George Washington

We had another one of those damned ice-breakers today. “Tell us a lie, and tell us something true, and we’ll guess which is which”.

Huh!

I get very flustered by having to lie, and all I could think of was the things I wasn’t going to tell them. The best I could come up with was:

“I messed this up last time and everything I said was true” – which was true of course;

and

“I am the youngest of four children… oh shit, I’ve done it again, that one’s true too, I am really bad at this” – which was also true.

They all looked at me.

If I am asked to do this again I think I will refuse to participate ethical grounds.

Stroppy cow that I am.

it may not be medically proven yet…

… but anecdotally, you know it’s true:

Too much PowerPoint causes irritable growl syndrome