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CEO's Diary: I could be chuffed

31st Aug 2007
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Man at desk

The CEO's got a big order - but isn't over the moon

August 31 - The good and bad of a Friday.

Promo's team landed the biggest order they've received since he's been in charge, and he's on holiday. I could not resist texting him to tell him - and to suggest the commission would be enough to cover a good last night out when away.

The bad news - number 3 in accounts did not arrive aagain. No call, and no response to ours again, so I decided the best thing to do was write to her and ask her to come in and see me to discuss her absence, its cause and how the situation might be resolved. As one commentator here suggested, it is down to me to resolve this.

I've assured #3 I will, but I've also involved her throughout and said, for example, that she could veto or change my letter. I'm taking others advice and am making it clear I'm working with her on this.

What I have also done is call our lawyer. They must love this sort of thing. He's quite confident we did nothing wrong. No one has the right to object to the imposition of a reasonable internal control. And it's not constructive dismissal to do so.

So maybe what's arisen really have nothing to do with that at all. Pity it's knocked the edge off the week though. I'd feel really chuffed with that order but for this. But it does tell me that I at least have yet to get this process right. Which does sort of suggest that my friend asked an appropriate question last weekend: I do have to work out why I am doing this. Without having a deeper understanding of just what I am seeking I may not improve my own performance, or that of the company as much as I would hope.

* * *

August 30 - The awkward member of the accounts department did not appear at work today.

Nor did she phone in.

Nor did she answer the phone or her mobile when called.

But let's be honest, we only called each once at about 10. And she could have identified the caller and made the choice not to talk.

But it has meant she's on to a warning on her return to work. I may be wrong, but I always feel that if you're going to have a dispute it's worth getting as much ammo on your side as possible.

In the meantime I've been looking at her work, as has #3. So far a journal review shows nothing wrong. And given journals are the cause of this we looked there first, again.

Now it's a mater of looking at the purchase ledger for which she has primary responsibility, including sub-contractors. The obvious concern is that she may be trying to hide something that's happened there.

Equally she may just be miffed.

But it sure as heck as reinforced that question my friend asked me at the weekend. Why do I do this? Could there be an easier way to earn a living?

The answer is probably not if I want to earn the sum I bring into the household economy from here, if I'm honest. But then I know my friend would ask if we really need that much. Two years ago we lived on somewhat less.

Tell me, why is nothing straightforward?

* * *

August 29 - Well, I may have had fine thoughts over the weekend but mundane reality has descended. And it's all because of that journal problem.

#3 was unhappy with me about my request that she restrict this member of staffs access to parts of the accounting system. So we spent some time beating it through and spent hours (I mean that) discussing the control environment on things like journals and in the end she agreed with me (after some compromise on my part where, in fairness, it was unlikely that there was real risk).

That happened on Tuesday. On Wednesday she wrote this all up as part of our operating manual, and we agreed it. So she told her staff who were affected. All two of them. And the one who I had helped blew a wobbly.

She protested that we were demoting her. She was an accountant and an accountant without access to journals across the whole system could not do her job. And she then said that this change was constructive dismissal and she'd consult her lawyer. And more besides.

Actually, she's number 3 in the department and was not employed as an accountant but with specific ledger responsibilities. It's true she was over-qualified for that job (but the hours we offered suited her) and #3 as boss of the department had allowed her to undertake tasks not covered by her job description - which is where the journals came in.

So I had a long, and stressful, meeting with her in which I explained carefully, and calmly, the need for an appropriate control environment which required checks and balances to be in place. This, inevitably, required a hierarchy of authority and an approval criteria to be established for more sensitive transactions of all sorts, such as journals.

I confess we did not get far. Her position was blunt and obdurate: she'd done it so she had to continue doing it.

She left my office at 4pm and went straight home, without permission. I spent the rest of the day writing it all up to cover our backsides in case of complaint. I also asked #3 to block her access to journals, immediately.

My big concern is why she is so stressed. Is she hiding something? I'm not sure, but my inclination is to suspend her whilst we investigate.

But I also suspect she won't be in tomorrow anyway. And that this one might turn nasty.

