“Nobody can see until the end of the month – never mind into the third quarter,” commented an olefins trader recently.
“The reason is that very senior managers are too busy micro-managing everything, from getting involved in trying to track commodity chemical price direction to insisting on signing off every expenditure over a few hundred dollars.
“The problem with these senior guys when they track markets is that they are so out-of-the-loop – assuming that they have ever actually been in the loop – that they don’t know what they are doing.”
I heard of one big company where the CEO has even insisted on signing off travel authorisation to next week’s APIC conference in South Korea.
In these days of tight credit and collapsed sales, it’s understandable that much tighter control on spending is essential.
And during the boom years, can we all honestly say that every single trip we made was entirely commercially justified – and that we were always sufficiently foused on the bottom line to get maximum value out of each trip? Look back at your old expenses forms and count up the number of genuine “drinks with Mr Kim” entries.
It will be interesting to see how the lessons being learnt today will be remembered when the economy has fully recovered.
But from a HR perspective, a tough sign-off regime needs to be well-communicated.
So does the senior guys tracking shifts in chemicals pricing – whether competently or incompetently – otherwise the workers on the ground are likely to become demoralised.
They are unlikely to be able to leave in this current climate, but will surely perform far worse if they feel their opinions are being ignored for no good and well-explained reasons.
Off-the-record, of course, how does your company measure up?
And did you fiddle your expenses during the good times?