8.26.11: Treat Other People’s Money As If It Were Your Own
Yesterday I had lunch in a rain drenched NYC with a rain drenched advisor (Ed Busby was literally soaked beyond the point of recognition when he arrived) and we finished up with a short discussion on the importance of raising quality capital – perhaps for an ark if Irene hits…
The one dominant thought that came into my mind wasn’t necessarily *who* the investment partner was, but how any business – young or old – treats other people’s money.
It reminded me how fortunate I was to spend time with the late Ray Anderson, filming him for 50 Lessons, my former company. Although Ray is considered a visionary business leader, best known for transforming a carpet tile company, abundant in hazardous petrochemicals, into a model for environmental sustainability, he is also one of the most experienced, humble entrepreneurs I have ever met.
As the filming rolled on, I was pleasantly surprised to hear Ray candidly share his first-hand experiences of being an entrepreneur as well as CEO and Chairman of a global organization. In fact, he recalled many of his difficult experiences in starting Interface, Inc, ‘in the teeth of the worst recession since 1929′.
The most profound lesson Ray shared, was on the importance of treating other people’s money as though it was your own. It was profound, brutally honest and had an incredibly deep impact on me. His story centers around a concentrated series of acquisitions which were funded by others people’s money in the form of bond offerings and selling stock. In Ray’s words, ‘it was too easy’.
He concluded the session like this: ‘If we’d been spending our own money, we would have thought very hard about those acquisitions. In the long run, they turned out to be a mistake, and six, seven years later we began to dismantle this distribution system and liquidate it, selling the businesses back to the owners or back to the employees. And we might not ever have undertaken that unfortunate series of investments if we’d been investing our own money. We would have questioned it.’
Ray’s wisdom has stuck with me and it’s central to how I act and behave both professionally and for that matter, personally. At the risk of climbing up on a soap box, I believe this lesson should be a mantra for any organization (public or private), any size.
I’m not sure of you can still watch the video if you are not a 50 Lessons subscriber, but we published the lesson in print in our Harvard Business Press series ‘Straight Talk From The World’s Top Business Leaders‘.
Sadly Ray Anderson recently passed (9 August 2011), but his legacy lives on.
Adam Sodowick