CEO's Diary: Get those invoices out - now

The CEO's bonus depends on it

February 28 – It’s the last day of the year, and I’m being a tyrant.

Usually I’m a bit relaxed about the month end cut off on billing. If an invoice goes out a couple of days late with the previous month’s date on it, I can’t get too worried. I’ve paid the VAT early and someone might reclaim it early, but they match, so what the heck?

At the year end though I feel different. I’m not sure why. I guess it’s those people looking over my shoulder. So I’m driving out invoices for all they’re worth today to make sure we get what we want, which is a good result. Sure, my bonus depends on it. But so does a good looking set of accounts as well. And I’d like both.

* * *

February 26 (again) – Late evening, and I’m still plugging away at home.

I’m convinced Wikis have something serious to offer us. It’s the ability that they seem to have to let keen people share their knowledge that I like. It’s liberating people to say their own thing. It’s about making the whole more than the sum of the parts.

I’ve noted some people aren’t sure, but what I really want to do is build an operating manual from the bottom up. Surely that’s possible? And economic, and the best way to do it, within constraints?

So I’ll tell you I like wikispaces, I don’t like wetpaint, I love tiddlywikis but doubt they suit our need, and I’ve looked at socialtext and need help I think – but suspect it’s good but not very presentable – and am not sure about that.

I don’t know why this is exciting me. Just take my word – it is.

* * *

February 26 – I know I shouldn’t get worked up about the year end. I’ve done hordes in my time (which just goes to show I’m past my youth), but I still do. I want it to be right. It’s a matter of pride. And this is the first time I’m not completely in control of things. #3 is in charge, and I have to show that’s the case by not interfering, however much I want to. But I did think it fair to have a ‘pre-year end review meeting’ this morning, just in case.

To be candid, I didn’t add much. I should believe that #3 has learned well from me, and is pretty willing to follow the example I set. So I’ve justified it to myself as being ‘providing support’. But I’m going to have to learn not to do so unless there is reason or until I’m asked. There was neither on this occasion. It’s a lesson learned.

PS Those with long memories will recall that when AJ arrived in the accounts department so did most of the men in the business. We’ve got a new credit controller, and following the traditions of our accounts department the new post-holder is female, and if anything makes AJ’s hem lengths look conservative. The old problem is recurring. But I’m going to leave #3 to manage it.

* * *

February 22 - It did not take the AM long to call about UITF 40. Which at least reassured me that I have one regular reader!

Having discussed the issue she says she's relaxed. Our cancellation fees represent little more than cost recovery, much of which would be reflected in stock anyway. The mark up would be, she thinks immaterial if we were to recognise income, and the chance of recovery variable (I'm candid - I can't be sure how much we'll really get in the case that have given rise to this discussion). So we agreed I was right - it is immaterial.

Which left me musing on other things with Newc. One marketing issue we still have not addressed is the web - which embarrasses me. We see three issues right now. The first is the web site itself, which needs to convey a lot more information on the benefits of what we do, and justification for why it's useful.

The second issue is the need to have internal and external 'knowledge bases' to which people can refer. Externally this is about legislation and regulation our area and how this is reflected in practice. Internally it's about how we meet these requirements, our policies and practices, operating guidelines and other information. Some of this stuff needs to be centrally controlled but on some others people might need the chance to develop ideas in shared work areas (we think).

Finally we wondered if we needed a blog - or maybe blogs. We can't yet see much need for this externally (although we may be wrong - because it seems RSS feeds might be a way of telling clients they can get news updates from us, but we're also worried about information overload in that case). Internally, given that we're a geographically dispersed company in some ways with lots of people on the road this seems an ideal way of passing on news - and even information requests rather than by long email exchanges etc.

Well, that's what we thought having spent happy time swapping notes on what we know (and do not know) on all this stuff.

When it comes to the practiclaties, web sites we reckon we can handle. We're also fairly OK on blogs we think (we've tried them - not telling you where) but wikis - we know they seem to be 'in' and we think we've got the idea of their use right. But given we're looking for something pretty simple (we think) - just a means of posting links to material with an easy way of searching by topic, what's the best way to do that without paying a developer a fortune (and I have a sneaking suspicion if we don't understand it we won't use it)? Any clues anyone?

