The Dadamo Digest of July 1998 by Dick Dadamo

A View From the Board Room:
Accountability

Accountability - (a-kount-a-bil'I-ti), n. the state of being liable or accountable.
Accountability - a word I seldom find in the vocabulary of small companies.
Accountability - a word I preach to my client base of Company Presidents all the time.

A manufacturing manager blows revenue predictions by a couple of days; an engineer doesn't meet schedule or budget; a sales person's forecast is missed. Are they then hung up by their fingertips because they aren't accountable? Do you fire them over this? A teenagers has a car accident because he was drinking. This is easy -- it's assumed he was accountable. A customer doesn't give your salesperson an order promised for weeks. Is she or he accountable? Today's employees want to be held more accountable if you believe the writings of management experts, and my own experience from interviews with management staffs.

Where do you draw the line and take action? I must admit I have trouble defining the line. Words alone are not sufficient. I shutter when a senior marketing person upon failing says in a hallow fashion, "I'll take the responsibility for the revenue." He eventually bails out and actually takes a better paying job, only to leave the company holding the empty bag. But I do believe the problems are deeper than just saying someone is accountable and then being upset when they fail.

Before holding anyone accountable, there must be a clear definition of what is expected of them, and the method of measure, before "accountable" can be tattooed on the person's forehead. The goal, objectives, priorities and support must be made clear to attach accountability to the task. Most importantly, the best way to get some to take accountability seriously is to make it clear what the consequences will be if they fail. I seldom, if ever, see this made clear in the companies I deal with. In my experience, the vast majority of subordinates do not know what is expected of them. So if true, how can they be held accountable?

And Holding onto Employees	Good News
From the Chatter Section of the O.C. Register, some employers are getting quite creative when it comes to perks to keep employees. How about a free (leased) BMW? And there are on-the job massages and hammocks in the employee lounge. What next, housing and grocery allowances? The O.C. Register completed the annual study of executive compensation for Orange County and found a million dollar threshold as being lost in the dust. The top 50 highest paid executive have amassed more than $500 million in unexercised stock options. Stock options account for over 50 percent of the compensation. The leader at this time is William P. Foley II, COB at CKE Restaurant, Inc. holding about $50 million in unexercised options. I have no problem with the reward when a top executive drives the value of the company. I just wonder if the large differential between the top executive and the doers in a company shouldn't be narrowed a bit.	The 1997 "Report On the American Workforce" claims the median annual earnings of workers 25 to 34 with bachelor's degrees are roughly equal for men and women.
	I Wonder
	In a survey by Accounting Temp noted in the O.C. Register, the qualities rated highest by executives in job candidates are honesty and integrity. I am not sure how you can evaluate these from resumes and an hour interview. Sadly I find less and less background or reference checks being done by companies.
	Mergers and Acquisitions
	From an article in the Los Angeles Times, mergers in the US in the first half of 1998 totaled $945.5 billion, up from $920 billion in all of 1997. It seems the main reasons are to exploit deregulation and crumbling economic borders, and to extend earnings growth to support towering stock prices. Even in my world, three of my clients are being wooed by potential partners.

Athlete or MBA	The Bad with the Good
According to the Orange County Register, the median starting salary for a graduate with an MBA from the University of Chicago is $120,000. This is for the 500 graduates.	The ease and availability of communications is affecting executives on vacation. An AMA study found only 19% of managers on vacation planned to have no contact with the company. Keep that pager handy!
Finally	Shoplifters Beware
CNN, after admitting a story about US Troops using nerve gas to kill American defectors did not have the proper checks and balances to the source -- resulting in firing two producers.	The most frequently stolen items at grocery stores is cigarettes. That's interesting because most stores I go into have them behind the cash register.
Las Vegas Hurting	News from the R.E.A.R.
Anyone care -Visitor count is lacking for the first part of 1998. Let's get going as someone has to fill up those 106,000 hotel rooms, with 20,000 more to come.	Reebok dropped Shaq O'Neal's endorsement contract. He is going to have tough times catching up to Tiger Woods and Michael Jordan. They probably caught up with his movies.
Silly Statistics	From the O.C. Register
Saturn continued to be #1 in J.D. Power surveys for how well their dealers satisfy customers. Most of the top ten are luxury cars, so it makes Saturn's win a little better. Good to see a US car out front. Coffee shops now total over 7000 including espresso bars, cafes and carts. That's spread- ing an awful lot of caffeine around, and most drinkers end up on the freeway racing me.	The rate of women in the workplace rose from 20% to 70% from 1960 to 1996. I wonder how much of the wage differential changed. The percentage of job seekers that lie on their resumes or omit important information is nearly 30%. The toughest checks to make are the jobs they leave off their resumes.

