The CotoBlogzz

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.

This entry was posted on Friday, February 20th, 2009 at 7:53 am and is filed under Misc, Laguna Wood Village, HOA/CID, Politics, Fiduciary Responsibility, Senior Advocacy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.