Key takeaways from Turmoil

I haven’t written much lately, and that’s been for a variety of reasons. The most important being that I had to ensure clients capital was sheltered from what seems like Tsunami’s of bad news. Not much changing to do, just some re-balancing into less risky investments and continuing to hold our oldies but goodies.

Some of my observations or takeaways over the last few months:

  1. Don’t panic, analyze
  2. Ensure you always have enough cash on hand in case of an emergency (worst case scenario)
  3. Make sure you have adequate Insurance on all hard assets, including your lives
  4. Believe in your ability and instincts
  5. Never rely on others to help you out financially
  6. Never assume someone in authority is smarter than you are
  7. Question what seems too good to be true
  8. You always get what your pay for.
  9. Consistency always pays off
  10. Take care of yourself and your health (mentally and physically)

Stay sharp, stay committed and stay focused

Rick

 

 

Trust and Competency

Companies and Individuals that exude both trust and competency in their work are increasingly hard to find.

A few recent examples:

Samsung

  • Leadership charged with collusion
  • Produces sub-standard home appliances
  • Revealed only recently that “Smart TV’s” are prone to hacking and can be used to record behaviour

City of Toronto

  • Road maintenance contracts awarded to “select” firms who are then sub-contracting to lower bidders

Province of Ontario

  • Contractors using sub-standard asphalt to win the bid, only to keep repaving because of the poor quality
  • Ontario Power Generation/Ontario Hydro-Ridiculous solar re-purchase agreements for residential producers that lead to super high hydro rates

I could go on but would rather focus on why this continues to happen. When we accept sub-standard and poor performance as the new “Norm” we endanger the very existence of our institutions and companies. Dealing with poor performance adds costs and inefficiencies. We must go back to demanding more from our workers, management and governments to live up to what is expected of them.

Holding people, managers and representatives to account is not easy, nor HR friendly, but it must be something we are prepared to do. Accepting sub-par performance will mean that people will go elsewhere or lose faith entirely. Both scenarios are not good, but losing someone’s trust can be devastating.

If you are not happy with your product, service or government representative, make it known that you demand better. Hold them to account, vote, or find someone that you can trust and is competent.

Remember

Are you with me?

Regards,

Rick Barbosa

 

 

 

A tale of two incompetents-The Oscars

I’ve told this to many of my clients and potential clients, but I’ve never had a “public” example to refer to. Just because you work for a big 4 Accounting firm or large Fortune 500 company does not mean you are competent. Throughout my career in private accounting where I’ve worked at some large companies, there was never a shortage of ill-qualified managers or so-called experts. Instead when I pulled back the covers on their ascent to these roles, more often than not there were social or organizational connections that helped them attain these posts.

I also found that Managers that were appointed based on their connections instead of their merit, tended to propagate the pattern. They would hire subordinates that posed no threat to their dominance in the company or more specifically their department. It would make these Managers seem all-knowing and indispensable by their own doing.

We need to get back to hiring the best people period. Forget about equal opportunity or quotas Mr. Trudeau, these just create tensions among those that are much more qualified and have more experience.

As for the two Accountants who didn’t do the one job they were hired for, please resign from your position and go back to your cubicles where you belong, not the corner office. You embarrass the rest of us.

Rick Barbosa

 

 

 

 

Playing by the Rules

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Whatever your Politics, you cannot argue with the recent market uptick and how it’s been impacted by pre-emptive policy choices of the new U.S Administration. In my recent posts you will have read that Free Trade and Trade Agreements in general only work if the playing field is level. The playing field is not level, and Large Multi-Nationals like it that way. We have systematically exported our manufacturing expertise to nations that are not democratic and do not see raising the standard of living as a priority. Product quality, safety, pollution and labour practices have all suffered as a result of non-level playing fields.

North American companies can compete with any company in the world on a level playing field. Our access to talent and innovation, capital, and natural resources is beyond compare. The standard of living we all share in the developed world was the result of investments made by both private and public sources, for the long-term prosperity of our companies and countries.

The current administration is disrupting the status quo. By refocusing and rebuilding North American industries we are saying that it’s time we focus on ourselves and our standard of living. The message is simple and effective. We must put our country, its industries and it’s people first or we risk our very way of life.

Play fair or don’t play at all.

Regards,

Rick  Barbosa

 

 

I wanna be a weather forecaster or economist when I grow up

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When it comes to job security, where else can you be wrong most of the time and still be employed? These two professions have the luxury of formulating “educated guesses” with no accountability for their outcome. How many times have you planned an evening out or a quick trip based on forecasted weather, only to be let down when it was nowhere near what was promised.

