Corporate Confidential

Out of the Muck...Briefly

I wrote about something slimy last time – or should I say someone?  At any rate, I thought I would blog about something more uplifting this time.  It’s Sunday, so I was catching up on my reading.  This is from last Sunday’s New York Times:  It may be a good job, but is it ‘Good Work’?

Howard Gardner, a psychologist at Harvard, is cited in the article for his “influential theory of multiple intelligence.”  That is, there are abilities beyond math and verbal skills which really lead to success in life. “Good work” is defined as a calling which combines:

·         Excellent performance

·         Expressing ethics

·         Engagement

If you don’t have all three you have a job or profession but it’s not good work.

This really hit home with me in light of my current experience at work with the psycho slut beast.  Especially the questions to ask yourself about a job:

“Is this the kind of place where I can see myself in others?”  God, I hope not.

“Are my colleagues people I’d admire or people I’d prefer to avoid?”

‘nuf said.

A good job is one which fits your values as well as one which enables you to be competent and effective.  The article says to ask yourself if your work brings you joy.

In light of all of my rants against corporate greed I like articles like this which lay out different criteria for success.  It’s really not about status or fortune.  I make good money at my current gig but I feel impeded from achieving excellence and I certainly don’t admire some of my colleagues.  As a result I have no desire to engage.  And joy?  At this point I’m not sure if I’d recognize joy if it hit me over the head with a two by four.

As I move on in my career – and I will move on – I hope to find this elusive good work, work that combines excellence, ethics and engagement.  It makes me sad that I don’t have it now.  I hope to in the future.

One Way to Do It

How to get a new computer in corporate America:

1.       Spend time researching what you need and preparing purchase requisition

2.       Get your request turned down by the finance department

3.       Find an existing unused computer as requested

4.       Junk up the old computer

5.       Shame management into letting you have a new one

 

This actually happened to my boyfriend.  He was starting a new job.  When told he could not have a new laptop he went and found one that was no longer in use.  It was already pretty junky, with makeup stains and some scratches.  He further “distressed” it and then went in proudly to show the comptroller that he’d found a computer.

 

“That’s disgusting, I can’t let you go around and visit customers with a laptop that looks like that!” she exclaimed.

 

Voila.  His request for a new computer was approved.

 

How much time went into researching the purchase?  How much time went into his exchange with the comptroller?  How much is their time worth?  Corporate culture in most places does not, unfortunately, put much of a premium on their human capital.  But if you want to buy something you better watch out.  Strange.

Feeling No Pain on Wall Street

As opposed to Main Street.

News Flash:  Corporate greed is alive and well in America.

 

My retirement account is down by almost half.  Foreclosures are at record numbers.  Bankruptcies are skyrocketing because people can’t afford healthcare.  But you'll be happy to know that Wall Street is OK.

 

That bailout was sure worth it.

 

The Associated Press reports that despite the meltdown, despite the plunging stock markets worldwide and despite the bailout America’s biggest banks are still preparing to pay their workers as much as last year – or more.  This news was splashed across the front page of The Santa Fe New Mexican, my local paper.  Went down real well with the morning coffee.

 

Excuse me a moment, I have to put some more stop loss orders in on my deflating brokerage account.  I also have to vomit.

 

When this started, the pension fund I manage for my (very) small business was about 30% in cash.  It’s now more than 50%.  And that’s certainly not because the cash grew.  But those Wall Street tycoons won’t feel a thing!

 

One of the goals of the rescue was supposed to be eliminating the king-sized incentives that got us into this mess in the first place because they encouraged risk-taking.  If these guys feel no pain then what’s their incentive to change their behavior?  If you’re rewarded equally for failure and success what’s your motivation to ensure the latter?  This seems like very simple psychology to me but apparently Wall Street’s goal is insulation from pain.

 

And insulation, it appears, from the real world that the rest of have to live in.

 

They make the mess.  We bail them out.  They get rewarded all the same.

 

Nice.

 

Bailout Booty Denied!

Wow, the House rejected the bailout plan.  You could knock me over with a feather.  Really.