* * *

February 21 - The run up to the year end seems to be trouble strewn. I'm deliberately ducking detailed audit issues this year - #3 is running that, in the main. But today we got a real conundrum. A new order cancelled. After yesterday's receivership this wasn't what I wanted.

My first thought was that maybe this was an Ops / West issue, but to be honest there's no sign of it. It just seems like one of East's people who was largely responsible has not offered the customer the best possible deal, and although they signed for it they now want to pull out and can't be persuaded otherwise.

So, what's the issue? Well, we've passed the point where cancellation fees can be charged. We will, of course, seek to do so. This covers design and other issues. in their case the fact that stock was on order for their site before they stopped (and I'm really wondering if they're aware of all this). But if that's the case, and assuming we can recover it do I have a UITF40 problem on income recognition on other orders not yet installed? If not, why not? I've read all the furore here on this stuff. Usually, to be candid we've not recognised any income until delivery has taken place. But perhaps we should? And if I do, do we have to do so for management accounts from then on?

And do I tell the auditors this? I used to wonder - but even by sharing it I can assume now that the AM will have read this and will be on email or the phone soon. How long do I give her?

I'm candid up front by the way - it's not material! I genuinely think that's true. But will she agree?

* * *

February 20 - I can tell you I answered my own question about whether to play with the balance sheet by trying to bring forward or hold back cash minutes after getting here yesterday. A useful customer going into administration is always sobering and proves the value of cash in your own account.

I'm confident that this particular threat is small to us. It's a relatively small account, even if profitable, and we were fairly up to date (which makes me wonder where their stress was). I also gather that a sale out of administration is likely in days, which usually means we keep going with the account because our stuff is fairly fixed on the premises and few people have time to worry about it just after a takeover. But I never took that consideration any further after that. I want all the cash I can get! And I'm happy not to distress others.

* * *

February 19 - Off for a couple of days and I spent my time wondering whether I need to fix the year end (Feb 28) balance sheet if we're going to be looking to buy other companies. Do I want lots or little cash? Or do I not disrupt the commercial reality.

I'm much inclined to the latter, but it had me thinking.

* * *

February 14 – If I know what’s good for me I’m out of here on time tonight, ready to take my wife to dinner (oh yes, there’s a romantic in me somewhere) and the family off for a short break tomorrow.

And it’s OK. I can do that. Yesterday the management team meeting worked like a dream. Billing is happening, as requested (West’s departure helps). They metaphorically put their arms round Promo (a big task in reality) and embraced him in the group, which was, I thought a really healthy sign. They’re up in arms about Ops (an opponent always help unity) and we made real progress on several issues which are touchy – such as pay rises. Am I alone in wondering what’s right at the moment?

We also had a fright when discussing the decision to outsource payroll – because Office had wondered whether the new TUPE rules might apply, but we got reassurance they probably wouldn’t. And #5 in accounts is anyway happy to stay on other tasks, but it gave us pause to thought about people doing too much for one customer – and gave rise to some good thinking on that.

And the order book is good – Newc and East are firing on all cylinders. Even I’m being credited with my fair share.

Today was more of a relief though. The budget was approved by the Board. I’ll be honest. We (the Chair and I) played a diversionary trick. Having talked through the new approach and how we plan to report against it (which is only at high level, and only really for shareholder benefit) we then threw in the real wobbly, which is cash. Isn’t it always? Well, actually, no – not here. Ever since the shareholders signed their agreement as part of their divorce from each other and operational management three years ago their remuneration has been pretty much fixed as a combination of salary and dividends (somewhat higher). The thing is, we make more now than then and even having bought Newc’s company we have cash spare, cash Mrs ex-CEO won’t let the ex-CEO have as he’ll spend it on his latest girlfriend (he changed recently). So rather than spend ages talking about the detail of the budget we asked them for direction as to what to do with the cash. This is their problem, after all. They can have it if they want.

But she won’t agree. So, they’re actually happy for it to be retained by the business. We even asked if more acquisition options came up would they allow us to look at them. Yes, was the answer. It would seem a shame not to assist in that case.

