Leadership Series: Getting Your Money's Worth

This essayist started full time work in a large and growing well known business. His job was to investigate all the financial implications of investing in plant, machinery and equipment to increase the profitability of his employer. In fact his job was to deal with those who ran the factory and who were responsible for producing the finished goods of the company in a consistent high quality manner that met unit production estimates at a predetermined budgeted cost. The factory folks were not necessarily college educated; their education was nevertheless thorough and they prided themselves on attaining the objectives described above. They knew they would be measured and they knew their behinds were on the line for the task at hand and the money spent to get the job done.

Now investigating the financial implications of investing in plant, machinery and equipment to increase profitability requires a pretty good knowledge of the production process and the only way to learn that process is to show up on the factory floor; shut up; pay attention; listen and then do it again the next day and the day after. Showing up and shutting up were as important as using present value tables and advanced cash flow analysis. It also didn’t hurt to have a thick skin because the old line production guys, while part of the big team, still were only too ready to determine if this new kid had any persistence to go along with the twirling propeller on the beanie on top of his pointed head.

Persistence pays; but so does showing up and shutting up. So what does all this have to do with “getting your money’s worth?” Here’s what. When you show and shut up you create the environment in which trust can develop. And when trust develops you actually learn about people and what they can do and can’t do and what they need and what they want. In other words you find out what is really going on; not what someone may want you to think is really going on. Here is what this essayist learned.

There are people with whom you could trust your last dollar because you know they will give it the same care and attention as they would their own last dollar. And then there are the others. You also learn that there are people who spend the company’s money as if it is their own and then there are people who spend the company’s money as if it were other people’s money. And the test to separate the former from the latter is “are you getting your money’s worth?” And we taxpaying Americans are not getting our money’s worth. So, when the next pundit tells you that Obama’s favorable ratings are low or that the poll says no one trusts congress and then they tell you they are sick of the bipartisan bickering and the finger pointing and all the rest, you tell them that is not the reason at all. The reason is the people who work and pay taxes and play by good financial rules are just not getting their money’s worth. There are too many ways in which they are not getting their money’s worth to document them in this essay. But here are a few:

• Money sent to foreign lands for wars and other purposes is wasted. There is no measurable, productive consequence to the expenditure  ( Read the book:  Imperial Life in the Emerald City by Rajiv Chandrasekaran)
• Money spent domestically is largely spent on administration, personnel and bureaucracies and not on measurable, tangible improvements ( Read any article about San Francisco’s billion dollar Chinatown subway)
• Money spent by government is not spent according to the discipline of frugality and value that the government employees apply to their own funds but rather are wasted because there is no possible way to monitor the quantity of expenditures and follow the myriad of rules and procedures and laws and political meddling
• Fraud and illegality are now rampant throughout all domestic and foreign spending
• Measurement of attaining specific predetermined objectives is non existent

Leaders do not tolerate this situation because it leads to destruction of confidence and that builds more corruption and waste. Leaders demand measurable objective setting before funding; government demands funding and then sets vague, non measurable objectives.

The disgust with governance throughout this country is not based on social agendas or bipartisan bickering; it is the consequence of too many people being paid too much for no measurable result. When you don’t show up and shut up but clamor for more spending and more government you destroy trust and confidence. When year after year the people who pay taxes and have to look at the growing debt as their responsibility to repay and then see what they are getting for their money, they turn away in disgust.

The old fool from Omaha says he wants to send more of his money to Washington and he wants Washington to take more money from his equally well heeled peers. This position is in direct conflict with what this wise old fool requires of his own business associates and investments. He literally speaks with a forked tongue; demanding measurable quality output from the money he oversees as a businessman and tolerating not getting his money’s worth from the money he sends to Washington. No real leader tolerates waste whether it steals 10% of your earnings or 50% of your earnings. Principled people and leaders are dissatisfied with either. A leader would fight for responsible spending. Could the old fool see some benefit for his companies in government waste? Why he is so inconsistent is up for others to determine but we question if he has an agenda that is tolerant of wasting other people’s money as long as some of it lines his pockets.

Shame on people who don’t believe in spending other people’s money as they spend their own and who don’t demand getting their money’s worth. We think getting your money’s worth is a fundamental of leadership.