Other People's Money (OPM)

Other People’s Money is often too easy to spend and demands ever greater levels of stewardship...

Design Principles:

  • Build shared risk into funding – when you spend OPM+, you also spend your own resources. Align self-interest with shared-interests
  • Independent evaluation+ is crucial – if for no other reason than perceptions
  • Build self-funding and third party-funding into R&D, bringing third parties into discussions whenever possible
  • Tear down the walls – knowledge can be good or bad regardless of its source. Encourage knowledge bartering with third parties. Don’t allow new money to be spent on old knowledge

Discussion:

  • The temptation is often great to use OPM to advance one’s personal goals, using  tit for tat, insider trading, collusion, etc.
  • Individuals with OPM often use it to fund arguments for their greater share of future OPM
  • It’s too easy to delude yourself into thinking you are acting in the best interests of others when using OPM

Quotes:

The directors of such companies, however, being the managers rather of other people's money+ than of their own, it cannot well be expected, that they should watch over it with the same anxious vigilance with which the partners in a private [firm] frequently watch over their own Smith, Adam (1776). An Inquiry into the Nature and Causes of the Wealth of Nations

I take from the rich and give to the middle class. Well, the upper middle class. Danny DeVito, as "Larry The Liquidator" Garfield in Other People’s Money+

References:

Further Reading