Find the Hat

by Norman Horowitz

“Shorty” was scouting locations for the production of Gone with the Wind. He stood up on the back of a moving pickup truck, and the wind blew off his hat. At the first opportunity, he purchased a new hat to protect his bald head from the sun.

Shorty filed his detailed expense report for, shall we say, $4,385 and included $6 for his hat. His report was rejected because of the $6 he had spent for the hat, and he was asked to resubmit the expense report without the hat, which he did.

Supposedly, he submitted a report for the same amount with the admonition: “I dare you to find the hat.”

Many media managers were and are obsessed by “finding the hats.” I have worked for a few of them. While they were doing this, Rupert Murdoch was out expanding and diversifying his business.

I still remember my first senior management meeting with the head of Polygram North America. The company had just lost $100 million, and the only subject discussed was whether we were all willing to fly Business Class instead of First Class. Nothing else.

Later on, I arranged for the Polygram president to meet with very senior people at three major companies to discuss the formation of a joint venture entertainment company. The morning of the scheduled meeting, my Polygram president asked me to postpone the meeting because he needed to attend a previously unscheduled budget meeting. The joint venture meeting never happened.

For many managers, their operating goal is to doggedly “find the hat” rather than to expand their business activity.

There is a joke about a board meeting of The Really Huge Company: There were two items on the agenda. One concerned the multibillion-dollar investment in nuclear energy, and the discussion concerning it took 3 minutes. The second item was if they were going to continue providing free coffee to their administrative staff, which took over an hour.

The conclusion is that no one knew anything about nuclear energy yet everyone knew about coffee.

I continue to ask myself how an Australian media person like Rupert Murdoch was able to create a media mega-company while the majority of the Hollywood establishment sat around and waited for someone to come along and buy them.

ITYS Alert: Executive Compensation

Lately, I find myself trying to think of gentlemanly ways to say “I told you so” a lot. So I’m creating a new feature: the “ITYS Alert.” That way, I don’t have to say that cocky phrase, but you’ll know what’s coming. Trust me, I’m never happy to say ITYS because it’s always about bad things.

In the Washington Post, Steven Pearlstein opines over the growth of outrageous executive compensation, despite the weak economy:

The data from this spring’s proxy season is mostly in and it shows that after two years of decline, the average compensation for chief executives of the 500 largest U.S. corporations is on the rise again. According to Governance Metrics International, the average “total realized compensation”…was just under $12 million in 2010, up 18 percent from 2009…

This wasn’t supposed to happen.   Continue reading “ITYS Alert: Executive Compensation”