The FiscalDoctor Is In - Best Practices for Long Term Business Health

Hunker Down or Grow - Cisco approach - How can you best apply and benefit?

FiscalDoctor com — 2010-03-12T21:53:00Z

The article “Cisco Plumbs Lessons from Dot-Com Bust” in today’s Wall Street Journal (B1 column) lays out an interesting review. Cisco makes the case of being more aggressive to jump on opportunities this time than they were after the dot-com bust. The article lays out the short term costs they paid, or they infer invested. Good comments about both the benefits available and the risks they recognize they are taking.

The biggest point that I do not think is elaborated upon is the available resource advantage that Cisco has over most companies – basically a fortress balance sheet compared to most.

After all, be too conservative and competition will take your best customers, best people enroute to possible taking over you. Move too fast or too early and you squander your resources. No one said the new economy will be easy.

Cooking the books Govt style – Where and how much does your govt cook books? Impact on your biz is & will be?

FiscalDoctor com — 2010-03-03T15:03:00Z

The front page of the Wall Street Journal on March 3rd has an article “Europe’s Original Sin”. The subtitle of National Leaders ignored Greece’s soaring debt for years leads a discussion of how governments ignored sticking out their balance sheet and coughing about Greece and possibly themselves.

The gentler version on the other countries in the article describes this as Fuzzy Numbers and restatements of prior years.

Some of you are thinking why should you care. After all expectations of politicians are pretty low and government bureaucrats who report to politicians may be lower.

To the extent that this allows politicians to avoid making hard choices on overspending, this also increases the amount of debts they run up and look around someday for you to pay. After all, it appears that someday is getting here sooner than most people thought.

Also how much harder is it to create the economic framework you use for making your business decisions when you are not sure which economic data from the government can be trusted. After all if they only fudge the numbers or cook the books on some indexes, that should mean most of the indexes are truthful. Unless they fudge a little on everything or cook the books on the numbers that are relevant to you. How do you know which ones are accurate and which ones have become Fuzzy?

For those with low opinions of politicians who may be feeling a little proud, think about these two points in closing: 1. When you cook the books even as “little” as they are now admitting they did, you get sued or go to jail. 2. Where are over optimistic assumptions or cutting the corners fudging your books that you have not faced up to?

How could anyone do a worse job w customers of converting a system than att.NET is doing?

FiscalDoctor com — 2010-02-22T15:52:00Z

I use att.NET as a backup to Verizon while traveling, or when Verizon goes down here in Boston. Evidently they sent out an email telling me to change my information and service because they can NOT transfer my data, as a customer of almost 2 decades.

Starting yesterday I got a message telling me to do what the email about service change said or they will cut off my service the second week of March and to call an 800 number.

After an hour hold, I am told to re-enter all my data for the system and change from 7.95 plus some fees to 15.95 a month. To get a smaller version plan like I had is another hold. I asked the person who put me on the other line, why they did not send the email a second time to people.

My response then was to setup the vacation responder to say “this will be ending.”

Maybe someone can find a way to propose a project to ATT. NET to salvage their computer conversion and customer satisfaction department. You may laugh at this. While holding etc, I was told some version of how valued a customer I as.

Which cities will go chapter 9 bankruptcy and how will it impact you?

FiscalDoctor com — 2010-02-18T15:38:00Z

A number of people have decided selling to governments is the way to restore revenues. You might want to look before you leap and apply credit review and procedures which you do for commercial entities.

A Wall Street Journal article today section C1 names 4 municipal groups in bankruptcy or on the edge. Some experts are saying that almost every city and state is insolvent or bankrupt if they were truthful about promises and guarantees they have made on their employee retirement and health care plans.

It is scary when you research how many are insolvent even with the limited disclosures made. My suggestion is that you have some process to watch your exposure to this sector. Or you can wake up some day and have some large write offs.

If There Is No Inflation, Why Did the Cost of My Lunch Just Go up 25 Cents?

