Identifying Red Flags!
It’s impossible to have the answers to all the problems and opportunities life throws at us. Instead, the key to being a great business owner, parent or spouse is knowing how to ask great questions and recognize the “red flags”.
Another guest author today - Tom Pryor is a consultant and trainer on staff at the Texas Manufacturing Assistance Center specializing in the use of Activity Based Cost Management (ABC/ABM) to support Lean-Six Sigma and improved decision-making.
Tom has trained thousands of people and helped hundreds of manufacturing, service and governmental organizations of all sizes improve their financial results. Tom’s customers include such recognizable names as Dell, Ralston-Purina, Ford Motor Company, Lennox, AAA, Department of Veteran Affairs, the City of Plano Texas, The Dallas Morning News and many lesser known small to medium size organizations needing financial improvement.
My top 3 interview questions for prospective employees are:
1. How old were you when you had your first paying job?
I learned from many years of experience that people who worked for someone outside their family before age 16 have a better work ethic. They show up on time, do what I ask and expect to be treated fairly, not equally.
2. Have you played any sports?
Again, I’ve learned from experience that people who have played team sports are more likely to be a team player. Businesses are comprised of individuals. Those people must work together as a team for your business to be successful. I see far too many businesses that lack teamwork. The good news is that teamwork can be taught.
3. Are you good at multi-tasking, like eating and using your cell while driving?
If they say “yes”, I get concerned. I’ve learned people who multitask are often busy but never finish projects or key tasks. Multitasking is a curse, not a cure. The benefits of multi-tasking are an Urban Legend that needs to be debunked.
While the basis for my questions is not scientific, they have proved to be a reliable predictor of performance. A red flag goes up if the interviewee’s answers do not conform to my experience.
Red flags are warning signals that problems may exist. Red flags don’t pop-up on a computer screen, tap you on the shoulder or flap in the wind outside your home or office. Instead, red flags are triggered by things you see, feel, hear or read. Red flags are not instinctive or innate, they’re learned.
A century ago, coal miners learned to use canaries as red flags. They brought the birds into the mines to serve as danger warnings. At the first hint of poisonous methane gas, the little birds stopped chirping, saving many miners.
Accountant Red Flags
In today’s fast-paced workplaces and lifestyles, people run through red flags like they do red lights. Listed below are red flags that should raise concerns whether a person is equipped or qualified to serve as your business’ CPA or accountant. If they answer “No” to three or more questions, it is time to raise a red flag.
1. Have you read a non-fiction book since college?
2. Do you have a budget at work and at home?
3. Do you have a personal Balance Sheet and P&L at work and at home?
4. Do people outside your business ask you for financial advice?
5. Is there a difference in mark-up pricing and cost-plus pricing?
6. Do you know your FICO score?
7. Is it possible to be debt-free? Are you debt-free?
An anonymous January ‘06 e-mail to the Fort Worth Star-Telegram alerted a reporter of Radio Shack CEO Dave Edmondson’s DWI arrest. A red flag went up. Now curious about Edmondson’s background, the reporter began digging and soon discovered three DWI’s in the past 17 years, a divorce in process and the academic record listed on the CEO’s résumé to be totally false. Radio Shack’s board of directors decided in February ‘06 that Edmonson was not qualified to sign the Sarbanes-Oxley authenticity of financial statements, much less lead the company.
Do you have a red flag that needs follow up today? It’s time to ask some well thought-out questions.
