Art of Accounting: Staff Person Was Too Smart for Practical Issues

[kcjenkins]

August 15, 2014
By Edward Mendlowitz

One time I got a client who was on the verge of going out of business and he asked if there was anything we could do to stop it from happening.

After my usual tour of looking around, I sent in a staff person to get some numbers for me. I didn’t want the numbers in the financial statements, but the numbers that would show me how the business was really doing, what the trends were, how much business he did with his top five or 10 clients and vendors, the largest-selling items, his pricing methods, who his higher-paid employees were and maybe whether there was hidden value in the business. My staff guy was told what to do, that he had three days, and this was a very high priority.

 

I called him at the end of the first day to check on his progress, and he told me it was too early to give any conclusions but would have something for me the next day.

 

I called around 2:00 the next day and was told that he spent a good day with the client working on a break-even analysis and methods to better price his products.

 

At that point, I got a little upset. In those days I did not hide my anger too much. I told him I would be coming over there, at which time I then fired him after hearing his explanation about why he did not follow my instructions. He explained that the client had no understanding of his costs and he priced willy-nilly.

 

I explained that I was trying to save a dying business, and the pricing, while important, at that point would make no difference in the business surviving or not; at a later point it would. I also explained that he did not follow my instructions, and after his almost two days of work, I still did not have any information I could use to analyze and apply my skills.

 

This staff person was a very smart, if not brilliant person —from a book-learning or pedagogical standpoint—but seemed to lack a practical understanding of our role and how to apply his (and our collective) knowledge to the situation at hand. He also did not follow my instructions—a cardinal sin! I had to start all over and did most of the work myself with assistance from a lower-level accountant on my staff.

 

Takeaway: Besides explaining what to do and making sure your staff person knows how to do it, you need to make sure they understand that is their job, and that if they want to digress, they need to call to get agreement on the diversion.

 

It also never hurts to over-supervise when a job gets started and to have definite benchmarks in the form of a deliverable at reasonable intervals over which the work will be done. This is a recurring theme and is part of overall project management.

 

A secondary takeaway is that once you are sure you have a staff person who does not listen, you have to let them go—and the sooner the better.

[Randall]

He should have gone there first with the staff person to assist him. Then he might have trained him better. That kind of thing takes experience, not just a set of instructions. He doesn't say if he came up with anything better for the client.

[kcjenkins]

I think you missed the point, Randell.  1.  He wanted the assistant to do certain SPECIFIC preliminary tasks, due to the urgency of the engagement.  The assistant ignored the directives given him.  2.  He did not have the time at that point to 'train' him, nor was he supposed to NEED training.  Sure, he points out in the piece that "It also never hurts to over-supervise when a job gets started" but the most important point is that if an employee does not follow instructions, or at least ask before deviating from them, he/she is not going to be a good team member.  3.  He did not expect the guy to be able to do what he could do, " That kind of thing takes experience", as you said.  But he did not have much time, due to his schedule, so he needed the preliminary work done so he could come in and hit the ground running.  And the assistant did have the knowledge to do the preliminary tasks.  He just did not do them.  Nor ask permission to change his assigned tasks. 

[Randall]

KC, maybe so. There's a lot of things unknown here. But I took some things from it in my own way. I took it that he fired the person on the spot in the field. If so, I have a negative view of that approach. I also have the perception that small firms are poor in training, assume staff know and understand more than they really do. That may not be the case here. I really don't know in this particular case. I got his point, I was just thinking maybe there's a lot more to the whole story. He may have a point about the staff person's focus but if he were saying this in a Q&A lecture format, I would have a lot of pointed questions for him as well.

[Pacun]

I have noticed that a book smart person is good in most areas if you teach them. Teaching a book smart person is a very good investment that will pay off if you can retain that person in your company. In this case, I would not fire this person but I would assign him other tasks and later on he would become the best on the field.

 

Do you agree that a "not so smart" person will be successful in Marketing and sales only? Why is that?

 

You know who I am referring to, correct? Have you deal with co workers that are not so smart? Are you one of them and you have not chosen sales or marketing?

[JohnH]

Firing the guy on the spot, in the field, is bad management no matter how one spins it. 

That sort of knee-jerk behavior is strictly ego-driven and counter-productive at all levels.

It also breeds a culture of fear and tentativeness in the organization.

It intimidates any other employees (or those to whom he bragged about it for years to come).

 

Good people make mistakes - very good people make big mistakes.

An effective manager uses these mistakes to mold them into top performers.

A sloppy, lazy, insecure manager discards them, often because they are a threat to his self esteem.

It's also a convenient cover-up for the manager's own lack of clear communication and follow-through.

 

I'd more quickly buy into a philosophy of "No more mistakes and you're gone !"

[ILLMAS]

There is probably more to this story, but did you know control freaks make bad managers?