FiscalDoctor com — 2010-02-17T20:13:00Z

I just paid an extra quarter AGAIN for lunch at the salad bar where I eat on the weekend. I believe the price went up a quarter last year.

If we have no inflation and deflation is the risk, why are people seeing things like this?

Last year’s bailouts put trillions of cash into the system, supposedly until our experts decide it is safe to take the extra liquidity out. As the time drags on to reduce the liquidity overhang, experts raise the question of WHEN, not if inflation will start raging.

The last time this process happened and our politicians were helping us, they publicized a misery index. Last month, it was 12.72 for December 2009. The all time low was 2.97 in 1953. The high was 22 in 1980. You can learn more than you really wanted about this at a website on topic at www.miseryindex.com.

“The misery index was initiated by economist Arthur Okun, an adviser to President Lyndon Johnson in the 1960's. It is simply the unemployment rate added to the inflation rate. It is assumed that both a higher rate of unemployment and a worsening of inflation both create economic and social costs for a country. A combination of rising inflation and more people out of work implies deterioration in economic performance and a rise in the misery index.”

A number of experts suggest the index is manipulated by the party in power to reduce both the level of unemployment shown and inflation. The most comments in that area say the unemployment rate is artificially low since people who drop out of looking for a job until the economy improves stop showing up in unemployment numbers. Think about the artificial levels that interest rates on CDs and money markets are being held to help banks and financial institutions restore their battered equity and slowly bleed off losses in their loans and investments over time.

How should you look at the misery index and its impact over the next year in your business and personal life?

Are You Hunkering Down too Much?

FiscalDoctor com — 2010-02-10T17:09:00Z

“Firms Poach Top Talent From Recession – Weary Rivals” says February 8th Wall Street Journal on page B6.

Risks are what really go wrong when you are not looking: stupid things like bounced checks, losing your best customers or best people when you are blindsided. Some firms took a lot more risk than they thought. After all, top talent now has been lost to a more nimble, more opportunistic competitor.

You need to create peripheral vision in your business so you are not blindsided.

When you get real and look at a 3-3-3 method regularly, every three months you employ the J Paul Getty approach of the top 3 risks which could reasonably happen. Then you look at reasonable efforts to prevent those things from happening.

When you decide to get real, what are the three key risks you are ignoring?

And for the third part of the 3-3-3 process, what three opportunities does you business plan count on occurring next year, which will NOT happen based on the resources you are investing in those areas?

A vote for common sense on ERM, ORM and risk management

FiscalDoctor com — 2010-02-06T16:47:00Z

Interesting post by Earl Malvar at

http://commander-eon.blogspot.com/2010/02/thoughts-on-risking-enterprise-by.html

Thoughts on Risking the Enterprise by Cavanaugh - Earl Malvar - or to save you some time, he said --

Enterprise Risk Management, if to prove successful for an organization’s sake, must encompass and permeate through a company’s culture. As what was mentioned in the article, the big Wall Street names that tanked amid the mounting pressure during the financial crisis were not short of documentation and conceptual design on risk management systems, but they were lacking in execution. Risk management, especially in the insurance industry, can be tricky because risk factors can sometimes be unquantifiable.

The very nature of risk as an unanticipated loss or liability further highlights the need for a firm’s workforce to understand and practice ERM. Risk management, though a relatively new function in organizations, has now been given greater attention by higher management after the debacle of 2008. It may still have a long way to go though before uniformity and formalities are established as different industries and companies possess unique attributes and business needs that make effective Enterprise Risk Management elusive to practitioners.

Interview on the Cost of What You Don't Know?