Having dealt with that getting the budget through was quite easy. After all, they’re going to get all they can. What more do they want? Actually, if I was the ex-CEO I’d be spitting fire. But he seems to live with it. I wish I knew why.

* * *

February 13 – Rumour has reached me that West is not going to work for a competitor. The same rumour says he’s going to work with Ops to set up something new.

I suppose I should have guessed this was a possibility. But would it have made any difference? I doubt it. They weren’t fitting in here. I can’t stop them setting up in competition. But I can stop them stealing customers for a while.

That’s an extra item for this morning’s agenda at the management meeting.

I’m pleased I went to see Promo’s team with him last week now. I can feel pretty confident that few of them will want to follow West. That’s key to this. As for Ops, most people now seem to think he’s let them down. He might have been the boss for a long time but he’s widely seen as not having done the ‘right thing’ by the company at the end of the day. Again, that makes me feel pretty secure about people not wanting to leave to join him.

But I guess they might try to steal customers, especially whilst we remain exposed in the North. Newc has his work cut out still covering that patch. Still, adverts are out this week and we’re open to agencies as well, if we have to be. This post needs the right person.

* * *

February 12 - A hairy week coming up. We’ve got the monthly management meeting tomorrow. That will involve getting Promo into the way of these things. That will be a challenge.

Then there’s the Board on Wednesday – and they need to approve the ‘budget’. It’s still called that, by the way. Since the shareholder agreement requires that we have one, the overall view of the plan, with sensitivities built is called a budget, even though I think t a flexible rolling indication of possible outcomes from planned activities, which is quite different.

In between that – not a lot bar a horrible pile of admin. I hate that now, and I’ve always been rather good at offloading it, but sometimes there is no option. Time at the desk is needed. It’s unexciting, but I won’t complain. I’m off on Thursday and Friday. Sometimes I have to play the roll of Dad as well. I quite like that one.

PS – The team in the West were really happy last week – they’ve clearly already been working for Promo on reality, so the change is good news as far as they’re concerned. Unfortunately, neither candidate for his #2 is an obvious contender for the North. But one is clearly the person to support Promo. She (it’s good to notice) is clearly the best management thinker. With luck we’ll resolve that quite soon – may be interviews next week.

* * *

February 8 – Well, we found a great site in the north. Good enough to think it could be the base for real development.

But, having agreed with Newc that he’d done a good job on that I then focussed him on the fact that although the team in the south is now complete again we really do need a manager in the north now.

This is Newc’s number one objective. We’re going for it flat out, although I’ve agreed he can also make moves on this site so long as we commit nothing: if we get the right person the other side of the Pennines (and I gather this can be important ;-) then I want the right to look again.

Now, it’s off to see Promo and his new team. I know feedback is already good, but there are bound to be people who need reassurance, not least because there’s now a vacant #2 slot there and at least two people who will want it. But that does not worry me. Better that way than no one in sight who could do it. Shame neither could go north. Actually, now I think about it, I suppose I should just have that in mind. Stranger things have happened, but I suspect that would be a step too far for these two.

And by the way, if anyone ever asks why I write this, that last sentence is the reason why. It helps me see things in a different way, which I think is essential.

And the reason not to write this is that the Audit Manager who rumbled me a while back told me yesterday they'll be looking rather hard at issues of asset security and insurance after the van incident. Cheek!

* * *

February 7 – Yes, I know, I seem to have missed yesterday. Blame it on the fact that I didn’t get to bed until too late, had one glass more than I probably should have done, and was in a hotel room.

Let’s also be clear, that’s because Newc dragged me north. He had good reason. Our insurer is worried about our vans. Two attacks have not endeared us to them. The yard we’ve been using in the north is not good enough. It’s insecure. It’s also not giving the right image. I’m aware that most of the time meetings can be done in hotels these days (and that’s my preference: the country is now becoming ringed by hotel foyers of my acquaintance). But sometimes a job of work needs to be done from an office and if we’re serious and want a good new manager who’s going to drive things then we have to get new premises. Newc had lined some up, so we were doing the ‘location: location; location’ thing yesterday (and today) with no TV crew in two though. Not sure I could face that Kirsty whatever her name is.

