Mark Koscinski Uncategorized

For the Good of the Profession

For the Good of the Profession

This blog is usually devoted to not-for-profit organization management issues, but today I would like to deviate from that subject and talk about some developments in my beloved accounting profession.  As many of you are aware, the regulators in virtually all jurisdictions require 150 credits (five years of college education) for professional licensing as a certified public accountant (CPA). This has been the norm for almost four decades now. For instance, Florida was one of the first states to require a fifth year of college to qualify for a CPA license back in 1983. Other states fell into line until today only the U.S. Virgin Islands does not require 150 credits for licensure. 

 Interestingly enough, the extra 30 credits do not have to be taken at the graduate level or in a business related subject at all.  Students can satisfy the requirements by taking classes in any academic subject as long as the additional credits appear on a college transcript.  In recent years one of my students completed a second bachelor’s degree in music and that qualified her to become a CPA when she passed the Uniform CPA Examination.  Other students will complete their bachelor’s degree and then take additional courses at a community college. 

What was the purpose of requiring another year of college education?  Presumably the business world was becoming  and still is becoming) more and more complex and the profession recognized it over forty years ago.  As the American Institute of Certified Public Accountants (AICPA)  website (1) notes:  “A certified public accountant (CPA) in today’s environment must not only have a high level of technical competence and a sense of commitment to service, but must also have good communications and analytical skills, and the ability to work well with people. Employers are looking for individuals who have the ability to analyze and evaluate complex business problems and the interpersonal skills and maturity to make decisions in a client- and customer-service environment.”

Why were business subjects or additional accounting courses not required?  I think a close reading of the above quote puts everything into perspective.  At the time the profession seemed to believe there were several deficiencies in the training of accountants, including communication skills. Therefore, even more liberal arts courses would help an accountant become a more critical thinker and better business person. I also believe the profession wished to have well-rounded professionals who could function not only as a CPA but as an informed member of society.  As I tell my students, accounting firms can hire computers to do accurate accounting. However, the firms are looking to hire interesting people who can relate well with the clients, stakeholders, and other employees of the firm. I believe this has happened but I also think it is time to rethink the 150 hour requirement.  

To be sure I don’t want the 150 hour requirement to be abolished.  That would be a step backwards in my opinion. State Boards of Accountancy are not inclined to do that either since there is reciprocity and portability among the various states. CPAs licensed in one State can temporarily work or be licensed in another State since each has similar educational  requirements.  Removing the 150 credit hour requirement would need to be done by all jurisdictions or there would be mass confusion as CPAs from one state tried to work in another.  No one wishes to see that.  

The requirement does have several serious implications though. First, the extra cost has increased the barrier  to entry.  While the AICPA disputes this, the actual results seem to tell a different story.  Minority groups are underrepresented at the professional level in accounting firms (2) and some believe the 150 hour requirement is a cause.The total number of accounting graduates seems to be dropping (4) and firms are afraid they will not be able to secure sufficient talent in the near future.  The latter concerns were expressed at a meeting of the State Board of Accountancy of NJ during its May 2022 meeting (4)  During the same meeting the State Board took direct aim at the fact the additional credits did not have to be in a business related subject,  saying this requirement “…makes little sense.”  It should be noted that even the AICPA believed most students would pick up the additional education through graduate programs such as a Master’s of Accountancy degree.   The NJ State Board also  noted there seems to be very little correlation between the extra year of college education and success as a CPA.

As a result of these concerns, the NJ Board approved a “Work for Credit” program where students can earn 30 credits by working in a co-op program with an accounting firm. Students will work for nearly a year with a sponsoring accounting firm to achieve the extra 30 credits.  Since the students will be paid, there will be significantly less financial burden on them.  Hopefully, this will also increase minority participation within the profession. I am very much inclined to agree with this approach to solving some of the problems in the accounting profession.  Afterall, who can disagree with better trained CPAs and greater opportunity and  participation in the profession? 