FiscalDoctor com — 2010-01-29T01:01:00Z

What is the cost of what you don’t know about your business? This interview helps you find the answer, and learn how to avoid the risks those things may bring, in today’s AIE Imaging Executive podcast.

http://www.imagingexec.com/index.php?post_id=550701#

The Imaging Executive Podcast, from the Association of Imaging Executives(AIE), offers leadership insights and a glimpse at the future of imaging. Hosted by Paul Worthington, editor of The Future Image Report, the weekly podcast offers interviews with leading experts, as well as the editors of PMA magazine and The Future Image Report, to provide imaging industry executives with insight into management practices and relevant discussions about innovative technology. http://www.pmai.org/aie/

Money Matters Radio Interview January 18 on Risk, Quick Cash, and Passing the Embarrasment Quiz

FiscalDoctor com — 2010-01-22T22:26:00Z

Risks are what really go wrong when you are not looking: stupid things like bounced checks, losing your best customers or best people when you are blindsided. You need to find someone or way to create peripheral vision in your business so you are not blindsided. You need a perspective of life under the microscope and to have lived to tell the tale.

Because “What You Don’t Know About Your Business Can Cost You Your Business.” Sticking out your balance sheet and coughing gets you what you need to know in time for needed procedures which can mean the difference between life and death, in your product, business, department, life or job.

During the interview, we discussed risk, cash tips, ERM and how quickly the world can change, as the Chavez devaluation and follow-up closure of a foreign owned retail chain showed.

The shows website includes background information, educational resources, financial calculators, newsletters and an article of the day section. www.moneymattersradio.net/index.cfm

Click below for my January 18 interview for comments on risk in the first section

Risk, Cash, and Your Business # 1

Risk, Cash and Your Business # 2

Risk, Cash, and Your Business # 3

Let's Hope These 4 Things Don't Happen

FiscalDoctor com — 2010-01-16T11:52:00Z

How risky are each of these possible events that USNews mentions for your business, what are your best guess at the likelihood of them occurring, and what contingency plan can you create in case one of them occurs? After all, USNews is a very reputable publication, and the fact that they put these in an article suggests there is some reasonably likelihood that one or more of them could occur.

The article was titled Let's Hope These 4 Things Don't Happen

By Rick Newman , On Wednesday January 13, 2010, 5:43 pm EST

The 4 Things he suggest you consider are:

Housing tanks all over again.

Stocks crash.

There's a U.S. debt crisis.

Consumers become rational.

The original article is available at
http://finance.yahoo.com/news/Lets-Hope-These-4-Things-Dont-usnews-2604707770.html?x=0&.v=1

Revealed Secrets - How to Jump Start Your First Quarter With Crucial Best Practices

FiscalDoctor com — 2010-01-01T14:13:00Z

As I see it (and you may too), the economic downturn is a transformative game changer, whereby the winners (real survivors) will be those business leaders who will pay attention to tomorrow and thoughtfully pursue the golden opportunities that are waiting to be discovered.

Here are 9 paths to CYA that you can follow in order to achieve a head start on making next year a surprisingly great year.

1. Review the 3 best opportunities you could create longer term, and assess in great detail what you need to do to pursue them.

2. Examine the 3 top longer-term risk areas of your business today, and focus on how you will respond when those concerns materialize. Since J P Getty, one of the richest people in the world used this approach, it can benefit you too.

3. Assess your short-term risk tolerance and develop a contingency plan to stop Murphys Law in its tracks -- include as much detail as necessary to establish a clear picture in your mind.

4. Evaluate the 3 most crucial infrastructure issues you will face over the next 2 years (key people or skill set needs, financing, or system and process upgrades).

5. Analyze your staffing levels and determine whether you should staff on a "green field" basis. Ask yourself these questions: "If I were starting a new company, would I hire the same employees I have today? If I were to hire them, would I have them in the positions they are in today?" You may be surprised at your answers!

6. Learn which products are losing money and get rid of them immediately, or raise prices on these products/services.

7. Determine the cost of the risks you do not know, such as potential inventory mismanagement, product defect or service quality problems, and inaccurate or unrealistic financial projection and statements.

8. Ascertain your company 10 top customers not only in revenue but in terms of profitability. Ask yourself what complimentary or add-on products and services you can sell them to balloon your profits.

