The Eagle Blog

Does the Average Manager even think like a Business Person?

You only have to read the press to see the number of people that think corporations are bottomless money pits! The Conrad Black trial and those of the Enron, Tyco and Worldcom executives before him to name but a few high profile cases.

Kevin Dee’s realities of running a business are pretty simple really. Unless you are a non-profit organization then you are in business to make money. In order to make money you need to make more than you spend. This requires focus in a couple of areas (1) growing your revenues and (2) controlling your costs. Pretty fundamental!

If you are in a management position in any company then it is your responsibility to support the goals of the organization … and protecting the ability to be profitable is one of the keys of any business. Conrad Black appears to have spent company money to suit his lifestyle and quite often the comment has been made that he was spending shareholder money, perhaps he thought he was running a private company. I can tell you that running a private company should be no different! If I treated Eagle’s finances as my personal cheque book that would not be fair to MY shareholders, and very likely it would be stretching the limits of our various taxation authorities!

So … I would contend that private corporations need to act with the same level of fiscal responsibility as any public company.

Secondly, I would say that managers of either public or private corporations should examine the “business” decisions they make when spending company money. Some very high profile executives have been in the press for their excesses … but surely the average manager makes the same kind of decisions on a smaller scale. Does it make sense to spend a ton of money on a dinner at a fancy restaurant if there is a more cost effective answer? Do you really need to golf, or would dinner be a better option? Would a breakfast or coffee meeting achieve the same end? Do you need to go on training in that sunny resort, or is it available locally? Do you need to stay at the expensive hotel or will a slightly lower cost solution be just fine?

There are a lot of decisions that managers make every day that approximate, except for scale, to the kind of decisions that Conrad Black made. Would you protect the interests of the company/shareholder or would you assume the company (read shareholders)can afford it?

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