  1. https://us.aicpa.org/becomeacpa/licensure/requirements#states
  2. https://www.accounting.com/resources/minority-accountants/
  3. https://www.journalofaccountancy.com/newsletters/academic-update/how-faculty-can-address-declining-accounting-enrollments.html
  4. https://www.njconsumeraffairs.gov/acc/Minutes/accountancy-minutes-051922.pdf
Mark Koscinski Uncategorized

Spotlight On…

This week I wanted to spotlight a small NFP organization that provides a wonderful service to young mothers. There are many organizations providing essential services out of the good of the volunteers heart. My hat goes of to Zair Burris, the driving force behind Moms Offering Mom’s support. Please generously support this organization with your time, treasure, and talent! Here is the transcript of the interview:

  1. Tell my readers about you. You have an interesting background.

I’m from the Oregon coast- I have a master’s in marine biology and a PhD in oceanography. All of that training was actually really helpful for starting and running a nonprofit- from writing grant applications to developing databases to track our donations to data analysis to get an idea of the impact we have in the community (number of people we help, for how long, etc.). 

  1. How did you become involved with this organization? Why did you start this organization? How has it grown or changed? 

I started thinking about starting this nonprofit (Moms Offering Moms Support) about 6 months after I had my first baby. I read an article about “diaper need”- how in the US, 1 in 3 families can’t afford to buy enough diapers for their baby. Having a baby is so stressful and exhausting on its own, I couldn’t imagine having to worry about having enough diapers to get through the night. 

We opened 4 months before the covid pandemic hit, working out of my house, with no volunteers other than myself and occasionally my husband (he had a full-time job). We had to work out the kinks pretty quickly- we went from providing 5 babies a month with baby supplies to over 40 in a matter of months! We started with no money in the bank, so it really increased our impact when we started partnering with the Lehigh Valley Diaper Bank. They give us diapers every other month. I cried when we got our first shipment- it was such a relief to not have to worry about how I would come up with money to purchase diapers for our babies. Diapers are still the number one item requested by our families.

Surprisingly, the nonprofit runs almost exactly the same as when we started 3 years ago- we provide the same things, but just more of them and to more families. Because we get more people wanting to donate than we can handle, we are able to be pick and choose what we accept. We used to have to take everything, no matter the condition, because something was better than nothing. Now we only accept things in great condition. This saves us a lot of time cleaning and reduces the number of things that get thrown away.  

We’ve also started partnering with hospitals and social workers to get those families most in need referred to our program (young moms, homeless families, women who have escaped domestic violence, and undocumented moms). We have started a number of “Programs”, for instance our Car Seat Program provides families with car seats donated to us by the Pennsylvania Department of Transportation. Our Full Bellies Program is mainly funded by local grocery stores (especially Giant Food Stores) and provides baby food, highchairs, formula, and breast-feeding supplies to families. Our Safe Seep Program is mainly supported by local grants (Leona Gruber Trust, Caroline JS Sanders Trust, John & Margaret Post Foundation, etc.) and allows us to provide bassinets and portable cribs. 

  1. Can you tell me about the work your organization does and the wonderful program you run? As a follow up, what differentiates you from other organizations? 

Right now, because of the formula shortage that started in February, we are helping a much broader segment of the population get infant formula. Normally, we provide low-income and homeless families with baby supplies once a month until their baby turns 1-year old. While we focus on infants, we also provide maternity clothing and toddler clothing (many of the babies we serve have older siblings). We provide anywhere from 45-85 infants/toddlers with supplies each month. We are a donation-based organization, so what we have available each week changes constantly, but we normally provide: diapers, formula, wipes, toys, clothes, shoes, shampoo, car seats, bassinets, etc. We are different from other organizations because we deliver the baby supplies directly to the family’s door. This was very important to me when I was developing the nonprofit- it is a lot of work to go anywhere with a newborn baby, especially if you don’t have a car and rely on public transportation (as many of our families do). We didn’t want moms having to bring their babies out during winter to get their supplies. Similarly, we make it easy to donate by doing no-contact porch pickups from donors. We started this as a covid precaution and it stuck because it makes it easy for everyone – families can leave their items out for us and we collect everything during a scheduled pickup window. We are also all volunteers, including me!

  1.  What do you think your constituents  would say is the best thing about your organization?

I think the thing that our families appreciate the most (in addition to the wide range of items we supply) is how easy it is for them to get their stuff each month. To become registered with us, they have to show proof of need just at the first delivery (most show us their WIC or snap card) and a note from their doctor if pregnant or discharge paperwork for their newborn. After that, all they have to do is fill out our online request form each month and select what they need from a list. Then we deliver it right to them, typically within 3 days of their request. 

