October 7, 2019
Our local newspaper recently had an article about Holly Branson flying economy on a Virgin Airline flight with her three kids in tow. What made this story newsworthy is that Holly is the daughter of billionaire Richard Branson—that would be SIR Richard Branson, the airline’s owner. I found her down-to-earth decision refreshing and, apparently, I’m not the only one. The pictures she posted of her trip lit up Instagram.
I’m not easily impressed by displays of extravagance. Don’t get me wrong, I like to enjoy the fruits of my years of hard work just as much as the next person. But I try to be sensitive to the optics of how my decisions and behavior are perceived by those less fortunate, especially when those people are employees or customers. Besides, my senses aren’t refined enough to tell the difference between a $10 bottle of wine and a $100 bottle or to fully appreciate paying $50 for a prime cut of meat. And I don’t think the brain cells that are about to be destroyed by that wine really care.
From a business perspective, I also think it makes good sense to be aware of how our decisions and purchases are perceived by our people. Once again, I’m apparently not the only one who feels this way.
One of my favorite beer brewers, Jim Koch, the billionaire co-founder and chairman of the Boston Beer Company, writes in his memoir, Quench Your Own Thirst: Business Lessons Learned Over a Beer or Two, about his trips to Germany for research on beer ingredients. He says, “On those long trips to Munich, the upgrade from coach to first class is an extra $5,000. I can’t make the math work—the average person at Boston Beer makes $55,000 a year. How can I justify paying over a month’s salary for a first-class ticket? Is having me get a little more legroom and a better meal really more valuable to the company than what the average person contributes every month? I’ve never believed that.” What’s not to like about that logic?!
The privileged seat I’ve occupied as an advisor to small business owners for over three decades has allowed me to have lots of conversations with people—hard working $55,000-a-year folks like Koch mentions above—who work for owners who indulge. It’s not hard to notice the nuanced comments many of them have made about their owner’s purchasing decisions and the impact those decisions had on their ability to have updated equipment to do their jobs or the impact on their compensation.
If the reasons above aren’t convincing enough to have you shun extravagance, consider the competitive implications. This is where the slope gets slippery.
For much of our business lives, small business owners are on the offensive, always chasing competitors, customers, new markets, sales growth, and increased profits.
Ever so subtly we can find ourselves in a defensive position, protecting and defending the things we’ve acquired or the executive privileges we’ve grown accustomed to. Without realizing it, we can grow soft and lose the hunger that led to our success.
I haven’t witnessed many businesses that have suffered because their owners were overly cautious with their perks or purchases. But I’ve seen a lot that have suffered when they weren’t. For my money, I’ll keep flying coach. Maybe I’ll even meet Holly Branson.