On a more serious note, economists and more specifically central bankers like Steven Poloz and Mark Carney are glorified weathermen. Steven Poloz’s insistence that lowering the benchmark rate to .5% was going to offset Oil and Gas’s demise by propping up manufacturing in Central Canada. #Epicfail. All it did was spur more borrowing for investment in the housing sector which is in a “bubble”. Mark Carney during his tenure never really did anything, including change rates. All he did was talk. Now that the BOE has Mr. Mark, he is doing much of the same thing which is nothing. What people are slowly realizing is that these “forecasts” are just guesses. Like those who bet with the “experts” on Britain never leaving. Unless you are held accountable for your actions your words mean nothing. True professions like Doctors, Lawyers, and yes Accountants, are held to professional codes of conduct and practice standards. If they fail to live up to these there are consequences and disciplinary processes in place. It’s a matter of public trust.

So next time you hear someone’s forecast or projection, ask yourself what they’re on the hook for if it’s wrong.

‘Till next time

Rick

cufflings

The cost of drinking the Kool-Aid

Kool-Aid

Now with tax season winding down, I finally have some time to reflect and write about recent events and provide my spin on these.

In any corporate environment we all know of those individuals who have attained their positions either by

  1. Selectively being drafted from upper management for their sympathetic views
  2. Taking shortcuts to achieve short-term results, neglecting long-term consequences

The first type of promotion is what’s known as Empire Building. This comes about when senior management wants individuals around them willing to “go along” with their direction and corporate outlook on how to best serve the interests of the company. Interests of the company in Empire Building more often than not will miraculously coincide with Senior Management’s own self interests. These interests can take the form of Bonus’, Stock Options, Board Positions, Fringe Benefits and Gold Plated Pensions. The least amount of resistance that they can have while attaining these interests the better.

The second type closely mirrors the first, but is distinguished only by the individualistic approach to the end result. WIIFM (what’s in it for me) Managers see employees and subordinates as tools and assets to employ in attaining the quickest, most cost effective, and most personally rewarding path to success. They often do not take into account longer term issues such as quality, impact on brand, societal impact and human cost of their decisions.

Many out there would see nothing wrong with either approach and tout that it is often necessary to employ these tactics to achieve the results the market expects. “Market Expectations” is another name for a Giant pitcher of Kool-Aid. Once we drink from the Kool-Aid pitcher as an organization we start to rationalize the decisions we make to make the market happy. Trouble is, this can’t and won’t last forever. What’s often left in the wake of pandering to the market and drinking the Kool-Aid, is broken trust, lost resources and damaged lives.

As owners and managers, we have a fiduciary and moral duty to think long-term on how to best achieve sustainable and realistic results that elevate our companies and staff as a whole. It’s not a 100-yard dash, it’s a marathon. Play to finish.

Some recent examples of “Kool-Aid” corporations:

Volkswagen takes $18 billion hit over emissions scandal Friday, April 22, 2016 02:03 PM EDT Toronto Sun

Mitsubishi Motors mileage scandal widens, U.S. regulator seeks information TOKYO 
— Reuters

General Motors will pay $900 million to settle criminal charges related to its flawed ignition switch that has been tied to at least 124 deaths. CNN Money

Till next time.

Rick Barbosa

 

 

Small Business Excellence: Confidence

Self-Confidence

First and foremost I would like to apologize for not posting more frequently. I have recently been involved with getting a new client up to date with their record keeping and it’s taken most of my free time. I always personally handle new clients so that I understand their business before I hand it off to junior staff. If you’ve read my prior posts I lament about getting an accountant early on and getting things in order instead of catching up.

I digress.

Many of you already know this, but to start and have your own business takes guts and a lot of B***s. I’ll substitute B***s with the word Confidence going forward. Taking that leap and putting your money in harm’s way on a daily basis is not for the faint of heart. Normally individuals with this kind of appetite for risk have an abundance of confidence in their abilities and desire to follow through on their business plans.

This is an absolutely essential quality to have and must be in place to facilitate sales, cash flow, and operations. These 3 key areas will need guidance, coaching and vision to sustain the initial business and see it through its inaugural year.  Most small business owners and entrepreneurs can sustain their optimism through this start-up phase, but when things start to get serious (either in a good way or bad) is when you need that confidence to stick around even more.  Having the ability to stick it out through growth spurts, cash crunches and competition means turning that confidence into persistence. Your staff, partners and bankers will all look to you to see them through these challenges.

No one said you had to do it alone. Confidence and indeed persistence, can come from many sources. Knowing you have help and options when these challenges arise feeds your confidence and enables you to push through roadblocks to come out the other side. That’s why choosing your partners and advisors wisely can help you formulate options you thought you never had. Knowledge is Power.  Power is Confidence.

‘Till next time.

Rick