You're familiar with the placebo, a pill or treatment with no intrinsic therapeutic value that's administered to a control group in medical research. Then there's the placebo effect, through which people become convinced of the efficacy of the phony therapy and get better strictly through the power of mind over matter.
The placebo also has a "dark twin," in the words of the University of California, Berkeley Wellness Letter. This is called the nocebo. Just as positive thoughts can make people feel well, negative thoughts can make them sick. In medical research, it has been found that people warned about the side effects of medication are more likely to develop them than people who are not. Moreover, people given a placebo and cautioned about imaginary side effects often manifest them, though there is no physical reason why they should.
How does all this tie into financial careers? Financial organizations are constantly fielding urgent demands for data and analysis from senior management. The pressure is compounded by the unrealistic expectations behind many of these inquiries, and high-level executives' poor understanding of the realities of how their companies actually function. From firsthand experience, I can attest to how working under a financial manager with a positive, can-do attitude translates into high staff morale and effectiveness, even under such trying conditions.
I also have firsthand experience with working under and among managers who foster an atmosphere of crisis, panic and finger-pointing. They often act surprised about dismal employee morale and the resulting high employee turnover. While a departmental controller in an environment like the latter, I had the added unofficial title, I kid you not, of departmental morale officer. My main challenge in this regard was to convince my boss (otherwise a fine person) to check her tendency to react in a panicked fashion to every new ill-thought demand or directive from above. An equally tough task was opening her eyes to how a trusted lieutenant of hers was the source of most of the negative energy in the group, and most of the finger pointing.
Beware the human nocebo.
Checking or verifying resumes presents a huge challenge for hiring managers and human resources staff who seek to vet potential outside hires. The problem is not nearly as acute with internal candidates, since their accomplishments and records within their current firms normally are known quantities.
Accordingly, people seeking to change employers often have many temptations to bend the truth in their resumes and job applications. Follow the link for details, including a case study, on how this form of employment fraud can be perpetrated. If you are contemplating hiring an outside candidate whose resume seems too good to be true, perhaps it is, for the reasons discussed in this article.
During my career at Merrill Lynch, my eyes were opened to the value of hiring a personal publicist as a method of career enhancement. Much against typical corporate policy at the time, the firm hired an inveterate job hopper into a highly visible position, just below the executive level. From day one stories emerged about how this person seemed to have remarkably little insight or expertise to offer, yet somehow kept getting press mentions as a leading light in the industry, much to the consternation of one and all.
How was this possible? Another fact that soon surfaced was that this person had a personal publicist on retainer, and a very adept one at that. Follow the link for details on how this strategy can work for ambitious people on the move.
One of the traditional symbols of Thanksgiving is the cornucopia, or horn of plenty. This gets me thinking about Critical Few Objectives, a.k.a. CFOs. Too many managers, especially senior executives, do a terrible job of keeping such lists of objectives focused and short. Instead, they have an annoying tendency to add objectives during the year without deleting any. The result is chaos.
When I was a departmental controller, the head of this group attended a weekly staff meeting hosted by her boss. Without fail, each time she'd return breathless, telling me that I had to add at least two more items to our group's CFOs. I'd then ask the same tough question each week: "OK, what comes off the list?" Stunned silence would ensue.
My stock response? "When everything's a priority, nothing is." Indeed. When a list of the "critical few" has metastasized into a 100-item blob, it is beyond comprehension and control. Actually, it never quite got that bad, but without my constant badgering (which was not entirely appreciated, as you might guess), it very well might have.
If you ever become a controller with chief of staff responsibilities attached, beware of unfocused bosses thus prone to mission creep. Attempting to rein them in may be difficult and frustrating, but letting them add indiscriminately to CFOs is a recipe for disaster down the road. This is a big, yet rarely commented-upon, problem in the corporate world.
As a financial professional, you always have to be concerned about possible unforeseen consequences of your actions and initiatives. We've already delved into how improperly-designed incentive systems unexpectedly can promote dysfunctional behaviors. Likewise, risk managers need to worry about whether risk mitigation initiatives, like the construction of safety nets to shield individuals or organizations from catastrophic events, actually promote excessive risk taking.
Curiously enough, the Thanksgiving holiday brings this to mind. How's that? Well, Thanksgiving is notable (or notorious) for its association with football. For several years, there's been a buzz in the media about the prevalence and long-term effects of head injuries in the sport, which appear to be growing despite advances in the protective qualities of football helmets. What to do?
A radical idea appeared several years back in a Wall Street Journal article. Since better helmets may be encouraging more dangerous play, some outside-the-box thinkers wonder if American football actually would be less dangerous if there were no helmets. They point to rugby and Australian rules football, both similarly hard-hitting games, but games in which the unhelmeted, unpadded players suffer far fewer serious head injuries. A similar dynamic has afflicted hockey. Over the past three decades, after helmets became mandatory in the pro game, and face protection in the collegiate game, blows to the head have become much more common.