  1. What results does your organization achieve? How has your program improved over time?

Last year, we provided over 49,000 diapers to more than 230 infants, 101 pack-n-plays, and 46 car seats. These supplies keep babies safe and help parents keep their jobs. Most daycares require parents to provide diapers for their babies. If a family runs out of diapers, the baby can’t go to daycare, and the parent has to take off work to stay home with them. This obviously makes it harder for the family to afford diapers. In addition, babies with clean diapers have fewer rashes and other health problems, which has been shown to reduce parental stress.  

Similarly, during the first year of life babies are prone to Sudden Infant Death Syndrome (SIDS). SIDS has been linked to unsafe sleeping habits, where babies are put to sleep in unsafe environments like on a couch, floor or chair, or who co-sleeping with parents. By providing a place for babies to sleep (i.e. pack-n-plays and bassinets), we are keeping them safe during their vulnerable first year!

We also try to support breast-feeding moms by supplying pumps, and nursing bras and shirts. Breast-feeding has long term health benefits for both the mom and baby, so this is important to us.

  1. What are your goals for the next three to five years? What priorities will help you achieve them? What barriers are in your way?

We would love to be able to move out of my house and into a physical storefront where families can have the option of physically picking out the items they need from the donated goods. This would also allow us to shift from picking up donations to having people bring their donations to us. This would allow us take in more donations and help more families. In order to do this we would need to secure funding to rent a space and be able to pay for utilities. Right now we don’t have any funding for that!

  1. What is the hardest decision the organization has had to make recently, and how did you evaluate the tradeoffs involved?

Recently, I had to make the tough decision to stop providing monthly deliveries to families in Bethlehem. They still get one big delivery, but I don’t have the time or volunteers to do it anymore. The need in Easton alone is more than I can handle since having my second baby (I do the nonprofit work when she naps, or early in the morning or late at night). I may have to reduce the work load again next year when I have to go back to work.  I am trying to get grant funding to be paid at least part-time for the work I do with the nonprofit, but I haven’t been successful. If I do get funding, I would be able to increase our aid in Bethlehem again.

  1. What do you, personally, spend most of your time on?

Right now I only have 1 volunteer, so I do about 99% of the work myself. Most of my time is spent delivering supplies to families. After that, it’s sorting donations, putting together deliveries, data entry, and grant writing. I don’t spend enough time updating our facebook page or website!

  1. If people want to contact you to help out, what is your website and how do they reach you? 

Our website is: www.eastonmoms.org

Or, we can be reached via email: easton.pa.moms@gmail.com

Thank you so much for taking an interest in our cause!

Mark Koscinski Uncategorized

Bad Connotations

Certain phrases originally having innocuous meanings sometimes take on bad connotations. Many times it is not entirely clear how or why this happens, but you use these phrases at your own peril. Here are some recent examples you might run across:

Data Mining is  the process of extracting and discovering patterns in “Big Data”.  Recently, while taking a continuing education course I was a little astonished to hear the instructor tell us not to use the phrase “data mining”.  It has picked up some nasty connotations.  He advised using such terms such as data analytics and prescriptive analytics instead.  Last week I came across an article on Fox News with the headline “Utah parents heated after discovering DOJ ‘mining’ racial data, names of their children: ‘absolute overreach’. It seems data mining has become synonymous with invasion of privacy, marketing manipulation, security risks and a plethora of other nasty activities. 

Neuromarketing is the measurement of neurological and physiological reactions to determine customer motivations. It developed out of neuroscience and neuroeconomics and is now tinged with the stain of manipulation.  Many people feel that marketing itself is a form of manipulation, but now tailoring marketing campaigns to produce dopamine and provoke involuntary reactions to stimuli seems to be  an even worse form of manipulation to many.

Nudging was described by Richard Thaler, winner of the Nobel Prize in Economics in 2017, and Cass Sunstein, a Harvard law professor who is brilliant in his own right, in their 2008 book Nudge: Improving Decisions about Health, Wealth, and Happiness. The book was amazingly well written and accessible by almost anyone, but the premise was controversial.  Thaler and Sunstein believed in “liberal paternalism” where people could be guided into “right” decisions through a process of nudging people in the direction of the “correct” answers. Examples in the book include how this process would work in picking retirement savings and health insurance plans.   Nudging has many advocates, but it has many detractors too.  Some critics have called this theory yet another type of manipulation by the government. 