* * *

August 28 - An excellent, and somewhat surprising weekend.

The weather was excellent (as no doubt you are aware). Good humour prevailed as a consequence.

But the interesting bit (as far as this diary is concerned) was a conversation I had which really made me think.

This was with a very good friend who I have occassionally referred to here before. In fact, I guess he's my best friend if I use my children's language. We go back a long way. We trained as accountants together and although our careers have been quite different since then we have always stayed in touch and our families are good friends at almost every age that is represented within them.

We stayed with this friend on Saturday evening. The children camped in the garden, our youngest slept like a log throughout the evening and there was time for conversation. My friend, who has managed organisations much bigger than the company I now run but who gave that up a while ago to work in the voluntary sector (to do which I expect he took a massive salary cut) asked me a hard question. After a year in the job of CEO he asked me "What are you doing this for?".

So I offered the usual stuff - it's a job, we need an income, it's exciting, I want to make a success of things, I need and want to keep the shareholders happy and on and on. You know the sort of thing you say when people ask rather personal questions.

But he persisted. He's like that. We'd been talking about what I wanted to train people to do, and he made the point that what was the reason for telling them what I wanted them to do if I was not sure why I was doing this myself?

Now that was below the belt, I think you'll agree. But he was adamant. Was I expending a lot of effort because I thought this was necessary to ensure I earned my reward? Did I feel that the pay required it of me (or as he put it, was I not sure I was worth the money so bust a gut to prove those paying me wrong)? Or did I really want to own this company? Or was it an ego thing?

And why did I care about how my people performed? Was I being paternalistic? If so, was that condescending? Or did I want them to succeed me? Did that frighten me? Or was I really a team player and just wanted people to get along well? But if they got along where were we going together?

Could I answer that one? Was profit enough? Or did I believe in our product? Was it really useful? Could it be better? If so, how? Would it cost us to make it better?

Call it the Nth degree if you like, but I might have been reeling after all this. As it happens, I wasn't. I know this guy. I like him. I trust him. He was doing what a good friend should, and asked the sort of questions no one else can.

I'm embarrassed to say I don't know the answers. He said he even had an answer for that. He gave me a book. It's called Finding Sanctuary: Monastic Steps for Everyday Life. It's by the mock who did the telecision series called the Sanctuary recently. I saw one or two, but I laughed at first. He knows I'm not a regular on Sundays. I never have been. But he said ignore that - read it.

I have (well, some of it). It's fascinating. Take this which comes from the Rule of Benedict (who was a monmk 1400 odd years ago, or so I'm told):

Above all things, that the Abbot may not neglect or undervalue the welfare of the souls entrusted to him, let him not have too great a concern about fleeting, earthly, perishable things.

As my friend put it, this says you can spend all your time dealing with the fleeting, urgent things as CEO (which the Abbot is) and forget your real task - in his case looking after people. His challenge to me was to decide what my task is before getting too bogged down in training people before I know what I want them to achieve.

I didn't expect this. But I admit I'm glad that he decided to do it. I think he's really challenged me. And maybe I needed that.

Amazing as well to think that the issues are much the same now as 1400 years ago.

* * *

August 24 - I haven't been back from holiday for long and today has dragged. I want the weekend off.

No one seems happy today. The weather has improved as the day has gone on, but it's still left people miserable.

Newc seems uncertain about my enthusiasm for expanding the business and has gone away to convince himself I'm right.

East thinks I've been mishandling his staff. Clearly some have moaned that I made them work hard when he was away. I told them what I expected of them, he defended them and I chose to differ.

#3 thinks I mismanaged her staff member who made mistakes with a journal while she was away and can't see why I'm concerned about the issue. I made clear this one was not an option, it was a direction. I did not want relatively junior staff having free access to journal systems. I'll have to return to this next week.

North is still muttering about sub-contractors (although we seem on target none the less).

Only Office seems happy in fact. But she's always the most level headed here.

Candidly, I realise this team has more to learn about management than I realised. Management is not doing. Management is setting priorities and making sure others buy into them and then achieve them. I don't get the impression that's understood.

It will be a constraint if it isn't. We're not going to sit still for long if I have my way. I might be pushing this crowd during the course of the autumn.

