Thursday, March 19, 2009
Vikram Pandit, the CEO of Citigroup, is spending $10 million to remodel the bank's executive offices. According to the linked story, most of the relevant permit applications were made back in September, which means the decision to do it had to have been made back in the summer. More to the point, the work is being done to consolidate a bunch of offices together as part of a much larger reduction in space that will save the bank money. Seems like a non-story to me, even if not in the fevered swamps of the mainstream media.
All of that said, if I were a publicly noticeable executive of a company getting government assistance or asking others to make great sacrifices, I would make a personal point of living like a corporate Ghandi. I would drive my own car, take taxis, ride the subway, wear conspicuously cheap suits, fly coach, stay in "road warrior" hotels, eat in inexpensive restaurants, buy the furnishings for my office at Office Depot, and find a way to make all of that well-known to my employees. A little bit of visible humility and self-sacrifice, however insincere, would go a long way.
There used to be something known as Yankee thrift. Some of these companies would do well to reclaim some of our heritage.
That these companies spend like this, simply points out mismanagement that has been going on for years.
Of course the answer is government, but boards that actually hold executives to account and question excessive pay and other perks rather than rubber stamping them.
Some of my business friends have two private offices -- an elegant one to impress suppliers and successful customers (people like to do business with winners, not losers) and a spartan one for meetings with misers and government employees.
"In what meaningful way would that behaviour differ from yours as a less noticable executive of public company?"
If one wants to advocate different corporate standards of thrift as a general matter, that's fine, but why does the element of the personal have to introduced? It's unnecessary at the very least, in making the point, and kind of uncomfortable. TH can respond himself, but I would like to suggest that we leave our host out of the discussion.
Years ago 3-M Corporation built a new international headquarters building. In order to reduce costly remodels due to promotion the Architect designed all executive offices to be exactly the same size. The executives could draw on a warehouse of company owned furnishings in 7 price brackets, depending on their responsibilities. I have never been able to follow up to find out if the scheme worked, but it seems it would have saved them a small fortune.
MTF: "I would like to suggest that we leave our host out of the discussion ..."
Over the past three years, TH often has included personal facts when he has discussed this topic, MTF.
Business is theater. The image you project depends on the nature of your business. You do whatever helps you achieve your goals.
In my own case (international trade), the "Noble House" lifestyle works best. (See the "Noble House" DVD for more details. You can buy it at Amazon.)
To be clear, I do all of "drive my own car, take taxis, ride the subway, wear conspicuously cheap suits, fly coach, stay in "road warrior" hotels, and eat in inexpensive restaurants." There is somewhat nicer furniture in my office, but I had no choice in the matter and the chairs are still naugahyde. I am famously cheap when I travel. I fly coach everywhere unless I get a free upgrade. A couple of years back, when I had to go to Australia and Japan, I not only flew coach but I flew a deliberately long route (NY-Tokyo-Melbourne-Tokyo-NY) instead of a triangular route to save several thousand dollars. Don't get me wrong -- I hate flying across oceans in coach -- but I am in charge of travel policy at my company and my attitude is that I am going to live by whatever rules I set for others.
In fairness to Citi Group (to which I owe a large amount of money, heh), they are a multi-billion dollar corporation (still?), and though the scale and number of offices is not mentioned, $10 million dollars for office remodeling in a skyscraper in New York City does not sound outrageous in the least.
That could include a new phone system, data lines, electrical and plumbing work, along with carpeting, furniture, etc.
This is the price, both psychological and practical, for electing a stealth socialist-collectivist as President. Abasement to those who lead from behind will be the norm. And it is interesting how many Americans seem to think this is a good thing.
It will take a long time to wash this out of our system.
DEC - It's been a number of years since I watched or read Noble House, but I seem to recall that there were some fairly attractive and talented females (such as Casey Tcholok) as part of the story.
Are you Dunross, Gornt, or Bartlett?
Yes, TH, it is. Watch the DVD.
In my opinion James Clavell's books "Tai-Pan" and "Noble House" are the best novels about business in Asia. The stories have some things in common with the history of the Jardine Matheson Group.
Please bother to get the story straight. The $10mm is being invested to combine executive offices on two floors into one. The executives wind up with more austere offices, and Citi will sublet the vacated floor. This will result in a net savings.