According to a brief blurb in the 11/25/09 WSJ, the idea that football helmets may be as much a problem as a solution is gaining momentum among mainstream observers, most notably a panel headed by former coach and broadcaster John Madden. This group may recommend that helmets be banned from practices, in hopes that players thus will learn to refrain from inflicting or absorbing even the slightest blow to the head. Also, the panel is considering whether the face guards attached to the helmets used in games should be scaled back in size or eliminated completely.
Something to ponder while viewing the pigskin madness on Thanksgiving.
You may have seen a commercial that MetLife has been running for months now. (If not, you can view it right here on YouTube.) Called "Dad's Accident," it portrays a conversation between two adult daughters and their mom. The topic: what to do about dad (apparently a retiree about 65-70 years of age), who has fallen off a ladder while cleaning the gutters of his home.
At this point, the reaction of any sensible viewer should be obvious. Mom and the daughters should order dad to stop climbing up on ladders! If he's too cheap, the daughters should pony up the funds to pay for handymen to do such risky chores.
All my friends who've seen this commercial report having the same immediate reaction. However, this is not where the commercial is headed.
Instead, the daughters convince mom that what they really need to do is take out a life insurance policy on dad--good grief!
Implication, intended or not: now you've got clearance to fall and kill yourself, dad. We'll get a payout from MetLife. Disgraceful.
What indeed are the marketing department at MetLife and their ad agency thinking?
It should be noted, however, that MetLife has made some subtle changes to this commercial during its run. Now it specifically promotes final expense life insurance.
Moreover, what do you think? Feel free to add a comment. Plenty of other people already have--this commercial seems to have struck a nerve.
After 30 years as a loyal subscriber, I've just cancelled my subscription to my favorite news magazine, The Economist. A few years back, I accepted an offer to lock in an attractive rate. Last month I got a notice of rate increase, which violated the terms of that agreement. I called to dispute this, and a helpful customer service agent promised to work my case personally, and get back to me soon. He was concerned about losing a long-term subscriber. True to his word, within a few days he left a message, assuring me that they'd honor the promised rate.
Now I check my credit card statement--and see that they charged the increased rate, just days after I got that assurance from the helpful customer service agent! I called back and this time was told (by different people in customer service, including a manager) that they can do nothing about this. Really? Sorry, folks, a deal is a deal.
Be sure to read the fine print in any offer to which you respond, and be sure to save a copy. That's no guarantee, however, that the vendor will honor its promises. If not, vote with your pocketbook against companies that don't.
While the vast majority of wealthy clients engage in philanthropic giving, few do so in a strategic manner, according to a well-thought plan. Instead, they tend to do it in a haphazard fashion, reacting to appeals and solicitations as they come, and often with insufficient will to decline requests from groups and causes that really do not represent high priorities in their minds.
For the financial advisor or financial planner willing to invest the time, helping charitably inclined clients set these priorities and plans can be among the most valuable services you can offer them. See our article on financial advisors and charitable giving to get a feel for the major issues, including how charity and philanthropy should be looked at from a more comprehensive perspective than just that of writing checks.
That was an oft-repeated public service message from my youth, one that is burned in my memory. With Veterans' Day now behind us, it is worth remembering that the financial services industry has had a longstanding interest in hiring people with military experience. That interest extends to virtually all careers within the industry, but especially financial advisor positions. In short, the financial services industry has a history of valuing people with military experience as focused, hard-working self-starters.
Indeed, during my time at Merrill Lynch, there even was a recruiter who focused exclusively on bringing ex-military people into financial advisor training programs. More than a few of the high achievers in management, meanwhile, had military backgrounds themselves. Some were graduates of the service academies. Others were officers in the reserves. This list was lengthy.
The bottom line: those of you with military backgrounds would do well to give the financial services industry a close look, and to highlight that aspect of your resume.
With the Christmas shopping being pushed earlier and earlier every year, several leading national retailers are again publicizing their layaway plans, a venerable consumer finance option that recently was as good as extinct. Early in 2009, an article in The Economist put a spotlight on this revival, including the launch of a website named eLayaway that helps users find the right retailer with the right merchandise and the right layaway plan.
From a businessperson's standpoint, the limited revival being enjoyed by layaway is a case study in how old ideas in management, once fallen from favor, often can regain popularity. And then, just as assuredly, fall into disfavor yet again, at some unspecified future time. In some instances, the cycle can repeat itself over and over.
Don't know what layaway is? That's not surprising if you're relatively young, since this form of consumer finance has been in steep decline since the 1980s. Follow the link above for details, including a survey of major national retailers that offer it.
Given the increasing numbers of consumers who are over their heads in credit card debt, layaway might be a means to spend more responsibly, and at less overall financing cost. Here lies the rub. Some retailers assess fees on layaway purchases, so this is not always a costless alternative to carrying a credit card balance.