9. Evaluate and improve the speed and quality of your cash flow and key metrics monitoring in order to prepare for a challenging and choppy, turbulent year.

Bonus Tip: Pull this list out every six months to see how you can better manage company operations and resultant cash flow. Feel free to add notes or comments and change any words to "make it your own". After all, you gain when you internalize information. And in this case, you stand to reap some tangible benefits. Cash!

Note - I originally published this on December 31 on Ezine Artilces and a friend suggested I also post it on my blog, for you.

The current economy may occasionally make it feel like it’s an awfully tough time to ….

FiscalDoctor com — 2009-12-30T14:27:00Z

Very interesting and practical tips on ways to reduce business risk in the article link below. Substitute your name for the word CFO, and you get an interesting list of readily implementable best practices to have a better business year.
http://www.accountantsworld.com/DesktopDefault.aspx?page=articles&category=story&faid=709

As You Start Working On Your Next Year Resolutions for Yourself and Your Business

FiscalDoctor com — 2009-12-26T16:40:00Z

What was the best business decision you made this year, which can be expanded for even more potential for next year?

Consider adding this to build on what you learned in this year’s turbulent economy, as you plan to move forward again in your life and business.

Ed Grebeck Shared With You His Video Interview With RiskCenter

FiscalDoctor com — 2009-12-20T16:28:00Z

This concise 5 minute interview is basically as valid today as when the interview occurred, in March 2008. And with Wall Street selling CDOs under a newer name, you will enjoy his ability to point out major issues to be aware of.

Edward J. Grebeck, Chief Executive Officer Tempus Advisors strategist in the global debt markets, NYU Lecturer in credit derivatives, and a global debt market strategist and author.

Ed has contributed to this blog earlier, for your information and research copies of “The Debt Rating Agency Business After 2006: Who Wins” and Why Should INSTITUTIONS INVEST IN CDOs At All? [Euromoney, April 2006]”. Copies of both are included as separate postings below.

As I said about his earlier articles discussed below, this prescient warning of Structured Finance illiquidity, conflicts of interest, flawed pricing models and today's trillion dollar losses, still rings true.

http://fiscalclinic.com/2009/12/20/ed-grebeck-shared-with-you-his-video-interview-with-riskcenter.aspx

IT Expert and Senior Executive recomends my operational risk manangement book (ORM)

FiscalDoctor com — 2009-12-15T21:56:00Z

“What makes Stick Out Your Balance Sheet and Cough an indispensable resource for a wide range of professionals – from technology executives to boardroom directors and just about every executive in between – is Patterson’s incisive solutions to systemic problems that keep companies from achieving their goals and gaining competitive advantage in the marketplace. Whether it be communication breakdowns, operational inefficiencies, or IT obsolescence, Patterson gives business leaders the practical tools and strategies to replace silo mentality and interdepartmental fighting with consensual thinking and team effort. Finally, there is a book that gives new meaning to teamwork.”

Gregory Carney, Director of Consulting, Carney-Neuhaus, Inc., Former Partner with Accenture LLP, Consultant to the Board Greensmith Energy Management Systems

Just-in-Time Management Doesn’t Work for Cash

FiscalDoctor com — 2009-12-10T19:32:00Z

Just-in-Time Management Doesn’t Work for Cash, has been accepted for publication in the December issue of the ON DEMAND E-Newsletter.

And is available on the web at
http://www.ondemandexpo.com/on-demand-newsletter/newsletter-article-december-just-time-management-doesn%E2%80%99t-work-cash

Your Top Customers Hold Key to Your Company’s Profitability: How Well Do You Know Them

FiscalDoctor com — 2009-11-04T20:50:00Z

My article Your Top Customers Hold Key to Your Company’s Profitability: How Well Do You Know Them? was included in the On Demand newsletter published by Questex Media which holds the largest digital printing and automated production event in North America. Attend it, you will find it very interesting. I attended last year.