But right now, I'm bunking off ASAP for a weekend with the family. It had better not rain.

* * *

August 23 - Somehow yesterday slipped by without me noticing. Today feels so much better, East is back from holiday and that means that very soon now he can take over his team again.

Promo's away next week (he seems only to take weeks at a time) but that's much easier - Newc can cover for him.

In fact, once he's back summer will be over, although the weather already makes it feel that way. Then we can get on with serious business.

One task is to get the managers to let their people manage. I have discussed this with the Chair and he's designing a training programme for this now. It's vital that people don't get bogged down in minutiae all the time.

And second I want Newc to work with me now on developing the new business idea. It's been my thing to date. But I'm increasingly convinced we can grow this business be extending our reach organically. It will be interesting to see if I'm right.

The challenge will be a) persuading our people to do this b) giving them the skills and language to do it c) providing them with the right materials and tools to market it d) ensuring we can deliver. The last seems like the easiest to me. Candidly, we could subcontract manufacture with little difficulty I suspect at first, and might do just that to spread risk.

As ever, it will be the people who are the challenge. Why is that always the case?

* * *

August 21 - I'm back in new business thinking mode.

Sometimes the thing to do is just go out and be nosey. So I used the excuse of a day out with a couple of our people to visit some client sites.

I like days out like this. I think it's important I know who works for us, and that they know me. Time spent with them, actually out on site let's me see what happens, what they have to deal with and makes me aware of why things don't always run to plan. It' so easy to think that there's a standard time for a task. But sometimes there isn't, as we found this morning when a site manager made every complaint possible about what we had to do, and which had been agreed by her regional manager when we'd done the site survey. Maybe my presence helped, and maybe it didn't, but I was pleased with the courteous way our guy dealt with the issue. I now hold him in higher regard.

And while he was dealing with that I did a mini survey of the opportunities for the product I'd like us to sell. But there was an interesting aside from the objections from this manager. The new product is more visible than that which we supply, which has a more utilitarian role. That means the aesthetic negotiation will be even more important. Do I need to factor that into the cost equation? It's an issue I had not thought of before, and which may be important.

It shows why it's worth going out sometimes.

* * *

August 20 - I spent the weekend concerned about the journal problem I mentioned on Friday. So much so that I broke a rule, and decided to investigate myself rather than wait for #3 to return.

My concern was simple. I person I don't know well appears to be writing journals, and getting them wrong and that may be impacting the quality of the data I'm getting to run this company.

It's not hard to dump the journals out of our system onto an Excel file. You just run a query.

My big worry was journals in control accounts. That's a basic control check. Thankfully I found only one - and that one was a known problem which #3 had discussed with me on the bank rec where I'd agreed this was the easiest way to solve a problem.

But it did seem to me that too many people are writing too many journals right now and I would really like to know why. I like as much as possible to go through books of prime entry. For example, that's how stock adjustments are meant to take place here but we're getting small stock journals. Nothing seems material. But a control weakness is a control weakness.

#3 is going to have to look at this. And I'm going to have to be tactful and at the same time direct: I don't want this to happen.

* * *

August 17 - Had to do some accounting today. A member of #3's team (recruited since I was FD) was getting in a right pickle (to put it nicely) and I had to help out.

She'd posted a journal and got it wrong. So she tried to reverse it. And got that wrong. So she'd tried again but had not got back to her start point. And again.

In the end we printed everything we could lay our hands on off and reproduced it all as a spread sheet.

And then we filed it carefully because I have a funny feeling the auditors might just want to look at that one next year. And stressing the need for evidence for journals was no bad thing - she seemed (rather alarmingly) unaware of this.

In fact, I was a little surprised she could journal without authority.

Sometimes it s useful that people go away. I've learned quite a lot during the last fortnight or so as a couple of key staff have been on holiday.

But I'll be glad when they're back. I wonder? Do they feel the same about me?

No, I won't ask. That way lies insanity.

* * *

August 16 - Sober reality has interrupted my research.

The reality is the sheer tedium of micro-managing some people. It's driving me mad. I never had to do this for the accounts team, and they only worked feet from my desk, so why is it that half East's people seem unable to think without calling me?

