Focus Group

For years I had aspired to join the board of directors of a public company. All I would have to do was attend an all-expenses-paid quarterly meeting at a nice location, enjoy a sumptuous lunch, rubber-stamp a few management proposals, and collect a handsome director’s fee. Not a bad way to spend a day.

Now that post-Enron regulations require board members to take seriously their fiduciary responsibilities, directors must spend a significant amount of time preparing for meetings, which are also occurring more frequently because more decisions are being kicked upstairs, and companies can’t wait three months for approval.

A board member’s potential liability, if he doesn’t perform his duties with care, greatly exceeds his director’s fee. Even if the directors and officers insurance policy covers the damages, a shareholders suit or SEC enforcement action generates a lot of grief, such as giving depositions or producing documents for a discovery proceeding, that a busy (c’est moi), important (n’est moi) person doesn’t need to deal with.

A couple of weeks ago I chanced upon a great way to make some money, without being responsible for anything I said or did. A marketing research company had extracted my name from a financial managers’ mailing list and asked for a couple of hours one evening. And so it was that I participated in my first focus group.

After snacking on some sandwiches, soft drinks and cookies, a dozen of us were ushered into a conference room with mirrored walls. Although we represented a cross-section of occupations and institutions (business, government, and education), I noticed that we had a few things in common: we had financial backgrounds, we worked with financial software, and we used Microsoft Excel for much, most, or all of our modeling work.

The moderator gave a brief introduction and asked us our opinion about Excel. Although we all launched into gripes, in truth I find Excel to be an excellent, flexible tool, much more powerful than the original, pathbreaking Visicalc, Lotus 1-2-3 or the Excel of 10 years ago. However, I’ve had to review (or worse, take responsibility for) other people’s work, and frequently I’ve found errors, some minor, and a few major, that could have resulted in financial calamity for the project in question.

Because spreadsheets have become so complicated, and many people plunge right into projects without a plan (like writing a book without sketching an outline), following the logic and checking the output can be quite difficult. For my own work I always prepare a summary sheet with control totals, but that takes time which is often in short supply.

Specialized financial modeling programs, like accounting software, have built-in controls so their output is more trustworthy, but a) they require many hours to learn and b) they’re not as flexible as spreadsheets (if you have a project which has a few unusual features, it can be hard to adapt the program to represent those wrinkles accurately).

After listening attentively to our criticisms, the moderator introduced us to a software product that will soon be marketed by a company that is well known in deal-making circles. Deal volume is down, so this company, which has spent millions in development of its in-house software, is spending millions more trying to license it to banks, insurance companies and any organization that makes investments which have a complex financial structure.

A senior programmer, in his early to mid-30’s, entered the room and ran a demonstration. From his comments he had clearly been observing us from behind the mirrors. Also, unlike other programmers I’ve met, he had been practicing his people skills.

I didn’t say anything right away. There were benefits and drawbacks to the software, and I like to take my time before venturing an opinion. What was astonishing to me was the reaction of the other participants. They immediately chimed in with banal observations: “I like the fonts you use”; “I like the easy way you can draw lines”; “You can fill in the rows without moving the mouse too much”. Then the lightbulb went off. They wanted my opinion, so I should say something, anything, no matter how ridiculous-sounding, because I would suffer no consequences.

The bloviating continued for another 40 minutes, and I felt guilty that the sponsor was paying gold for such dross. After it was over, the moderator thanked us and said that they had gotten a lot of useful information, despite my misgivings. The two hundred bucks in the envelope assuaged my guilt, and I put my name in for the next focus group. I won’t get rich, but this is one job that I won’t take home with me. © 2004 Stephen Yuen