Fortune has an interview with Citigroup CFO Sallie Krawcheck. She made a very interesting point about delivering bad news in business – you have to be comfortable being uncomfortable.
It's very easy to see how a CFO can be tempted. I've seen it. It is much easier to deliver good news to the Street rather than bad news. As a CFO one has to have the strength of character, the thickness of skin, to be able to deliver bad news as easy as good news.
We've taken a lot of steps to remove as much of the temptation as we can. A lot of decisions have to be made by the CFO and the CEO. Things like our loss reserves, our incentive compensation accruals, our legal accruals [have been] pulled back from the end of the fourth quarter. So even if I think, "Boy, I'm fine missing consensus," we've pulled those decisions back before we know what those numbers are going to be, so we make the right decision for the company.
I think a lot of it has to be done at the top. I have to let my CEO know every step of the way when I talk to him that it's okay to deliver bad news. We want bad news. Numbers don't lie. See what the numbers tell you, and you have to be just as comfortable delivering bad news as good.
Which is why I'm glad I was an analyst. I always knew that if my stock tips were going to work…I should be uncomfortable. It was probably not the right place to be if everybody said, "Way to go, good recommendation." As an analyst, I was very comfortable being uncomfortable, and as a CFO I have to be comfortable being uncomfortable. I have to be fine with delivering bad news.