Keith’s yearly rant: The job interview.

WARNING: THIS IS NOT A TECHNICAL ANALYSIS BLOG, IT IS AN OPINION ARTICLE AND SHOULD NOT BE READ BY THOSE SENSITIVE TO POLITICALLY OPINIONATED AND POLARIZED ARTICLES!

PLEASE NOTE THAT THE FOLLOWING IS A FICTIONAL STORY. BUT IT CLEARLY REFERENCES MY POLITICAL BIAS. ANY OPINIONS IMPLIED OR DERIVED FROM THIS STORY SHOULD BE CONSIDERED THOSE OF MY OWN, AND DO NOT NECESSARILY REPRESENT THOSE OF THE STAFF OF VALUETREND WEALTH MANAGEMENT.  I WILL BE BACK TO THE TECHNICAL ANALYSIS BLOGS ON THURSDAY.

FYI: FOR 30 YEARS IN THIS BUSINESS , I’VE WITNESSED CHANGES IN POLITICAL PARTIES WITH LITTLE INTEREST, AND HAVE NEVER BEEN MOTIVATED TO DISCUSS POLITICS. IT IS ONLY IN THE PAST 2 YEARS THAT I HAVE BECOME UPSET ENOUGH WITH A POLITICAL ENVIRONMENT TO OFFER MY OPINION. I’M NOT PARTICULARLY INTERESTED IN ARGUING THAT OPINION IN THE COMMENTS SECTION, AND I WILL NOT BE POSTING OR RESPONDING TO NEGATIVE COMMENTS. WRITE YOUR OWN BLOG IF YOU HAVE AN OPPOSING BIAS, AND  DON’T READ THIS IF YOU LIKE TO AVOID SUCH TOPICS.

“Sometimes I wonder whether the world is being run by smart people who are putting us on, or by imbeciles who really mean it.”
― Laurence J. Peter, The Peter Principle

Not using any names here, let’s consider the story of a fictional job applicant for a high level position.

Let’s say that, three years ago,  a fellow comes to your company and wants a job. In fact, he wants the CEO’s position. You are the HR person for the company. You aren’t allowed to know this persons last name. You review his resume.

Lifestyles of the Rich & Aimless

This fellow is 43 years old at the time of his job application. He has,  during  those entire 43 years, had a spotty work history. No need to slug it out in a job year after year like an ordinary member of society! Instead, as a trust-fund child of a rich family, he was able to forgo the necessity of settling into a full time job.  Instead of working full time, this fellow entertained himself by “travelling the world”, and attending parties and social events while living on his daddy’s money. He supplemented this fun by working here and there as a substitute teacher, a part time doorman, and a part time snowboard instructor. This fellow seems to have lived his life as a Canadian version of Paris Hilton

Wondering what gives him the impression he could be hired as CEO of your company, you ask about his education. This applicant does not hold a business or economics degree, and has no background in finance or commerce. Instead, he had attempted to achieve a degree in environmentalism, but he dropped out.  He later went on to get a liberal arts degree. And an education certificate……

Your lights are on, but no one’s home. Your mind is not your own – Robert Palmer

Despite the lack of traditional leadership education and work experience, you enquire how he might improve the growth and profitability of your company.  He replies that he would spend a lot of money building its infrastructure. You ask for specifics – what does Infrastructure spending mean to him? He isn’t quite sure, but stresses that the most important thing that he will do for your company is to “Build the company from the heart out”! When asked what that specifically means, and how that specifically translates into growth, he is unable to respond. Apparently, he’s not very good with plans, money, math, and stuff like that. He then mumbles something about “inclusiveness”. Inclusiveness? You are becoming confused as to what this fellow actually has to offer, beyond group-hugs. But, you press on.

You need to stop spending money we don’t have- Paul Ryan

What are the expected expenditures? How will the debt be paid back? Can he describe the projects that would be investing in – and, most importantly, what is the expected payback period and benefits to those projects? He is unable to provide you with any specifics. In fact, he doesn’t really know how much he will need to spend, on what he will spend it, nor when it will be paid back. He is unaware of the term “ROI”, given that they don’t teach that kind of thing in drama class. But he did say that he has a lot of supportive “friends” in private unionized companies, public unions,  foundations, special interest groups, and charities.  He would like to use the company coffers to monetarily support these groups – to the tune of hundreds of millions of dollars! And it’s OK if they take the company money, then fold up shop and leave the country.  Or quickly lay off thousands of employees after scooping your companies hard earned cash. The main thing is to support them financially, sound business plan or not. Expected payback and commitment is not necessary for these financial gifts.

