Published on: 30 Sep 2011
In today’s work environment the pace of life seems to be getting faster and faster. Work and study pressures can all increase the amount of time that we spend at work.
I must admit that I need a coffee in the morning before I’m fully up to working speed.
That kick of caffeine always seems to help get my brain into gear.
Over in the States though it’s been reported that Keith Zakheim, the president of multimillion dollar PR firm Beckerman PR, was a little upset when he got into the office early only to find… (in fact this is so bad that I’m finding it difficult to write)… but he found that there was… wait for it… no milk left in the fridge to go with his coffee.
He was so upset that he sent the following email to his staff
From: Keith Zakheim
Date: September 27, 2011 8:20:21 AM EDT
To: Beckerman Staff
Subject: I don’t know what else to do…
I have repeatedly requested until I am blue in the face that the person that finishes the milk must replace the milk. Its not complicated and is a simple sign of respect for fellow employees.
So, imagine my chagrin this morning when I stumbled in at 715 … only to find that the skim milk in the refrigerator had three drops of milk left. Literally 3 drops, an amount that would maybe fill the tummy of a prematurely born mouse. The person that did this is either incredibly lazy, obnoxiously selfish or woefully devoid of intelligence – 3 traits that are consistent with the profile of FORMER Beckerman employees.
As you can tell from the tenor of this email, I am not happy and at my wits end … and I have repeatedly beseeched you to replace the supplies that you consume – whether its pencils, paper, or MILK. This costs you nothing – I pay for it! Yet, it is still repeatedly ignored.
So, I am gravely serious when I write this – if I catch someone not replacing the milk, or at least, in the case where the downstairs store has close already, not sending an email to the office so the first person that arrives (usually Christa or me) can pick one up upon arrival – then I am going to fire you. Im not joking. You will be fired for not replacing the milk, and have fun explaining that one to your next employer. This is not a empty threat so PLEASE don’t test me.
99% of this office consists of great people that work hard, treat their employes with respect, and understand that they are part of something that is bigger than them. However, there seems to be a small element that doesn’t understand this. So its time that they do or else they should start refreshing their resume.
For those of you who have worked for me for years, you know this is not my style so PLEASE take this seriously!
Thank you for your cooperation.
KEITH ZAKHEIM | CEO
It’s not been reported what happened when Mr Zakheim subsequently went to the biscuit tin and found there were no biscuits in it.
Published on: 28 Sep 2011
Meet two companies – Oracle and Autonomy.
A lot of you will probably have heard of Oracle but probably less of you have heard of Autonomy.
Oracle is a business software and hardware systems company whilst Autonomy develops search software.
Oracle’s Chief Executive is Larry Ellison and Autonomy’s Chief executive is Mike Lynch.
Interestingly enough Oracle’s CEO has recently accused Mr Lynch of lying or in his words of telling “whoppers”.
So, what’s the story behind all of this?
The story began a couple of weeks ago when Oracle’s Elison said that he thought Hewlett Packard had overpaid when they had paid £7bn to buy Autonomy and that Mike Lynch from Autonomy had earlier this year offered to sell Autonomy to Oracle but Oracle had turned it down as they felt it was too much.
Autonomy’s Lynch then said that any discussion of him talking to Oracle about them purchasing Autonomy was “inaccurate”.
Now the previous sentence is quite important as seeing that Autonomy was quoted on the London Stock Exchange, if there was any kind of sales process taking place then Autonomy were required to notify the Stock Exchange about it.
No such notification took place.
After Mr Lynch said that any talk of him discussing a potential sale to Oracle was inaccurate, Oracle responded in quite a dramatic way.
They posted a statement on their website (with the nice webpage address of Oracle.com/PleaseBuyAutonomy) and they didn’t hold back.
Amongst other things, they released PowerPoint slides of the meeting that Mr Lynch attended and the Oracle statement is entitled “Another Whopper from Autonomy CEO Mike Lynch”.
