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Sunday, May 29, 2005

3 Hats - how to make decisisons

When you have critical business decisions in the business, as a senior person you actually have 3 roles, each of which could give a different result.

You are a SHAREHOLDER - so decisions are all about using capital t gow the longer term strateegic value of the company

You are an EMPLOYEE - do decision are about increasing salary and compensation and improving working environment

You are a DIRECTOR - so decision are about the fair governance of the company, maximising returns, and developing a strong business.

What brings this into stark contrast is the decisions in the early days about what to pay you and the other founders.

As SHAREHOLDER - nothing, we want all revenue to go into growing the company
As EMPLOYEE - everything, we want to be paid as much as is available
As DIRECTOR - enough to stop the employee leaving - a balance to keep company rgrowing, but not lose valuable staff.

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