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March 2009
We do not make jokes, we simply watch the LA Times, the Orange County Register and CID/HOA board of directors and report the facts!
PCM
& Third Mutual – The Ultimatum
Posted
by CotoBlogzz 2/20/2009 6:30 AM
After
a successful Initial Public Offering (IPO) and
experiencing an exponential growth in revenue circa
1996, Gateway computer issued an ultimatum to a
computer peripheral supplier: You can
bid on a new product, however, you must significantly
improve the quality AND reduce the price of the
new product, or else. The demands
were so drastic that the CEO of the Taiwan-based
supplier conceded in a press release to having lost
the Gateway account.
However,
a young executive decided that not all was lost, and
although the Taiwan-based supplier had never proven
able to deliver a quality product, he figured out a
way forward: Radical changes were implemented
and the new product established new sales and quality
records for both Gateway and the supplier.
Milt
Johns, PCM vice president issued the Third
Mutual of Laguna Hills board of directors a new kind
of ultimatum. In this case, it is the service
provider issuing the demands and “respectfully
requests the directors to adhere to the following
conditions”, reads a memorandum dated January
20, 2009.
The
conditions define a code of conduct for board members,
including a Shut Up Rule: “Directors will
not make demeaning or hostile comments about staff nor
the general manager in any venue other than closed
session meetings of the board”.
Additionally
the demand in essence turns the employer-employee
rules around, by having the service provider dictate
what the board can and cannot do as in “Directors
will agree to not breach the management agreement by
performing any work of the managing agent, eg.
Preparing RFQs/RFPs to solicit proposals from banks,
law firms, lien and collection companies, etc.”,
presumably not going out to bid for
property management services either.
In
the case that “board members question an action
on the part of PCM that they deem not to be in
conformity with its duties as managing agent, a
mediator will be hired at the expense of the Mutual to
privately resolve the issue.” In other
words, if the service provider is not performing,
quietly hire a mediator at resident’s expense.
The
demands also describe a chain of command: “To
assist the Directors to this end, and effective
immediately, and until further notice, any contact
between the Directors of Third and PCM shall be
restricted to only the PCM Executives (currently Jerry
Storage, Jane Price, Kurt Rahan and Russ Ridgeway”.
However,
Mr. Johns will be “very happy to ease these
restrictions once the roles of the Directors and PCM
as management agent have been reconciled to the mutual
satisfaction of both parties.” so states the
memorandum.
Gateway’s
ultimatum to the Taiwan-based supplier significantly
raised the performance and quality bar. And
although the Johns’ ultimatum to the Third Board
seem to go South, we understand there are some Third
board members willing to accommodate Mr. Johns’
demands. Judging for Gateway’s pursuit of
excellence, seems like they would have fired the
service provider on the spot, had it tried to
establish the rules of engagement.
We
have asked PCM representatives to confirm whether PCM
is seriously willing to walk away from the Third gig,
but have not received a response.
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