Wednesday, May 03, 2006

The Value of Money

Now to the vast majority of mankind, a million quid is an awful lot of money. The thing is, to a large corporate like the one I work for, its pocket money, a rounding error. It is such a relatively small amount that the big beasts who run finance can loose track of it.

That changes people’s attitudes. They know its meaningless to the company as a whole, and so it becomes something else. Those big numbers become mere status symbols, bragging rights and are used for metaphorical willy waving. People who wouldn’t dream of spending their own money in extravagant fashions, throw caution to the breeze and flaunt it when it’s the company’s money.

Yesterday I saw another example of it. It was a small meeting, two directors, two senior managers. All there to discuss one of the managers pet projects. Roughly speaking the cost of the project was a million pounds. Three of us had met separately and had generally agreed that it was not the right time for this particular project. Though it had merits, in the grander scheme of things doing it now would almost certainly mean we would do some or the entire project over when other works finished.

That is the nature of corporate life, there can be a necessary sequence of things. Do it in the wrong order and it inevitably means redoing one of the earlier segments. Think of baking a cake, one you want to decorate with cherries and raisons. If you put the ornaments in the pan prior to mixing and pouring in the batter, you will almost certainly ruin your lovely arrangement of tasty bits. Far better to bake the cake and put on the ornaments after.

Therefore, this little project was discussed. It was to build an ecommerce site that could be used by all our digital properties. Thing is, our dear company was not yet entirely sure what its retail aspirations where. We publish, and know very well how to sell newspapers, magazines, books and the like. Re-using some of our brands to sell related items has an attraction. Its easy money, you rent your brand and someone else does all the hard work taking the orders, delivering the good and just sends you a cheque once in a while. Brand extensions can be highly profitably things, think of all the things Branson sells with the Virgin label, many of them just rent the brand from him.

There was another project about to be kicked off to really look at this area. Maybe it would be better to have tighter relations with some of the vendors, even manage the sale and customer service of the goods to ensure the customer experience of our brand was uniform and safe. These are big questions, and could substantially alter what sort of ecommerce site we built.

But no, it has to be now, waiting isn’t possible. The site has been talked about and talked about and how would it look if we delayed it? So a decision taken in a dynamic of three managers, changes when the fourth is added to the mix. Frankly, I think my fellow director may fancy the manager with the plan, and so he wavers. We haggle and compromise and come up with a solution that only spends some of the money now. I’m certain its money down the drain as we’ll re-spend it when the strategic project is done, but I’ve done my bit to protect the company’s interests. I can’t completely say no as I’ve got my own projects to protect, my own willy waving to do, and being the nay sayer here, means a potential loss of support over there. The value of money has changed, and another day is done.

Besides, its not my money, is it?


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