You, the Chief Financial Officer (CFO) of the business of YOU

Can you imagine what happened at the office today? We were all expecting a decent Christmas bonus to be announced when the CFO called a meeting. Do you know this man starred at us for a few moments and began saying “Ladies and gentlemen, as you know, we have had a very challenging year, the unrest in the Middle East, recession in the US and the debt crisis in the Euro zone really hit businesses of our size rather hard. Therefore, we will not be able to pay any bonuses this year, and unfortunately we will have layoffs and benefit cuts in January. We will do our best to treat everyone fairly, but we must face the tough reality of the current times.”

What? I feel so betrayed, this is the company I have been working at for years, I have made huge sacrifices for this job and for them to treat me like this is just wrong. Can you imagine we are being punished while they (management) got new cars, allowances for designer clothes and even hired the best decorator in the city to renovate their living rooms and offices at the beginning of this year? I just don’t get this at all.

I was so frustrated during the following Q&A session: one of the floor managers asked the CFO to justify those extravagant purchases management made and he said, “Those things you mentioned were really an investment. In fact we got a loan from Union bank to be able to afford them. Our top people have to look respectable in order to be taken seriously when they meet to discuss business with people on these high levels you know.” Can you imagine? Are our executives so shallow and our products so worthless that the only way we can get business is for them to wear what they cannot afford? The most unfortunate part is that this so called investment did not yield any fruit! These people wined and dined at our expense but closed no major deals. How can that be an investment, especially one to borrow for?

I thought I was going fall on the floor when he was responding to questions on financial records and future plans thus: “We are putting together our financial statements, the accountants are working round the clock, calling banks and checking receipts to put the most accurate set of financials out there, we will share them with you in the coming weeks….. Unfortunately we did not conclude our budget process in the first quarter, so we don’t have a budget to share with you for this year, we will build one for next year….. We are considering a lot of options to bring the business back to a healthy position, one of the options was what I discussed earlier – payroll and personnel management. We have also considered price increases but we know that will allow competitors to steal our market share, so it is not the best route to take. The economy does not leave us with a lot of options, but we must come up with a plan soon.”

So no one was checking actual expenses to budgeted amounts and business plans while they were buying cars and designer shoes? And the only plan they have been able to come up with so far is to hurt the workers? Did anyone think ahead here? As I sat down at my desk after the meeting, the truth hit me – our CFO and the rest of the management team are the most incompetent managers in the business. They have been living large on bank loans all this time? I honestly don’t want be here when the union bank receivers come and possess everything, and I know that time is coming. I need to find another job.

The situation above is now a common scenario in many corporations around the world, and like the ‘victim’ narrating this story, we feel hurt and betrayed when our employers act so carelessly. But what we forget to do is relate these situations to our own lives as well. The truth is that YOU are a business and the CFO of that business is you. The smartest CFOs, the really wealthy people, focus on building long term wealth instead of seeking instant gratification. They do not go around borrowing money from banks (swiping credit cards) to buy vacations, clothes, luxury cars and other similarly nonproductive items just to feel among a certain crowd. Part of being mature and respectable is knowing how to improve your ‘brand’ to the level that you do not value yourself based on what you wear, and become comfortable knowing that people who try to place a value on you and your ideas based on the bag you carry, car you drive or shoes you wear will not benefit your brand anyway, therefore should be avoided. How did Warren Buffett and Sam Walton close business deals and build massive empires without splurging their capital on expensive watches, cars and clothes?

On a recent trip back home toNigeria, I noticed that a lot people in my generation are indirectly killing their children’s self worth under the guise of ‘giving them what they never had.’ Folks are borrowing to fly themselves and their kids in the upper class section of the plane, buying designer clothes at ridiculous prices they can hardly afford. And when you ask these parents about the education fund they have set up for these kids, they start stammering. I also saw the trend of riding flashy cars and wearing watches bought on credit. It was appalling and disappointing to say the least. Your duty as a parent is to instill the right values and be the best example for your children not to teach them that they can borrow or loot their way through life.

Before you take the next loan or buy the next flashy item, please ask yourself the following:

1. What type of lesson are you teaching your child when you buy everything she/he asks for?
2. How much wealth have you built for this child’s real needs in the future?
3. How many houses do you own (minus the one that is truly owned by the bank)?
4. What happens if you suddenly lose your job tomorrow? How much do you have saved and what will your life style be?
5. Is your life really all about watching other people on TV and hanging out with people who don’t matter to your brand?
6. When was the last time you read a book that inspired you?
7. It sounded ridiculous when the CFO in the above story could not come up with a financial plan, but what about you. Do you have a budget or financial plan?
8. How do you decide what to spend your salary on?
9. How much have you spent this year and what did you spend your money on?
10. What are your short and long term goals?

I got the inspiration to write this piece when I was watching the movie ‘Gifted hands’, which tells the story of the great pediatric neurosurgeon, Ben Carson. There was a line in the movie that really caught me: Ben was asking his mother for nice and expensive clothes like the rest of the kids in school and his mother said the clothes the kids were wearing were ‘cheap’ because beyond the price of the clothes, those kids had nothing on the inside. So think about yourself, look inwards. Are you spending money you should be investing to build wealth or borrowing to buy things you don’t really need because you are cheap and insecure inside?

If you have not been doing so in the past, it is not too late to start being the proactive CFO of the business of you, there is no better candidate for the job apart from you.

Enjoy the holidays, spend wisely, take stock and come up with a plan for the new year!