Watching Uncle Bill	Changing Communications
Microsoft has over 5000 "temporary" workers -- to avoid paying pensions and other benefits? They announced part-time workers who have completed an assignment must leave the company for 31 days. You judge. Do I see a Union in sight? Microsoft lost their battle and had to pay for the name Internet Explorer. The company SyNet, now bankrupt and defunct, was awarded $5 million. Incredible! I guess Bill paid that out of his petty cash!	Here it is, the AMA says executives are more likely to read an e-mail than pick up a telephone. E-mail is preferred by 36% of the executives as the primary communication tool versus 26% for the telephone. The Internet and Orange County from a UCI study of executive: ..... 92% are connected on the Internet. ..... 79% have a site on the web. ..... 89% use e-mail Can you believe experts are predicting that by the year 2000, 50% of telephone transmissions will be data and 50% voice?. Better yet, by the year 2003, only 2% will be voice. I gather, from the size of my phone bill my household will represent most of that 2%. Traffic fell at John Wayne Airport comparing May 1998 to May 1997. I still can't find a spot up close.
OC Investors in the News
The SEC sued four OC residents alleging they defrauded 83 investors in an ostrich breeding scheme. The take - $800,000. It seems they purchased two ostrich breeder birds, instead of the 247 they claimed. It's rumored both birds were of the same sex - what kind of due diligence was done? Maybe the investors wouldn't know an ostrich gender even if they saw one.
Customer Service Award	Looking for Angels
The winner is Claim Jumper. After screwing up the catering date for a wedding, management straightened it out serving the guests themselves with no charge for the catering and then picked up the tab for the couple's Hawaiian honeymoon.	From the OC Business Journal. Microsoft, Intel and Lucent Technologies invested $500 million each year for start-up capital. Sun Microsystems set up a $100 million fund to invest in companies using JAVA in their product. It proves that much of the innovation will still come from small companies.
USA Business	Corporate Giants
Borrowed $261 million from the SBA last year. Temporary Workers: 800,000 in 1996, 2.5 million in 1997. California: Self-employed, 2.2 million. Self-employed in companies, 800,000.	General Electric is the first worldwide company to break the $300 billion dollar barrier for company valuation based on the market price in early July. GE is the epitome of what America is all about and stands tall around the world as an example of how a successful company is run. The Disney Company that wants to believe it is what America is all about took a kick in the ankle from Texas Board of Education. Texas dumped $45 million in Disney stock in the market in protest against its films, which board member Richard Neil described as "garbage." The market reaction: the stock value rose.
Coming on the Internet
Before year end I will offer to send your copy of this newsletter over the Internet. If you would like to receive your copy monthly over the Internet, please mail or fax your e-mail address to RJD Associates Inc., 42 Nantucket Lane, Aliso Viejo, CA. 92656 or fax (949) 643-3725.

Numbers for Time Magazine

119 - Total number of Asian billionaires in 1996.
44 - Total number of Asian billionaires today.
It seems to me Japan is suffering like many companies that have continual growth for year, and then can't cope with a slowdown or reversal.
$ 00 million - Estimated worth of Cuban President Fidel Castro. You would think he would buy a new wardrobe or at least a better fitting set of khakis.
95% of British men aged 20-34 who said they would rather watch World Cup soccer on TV than have sex with a woman of their dreams.
$16 billion - Estimated wealth of Queen Elizabeth II.
$1.3 - $5.0 million - Estimated wealth of President Clinton and family (not allowing for legal bills).
23.7 million out of a population of 59 million of British viewers watched the World cup soccer match between England and Argentina.
52% of American men knew the World Cup involved soccer.
$31.00 - Amount saved by the Queen's sister Margaret by using a senior citizen's discount pass on public train.

The Dadamo Digest
CALENDAR OF EVENTS

Executive Roundtable - Tuesday July 21, 1998
Time: 10:30 a.m. - 1:30 p.m.
Agenda: Company Visions and Values

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