The statement then goes onto say amongst other things:
“Autonomy CEO Mike Lynch continues to insist that Autonomy was never ‘shopped’ to Oracle. But now at least he remembers and admits to meeting with Oracle President Mark Hurd and Doug Kehring, Oracle’s head of M&A, this past April. But CEO Lynch insists that it was a purely technical meeting, limited to a ‘lively discussion of database technologies.’ Interesting, but not true. The slides Lynch showed Oracle’s Mark Hurd and Doug Kehring were all about Autonomy’s financial results, Autonomy’s stock price history, Autonomy’s Price/Earnings history and Autonomy’s stock market valuation. Ably assisting Mike Lynch’s attempt to sell Autonomy to Oracle was Silicon Valley’s most famous shopper/seller of companies, the legendary investment banker Frank Quattrone. After the sales pitch was over, Oracle refused to make an offer because Autonomy’s current market value of $6 billion was way too high.
We have put Mike Lynch’s PowerPoint slide sales-pitch up on the Oracle website – Oracle.com/PleaseBuyAutonomy – with the hope Mike Lynch will recognize his slides, his memory will be restored, and he will recall what he and Frank Quattrone discussed during their visit to Oracle last April. Yesterday, the Autonomy CEO did not remember having any meeting with Oracle. Today, he remembers the April meeting and inaccurately describes how it came about and what was discussed.
The Statement continued but the key message appears to be that the two individuals are probably not the best of friends and somehow I don’t think the two CEOs will be sending each other Christmas cards this year.
Published on: 26 Sep 2011
The Financial Times or FT as it is generally known, is a great newspaper.
First printed way back in 1888 by James Sheridan and Horatio Bottomley, the FT specialises in business and financial news.
You can find a lot of information in the FT.
Information ranging from share prices to the latest business activities can all be found within the paper’s famous light salmon coloured covers.
They have also recently highlighted some interesting figures about the average partner remuneration in the UK firms of PwC and Deloitte.
In the year to 30 June 2011 the average profit share for each PwC partner in the UK was a healthy £763,000.
In the previous year to 30 June 2010, Ian Powell, the Chairman of PwC, received £3.6 million. The latest figures show that he managed to increase this amount to £3.7 million in the year ended 30 June 2011.
But what about PwC’s fellow Big 4 partners from Deloitte?
Even though the Deloitte figures are not entirely comparable with PwC’s due to differences in the treatment of past pension obligations, the results are interesting and it’s not all good news for Deloitte partners in the UK.
This year saw their average profit share fall by 13%. They now have to scrape by with £758,000 per year compared to the £873,000 that they had the year before.
Whilst figures are available for the UK Deloitte partners they are not currently available for the Deloitte partners from over in the US.
My guess though is that the US Deloitte partner’s profit shares may well be reduced this year though as money may be held back for potential legal fees after it was announced today that Deloitte in the US are being sued for the princely sum of $7.6 billion.
They are accused of failing to detect fraud during their audits of a US mortgage firm which went out of business during the US housing crash.
A Deloitte spokesman was quoted in the press as saying the court claims were “utterly without merit”.
Published on: 23 Sep 2011
You probably haven’t heard of the lady by her name but you have without a doubt seen her most famous piece of work.
40 years ago Carolyn Davidson was paid the princely sum of $35 for the design of a logo.
That logo was the Nike Swoosh and it has gone on to become one of the most famous logos in history.
Nike has just released their latest set of financial results and for the 3 months to 31 August 2011 they made an impressive net profit of $645 million. Despite a global recession Nike has increased profits by a healthy 15% on the same quarter last year.
Their revenues showed an even more impressive increase, rising 18% to a quarterly figure of $6.1 billion.
The fact that sales increased by 18% but profit only increased by 15% indicates that costs increased and Nike stated that costs had increased due to higher raw material prices.
Nike is the world’s largest sports shoe and clothing maker and the latest set of results emphasised its global business. Sales improved in nearly all the markets that they operate in. There were especially strong gains in the US, India and China.
North America is Nike’s biggest market with sales rising 16% to $2.2 billion but the emerging markets are quickly catching up with revenue from this area rising 35% to nearly $800 million.