What do these all have in common?  It seems to me the issue with each of these is a perceived  restriction on freedom and some form of perceived manipulation.  I say perceived in both cases because I personally believe the jury is still out on whether this is the case or not. Thaler and Sunstein state the careful application of nudge theory is not really manipulation but rather a simple use of techniques and/or technology to lead people to the right decision about critical life decisions. Yet people feel uneasy about giving up their right to be, well….wrong.  People obviously do not want to be manipulated, nor do they want to surrender their privacy.  In fact, people have now become  less trusting and are becoming leery of anything that could even potentially be used to violate their own personal space. They fear data mining, neuromarketing and nudging (whether by the government or by big corporations) could be the beginning of this path. Only time will tell, but for now, I would suggest staying away from using these terms. You may only be looking for trouble if you do. 

Mark Koscinski Uncategorized

Still Waiting

The April 29, 2022  issue of the Warren Reporter, a newspaper affiliated with NJ.com,  contained a very balanced article written by Ted Sherman about the investigation of clergy abuse of minors in the State of New Jersey. State officials created a task force in September 2018 to investigate the allegations against clergy dating back decades. We need not go into the details of the allegations here as they are well known already.  Suffice it to say there have been only three prosecutions as a result of this task force and the promised final report on the matter has not materialized.  As a result of such a small number of indictments, many have doubted a special grand jury to investigate this matter was even empaneled.  We can only hope and pray the absence of prosecutions was the abuse was not as widespread as has been suspected or reported.  We also hope church officials have taken their duty to protect minors make appropriate disclosures as seriously as they should. 

As heinous as these crimes may be, I want to focus on another insidious aspect of this situation: the financial devastation such mismanagement has caused. NPR reported that by 2018 this scandal has already Catholic Church $3 billion.  That total has continued to grow in the last four years. Recently, the Roman Catholic Diocese of Camden, like many other Catholic dioceses, was forced to declare bankruptcy because of the projected cost of litigation surrounding the abuse of minors by its clergy. The diocese recently announced the settlement of such lawsuits and the creation of an $87.5 million dollar fund to come into existence over the next four years to pay out survivors of such abuse.  The source of these funds was not reported and the settlement must still be approved by the bankruptcy court.  

With such vast sums of money being thrown around, the question arises: Is this why donors contribute to religious organizations? To fund such horrible management by its leaders? It is high time large religious organizations are required to file a Form 990 with the Internal Revenue Service.  All charitable organizations except for religious organizations must file the Form 990 every year. Religious organizations are specifically exempted from this filing. While no one wants the federal government  mucking around in Church affairs, the Form 990 contains information any contributor and/or member of the congregation would generally be interested in.  This, form requires not only financial disclosures but also information about the adequacy of internal controls.  As of right now, many religious organizations do not release financial information.  Perhaps some sunshine on the matter would make those who run religious organizations a little more cautious when it comes to spending the hard earned donations of its members.  For example, do members of the Diocese of Camden know a substantial amount of their donations over the next four years will probably be directed to this fund? Will the Diocese of Camden disclose where the funds will be coming from?  We shall certainly see. 

While there has been a lot of attention aimed at the abuse issue, financial frauds and scandals often “fly under the radar”.   Again, we need not go into the details of such events as they are documented elsewhere, but my sense is these are but the tip of the iceberg, an opinion I formed being connected to the financial management of several  religious and Not-For-Profit organizations.  The lack of internal controls and the weak control environment can often be frightening.   I hate to recommend this, but it is time for the government to compel financial disclosure from the larger religious organizations.  As for the objection that this will be expensive,  let me counter this by saying somewhat tongue in cheek that Rome wasn’t built in one day.  Perhaps the reporting would only be required for any organization with gross receipts in excess of $1 million (or some other appropriate number).  At the end of the day the cost incurred for preparing such a report will be more than made up for by the tighter financial controls religious organizations will have to put into place to make the proper reporting.

Mark Koscinski Uncategorized

Joining the Vibrant Publishers Advisory Board

I am very proud to join the Vibrant Publishers Advisory Board. Vibrant is a growing publisher with a varied content! Here is the text of the press release:

This board is made up of industry leaders and subject-matter experts with a combined experience of more than 75 years working in academia and industry. The Board will assist Vibrant Publishers in developing rich academic material and educational resources.

Vibrant Publishers is focused on presenting the best texts about technology and business and books for standardized test preparation.

The New Board Will Provide Strategic Insights to Co-Create an Array of Practical, Actionable, and Affordable Learning Tools

Formation of the board is a direct reflection of our commitment to making a wider range of top-quality books available for our customers.”

