I once worked for a company who had the mantra “Spend the company’s money like it is your own”. For those of us straight out of university this was a great joke. As soon as we got to go on a business trip or one of our group got an expense budget – we did just that, and eat and drank more of the company’s money than we should have.
There are reasonable arguments as to whether the “Spend the company’s money like it is your own” mantra is good or bad. On the one hand it frees employees from bureaucracy, on the other hand it leads to poor spending decision making – as the above illustrates.
The intent of course is good. I think the issue is with the word “spend”. It would be better if we replaced it with “invest”. So, the mantra becomes “Invest the company’s money like it is your own”. The word “invest” generates considerations of wisdom, long-term thinking, return on investment and even portfolio management.
Too often we think of “spend” as required when it comes to strategic initiatives or decisions. Spending on transformation especially a digital transformation is required. Spending on new systems to enhance the customer or employee experience is required. Spending on maintenance, repair and operations (MRO) is required. But is the executive leadership team aligned around these investments?
We often see executive leadership teams, steering committees or others claim to be aligned around spending. Of course they are, as its not their money. Rarely are they held accountable for spending and certainly not for their investments, and the ROI to the organization. For a strategic initiative to be successful, the executive leadership team needs to be fully aligned around its investment decisions and outcomes.
So, how can we ensure alignment around the investment in a strategic initiative? We need leaders to have a clear view as to the investment tradeoffs and the ROI. We need leaders to commit their time, their organizations or departments funds and most importantly, their best resources to an initiative. We need leaders to prioritize the work of the initiative above other work they may have ongoing. Ultimately, we need leaders to invest the company’s money like it was their own.
Too often the ROI is virtually ignored once it passes some corporate hurdle rate and is in someone else’s budget. The investment decision "spreadsheets well", but is impersonal, there are no tradeoffs, the decision makers as a group are sacrificing little and risking nothing. Taking a venture capital mindset, one might ask “if you are not an investor why are you at the table?” One way of ensuring some skin in the game is to set the expectation that leaders are committing their time – not one hour bi-weekly to attend a steering committee show and tell – but real time to lead, make decisions and actively help deliver ROI. Another is to ensure leaders are investing their organizations or departments funds and therefore performing some level of portfolio management and making what I call “compared to what?” decisions or trade-offs. If they are not prepared to do this it says something about the initiative in the first place. One of he best measures of an aligned investment decision is resources. A sign of lackluster commitment or investment in a strategic initiative is the provision of B- resources. This happens (way) too often. A client I worked with used to say when asking his peers for resources to staff a strategic initiative, “if its not hurting you then you are giving me the wrong people”.
Finally, we should also ask those who invest, to own the outcome – just like they would with their personal portfolios. Far too often the original “investors” move on, for example by leaving the leadership team or steering committee. While this may absolve them from the outcomes of decisions made after their tenure, it does not absolve them from the original investment decision. If you were investing the company’s money like it was your own, you would not invest, ride the market to the bottom, move on and then claim it was a great investment – at some point you would realign your portfolio and get out – or at least I hope so. This is the clear-eyed and aligned investment mindset we rarely see but need more of in executive leadership teams and steering committees.
Spending on food and (copious amounts of) drink was “required” but it was not a good investment of the company’s money or our personal wellbeing - especially the day after.
What is alignment? How do we align around an initiative? How do we know we are aligned? These are really hard questions. Questions we are answering at AlignedAround. I would welcome your thoughts.
Photo by Towfiqu barbhuiya on Unsplash