So, what will the results look like for the corresponding quarter next year?
Well, with the 2012 Olympics taking place my guess is that the results for Nike will look pretty sporting.
Published on: 19 Sep 2011
Sometimes it’s difficult to get a feel for economics and the concepts and amounts involved.
A friend sent me an email that’s doing the rounds on the internet and it emphasises rather nicely the issues behind the financial problems that the US currently faces.
It moves away from “grown up economic terms” to instead use an example about the US financial problems which people will find easy to understand.
They may also however find it a bit shocking.
The US financial position can be succinctly stated as:
1. US Tax revenue: $2,170,000,000,000
2. Fed budget: $3,820,000,000,000
3. New debt: $1,650,000,000,000
4. National debt: $14,271,000,000,000
5. Recent budget cuts: $38,500,000,000
Now, if you simply remove 8 zeros and imagine it is a household budget you’ll get the following:
1. Annual family income: $21,700
2. Money the family spent: $38,200
3. New debt on credit card: $16,500
4. Outstanding balance on the credit card: $142,710
5. Total budget cuts: $385
There. It’s easy. Who said economics was difficult?
Now, how do we go about extending the credit card limit again?
Published on: 16 Sep 2011
I tell you what. I don’t really have insurance against anything going wrong but if I put a tick in this box and pretend that I do nobody will notice and it will be ok. Won’t it?
Mr Kweku Adoboli, a 31 year old banker with UBS in London, was working in his office in the early hours of Thursday when he was arrested on suspicion of fraud and false accounting.
In simple terms he is alleged to be a “Rogue Trader“ who undertook illegal transactions which cost the bank a serious amount of money.
£1,300,000,000 to be precise.
That’s a fairly significant figure and would represent the largest single fraud that has ever taken place in the City of London.
Not whilst there is the principle of “innocent until proven guilty” and Mr Adoboli hasn’t yet had an opportunity to defend himself, it’s not currently looking too good for him.
There are striking similarities to the case 3 years ago where trader Jerome Kerviel lost Societe Generale nearly €5bn through Rogue Trading activities.
A detailed investigation has just begun but the early reports indicate that the fraud involved setting up fictitious hedging transactions to trick the bank’s risk management systems into thinking that a trade or position had been hedged against to minimise risk and limit exposure.
A hedge is in effect a form of insurance to insure that if a particular trade goes wrong there is some offset present to mitigate the loss.
If setting up false hedging entries into the bank’s “computer risk system” turns out to be true then there will be some nervous (and possibly soon to be unemployed) people at the bank who were responsible for the risk management system.
Many thought that the days of individuals being able to lose significant amounts of money for banks through unauthorised transactions were a thing of the past. After all, banks have spent a considerable amount of time and money over recent years in ensuring their risk management systems were good enough.
Unfortunately for UBS though it looks suspiciously like their systems weren’t up to the job.
Published on: 14 Sep 2011
Here’s a good question – what is about 20% of your height and could help a number of fashion companies to increase their sales by a significant amount?
The answer is a “mini-me”.
Top fashion brands such as Burberry, Barbour jackets and Ugg boots have all seen increases in sales of certain items of clothing recently and some people are putting it down to the ex-Spice Girls singer, model and husband to David, Victoria Beckham.
Mrs. Beckham recently took time out from shopping to give birth to a baby daughter called Harper.
Photos in the press show that baby Harper is not only a cute looking baby but that she also follows her mum in the fashion stakes.
Now whilst Harper is only a few weeks old and therefore doesn’t get overly involved in detailed discussions with her mum as to what she will wear, the photos show that mother and daughter are wearing matching outfits.
This has resulted in a boom for sales of “mini-me clothing”.
A fashionable mum who owns a Burberry trench coat for example can now buy a mini version of exactly the same coat for her young daughter for £375.
If mum wears the trendy Australian Ugg shoes then the lucky baby daughter can also own her own pair for £104.
Anyone with young children will appreciate that they grow at a remarkable rate and this got the accountant in me thinking about the “cost per hour of use ratios” that will apply to these clothes purchases.