— Deep Udeshi, CEO of Vibrant Publishers

BROOMFIELD, CO, UNITED STATES, February 9, 2022 /EINPresswire.com/ — Vibrant Publishers, a publishing company with a focus on educational books, is excited to announce the formation of a strategic Advisory Board. This board is made up of industry leaders and subject-matter experts with a combined experience of more than 75 years working in academia and industry. The Board will assist Vibrant Publishers in developing rich academic material and educational resources for current and future generations of learners.

Vibrant Publishers’ Advisory Board is made up of the following respected leaders, who each bring a wealth of knowledge and decades of real-world experience to the company: Mark Koscinski, Carrie Picardi, and Dr. Denean Robinson.

Mark Koscinski is a certified public accountant with over forty years of experience in the corporate and not-for-profit worlds. An assistant professor of accounting practice at Moravian College in Bethlehem, Pennsylvania, Mark teaches undergraduate courses in accounting and decision analysis on a graduate level. He served as chief financial officer and corporate controller of companies in the toy, banking/investment banking and defense-contracting industries. Mark earned a doctorate from Drew University.

Carrie A. Picardi, Ph.D. is an Industrial/ Organizational Psychologist with over 25 years of experience including human resource management positions within the manufacturing and education sectors, as an organizational research analyst and consultant, and as a professor of management. She has designed and led initiatives in the areas of talent acquisition and retention, job analysis and design, training and development, compensation strategy, performance management, employee engagement, leadership development, and technology/systems assessment. In addition to several peer-reviewed research publications, Carrie is the author of three textbooks: Research Methods-Designing and Conducting Research with Real-World Focus (Sage, 2013); Recruitment and Selection: Strategies for Workforce Planning and Assessment (Sage, 2019); and Leadership Essentials (Vibrant Publishers, 2021). She holds a Ph.D. in Applied Organizational Psychology from Hofstra University and a certificate in Human Resource Management from Cornell University.

Dr. Deanean Robinson has been teaching Management, Marketing, Business and Education classes at various colleges and universities across the Washington D.C metropolitan area over the last 17 years. In addition, Dr. Robinson has developed corporate and educational training programs for various government and private agencies. Her training has been implemented in the areas of career development, personal management, strategic planning, and organizational development.

Vibrant’s Advisory Board aims to unite the best of academia and industry expertise to create accessible and affordable educational material for learners from all walks of life. As Carrie Picardi states, “As an Advisory Board member, I am looking forward to collaborating on relevant and forward-thinking educational resources for current and future learner needs. I am honored and excited to share my expertise with Vibrant Publishers and fellow board members as we work to co-create an array of learning tools that are practical and actionable as well as rigorous, with ease of use for both learners and educators.”

“I am honored to welcome these industry experts to our advisory board,” said Vibrant Publishers’ CEO Deep Udeshi. “Formation of the board is a direct reflection of our commitment to making a wider range of top-quality books available for our customers. Right from the start, we have focused on reducing students’ debt by introducing low-cost, concise top-quality management textbooks. With this Board, we plan to introduce books for community colleges & university courses, thereby reducing a lot of debt for students. Vibrant’s eBooks sell as low as $9.99, & Paperbacks are sold at around $25-$30, in comparison to the $200+ textbooks published by other publishers.” Board member Dr. Denean Robinson’s statement reflects her commitment to this cause. She says, “I joined the Board of Directors for Vibrant to be a change agent and voice for the underserved student population.”

We are excited to have this trio onboard to assist us in improving our brand legacy. Here’s to a new era of collaboration, learning, and positive impact in the world of educational book publishing!

About Vibrant Publishers
Vibrant Publishers, Colorado, is a publishing house with a focus on high-quality books for entrepreneurs, professionals, and students. Vibrant Publishers has redefined how rich content is made available to today’s fast-paced generation. We have three academic book series, dedicated to Self-Learning Management, Job Interview Questions, and Test Prep.

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Mark Koscinski NFP, Uncategorized

Who is the New Grinch This Christmas?

The Financial Accounting Standards Board (FASB) recently delivered an unwelcome holiday season body blow to the NFP world (and privately owned companies as well). 
Working hard to earn the title of Grinch, the FASB  decided on November 10 not to defer the new lease accounting standard for a third time.  The previous justifiable deferrals of the original implementation date were caused by the Pandemic, as many organizations were shut down or forced to adapt to their new reality. 