But that’s an explanation. Seeing at least one good, and affordable site, is more good news. Having two of three will give us options. We might even plan recruitment around the options. But yesterday started really well with West’s #2. He was unfazed by the news of West’s departure. I’m not sure he knew, but he certainly expected it. The immediate timing and my offer of the job to him did however take him by surprise. I told him he had unanimous support. The job was his if he wanted it. Sometimes the beaming smile on a man’s face says it all. He really wants this.

I’m delighted at his promotion. And that’s given him his name – he’ll be Promo on this site now. It may not be inspired, but I can think of nothing better and he’s been promoted into the job, so it will do.

Despite his acceptance I gave him 15 minutes to think on it and call his wife. He took the time. He still said yes. We discussed pay. He was happy with an offer which gives me room for rises if he grows into the post. So I made the announcement. There was no way to do it but by email to those out of the office. East and I both agreed to take calls though. I’m at a team meeting in the West on Thursday. This is good stuff.

There are days when your mood matches the bright sunshine, the frost and even snow that’s around and you feel like glowing. This is one. And I’ll quit before I go gooey.

* * *

February 5 – West has resigned. His contract says three months notice, but he’s asked for early release.

I called a telephone management meeting. Three things were agreed. He can go now; his deputy can be offered promotion straight away and this resolves the lingering doubt about what to do in the North. We have to go flat out for recruitment there.

I called his #2 and asked him to come in. For good reasons he can’t make it until tomorrow. I decided these things have to be done face to face. So, West was next. He was told he would have an early departure agreed if he didn’t talk until we wanted him to. He agreed and said he’d come in.

I interviewed him with Office present. He’s going to a competitor. It’s no surprise. I congratulated him on the move and then asked when he wanted to go. He said a month. Would they take him earlier, I asked? He thought so. I asked him to ring them. He did. They said they’d have him ASAP. Ok, I said. You can leave now. You’re no longer required in the office as of now. Please leave your lap top. Can I have your phone? Can we please have all kit out of your car now? Can we have the car tomorrow afternoon? (I did not want him driven away). Please pass over your keys to the office.

He was amazed. But I said we’d pay for the month even though he’d leave now as compensation for losing the benefits straight away. He accepted. Office noted it all.

And then she went to have all his access to our systems blocked. Rumour is bound to fly soon, but with a new appointment in the morning, I can live with that. His #2 will be a real asset.

Now, what the heck do I call him here? This is becoming a problem.

* * *

February 2 – And so, the ‘budget’ has been despatched. It looks like nothing I’ve done before. I haven’t got a profit forecast. I’ve got a range. I can’t say our forecast maximum and minimum cash: I can predict within bands. We won’t be able to report against detailed budgets in management accounts on many things, they don’t exist. This is all a bit scary in some ways.

Now my job is to convince the board. And to direct a team who don’t have this stick hanging over them that they have to deliver expectation and more, and that reaching ‘target’ is not good enough (as is happening this year, but that achieving potential is what we’re going for.

I think all but West are up for this. And he’s still here.

I wonder what the shareholders will say? The Chair thinks its great. Which really helps.

February 1 – Finished the day late – very late. It’s been another exciting week, and in a way last evening symbolised it. East and I were trying to do a capital spend budget. In the past this has been pretty detailed and has then been linked to later authority requests. If in line with budget Ops could sign them off: if not the board had to say so, but that was usually done by email.

We’ve decided that’s crazy. We really don’t know what we’re going to spend. Obviously, some vehicles will be under review, some IT will need replacing and so on. But more strategically, who knows?

So in the end, we’ve allocated an overall budget figure spread quarterly and said each spend has to be justified at the time. This seems more sensible. I argued with East that this will require more board contact and that’s hassle. He said I should treat them like mature adults. I wish I had his confidence, but he may also be right.

In January the CEO got his new team sorted, and gave up budgeting.

For previous installments of the CEO's Diary, see:

December
November
October
September
August
July
June
May
April
March
February
January
December
November
October
September
August
July
June
May
April
March
February
January
December
November
October
September
August
July
June
May
April
March
February
January
December
November
October