Unless your dad goes by the name of David Beckham then I think the resulting figures will be a bit of a shock…
Published on: 12 Sep 2011
Don’t panic whatever you do but by any chance do you work with a male who is 36 to 45 years old and whose job is in a finance related function?
If you do then look at him as discretely as you can.
Is he exhibiting any of the following characteristics?
– Volatility and being melodramatic, arrogant and confrontational, threatening or aggressive, when challenged.
– Performance or skills of new employees in their unit do not reflect past experiences detailed on resumes.
– Unreliability and prone to mistakes and poor performance, with a tendency to cut corners and/or bend the rules, but makes attempts to shift blame and responsibility for errors.
– Unhappy, apparently stressed and under pressure, while bullying and intimidating colleagues.
– Being surrounded by “favorites,” or people who do not challenge the fraudster, and micromanaging some employees, while keeping others at arm’s length.
– Vendors/suppliers will only deal with this individual, who also may accept generous gestures that are excessive or contrary to corporate rules.
– Persistent rumors or indications of personal bad habits, addictions or vices, possibly with a lifestyle that seems excessive for their income, or apparently personally over-extended in their finances.
– Self-interested and concerned with their own agenda, and who has opportunities to manipulate personal pay and rewards.
If he is then that may be a bit of a worry.
KPMG have announced that after an analysis of nearly 350 cases that they investigated for their clients across 69 countries from 2008 to 2010 a typical fraudster was a male, aged 36 to 45 who works in a finance related function and exhibits the above list of traits.
Now, strangely enough everyone in our office who is reading this is has now turned to look at me who just happens to be a male, aged 36 to 45 who works in a finance related function…
Published on: 09 Sep 2011
Share incentive schemes are a good way to motivate and reward senior executive employees.
As far as I’m aware though there are very few supermarket checkout operators that find themselves eligible for £100,000 worth of company shares as part of their remuneration package.
Mr Jeffrey Adams who worked on the checkout at Tesco’s Burton-on-Trent store in the UK though thought otherwise.
Back in 2002 he received some 44,000 shares in Tesco’s from the company that runs Tesco’s executive remuneration share plan.
These were meant for Mr Adams but alas not the Mr Jeffrey Adams that worked at the checkout in Burton-on-Trent but instead, Mr Jeff Adams who is the Chief Operating Officer of Tesco’s Fresh and Easy business in America.
Now what did Mr Adams (the checkout operator) do when he received the shares?
Did he do he honest thing and report it to his employees straight away?
No he didn’t.
Instead he sold the shares and made a profit of £100,000.
His ill-gotten gain remained secret for 7 years until Mr Adams (the Chief Operating Officer) tried to cash them in and found that the shares were nowhere to be found.
Mr Adams (the checkout operator) didn’t really appreciate the paper trail that exists when shares are sold and when he was arrested he claimed that they were left to him by his grandfather.
Mr Adams (the checkout operator) no longer works for Tesco and was last week jailed.
The judge said “You have to serve a prison sentence for £100,000 of dishonesty. You have shown no remorse and gave no plea of guilty.”
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Published on: 07 Sep 2011
Now this is an interesting one and emphasises the importance of proper proof reading in job adverts.
The Royal Liverpool & Broadgreen University Hospital recently placed a job advert on the UK’s National Health Service website.
All seemed pretty normal with the advert and there was some fairly standard wording present in the job description including:
“Applications are invited … to work at this large University teaching hospital”.
“The applicant will be joining a staff of 37 consultants…”
“We provide anaesthetic services across 2 sites for adult patients…”
But at the bottom of the advert there was a sentence saying
“the usual rubbish about equal opportunities”.
The mistake was a reference to the organisation’s equal opportunities policy and was quickly deleted and replaced with their standard wording about equal opportunities.
This looks suspiciously like a situation where somebody was dictating the advert to a secretary who then typed it out word for word without noticing the phrase.
Now, I wonder who will get the blame for the error. The manager that dictated it or the secretary that typed it?
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