The new lease accounting will take effect for fiscal years beginning after December 15, 2021, and for interim fiscal periods beginning one year later. This standard requires all lease obligations to be recognized on the balance sheet of the organization, with only minor exceptions. Management could be in for some surprises  as bank loan covenants might be impacted because of the new debt on the balance sheet.  Additionally, an NFP organization will need to not only implement the lease accounting for future years but also to retroactively recalculate the impact of the new accounting for prior  years. This is required even if the NFP decides to adopt a “cumulative change” approach to implementation.  In short, NFPs shouldn’t underestimate the amount of work involved in this effort. Many organizations have already found the implementation more difficult than they originally anticipated. 

To say I disagree with the Grinch’s action is to put it mildly.  Many NFP organizations have been operating on a shoestring budget for extended periods of time, not to mention the fact the job market for accountants is extremely tight.  This means just finding the bodies to do the work is a difficult proposition. Mercifully, many NFP organizations have fiscal years such as June 30, giving them some more time to complete the required work. Nevertheless, it is imperative to begin working on this project as soon as possible so the delivery of financial statements to donors and other stakeholders is not delayed.  

Perhaps the FASB should adopt green as its new official color? 

Mark Koscinski Uncategorized

The Birthday Problem

Hello Everyone! I hope you all had a wonderful, long and restful Thanksgiving Weekend! There was some excitement in my family as my fifth grandchild was born on Thanksgiving Day. Interestingly enough, this was the third grandchild out of the five born on Thanksgiving Day itself. They were all born in different years but all on Thanksgiving Day of that year. I have told my children the individual birthdays are now irrelevant. All three now have an official birthday, like the Queen of England does.

How unlikely is this scenario? I teach Decision Analysis at Moravian University and have acquainted my students with the mathematics of combinatorics. Check out this amusing little video made by David Knuftke for Ted-Ed called the Birthday Problem. it describes the use of combinatorics in calculating a similar but somewhat different problem.

PS. You can calculate the odds of three people being born on the same day by watching this video. Enjoy!

Mark Koscinski Uncategorized

The Delegation Heuristic

Heuristics have been called “fast and frugal” decision-making rules.  There are many types of decision-making heuristics, some notably better than others.  For instance, I am not a particular fan of the concept of satisficing, a term coined by Herbert Simon.  Simon won the Nobel Prize in Economics in 1978, but I have always believed his theory of  satisficing short-changes the process decision makers actually employ.  Daniel Kahneman (another Nobel Prize winner) and his partner Ivan Tversky (who sadly passed away before he could be awarded the Nobel Prize) developed or discussed many other heuristics.  For a more complete discussion of these, I suggest you take a look at Kahneman’s outstanding book Thinking Fast and Slow.  Some of my graduate students have called this the best book they have ever read. 

I would modestly like to propose another heuristic I will call the delegation heuristic. Many of us have seen organizations grind to a halt because the decision maker was often overwhelmed with many small decisions or with subdividing  a major project into many smaller tasks.  A prime example of this is history is how Robert E. Lee controlled the Confederate Army of Northern Virginia during the Civil War. Lee made very little use of his staff, who jokingly referred to him as “the Tycoon”. Lee insisted on coordinating every aspect of a potential  engagement. This constant exertion wore Lee out and may have contributed to the final defeat of his army after years of combat. Contrast this with Union General U. S. Grant, who maintained a large military staff for the time and used them effectively.  Even while he campaigned with the Union Army of the Potomac, Grant left General Gordon Meade in command of this army while Grant concentrated on strategic issues.  In short, one of the reasons why Grant could effectively manage multiple armies was because he could delegate effectively and knew the rules of delegating.  He maintained final responsibility but he gave authority to his subordinates to issue orders and coordinate the campaign in detail. 

Delegating is perhaps the most fast and frugal of all heuristics. A leader understands heuristics conserves critical time and energy and brings more mental firepower to solving the problem at hand.  This type of leader will often delegate smaller less consequential decisions to staff members or subordinates.  In other words such a leader will make a decision by appointing someone else to make a decision. The decision is always made in the name of the leader, who may not even know sometimes the decision has been made. 

The decision heuristic can be executed in several different ways.  For instance, i would divide decisions I faced into the following categories: (a) delegate the decision entirely to someone else; (b) delegate the decision to someone else but provide the decision rule or decision methodology for the delegatee; (c ) delegate the decision but ask the person to inform me or discuss the potential decision before it was issued; and (d) major decisions I would reserve to myself. In this way I would be able to provide strategic leadership and deal with complex tactical problems without being encumbered by many smaller decisions, all of which needed to be made but would distract from my dealing with the “tougher decisions”. 

