Sometimes life can be a challenge, especially when reporting to difficult bosses. "Difficult" is a diplomatic term for "other agendas", and reflects poorly on a weak leadership. The past 10-15 years, I've mostly worked for investment-type companies or banks. Here are some of my real life most hilarious moments, and lessons.
The Perfect Report:
Many years ago, I had the sole responsibility of developing the methodology and calculating the economic capital of a firm. It was hard work . . . won't go into details . . . if you see financial and accountant resumes with heavy statistical and numerical modeling you know that their answer to the question, what is 1 + 1?, will most likely be, what do you want it to be?
Me: Thanks senior accountant (SA). I'm glad you are taking over this risk report.
SA: I hope you don't mind. Somebody in executive management wanted me to take over many of your functions, after all you have now developed and implemented a stable reporting process, and all I need to do is push some buttons.
Me: Hey, well and good. I can move on to other things.
SA: I'm glad you see it that way. I'll send you copies before executive management sees the reports, OK?
Me: Sure. Anything to help you.
Several weeks passed by, and I had forgotten this encounter. Then one day I received an email from SA. He wanted me to check the report before he sent it executive management. I looked through the report, and called him.
Me: SA, I looked through your report. Column 3 does not match with column 7 and 8. Good thing I caught it, yes?
SA: Oh, thanks. I'll get it fixed for next month.
A month went by, and SA emailed the next version of the report. I went through it.
Me: SA, column 3 still does not match with column 7 and 8. Do you know why?
SA: I'm not sure. I'll get it fixed for next month.
Another month went by, and SA emailed the next version of the report. I went through it. I had to call SA. He did not answer, so I left a message for him.
Me: SA, what happened? Where is column 3?
I thought that was the end of that, until a couple of years ago, I was relating this to a young environmental consultant I had met in a bar. I retold the joke to him. He said "Hey! We, do that. Let me introduce you to my boss", and he disappeared into the crowd.
Lesson: Beware of management systems that provide rosy reports, you are not seeing the whole picture.
Accounting in the Hole:
At another firm, I was tasked to determine the true long term losses of mortgage portfolios. I dug deep into their systems, and found out by accident (nobody was talking) that they had two systems. An accounting system (AS), which all companies should have, and an Asset Liability Management (ALM) system which certain financial companies should have. This was great as the ALM would provide more details.
I couldn't believe my eyes. After weeks of comparing the information between the two systems, I had found a $362 million discrepancy between the two, and emailed the out-of-state accountant responsible (AR).
Me: AR, can you take a look at this and let me know if what I have found out is correct?
No response. Resend email. Still no response. Then I heard he was coming to our location. A few days after he had arrived I managed to catch up with him.
Me: AR, you see this report. I compared the assets in the AS with that in the ALM. There is a $362 million discrepancy, with the AS having much less assets. Do you know why?
AR: $362 million? No, no, cannot be. $30 million, yes.
Lesson: I don't know what to say. They shouldn't have brought me in. Unless I was there to test if the hole could be discovered.
Serendipitous Setbacks:
Consultants can be a blessing or a curse to their clients. Two New York based consultants were brought in to "teach" us how to do loss analytics. One was a Harvard PhD, and the other had a Master's from Stanford. The project was a yearlong. It was rumored that the consulting firm was paid a million dollars. My supervisor (MS) and I, were on every conference call, and I completed much of the leg work. As usual I would ask a ton of questions about what they were doing and why. Then about 6 months into the project my supervisor called me.
MS: The consultants have told me that you are being disruptive. From now on, if you have any question during our conference call, you should email them to me and I will decide if your questions should be asked.
Wow. What a blow. Didn't question the consultants. They were being paid a million dollars, and executive management thought they were gods. I followed instructions to the letter, even when I thought they didn't know what they were doing. That was executive management's instructions.
At the end of 12 months the project closed. All data, models and reports were emailed to the consultants. Then, they missed their deadline for the final consultant's report. Per their request, the deadline was extended. Then, they missed the deadline a second time! Unbelievable. Unheard of in the consulting industry. What was it that these consultants had discovered that they needed more time?
Some week later, I heard that their report had been received. It took a few more days before it filtered down to me. I read their report. It was amazing. For someone who had been restrained by executive management, I loved every word of that report.
It said, that of the 21 mortgage portfolios, if cash reserves of $1,000,000 were maintained in each of the first 11 portfolios this would buffer each portfolio's losses by that $1,000,000.
For the remaining 10 portfolios, if cash reserves of $1,000,000 were maintained in each of these portfolios, it would significantly increase the portfolio losses by a $1,000,000. Therefore reduce the cash buffer $0.
Did you get it? They had invented the financial version of the perpetual motion machine.
Lesson: Listen to your people. They usually know more about your company than consultant do, and when consultants make mistakes the effects are usually horrendous. So watch their progress very carefully, and look below the surface glitter when hiring consultants.
The Innovative Report:
I cannot give too many details, as that might provide some clues to the firm.
Partner's Favorite (PF): Can you take a look at this report? I compared this data with that data. Did some information management analytics, and here is a great report.
Me: Sure, PF. I'll look at it and give my opinion. When do you need to know?
PF: As soon as possible. I want to hand it executive management because it is a great piece of work and they need to know as soon as possible.
Having a solid post-graduate level statistics background, it didn't take me 3 minutes to figure out . . .
Me: Who is the report for?
PF: Our investors.
Lesson: If you are given a report claiming this, that or the other, please, please, please verify the caliber and training of the people generating the reports.