Drip-drip-drip — We have to patch that hole before it sinks us

USS_Towers_DDG-9_sinkingMr. Jim Romenesko continues to be spattered with leaks from Patch, the local news arm of AOL, which he promptly, like a dog shaking off the wet, publishes on his blog (here.)

I have followed this leakage with, frankly, an increasing sense of amazement, starting with the leaking of the less than graceful and very public firing of Patch employee Mr. Abel Lenz by Mr. Tim Armstrong, the CEO of AOL (read about this here.)

Recently, the sales objectives of Patch were leaked in the form of two memorandums written by Mr. Jim Lipuma, Patch’s head of sales in the United States, and we promptly dissected this information in a posting (here,) where we arrived at the following conclusion:

    If we assume 260 working days, Patch’s sales people in the United States needs to secure $26 million per year in net new sales.

    If we instead assume that the days that Mr. Lipuma is referring to are calendar days (more likely, I think,) then Patch’s sales people in the United States needs to secure $36.5 million per year.

Today, it would appear that someone linked the actual sales goals and the attainment numbers for the United States market for Patch to Mr. Romenesko, and, of course, Mr. Romensko published them in his blog together with pictures from the meeting where Mr. Lenz was fired (you can see Mr. Romenesko’s blog posting here.)

Here are the sales goals and the attainments in a nice table form:

bookings

So, my $36.5 million sales target was almost spot on. At $9,038,230 as a target for the quarter, and assuming that the is baked-in growth quarter over quarter, the annual sales goal, as reflected in the leaked table, is $36.2 million. Moreover — and this should be enormously alarming to the AOL Board of Directors — the year-to-date achievement of the sales goal is seriously bad.

The firing of Mr. Lenz was clearly a mistake of the highest order and the subsequent mea culpa… eh… mea innocentia by Mr. Armstrong (read about it here) should cause some raised eyebrows in the board room of AOL.

However, it is becoming clear that, Mr. Armstrong’s odd behavior aside, the leaking is a critical problem, which has the potential for throwing Patch and AOL into a state of in extremis, and that must be dealt with immediately.

Sales goals and sales achievement numbers is extremely sensitive information, in particular in publicly traded company, and not withstanding Mr. Armstrong’s bizarre sweeping aside of the fact that AOL and Patch is evidently leaking more than the Titanic on April 15th, 1912, is something that should be dealt with decisively and immediately.

This is a corporate governance issue of the highest order. On-the-spot firing of someone that takes pictures at an internal meeting seems a little excessive and could reasonably be expected to make the Board of Directors question the judgement of the CEO of a multi-billion dollar corporation. Not taking immediate and extensive steps to finding and stopping the leaking of sales goals of and sales achievement numbers in a publicly traded, multi-billion dollar corporation is totally unacceptable and should make the Board of Directors question the judgement of such corporation’s CEO.

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