Mark Koscinski Uncategorized

Delivering Bad News

Robert Stack, portraying  Eliot Ness in the TV show and movie The Untouchables was asked if he heard about Al Capone’s death.  Stack responded, “Good news travels fast.” That is so true. Not only that, but good news also has many parents. I once overheard the CEO of my company being asked if he heard about the collection of a  long overdue accounts receivable  He said, “Yes, from about a dozen people.” 

On the other hand, bad news travels much more slowly than good news, if at all, throughout an organization. Unfortunate information about a problem is an orphan as people are often reluctant to pass it along.  This can be a problem as sometimes as an immediate response may mitigate the effects of the  problem.

How do you deliver bad news?  Well, let’s start with some ways you should NOT deliver bad news:

  • Email.  When I was a busy CFO I would receive a massive number of emails per day. It was hard to keep up with them, and sometimes a whole day would pass  before I worked through my entire email queue.  Like most people, I would respond to  the most recent email first and work backwards.  If the bad news or the problem was buried in my email, I  often could not respond to it on a timely basis. It was even worse if I accidentally deleted the email before reading it. I eventually turned the tables by sending out an email to my colleagues prohibiting the communication of bad news to me via email. I did not want to play email roulette with bad news.  I thought it was ironic when some of my colleagues  said that email  was lost in their email. 
  • The “desk document dump”.  This sneaky method consists of waiting until your manager leaves his office and then throwing a document with the bad news on her desk. The person doing this prays it won’t be found until the next day, or even better, it will be buried by other documents thrown on top of it. I truly hated this, and I eventually learned to close my office door when I left it, even for a short while. 
  • The casual conversation in the hallway.  As you are rushing off to an appointment, your colleague tries to quickly deliver bad news, often requiring an immediate answer.  You can’t focus on it, and even worse, feel forced to give a quick, off the cuff response.  As Daniel Kahneman writes in his best-selling book, Thinking Fast and Slow, these initial reactions are often wrong, potentially compounding the problem. 
  • Delivering bad news at 4 pm on a Friday. You wait  until the very end of the workweek to lower the boom on your  manager, depriving her of the ability to react appropriately to the situation.  Companies and government agencies have raised this to an artform. They rely on the fact their audience may already be focusing on the weekend. What’s worse, the manager on the receiving end thinks about the bad news over the weekend, feeling frustrated at her inability to respond to the problem.  
  • Not delivering the bad news at all.  People simply  do not like confrontation. They hope the situation will turn around or the crisis will blow over before anything needs to be done about it. Obviously, this can be disastrous if the bad news needs to be addressed right away. 

How should someone deliver bad news?  Here are a few suggestions: 

  • It is okay to think about the problem for a little bit before going to your manager with it.  Please note this does not mean sitting on a problem for an extended period of time.  It means quickly ascertaining all of the facts about a situation, organizing them in a logical manner so they are easily communicated and coming up with potential solutions. Managers hate having a problem dumped on their desk without  a  proposed solution. A good manager  values colleagues who work harder in adversity and having a proposed solution shows this. 
  • Make sure the recipient of the bad news has engaged their System 2.  Kahneman writes that we make decisions and eventually take action in two different ways.  System 1 responses are fast and intuitive and often wrong. That is one of the problems with the casual hallway conversation.  System 2 is the application of our full conscious attention to a problem. Make sure the person receiving the bad news has engaged System 2 or they otherwise might not even remember receiving the information at all! How do you do this?  Each person has their own preferred decision-making process. I liked it when someone made an appointment with me so I could focus all of my attention on a problem. I would engage my System 2 and work on the problem with minimal distraction.  You will need to find your colleagues’ preferred method of focusing on bad news or a problem. They will also appreciate the honesty. 
  • If you are forced to communicate problems via email, follow up. If circumstances require communicating bad news via email and you did not hear anything back from your manager, wait an appropriate amount of time and then follow up with a phone call or a visit to their office. Who knows? The email might have been accidentally deleted or your manager’s attention is diverted elsewhere. Not everyone is glued to their cell phone or their computers. They may not even know a problem has occurred. 

Besides the sneaky methods of delivering bad news I listed in this article, what other ways have you received bad news?  I would certainly be interested in hearing from you!