Now, there are two sides of me at the moment.  The woman who writes this blog and is thinking, right on!  And the personal investor who is terrified.  Over the last couple of weeks I sold anything in my portfolio that I considered even remotely marginal.  I asked myself, which companies do I think are fundamentally sound and will survive?  And I kept those.

Today however half of my split personality is thinking I should have sold everything.  Although even cash is not secure these days.  Not if it’s in a brokerage account because brokerage firms are looking anything but secure.

My blog-writing self is relieved because I was somewhat nauseated by some descriptions of the plan.  For example, that it would contain “limits” on compensation.  What limits exactly, I wanted to know. Because if a CEO was to receive $60 million and it got cut to $50 that could still be described as a limit.  And it would still stink.

So all of me will be watching avidly as bailout negotiations continue.  I guess if I had my way I would support a very conservative plan which gave taxpayers equity ownership of the firms they bailed out and which strictly limited executive compensation and took away any kind of bonuses.  After all, if you’ve driven your firm into the ground and sent the country into a panic why should you get a bonus?

Even though I may be eating Spam from now on I have to say:  Bravo House of Representatives!

Still Bailing

It looks like we may be close to a bailout deal.  Officials assure us that “the core” of the proposal put forward a week ago by Treasury Secretary Henry M. Paulson Jr. remains intact.  Wow, what a relief.

 

The gist of the plan is that the government will burn – oops – provide up to $700 billion in taxpayer dollars to purchase troubled assets from financial firms.  This will free their balance sheets of bad debts and help restore a healthy flow of credit through the economy.

 

“We must free up the flow of credit to consumers and businesses by reducing the risk posed by troubled assets,” said President Bush.

 

Just what we need.  More credit.  Isn’t credit what got us into this mess in the first place?  Hey, these guys have shown that they’re really, really bad with money so I know what to do, let’s give them more.  Billions more.

 

Instead, how about finding a way out of the quagmire financial institutions are in already due to the poor business decisions which led to the aforementioned “troubled assets?”  How about changing our ways?  How about figuring out what went wrong before we throw more money at it?

 

And calling these assets troubled is a little like saying Katrina was a light shower.  I think, however, that “assets” in this case deserves to be in quotes.

 

So, on we go.  The sky is still falling according to Senator Judd Gregg, Republican of New Hampshire, who said there was an urgent need for action: “Failure to do this will lead to a massive fiscal meltdown in the credit markets, which will lead immediately to a meltdown on Main Street.”

 

Senator Harry M. Reid, Democrat of Nevada and majority leader, said it was crucial to send a reassuring message to the financial markets instantly because, “We may not have another day.”

 

Yeah, that’s reassuring.  Immediately.  Meltdown.  No more tomorrows.  Way to stop a panic and inspire confidence, folks.

 

No word yet on whether the intact “core” of Paulson’s proposal still contains the provisions that would protect executive compensation packages and golden parachutes.  During the last week – as those pesky lawmakers risked Armageddon by not acting quickly – some of these issues were supposed to have been resolved:  Paulson and the Treasury would have to endure some oversight.  The $700 billion would not be forked over in one lump sum.  Limits on executive pay would be addressed.

 

And what about that amount?  Rachel Maddow wondered about it on her show:

 

Where the heck did this $700 billion figure come from in the first place? A Treasury Department spokeswoman told Forbes.com this week, quote, "It's not based on any particular data point, we just wanted to choose a really large number."

 

A really large number? That's the calculus among our nation's leading economic theorists and managers? We just need a ton of money; we don't know how much, just make the pile really tall? Isn't economics a science? Not reassuring.

 

Nope, not reassuring at all.

 

Bailout Booty, Part I

I have written a lot of columns criticizing corporate greed, but anything I could have imagined just got blown out of the water by the real-life development of the proposed $700 billion bailout.

700 Billion.  Dollars.  Because:

·         Financial institutions got stupidly avaricious and gave mortgage loans to just about anyone who could breathe.  Oh wait, I think towards the end of this financial free-for-all breathing was optional.