I can only guess East is partly to blame. He's clearly happy to accept the burden of decision making that at least some of his people pass to him when they should be perfectly capable of deciding the issue for themselves.

Let me be clear. I've got no problem with the person who says "I've been asked to do X and they want to pay less than our guideline price and say they need it now, but I've told them that's only possible if I also do Y on which I can make up the difference. Is that OK?" Because then they've formulated a plan and just want approval for going outside guidelines. That's called internal control.

But it really annoys me when they phone and say "The customer says they've got problem Z, what should I do about it?". That's just passing the monkey my way (and if you haven't read The One Minute Manager Meets the Monkey you should - it's probably the best one in the series). I don't expect that. We pay these people to think on their feet, or so I thought.

I want to take this up when East is back, because it's a waste of his time to be doing all this stuff, and it's time our people learned how to manage. This is one the Chair should be involved with. He's our training specialist and these people need it (or a kick in the proverbial, but the former is likely to do more good, all things considered).

* * *

August 15 - The Chair and I met for breakfast. As ever I value his input.

We used the proverbial back of an envelope to do some numbers. Based on what we know the target company is giving the owner a good living despite his moans. The Chair has identified the person who ensures that's the case. He's about 40, not on the board, started as a driver and has worked his way up and is instinctively good. Trouble is he's completely in awe of the boss (as Ops was here) and is underpaid and overworked as a result but does not realise it. Somehow they manage to keep people happy, and this chap is highly unlikely to be enticed away. He's living in his comfort zone.

So, the Chair asked, why was I bothering? By then I wasn't. This is a dead duck. We can't pay enough to replace the earnings the owner is enjoying, and nor do I want to, not for what I see as a lame business run by someone who may well not fit in here.

But it hasn't put me off. I've instead been asking several of their more attractive competitors to come and size up what they can do for our premises (as good a test as any). And I'm now scouring the accounts we've collected for this sector to see who might be of interest.

Or should I (dangerous thought) look to start an operation from scratch? What if I gave Newc this challenge? That's what I bounced off the Chair. He didn't say no. But that's not his style. He says go away and bring back evidence. It's a discipline in me that's worth a great deal.

* * *

August 14 - The quote from my chosen target came in today. In between considerable fire-fighting on another issue, where a sub-contractor (almost inevitably) massively over-ran on time allocated yesterday and upset a customer's trading activity as a result (or so they claim) I've been musing on this.

It's not the cheapest. It's not the best presented. I'm not 100% sure one bit is right - I think the product they've quoted for isn't what we asked for. And it has a general feeling of sloppiness about it.

So what's happening here? Their financials (as far as we can see) are good. The company seems to be providing its owners with a comfortable living. It must be doing OK then. But how do you square that with what I'm seeing where it's clear that there are keener companies out there offering better prices, better response and better presentation? Is it just that at the end of the day the product is better from the target and so they get away with slackness elsewhere? Or have they got a loyal customer base?

I just don't know. That's the trouble with business. You could go round in circles forever musing on what the competition is doing and still have little clue why they manage to keep customers who others could clearly serve better.

But I'm now faced with a conundrum. Who do I place the order with?

My answer is with my target, of course. I'm willing to pay the price to find out more. But, I'm also going to see as many of the rest as I can.

And already some of our people are telling me that we have had other enquiries for this sort of thing and they've deflected them, as I suspected.

My adrenalin is running. Helped also by the work being done by our summer intern. This person is not that inspiring (unlike the last two we had, who were great) but methodical work is producing a lot of information for me to look at. Given that the existing business can't stand much more heat right now I think this is what I should be doing.

In between fire-fighting, of course.

* * *

August 13 - Spent the weekend musing on my meeting with the director of my target company and felt uneasy. I thought from all I'd seen this would be a vibrant operation - but if it is he's not the reason right now. Of course, that could mean there's a really good person running the show there, but either way I decided to hunt out alternatives.

Of course I could have delegated the job of getting alternative quotes. But I didn't. There is nothing, but nothing like getting on the phone yourself to see what a company is like and I've got four alternative quote requests in today - two of which I've already had back as priced options.

