People tend to be precise with small numbers and imprecise with larger ones. Young kids love to explain that they are not 4 years old but rather 4 and a half – with an emphasis on the half. But hardly anyone says they are 54 and a half. They might not even admit they are…
Would you drive 20 minutes out of your way to save $5 on a $15 calculator? Would you drive the same distance to save $5 on a $125 leather jacket? According to research from Richard Thaler at University of Chicago, 68% of respondents would drive to get the calculator but only 29% for the leather…
Ever wonder why it’s so difficult to catch a cab on a rainy evening? Common sense suggests the reason is that people prefer riding to walking when it’s raining. Given a fixed supply, cabs are less likely to be available since more people want them. While this explanation seems obvious, economic theory suggests otherwise. As…
As a sound bite example of the Upside of the Downturn, Geoff Colvin suggested that death rates go down in a recession. Regardless of the accuracy of the claim, it’s worth remembering that the recession provides new opportunities for companies willing to take risks. To emphasize this point, Colvin subtitled his book “Ten Management Strategies to…
Financial Week must be a little bit schizophrenic. A Sept 1, 2008 article titled “CFO turnover hits a record high” stated that, according to Crist Kolder Associates: CFO volatility—a measure of how often an executive leaves his or her finance post—reached its highest level in 13 years in 2007, with 128 CFOs departing their jobs,…
Financial Week reports that “according to a study to be released [in October] by executive recruiter Crist Kolder Associates, roughly half of the CFOs at Fortune 500 and S&P 500 companies stay in their posts for less than three years.” This equates to the average tenure of an NFL running back. Before you get too impressed,…
Over at Intelligent Enterprise, an article entitled “How to Get to Better Planning and Budgeting” provides five questions every finance organization should ask: Is the planning and budgeting process as strategic as it could be? Are the budgets as accurate as they should be? Does your planning really help increase your company’s agility? Could your…
This week at SAPPHIRE Orlando I was deep in conversation with a customer about how to make scorecards more actionable when he said something like: I understand that I should focus on KPIs that are red and trending down but, honestly, I don’t trust the data. This is perhaps the true Achilles Heel of…
Openly, I get annoyed when people use the term planning to describe budgeting. While the terms planning and budgeting are often used interchangeably, they’re not the same thing. Budgeting is how you allocate resources (typically financial) to reach specific objectives. Budgeting helps you create an estimate of income and expenses for a specific time period. Budgeting manages money…
Unless you were trapped on a desert island over the last few months, it’s unlikely that you missed the Société Générale scandal and the resulting teeth-gnashing about the need for stricter controls and oversight in the financial services industry. While I’m all for better access and process controls leading to improved segregation of duties, I…