“Well, it seems to me you have a choice to make,” my friend and mentor Dave said to me. We were having our monthly coffee meeting.
We usually met at Peets in Town and Country Center off of El Camino in Palo Alto. It was May and the weather was nice, so we were sitting outside.
The company had been operational for a couple of months. Already there were serious issues. But Dave had honed in on what I thought was a small issue.
The issue was about expense reports. Specifically one expense report I received from my fellow cofounder “Ken”.
Ken had turned in an expense report for a lunch interview he had with a candidate. There was one line item that was bothering me. The line item read:
Ken was going to charge the company for a one mile trip to the restaurant. While he was using his car on company business, it just really rubbed me the wrong way.
So I was talking it over with Dave. That’s when Dave said, “Well, it seems to me you have a choice to make. What type of company are you going to be?
“Are you going to be a company that spends lavishly, or are you going to be company that manages its money carefully?”
Dave’s point was that I would be setting a precedent for employees pushing the boundaries of acceptable spending behavior if I let this go.
I agreed with Dave. Maybe that’s why this seemingly small issue bothered me enough to talk with him about it.
I decided I would bring the issue up at our next staff meeting.
“Are we going to be a company that spends freely, or are we going to be a company that manages its money well?” I asked the group.
Then, I brought up the issue of expense reports and mileage expenses. Without saying it was Ken, I talked about the mileage issue.
“We’re a startup. We can’t do things like (charging one mile trips) that!” One of the other cofounders (“Randy”) said.
“But I thought we said we were going to charge everything we could to the company!” Ken said to Randy.
I was stunned. Ken had revealed himself.
Ken was saying he wasn’t going to operate in the company’s best interest.
Ken was essentially saying that he was going to try and milk every penny he could out of the company. What made things worse was Ken was a millionaire many times over.
It was now clear to me that if I hadn’t taken action Ken would have continued pushing the boundaries. Others, seeing what Ken was getting away with, would have done the same.
Bad behavior spreads if you let it.
We never had this type of issue again. I don’t think I ever turned down an expense report again.
The team acted in a responsible manner. And we never had an official expense report policy. We just told the team to remember that we are using other peoples money (our investors). And we treat that money as if it were our own.
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