That's not been the case after my Friday meeting. Again, that's either not encouraging or it shows there's a lot of room for improvement. Now. how do I find that out without resorting to industrial espionage?

Given my enthusiasm for efficient client service though what is clear right now is they are not the market leader in that area, at least.

* * *

August 10 - I made a mistake yesterday when I said things might be tedious. It all depends on how you look at things.

So first thing this morning one of East's guys called me with a problem. A customer wants a quote on a job. There's nothing odd about that. But what he wanted in the package was some of the product that the company that I've been hankering to acquire, and have not had reason (or time) to contact make. He called me (as he would have done East) to simply see who he could pass this part onto, believing we wouldn't do it.

I told him otherwise, pronto. I told him to get on with the rest of the quote. I'd be right back on the subject of the extra bit.

And I didn't hang around. I was on the phone in seconds. I vastly overstated my potential interest. I made clear I was a CEO needing to talk to a CEO. And for all my reluctance to entertain I was offering lunch before I'd got three minutes into the conversation.

It worked. I did no more than say we had demand for their services, and could we discuss how we might work together, and it might be good to have chat over a sandwich since we were in the same area and I was in. All I'd needed was the catalyst of the client enquiry to give me the chance to be credible.

And then I decided to play it low key. I didn't want to talk an order, or a specific enquiry (as far as I know we've only had the one). I just wanted a chance to learn more. I knew what I wanted to portray to him. We're a growing company, expanding fast with a big contract base and high quality sites with customers who want and need to be up to date. I wanted to know if my opposite number responded to that idea.

Candidly, he didn't. Which might be good news. Because the reason he didn't is he's 58, fed up, wanting the good life (which he calls retirement) and is mighty disappointed by his children. A dream scenario for me, I reckon. I let him cry into his beer (which I noted he had whilst I sipped my water).

Of course they'll do for the current work. I don't care what margin we make on it, frankly. But I have made the opening and learned more than I could by digging for ages.

What I need now is an opportunity to keep this discussion going. So this afternoon I mailed around and asked for a general feedback on how often we might either be asked for this sort of thing or turn it down or alternatively might be able to offer it, but don't. This won't be an accurate response (these things never are) but again I had an excuse because of a specific circumstance.

And I wouldn't have had that if East had not gone away. Which also tells me I should share ideas more widely. Because I really don't think I've communicated my interest in this very well. Which is another lesson learned.

PS So excited I wrote this and forgot to post it!

* * *

August 9 - East has gone away and already I can feel the impact. Operational issues have flooded onto my desk as, being realistic I have to cover for him when he's not here. Promo can't and North has enough on. Newc is also away this week (which I'll put down to bad planning).

Thankfully nothing has been of any consequence. But it all takes time. It makes me realise just what these guys do spend their time doing, and just how lucky I am not to have to do so.

But even having #3 out as well makes a difference too. I have to authorise things she could otherwise do.

It's a good job I don;t need to be heavily engaged in a marketing effort right now and no one would want to see me anyway. I've got a tedious few days coming up.

* * *

August 8 - Back with a bang. Had to do a disciplinary hearing first thing this morning. They saved it for me. It was a case of a third warning for negligence with regard to control of the company's stock. Which is, as we all know, a euphemism for the fact that it's disappearing off a person's van and highly likely benefitting someone else.

The chap in question is good, but the stock losses are persistent and on high value items. He couldn't explain why he alone seems to be suffering this trend right now.

Having had two previous written ewarnings the outcome was inevitable. He was sacked, but with a final right of appeal to the Chair. Our rules make it clear that this is the result of this negligence. I hate sacking anyone. But we can't be taken for a ride forever.

That's another one for Office to replace, but she's doing well on that score despite the time of year.

* * *

August 7 - Crept back into work as quietly as possible.

It's been a great holiday - uninterrupted family pleasure. Well, almost. There's not a Dad on earth who can face his offspring for that long and not get annoyed occasionally. But we all came back feeling remarkably good.

As for here, the fact that it's like a morgue made life easier in a way. But East was here to brief me. And he genuinely gave me little cause for concern.