·         When these loans started to stink these same institutions packaged them as investment vehicles and sold them to investors who were supposed to be “sophisticated” – e.g. pension plans.

·         When those “sophisticated” investors wondered where their returns were the financial institutions who had sold the kettle of crap basically said, tough luck.

 

And now we’re supposed to bail them out.  You and me.

 

Treasury Secretary Henry Paulson, when initially floating his plan, insisted that the massive executive compensation and bonus packages should not be excluded from the bailout booty because that would make it too “complicated” to administer.

The executives who all along were bellied up to the trough should not feel any pain.  And if we don’t help them the economy will collapse.  The sky is falling!  The sky is falling!

Paulson demanded total authority over the rescue: $700 billion to be used at his discretion, with immunity for future review.  Should that be King Paulson?  Luckily Congress is balking at that and also calling for – gasp – limits on executive pay at firms that get federal money.

On the other hand, according to a New York Times editorial, Paulson has long opposed what is probably the best way to help Americans stay in their homes: allowing a bankruptcy court to reduce the size of bankrupt borrowers’ mortgages. Unfortunately, but predictably, drafts of the bailout plan circulated late Thursday do not mention that relief.

In addition, this bailout plan won’t help those who are already in foreclosure. 

Paulson's plan won’t help ordinary homeowners who are about to become homeless or small investors watching their 401Ks tank but it will get those stinky assets off of the big guys’ balance sheets.  And it will ensure that no big Wall Street executive entirely loses his or her compensation.

Whew!  I know I’ll sleep better at night.

 

If you have to ask, you can't afford them!

You know that old saying, “If you have to ask you can’t afford it?”  Apparently that’s the government’s approach to executive pay.  Two years ago the S.E.C. put rules in place requiring companies to explain how they determined compensation and incentive pay for executives and as of 2007 less than half have complied.  The hope was that this transparency would perhaps shame corporations out of the habit of fat compensation for thin results.

And what are the consequences for these companies figuratively thumbing their nose at the S.E.C.?  Oh right, the government gave them a loophole:  Corporations did not have to comply if they felt the disclosure would put them at a disadvantage in their industry.

So sorry, I just don’t feel like it.  And who gets duped?  Shareholders.  You and me.

Gretchen Morgenson in the NY Times states that according to the proxy filings covering 2007 only 47% of the companies made the required disclosure concerning short-term incentives such as cash bonuses.  23% complied in 2006, so perhaps we’re on an upward trend, but this is still disconcerting to say the least.

On long-term incentive pay, according to the Morgenson column, the results are better with 62% of companies complying last year.

As long as the S.E.C. does not enforce its own rule the corporate excuse list will just keep growing:  if we reveal our incentives then our competitors might try to steal our talent; we will lose the flexibility to give bonuses whenever we feel like it if they have to be tied to actual goals; it’s just too darned hard!

What you often find when you shed a light on the corporate gravy train is that the incentive bar is set stupidly low.  Lower than what they are telling Wall Street:

“The goals companies are using for bonus plans may be a lot lower than what they are telling analysts they reasonably expect to meet,” said James F. Reda, a pay consultant quoted by  Morgenson.

It’s a classic double standard.  The benchmarks a corporation is announcing to the world are not even close to the bonus thresholds they set internally for their executives.  These guys may cost way more than I, a simple shareholder, can afford – especially on a day like today with the Dow losing more than 500 points -- but I’m going to ask anyway.

Indispensable

Everyone, sing along with me, to the tune of that Nat King Cole classic:  Indispensable, that’s what you are.

45% of U.S.workers did not use all of their vacation time in 2006.

The average number of paid vacation days in America is 9, not including holidays, which adds an average of another 6 days.  What’s even more disturbing is that almost 1 in 4 Americans have no paid vacation and no paid holidays.

I can’t imagine not using the measly 10 or so days most workers get.  As a consultant, I routinely build 5 to 6 weeks of vacation into my schedule, and last year took a 3 month break to write.

