“How old were you when you got your first paying job?”

That’s one of my favorite questions when interviewing prospective employees. If the person answers “I was 21 years old”, a red flag goes up.

Based on personal experience, I’ve learned that people who had a paying job before age 16 have a better work ethic than people were given things until graduation. While the basis for question is not scientific, it’s proved to be a reliable predictor of performance. A red flag goes up in my mind if the interviewee’s answer does 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, they’re learned.

Corporate Canaries

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. In his new book Corporate Canaries, author Gary Sutton lists three red flags that warn stakeholders their business is in trouble:

1. Company revenues have grown at twice the rate of net profit for three years;
2. The sales force is commissioned on volume, without regard to profit; and,
3. Hallway conversations are about sales, not earnings. [1]

Top Ten 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 in financial management. If three or more questions accurately describe you or persons on your finance staff, raise a red flag.

Top Ten Finance & Accounting Staff Red Flags

1. They’ve not read a non-fiction book since college.
2. They have a budget at work but not at home.
3. They see nothing wrong with fudging on their personal tax return.
4. They use a Balance Sheet and P&L to manage money at work but not at home.
5. They’ve requested financial assistance from a church yet they rarely give to their church.
6. They work in finance but no one asks them for financial advice.
7. They can’t explain the basic principle of Activity Based Management.
8. They’re an agnostic, believing there are no absolutes.
9. They don’t know their FICO score.
10. They spend more at home than they make.

What you bring to work is what you give to work. Poor practices brought to the workplace rarely result in excellent work. The Apostle Paul acknowledged that principle over 2,000 years ago when he wrote the qualifications to serve as a church leader: “He must manage his own family well and see that his children obey with proper respect.” [2]

Connect the dots

An anonymous January 2006 e-mail to the Fort Worth Star-Telegram alerted a reporter of Radio Shack CEO Dave Edmondson’s latest Driving While Intoxicated (DWI) arrest. 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 2006 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?

[1] Corporate Canaries, Gary Sutton, Thomas Nelson Publishing, 2006

[2] 1 Timothy 3:4, New International Version of the Bible