How a Leader Spends Money Tells You Who They Really Are
Take a glimpse of how a leader spends money, both professionally and personally, and you will learn a lot about their values. It’s easy to espouse the expected virtues, but how a leader spends money reflects their true priorities. What a leader purchases, invests in, and acquires displays what matters most to them and how they see themselves.
Leaders, like everyone else, have a distinct relationship with money and resources. Money means many things. It can buy things, create experiences, give people access, support those in need, and grow and expand existing assets. Both professionally and personally, leaders use money to make a statement as to how they expect to influence people and outcomes.
Think about the many inferences those observing leaders often make regarding their spending choices. For example, leaders who invest in their teams with compensation, experiences, and skill development tell team members they are valued and appreciated. While team members are not always privy to the tradeoffs, they believe that leaders who find a way to invest in them do so to recognize their commitment and sacrifices.
Leaders who overspend and take risks with where they place their money are often seen as bold but unpredictable. When these monies disappear without a payoff, others may view the leader as wasteful or as needing to control outcomes (without having a sound understanding of how to do so).
Those who personally make status-enhancing or lavish purchases illustrate their need to keep score and to show others how well they are doing. This reveals their insecurities and their need to feel relevant.
Leaders who set aside money and time for charities are often viewed as more grateful and less self-serving. When charitable contributions are a mainstay and not an afterthought, leaders are often seen as highly compassionate and empathetic.
In contrast, leaders who are overly frugal and count pennies are often viewed as small and short-sighted. They see money as something to hoard rather than something that can expand support and goodwill.
While these are broad generalizations, how leaders spend money and what it reflects is fairly obvious to everyone around them. Over time, colleagues, friends, and family members come to know how a leader views money and uses it to represent their values.
Whether they put their money where their mouth is can suggest a mismatch between values and spending habits, revealing what really matters to the leader. We always give more credibility to the money trail than we do to the values leaders say they hold.
How a leader spends money is a barometer of their self-concept and how they orient to the world. Money is a tool that allows a leader to live their values and invest in what matters most to them. Money talks. What is it saying about you?
Yes, indeed. We spend our money on the things that we value, don't we?
I think we know far less about our colleagues and leaders than we did before covid, in this sense though. When we went to the office all of the time, we'd see more of someone's wardrobe, their cars, their lunch, their handbags etc etc. We miss some of that now, being that we're not always in close physical proximity.
Unless people volunteer or drop into conversation what they have and what they own, I guess we often don't know...
True. Very true. I worked for a university president who would submit individual receipts for small items, such as gum that he purchased while traveling. Another one demanded a new car when he was hired because the one driven by his predecessor was not luxurious enough. A third would spend extra days at her destinations while traveling so that she did not have to take morning flights, which she hated.
In contrast, I worked for a president who refused to spent university money on renovations to the president’s house so that it would be available for other priorities.
Guess which one of these was a wonderful president.