I haven’t had very many “regular” full-time jobs, but at the end of each of them I invariably wound up not receiving a full final paycheck because I was always in the hole for vacation time.  I considered myself lucky if I didn’t owe the company money.

So these recently published statistics, courtesy of sources such as Expedia.com and The Center for Economic Policy Research, are mind boggling to me.  I knew I was different, but 45%?  That’s not just a few.  That’s not some small minority.  That’s almost half of the U.S. work force.

Why?  The reasons cited in a recent article from The Christian Science Monitor run the gamut:

• Loyalty
• Too much to do
• Hard to coordinate family schedules
• Not wanting to return to an overwhelming workload
• Not wanting to be the “first one” in the office to do it

Some companies do maintain a use-it-or-lose-it policy, with which I wholeheartedly concur.  When I had my start-up in the nineties I enforced such a policy.  I also endorsed a paid time off plan, instead of segregating time into vacation or sick days.  My employees got 15-20 days to use as they saw fit.  If they weren’t sick, it was that much more vacation.  I am proud of the fact that, when I had the opportunity, I did put my money where my mouth was.  If it had been only up to me, I would have probably provided even more time off a la the European model, but I had three partners who kept me in line.

Do you wonder if my company was productive?  One of my partners did the math and used to love bragging that our productivity in dollars per employee was higher than Microsoft’s at that time.  We were such a profitable little entity, in fact, that it made us an attractive acquisition target, and the company was bought in 1997.

So there.

Big Brown turns 100

On a lighter, more trivial note than usual, 2007 marks the 100^th anniversary of the founding of UPS and two new books about the company have been published.

An insider's view comes from Greg Niemann, a loader, driver and manager with United Parcel Service Inc. for almost 35 years.

Published in February, “Big Brown: The Untold Story of UPS” is at times light-hearted in its focus on the company's history and culture and what the author calls the “mystique” of UPS drivers.  Niemann writes about a customer who had a crush on him when he was delivering packages in Hollywood.  Apparently a lot of the UPS drivers – who are mostly male – end up marrying women they meet on their routes.

This certainly gives new meaning to the slogan coined in the 2002 UPS advertising campaign:  “What Can Brown Do for You?”

I find this especially entertaining since I have the major hots for my UPS guy.  We’ve had a delicious flirtation going on since I moved into my current house in November 2005.  Hey – these guys work really hard and really long hours; they deserve to have some fun!

Alas, this will remain a fantasy, since I am totally committed to my wonderful real-life boyfriend JT.  Did I mention totally committed?

Niemann also describes the founder of UPS, Jim Casey, as “The Greatest American Capitalist You've Never Heard Of.”

The second book is a more authorized, company-sanctioned book called “Driving Change: The UPS Approach to Business.”  Its author, Mike Brewster was provided extensive access to top UPS officials and archives.

To read more, click here.

Or:

UPS Sustainability link.

Starving For Success

Starving to get ahead is no longer a good career move for only supermodels and actors.

An article in the Sunday Styles section of the New York Times on February 18^th discussed ways in which managers are now using employees’ eating habits as criteria for evaluating them.

“Why would a co-worker or manager trust you with responsibility at work if they see you making bad decisions in your self-management enterprise during meals?” an associate professor at the University of North Carolina at Chapel Hill, Philip N. Cohen, was quoted as saying.

Your self-management enterprise?  It used to simply be called “lunch.”  Except, as I’ve noted previously, no one gets the old-fashioned lunch hour anymore.  The reason managers and co-workers can so easily asses your dietary self-management is because everyone is eating in the office.  Yet another good reason to leave the office for lunch!

“Lunch” can get downright competitive at some workplaces.  For example, at Food & Wine magazine employees try to outdo one another by bringing in lunches such as duck terrine, according to the Times article.

And the most bizarre quote came from a headhunter named Stephen Viscusi:  “When I’m interviewing someone and I see their bones protruding, I know it’s a good hire.”  Because, Viscusi explained, it means they’re extremely disciplined.

Wow.  Starvation as a career enhancing tactic.  I thought I’d heard everything.  What’s next?  Hair shirts and branding oneself with the company logo?