Last week I joined some friends in a soma bar for a Friday happy hour. Met some very cool people. A couple of them were lawyers, and the issue of the backdating scandal came up, and Jeff (I think, there were three of us there) shared his perspective.
The story is basically that the tech economy started booming, and you had all these extremely high growth organizations struggling to keep pace with customer demands, and neglecting to invest sufficient resources in back office operations like bookkeeping and accounting.
It was a very reasonable story and I won’t be suprised if the story becomes (has already become ?) a common refrain for defendants accused of backdating.
Administrative mismanagement is more forgiveable when you’re describing the work of first-time entrepreneurs flying by the seat of their pants. It’s so hard to do everything right, or so it can be. And in that context, what was a reasonable backdating defense story becomes a good story.
Then at least one pundit makes offhand reference to the whole silicon valley basement closet to boardroom being mostly a myth. Hmm. Is it? I don’t really know. The good story gets less good.
Then we remember that backdating scandals don’t apply to one man operations… they apply to publicly traded corporations, with publicly traded resources. From my view, the less good story gets shakey.
And then a shakey story turns sour: Apple has announced a restatement of earnings, including changes to historic statements, some possibly dating back to 1997.
Being mostly a one man operation, I understand that it’s easy to ignore mundane administrative tasks. Unfortunately every business needs to perform administrative tasks. It doesn’t matter if you’re one guy or an organization like Apple Computer. Obviously the administrative tasks become increasingly complex with the complexity of the operation. Fair enough, but let’s not forget that you’re Apple computer. You can figure it out.
You can also tell stories about the complexity, and the growth, and oh just make up other reasons why you didn’t figure it out. It’s your reputation. Your credibility. Spend it how you see fit. There are a lot of stories to tell, and many different ways to tell them. Yet ultimately your actions matter more than your stories.