Money to him is no object – especially when it’s not his! He wants to impulsively tweet a $50 Million give away on the Daily Show with Trevor Noah. Clearly, throwing  corporate money around to be popular with celebrities is of no consequence to this candidate!

He also has a plan to set up a company-supplied $595,000,000 slush fund for Canada’s private sector journalists — but only if he can “trust” them.  You ponder, wouldn’t offering the media money potentially create a bias or conflict of interest? It seems like a dangerous proposition. Your previous CEO wouldn’t have had to nerve to propose such a deal. Another spending project the candidate thinks the company should invoke would be to buy the Trans Mountain pipeline from Kinder Morgan for $4.5-billion.  That company lost interest in an expansion project beset by fierce opposition from environmentalists, Indigenous groups and the B.C. government. So it’s clearly a risky deal in an industry your company has no experience in managing.

Of course, the company would also have to find another $7.4 billion to finance construction. This is ridiculous you think- why would we buy a risky project like this, and where does the money come from?

The candidate says, with a wry grin, we could take it from the CPP (Company Pension Plan). That sounds imprudent to use money from a pension plan. To invest it in a project with no clear potential for ROI, let alone completion, sounds like a violation of fiduciary duty to the plan.

Beyond  the potential conflicts in “helping” the media with the half a billion dollar slush fund or “investments” from the CPP, how would providing capital to all of those other special interest groups help our company, you ask? You are distressed – you want to avoid incidents that have plagued other CEO’s with “liberal” spending plans.  Rampant and thoughtless spending can sink a company. You’ve heard about one former leader whose company got involved with a Quebec sponsorship scandal (let’s call him “Jean”), and another who’s  company was involved in a $1BB gas plant scandal (let’s call him “Dalt”). That leader’s employee wiped their computers clean of the records! You’ve even heard of one spend-happy leader (let’s call her “Kathy”) who spent so liberally that she had to create a new category of “off book debt” to continue spending past her budget. Her company’s credit rating was lowered from stable to negative after playing that credit game.

 All you need in life is ignorance and confidence. Then success is sure – Mark Twain

 When pressed, the candidate finally tells you that he might just go way, way, over budget. Still, you shouldn’t worry about all of his liberal spending plans for your company. Regardless of the costs surrounding all of that debt, he tells you that “The budget will balance itself”. He seems puzzled by your lack of faith in his unclear plans. Besides, he says he can fix all of these deficit problems in the end. He says that “Billy” figured it would take 5 years to repay the deficit. Suddenly, he changes that projection and tells you Billy just informed him by a tweet that the 5 year repayment was optimistic. Now he feels it won’t be paid back until 2040! The repayment plan, if you want to call it a plan, just quadrupled!!

He seems puzzled by your lack of faith in his unclear plans.

How will the deficit take care of itself?  Well, perhaps he could deduct another 6% off of the paychecks of the companies most productive workers to pay for some of these expenditures. This is alarming – penalizing your best employees paychecks to pay for your questionable spending habits? Your best people would be leaving in droves if that were to happen – a recipe for disaster! And by the way, who the heck is “Billy”?

Do as I say, not as I do – Anonymous

The candidate says he would hire a new VP Finance for the company. This fellow, (“Billy”)  has a French villa that he held in held in a shell company until found breaking disclosure rules when he was a government minister. He also had numbered companies set up to hold shares in a pension administration company. He had made a fortune on these shares when he introduced a new bill on pensions as Finance Minister. Coincidentally, of course. Apparently, he had also forgotten to move that money to a blind trust – a requirement of being a minister. You know, it’s hard to know all  of these financial rules when you are only the Finance Minister. This minister used a loophole to keep himself invested in a financial company which he regulated … all the while calling honest small business people like plumbers and farmers tax cheats. He eventually moved his assets—but this is the kind of guy who has a conveniently forgetful memory. You worry that the candidate & his friend might put pressure on your companies previously clean balance sheet, not to mention its ethics record.

Your previous CEO (let’s call him “Steve”) had successfully migrated the 2008/9 world financial crises and brought the company back to a flat deficit. He had a background in economics and had used his knowledge to prudently guide the company through the crises. The new candidate with a background in liberal arts (and partying) is talking about reversing all of the years of prudent management with a willy-nilly program of frivolous spending and hiring a questionable VP Finance. This, at the cost of enraging your key employees. You are deeply concerned.

Friends in low places

Nonetheless, you press on with the interview. What is his leadership philosophy, you ask?  To clarify, you specify you’d like him to expand beyond his previous  “heart-out” and “inclusiveness” comments.  The candidate notes that “There’s a level of admiration I actually have for China because their basic dictatorship is allowing them to actually turn their economy around on a dime”. This causes you to pause…. The candidate admires communist regimes?

