Taking Money Personally - Susan de la Vergne

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Taking Money Personally: Entrepreneurial Leadership

Susan de la Vergne

I once worked for a VP in a large corporation who said that, as managers, we should manage company money as if it were our own. What he meant, of course, was that we should be as careful with company money as we were with our own funds. (I guess he was assuming we were the sorts of people who balanced our checking accounts regularly and filed our taxes on time.) We shouldn’t, for example, be cavalier about large sums of money—“Oh, look, it’s only $3000 over budget”—just because we assumed there was corporate money somewhere and this or that expense amount couldn’t really hurt that much.

I know I’ve done it myself, looked at an expensive price tag for a conference, for travel, supplies or tuition reimbursement and had, really, very little context to evaluate whether the dollar amount was worth it to us, worth it to the company. But once our VP put it in those terms—manage it like it’s your own—I had a different frame of reference. Does $3000 matter to me personally? You bet.

Taking company money personally—that’s thinking like an entrepreneur, which is not something everyone in engineering leadership positions has had an opportunity to try on for size. But staying sharp about the numbers, and knowing the implications of everyday financial decisions, will help companies steer through the current economic meteor shower and so they emerge intact.

How do you instill in others the need to take financial decisions to heart? Or how do you develop it in yourself?

One of the problems with managing financials is that it seems, to some engineering managers, like a secondary concern. The first order of the day is solving problems, working the kinks out of the latest implementation, driving some seriously destructive testing, or meeting an urgent deadline. Poring over columns of numbers looking for errors in judgment, planning or execution is much less fun.

Here are a few suggestions that can help:

1) In regular meetings, review financials first—at least sometimes. While many organizations review financials regularly, for some it’s an afterthought. After the project updates, the product design arguments, or the discussion about postponing the new release, then they whip out the over-crowded spreadsheets and look for anomalies. By then everyone’s had it, and those who were double-booked in meetings are leaving the room. Try shaking up the agenda. Start with financials first.

2) Discuss and demonstrate both fiscal prudence and urgency. The VP who advised managing company money with as much care as if it were our own did so himself, and everyone noticed. No one escaped financial reviews, either. Whether you enjoyed wading through the numbers or not, every week there was ample opportunity to explain why you were where you were with respect to expenses.

3) Educate managers about accounting practices. There are courses in accounting for non-financial managers, which can backfill this gap for those who need it. If you’re lucky enough to have an Audit group, ask if they can steer you to external resources to help your staff sharpen their financial acumen.

Entrepreneurial thinking about company financials means everyone who’s responsible for the flow of money—in or out—needs to care about it personally. That’s much easier to do if reviewing financials and making fiscal decisions is a familiar and engaging activity for everyone in leadership positions. This requires conducting financial reviews leaders can connect to, as well as the right financial leadership inspiration from the top, and the education to help non-financial managers make the best decisions for your bottom line.