Sub-contractors have been his big issue whilst I've been away: they always are a pain and I knew they would be. But he wasn't going to give me the opportunity to say so, so I resisted. He just made clear they have taken a lot of management but he thinks North can manage the case whilst he, in turn takes time off from Wednesday.

#3 also departs then. But even that seems not to be a matter of concern. Her team seem well under control. And she has promised me 'good enough' figures for July before going. I can live with that.

So all I've got to do is clear my inbox. Which means I'll be hitting the delete button until Friday.

* * *

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

July 2007
June 2007
May 2007
April 2007
March 2007
February 2007
January 2007
December 2006
November 2006
October 2006
September 2006
August 2006
July 2006
June 2006
May 2006
April 2006
March 2006
February 2006
January 2006
December 2005
November 2005
October 2005
September 2005
August 2005
July 2005
June 2005
May 2005
April 2005
March 2005
February 2005
January 2005
December 2004
November 2004
October 2004
September 2004
August 2004
July 2004
June 2004
May 2004
April 2004
March 2004
February 2004
January 2004
December 2003
November 2003
October 2003

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Replies (7)

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avatar
By carnmores
19th Aug 2007 16:55

good god
i had no idea you were still sane, it appears that you have an obsessive compulsive disorder - seen you commenst elsewhere. let it go enjoy your holiday

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By AnonymousUser
15th Aug 2007 15:05

Your potential acquisition target...
Is their product better? Maybe you need to spend a little cash to compare their product against their competitors.

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By listerramjet
31st Aug 2007 08:55

re your #3s #3 problem
you set yourself up for this. rather than looking for ammo you should be offering flowers and an apology.

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By AnonymousUser
17th Aug 2007 10:01

Micro-management
What are the causes of this behaviour?

Is everyone empowered with that responsibility or does East require his some of his team to come him with such questions? Does he treat some people in his team differently to others, and if so why?
Are some people opting out of responsibilty by habit and East just doesn't turn them away? Or maybe he does turn them away and they are just trying it on with you? Perhaps there is some other reason or influence as to they are seeking the comfort of you taking the risk of making judgement.

Does this behaviour indicate a need for further communication of the values you are trying to instil?

You already have an example for how you want people to behave from the way you are building the management team and the expectations you set on the management team members.

But do all of the management team members clearly understand the values that underpin this? Do you have a clear definition of these values yourself? Do you set an expectation that the managers will replicate this down through the teams? That they will encourage their teams to think, suggest, grow, encourage one another to feel successful, create and build trust, seek excellence, etc. and that they will allow their team members room to do this?

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By geoffemtacs
30th Aug 2007 14:10

#3's number 3
Sounds like the person in question has external issues and if your reference to flexible hours implies someone juggling child care and work, you only have to look at the calendar to work out what's going on as the stresses of the Sumer holidays come towards a conclusion. They might not have a leg to stand on but if they're actually a valued member of the team, you might be able to resolve this amicably so long as she's given a bit of space, time and thought.

The person who most needs looking after is #3. You've overriden her decisions about a liberal approach to journals, browbeaten her into accepting your point of view and alienated someone she had chosen to trust. You may well be right, but she's the one who needs to feel loved and consulted if you're to get the best out of her.

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By User deleted
03rd Sep 2007 11:18

Errant employee
Your employee made a mistake, and came to you for help. The result of which is you assume that she's up to something, and set up controls.

And you wonder why she's upset?

You've insulted her professionalism and her honesty and overruled #3, which is utterly at odds with the idea that you are touting elsewhere - that you should delegate and trust those to whom you delegate.

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By AnonymousUser
03rd Sep 2007 13:52

Number 3's number 3
You could be looking at a bad reaction to change and not some underlying misbehaviour (i.e. fraud). Typically (but not always) someone committing fraud is reluctant to take leave of absence (e.g. vacation) because that is when they are vulnerable to the fraud being uncovered. This is why enforcing the taking of holiday is an internal control.

Is there anything else in the department she might be reacting to which leads her to misunderstand the situation? Might she genuinely be interpreting this as a demotion or reduction in responsibilty?

Is there anything going on in her private life that might impact on her performance? Or causing her to overreact?

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