Alberto Fernández Terricabras, Professor, IESE, University of Navarra
Relax, pay the business
Much has been and will be said about F.C. Barcelona's high expenses and the need for them. It is true that some of them may be justified by their relationship with the generation of income or with sporting results. This is the case of player bonuses. For other expenses, such as those related to the hiring of detectives, there is little justification. And in some cases it is a question of moderation. No one disputes the need for a expense catering service in the box, but what is the right amount?
It is common, although not justifiable, for us to behave more laxly when business pays than when we do it ourselves. I remember that, on one occasion, when I told a friend to call me on the intercom when I got home, he told me that he would do it from his cell phone when he was nearby. "Relax, pay the business!", he blurted out. And without remorse of conscience.
Expenses in restaurants and hotels, calls from work, leaving the computer or lights on, making cabs wait, taking expensive flights without looking for cheaper alternatives, and a long etcetera. Who cares? Pay the business!
Why do we behave this way? Surely for various reasons. There will be those who consider that they are not well paid and that they are overpaid; others will think that since there are colleagues who do it, they do it too; that expense is insignificant within the total expenses of the organization; and many, I am sure, do not even realize the abuse and lack of honesty that this means. It is good to develop a culture of austerity in companies. Austerity starts from the self, from oneself, because if we have not learned to live austerely, we will not know how to and will not be able to apply this culture, for which it is vital to lead by example. Some companies have fired workers, for example, for committing gastronomic excesses at position of the business, which I think is fine. I remember, on the other hand, the case of a business that banned first class travel class; however, the director general continued to do so.
It will also help to create expense policies and good expense tracking. There are managers who do not even know what certain expenses represent, even though they are important for their organization.
It is necessary to analyze data and dedicate time to establish measures for their reduction. Some of these are related to negotiation with suppliers, others to organizational or technical improvements, but a large number are related to individual attitudes and the culture that we know how to create.
The border between austerity and stinginess is usually clear. It is not about not spending but spending what is necessary without falling into excess. If there is a reason to travel first class or go to a luxury hotel, go for it, but it should be the exception, not the rule. And as a worker, how can you know what is a reasonable expense ? Very simple: think about whether you would do the same if you had to pay for it yourself. If you behave with business as you would behave with yourself, you won't go wrong.