Cart Before The Horse? Transactions Dictate Financial Modeling

I'm working on a joint venture involving the acquisition of hospitals. The principals involved in identifying the first target hospital described a lease-purchase transaction. Spent a good deal of time creating financial pro formas reflecting what operating results would look like post-transaction. Then, an investor was identified and he's contemplating a totally different scenario. Guess who calls the shots? Now, we're trying to nail down just exactly what the transaction will be, so we can re-do the projections based on reality. Lots of time and resources wasted. The lesson learned? Getting busy with analysis before understanding where the project is ultimately heading is a supreme waste of time.
Have you ever found yourself in a similar situation?

HCA - One Way to Pay Those Big Bonuses

At one point in my career, I worked for a division of Hospital Corporation of America. As I learned about the company's origins and strategies, I discovered they were both creative and bold. They were one of the first national hospital ownership and management companies, founded in 1968 by a doctor in Tennessee. Not so coincidentally, at the time Tennessee's (and their Blue Cross plans) reimbursement to hospitals was amongst the most liberal in the country. Blue Cross paid 90% of a hospital's charges! Guess where the first hospital they acquired was located? As they grew, they targeted other Southern states with similar reimbursement and demographics. HCA is now, of course a giant, national hospital chain.

This is not to take away from the company its strong focus on effective management and operational excellence. But I draw your attention to the front Business page of today's New York Times, and the Dealbook article by Andrew Ross Sorkin entitled "Investors Extract a Payout". We all know the public uproar about investment banks paying shovelfulls of bonuses to its managers. So, here's where HCA's creativity and boldness is exhibited.

HCA announced last week that it was paying its shareholders a $1.75 billion special dividend. Just a bullish sign of the healthcare industry's health? As the Times points out, HCA was taken private in 2006. Its buyers included Merrill Lynch, Bain Capital, Kohlberg Kravis Roberts and, yes, some of HCA's own managers, along with a giant loan from a syndicate of banks. So, who's getting the dividend payout? You get my point? And this at a time when HCA has $25.7 billion of debt it still needs to pay off.

I still respect the management of the company. After all, its been tremendously successful. My question to you is (and its not rhetorical) - Is this an example of HCA's boldness and creativity, or a sneaky way to hand out "bonuses" under the radar?

Are You An Introvert?

Don't mean to put us all in one pot, but in my experience many finance people tend to be introverts, like me. If you feel this has a detrimental effect on your ineractions in the workplace, I've got a book to recommend to you - The Introvert Advantage, How to Thrive in an Extrovert World, written by Marti Olsen Laney, Psy.D.

It's an interesting paradox. Accountants, financial analysts and such often chose their careers based partially on their personalities. Among other characteristics, they like quiet for concentration, like to work on long, complex problems and have good attention to detail. Introvertive much?

Yet when one rises to a CFO position and is expected to lead, mentor and rally the troops, a totally different skill set is required. Extroverts respond quickly to requests and spring into action without much advance thinking. They like to be part of the majority opinion and feel isolated without management support. They enjoy phone calls and see interruptions as a welcome diversion. With due respect to extroverts, I don't see these characteristics  as particularly valuable for a CFO to have. Do you?

So, what's the takeaway here? Both introverts and extroverts can influence their own styles, while recognizing their natural leanings. Either can become a great CFO.

I work with a personal coach, and she is terrific. It was only in my last CFO position she helped me realize my introverted tendencies were hampering my performance. My coach recommended this book, and I found it extremely helpful.

Are you an introvert or an extrovert? How has it helped or hindered you in your career?