He then mentions a family friend he also admired , the now departed dictator Fidel Castro. In fact, his father was “very proud to call him his friend”.  The candidate feels that Castro had a “tremendous dedication and love for the Cuban people”. You suspect that this job applicant is joking, given that Fidel Castro jailed and tortured political prisoners, and murdered an estimated 15,000  countrymen….reminiscent of Hitler! But he seems to be serious….

Speaking of Hitler, he then showed you a picture of his father, who, as a young man, was seen driving a motorcycle in Montreal wearing a German military uniform during the time of the Nazi regime. As a joke, of course. One could forgive the act for the man’s youth. But to you, this seems akin to wearing an Osama Bin Laden costume after the 9/11 terrorist attack. This is not something that any young man you know would do, even as a joke!  The candidate and his family has made some questionable judgments, it would seem.

I ask this, did the terrorist allow any of his victims quarter? No, then allow him no quarter, and hoist the black flag – T.R. Wallace

Your company, being in a financially sensitive sector of the economy, is sensitive to terrorist activity and must report to the PCMLTFA (Proceeds of Crime Money Laundering and Terrorist Financing Act). You ask the candidate if he is familiar with the  importance of identifying terrorist activities. The candidate sees nothing wrong with terrorists remaining Canadian citizens, and feels we should treat them as equals as citizens with all the rights and taxpayer funded services. “Terrorists should get to keep their Canadian citizenship. As soon as you make citizenship for some Canadians conditional on good behavior, you devalue citizenship for everyone.” Having seen how terrorists operate through some of the educational programs your company offers, you are hesitant to agree with his attitude towards treating terrorists as equals. You ponder on why he would support citizenship for  people who, in your opinion, should be considered enemies and traitors.

Do as I say, not as I do-  Anonymous

Has he had any past records of sexual misconduct, you ask? This is a strong company policy to avoid this kind of behaviour amongst employees.  Apparently there had been an accusation of a groping, but the candidate explains that he had apologized to the woman and told her “If I had known you were reporting for a national paper I never would have been so forward.” You are troubled – what if the woman was not a reporter? The candidate went on to say that he is a feminist. You ponder on his past actions – the candidate seems to have an unusual view of what being a feminist means…

Selfie before others

Finally, he asks you about the size of his vacation allowance, and if the company will pay for a couple of nannies for his kids. He plans on taking at least ten vacations in the first year of employment. He feels entitled to such perks. He feels the company should not only pay for him to enjoy the many vacations he has in mind, but should also pay for his family and friends to join him. Not only that. He wants the company to donate millions to his friends trust fund, and he looks forward to the perks of such friendship such as a private helicopter ride and vacation at his friends exclusive private island for he and his entourage. Is this ethical, you wonder? Further, he wants private chefs, and security for all of his trips, paid for by the company. Of course, a private tailor should be employed by the company to create exotic regional dance costumes for the entire family to wear when they  visit locations such as India and China. That’s a bit presumptuous and narcissistic, you think. The candidate seems to be some sort of diva. The former CEO, Steve, was a hard working on-the-job type who didn’t  blatantly abuse company funds for personal benefit.

Sensing that he is losing you, the candidate suddenly rips his shirt off, takes a selfie, sheds a tear, and shows you his socks. Now you are really confused!

Nonetheless…You are now responsible for determining if this person would justify a position of leadership in your company – or for any position within any firm. Remember, you are not allowed to know his last name yet.

The conclusion

Would you entrust, as your new CEO, the welfare of your corporation to this 43 year old liberal arts graduate largely living off of a trust fund, who speaks in esoteric terms,  who holds high regard for communist dictators, and who feels entitled to expensive vacations and nannies at the cost of the company – yet wants to cut the net pay of your most productive workers? Would you be comfortable in a rampant spending program directed at benefiting special interest groups, personal friends, failing investments and foreign entities with no clear cut benefit to your company? Are you comfortable with hiring his friends, or with his unusual donation to what should be an unbiased press?

No?

Would you give him a middle management job?

No?

How about a job as a field manager?

Not qualified?

How about a job as the custodian?

Perhaps–but you’d prefer him have at least some job experience doing, at least some type of full time work during his adult life.

In the end, you just couldn’t see hiring this person for any level of job in your firm. He is a handsome fella, though – colored socks and all! Nice hair, too.

What if I then told you that the guy you rejected to be your custodian had a famous last name?

Somehow, the famous name and good looks seemed enough to get him his first full time job in a very prestigious position!

Really, you ask? What did he get hired for?

Well, this fellow made it to the top- not just as a CEO–but he is now the head of a G7 country!!!! A G-7 country!!!!!

You’d laugh at me for suggesting such ludicrousness. Wouldn’t you?