The article and newsletter are available at these two urls.
http://www.ondemandexpo.com/ondemand/v42/index.cvn?id=10241
http://www.ondemandexpo.com/ondemand/v42/index.cvn?id=10237

Some of you will be pleased to read about their favorable read of a key point in the economy.

How You Can Benefit -- Book it: Best bets for board reading picked my ERM / ORM book

FiscalDoctor com — 2009-10-30T17:59:00Z

Director and Boards magazine is deluged by a number of authors asking for a business book review.

Their website (http://www.directorsandboards.com/index.html) says their articles are essential reference advisories on:

• Audit Committees
• Crisis Management
• D&O Insurance
• Director Recruiting
• Director Compensation
• Duties of Directors
• Executive Compensation
• Performance Evaluation
• Succession Planning
...and much more.

Hence their selections indicate a corporate version good housekeeping seal of approval. They selected my common practical sense version of enterprise risk management (ERM) and operational risk management (ORM) book in the just released third quarter issue.

The table of contents says:
“From a roundup of new books, leadership insights on fundraising,
battling the fear of failure, coping with ‘blurry lines,’ and avoiding undue
embarrassment. Selections include 7 Lessons for Leading in Crisis by Bill
George and Stick Out Your Balance Sheet and Cough by Gary Patterson.”

Directors and Boards Third Quarter Table of Contents pages

Another author enjoyed the practical side and writing style of my book, and offered the quote below.

FiscalDoctor com — 2009-10-16T12:22:00Z

"What a creative way to offer practical business advice! What makes Stick Out Your Balance Sheet and Cough so attractive is that Gary W. Patterson, the Fiscal Doctor, offers is business practices in a way we can all relate to... through health care. We all understand terms like "symptoms", "diagnosis", "prescription", "treatment" and "check up", so when they are applied to business it just makes sense. Ingenious.

If you want a book to help keep your business healthy written in a fun and familiar manner, Stick Out Your Balance Sheet and Cough is it." -Leon Scott Baxter, "America's Romance Guru" and author of A Labor With Love and Out of the Doghouse
--
Leon Scott Baxter Lewandowski
(America's Romance Guru)
Author of "A Labor With Love" and "Out of the Doghouse"
www.CouplesCommittedToLove.com

The Debt Rating Agency Business After 2006: Who Wins? – His Insightful Follow-On Article Compliments Of Ed Grebeck

FiscalDoctor com — 2009-09-29T21:36:00Z

Edward J. Grebeck, Chief Executive Officer Tempus Advisors strategist in the global debt markets, NYU Lecturer in credit derivatives, and Chairman of StamSteer is a global debt market strategist and author. Ed has contributed to this blog for your information and research a copy of “The debt rating agency business after 2006: who wins?” As I said about his earlier article discussed below, this prescient warning of Structured Finance illiquidity, conflicts of interest, flawed pricing models and today's trillion dollar losses, still rings true.
The Debt Rating Agency Business After 2006: Who Wins?
His original article commented on issues including:
25%+ ROEs and conflicts
Gradual change?
You get what you pay for
How did this start?
Relationship management lending
Rating agencies rate ‘real’ borrowers
The SEC and the NRSRO designation
Regulatory licence expands

You will also find it interesting in that most of his comments are still valid today, including one of his summary points that “Conflicts of interest and agency costs pervade investment bank originators, issuers and rating agency distribution channels.”

Ed and I continue to discuss his comments that - It is still a house of cards; credit markets will never be the same.
• Without upgraded, new REGULATIONS, PRACTICES and PEOPLE-- additional, perhaps greater, losses lie ahead in tomorrow's debt markets.
• Because, Regulators have not addressed fundamental issues on rating agencies, financial instruments and the industry
• Clearly, the market remains skeptical of structured finance ratings and quantitative risk management technique as done by ratings agencies and banks.
• There is a crying need for a focus on clear explanations of corporate sector risk management. Ed advocates “thoroughly reviewing assumptions behind model analytics and further, motivations behind your assumptions.
Look between the weeds, to prevent loss and identify opportunities for value creation”.