A few months ago, our team at Hearty was debating whether or not to renew our office lease. It was about $25,000 for our team of four to keep the space for the year. I looked at the number and thought, “That’s a lot of haircuts.”
Don’t worry. I’m not going crazy. The haircut comparison is actually a little lesson on spending decisions that I learned from my barber, Tony, years ago. He shared this little jewel one day while cutting my hair, and it’s been stuck in my head since then. Let me explain…
Time with Tony
It’s the first Tuesday of the month again, and I’m in the lobby of the global headquarters of Procter & Gamble. People are hustling and bustling about, swiping badges through security, meeting up with friends, and checking in at the front desk.
I take a moment to realize that it’s been nineteen years since I last had my own employee badge to swipe on the way up to the 9th floor. And it’s been four years since I came here to call on our last startup’s clients on various floors. Today, I’m back for a haircut with the man who has been my friend and barber since I first walked into this place twenty-four years ago.
Back then, I was a 20-something new kid in town needing a haircut. My work friends suggested I see Tony Ramundo, who owned the barber shop in the Central Building, along with his brothers. Long before Facebook and Google made news for in-office massages and lunches, P&G and the Ramundo brothers figured that it would be easier for employees to pop downstairs for a trim rather than leave the building. I enjoyed that first haircut and haven’t stopped returning since.
Tony sees that I’ve entered the lobby and walks over with a big smile. We share our version of a bro-hug, and I follow along as he escorts me through security and down an escalator to his barbershop under the stairs. It’s small but bright and clean, with two barber chairs, three waiting seats, a table with that day’s thin local newspaper, and a collection of Cincinnati Reds bobbleheads along a mirrored shelf. I say hello to Tony’s brother, John, who works with a comb and scissors on another customer. I ease into the barber chair and breathe a deep sigh of relaxation.
This is a sanctuary for me, and I’d bet your barbershop or stylist holds a similar spot for you. I’m technically here for a monthly haircut, but what I most enjoy is the camaraderie that we’ve shared over these many years.
Tony asks how my Mom is doing. She’s been on her own since my Dad passed away years ago. I ask if he’s planted his garden yet. We compare the latest updates on my oldest daughter and his oldest grandson, who went off to college at the same time. He asks what’s new with our business, and I share that we decided not to renew our office lease—it’s just too many haircuts.
“That’s a lot of haircuts”
I have no idea how we got on this topic—does anyone ever know who the conversations turn in the barber chair or psychiatrist seat? But years earlier, Tony told me the story of him and his brothers trying to decide how to set up their new, larger barber shop. This would involve seeking a sizeable loan, and the budget was getting stretched.
“We needed to decide whether to spend $10,000 on new equipment instead of using our old chairs. And $10,000 is a lot of haircuts.” Tony went on to describe how he and his brothers always thought in terms of how many haircuts it would take to make investments.
The beauty of this way of looking at spending is that it makes a number feel much more tangible. Numbers on paper alone can’t always communicate the real work that is required to cover the costs.
Behavioral economists would say that thinking in terms of haircuts—or whatever end product your business creates—is a psychological framing tool that can help outwit our monkey brains. A new car would be nice, and a loan is easy to get, but think about how many (haircuts) it will take to pay it off. This ensures that the positive impression of driving that car around town is balanced by the negative impression of how many hours of hard work it will cost to pay for it.
In the case of our office space and recruiting business, $25,000 is roughly our fee for placing two candidates with companies. This is not easy work, and we definitely feel what this decision means. Remembering the feeling of this work forces us to consider if a gain in productivity from seeing each other at an office twice a week will be worth the effort. And we quickly decide that having this space is not going to result in two extra candidate placements in the year ahead.
We found an alternative co-working option at a very low price that allows us to get meeting space the few times a month that we really need to get together. We feel great about our decision and how this makes our business instantly more profitable.
Teaching others to make decisions
Tony also told me that in raising his children, he taught them to think in terms of how many haircuts it would take to buy the things they wanted. This shows another powerful use of this little frame—teaching others to make smart decisions when you’re not around.
Your primary role as a leader is to teach your team to decide on their own what is best for the business. If they can do this, you won’t need countless policies, meetings, or delays as people wait for permission. And by giving people decision-making responsibility, along with some coaching and guardrails, they will love their jobs even more. Human beings want self-direction more than anything else at work.
The trick is teaching, and tricks like “how many haircuts” can help greatly. Instead of just assuming there’s a big pot of money or reading into the fine print of a policy, they learn to test themselves.
Take business trips, for example. There’s probably no area of spending more frustrating for both the employee on the road and the CFO looking at expense reports. Let’s say you’re a consultant that charges a client $250 an hour:
I’m on the West Coast and need to fly back East. I can take the red-eye back tonight or stay until tomorrow and rack up $500 in additional hotel and meal charges. Is that worth 2 hours of consulting? Probably not.
My flight just got delayed for 3 hours. If I spend $50 on a Sky Club day pass, I can work on a client project in peace during that time. That’s $700 in net value created—an easy decision.
Sure, these may be small examples—but we all know little things add up. And, hey! No one had to write a policy or log an exception in Workday.
There’s a bigger lesson (of course)
The game of our lives is filled with characters that bring knowledge and inspiration—if we get off our damn phones and pay attention. Call them guardian angels, muses, or messengers from the universe—whatever. They bring a different perspective, nuggets of wisdom, and a kick in the pants when you need it.
Tony is now in his 70s. He recently dialed his work back to three days per week. His brother in the chair beside me is still working into his 80s. I’m not sure how many more haircuts we will have together. So now, when I greet him each month in the Central Building lobby, I give him a bigger hug and try to savor our time together.
It’s funny how the act of exploring your thoughts through writing can bring you to places you didn’t expect to go when you begin filling a page with words. I started off wanting to capture a simple, useful story about how the price of a haircut can help us make smarter spending decisions at work. I ended up realizing that the time with my barber, Tony, has been a priceless experience in life.
Bob Gilbreath is a 2x-exit entrepreneur and co-founder of Hearty, a curated matchmaking service that combines top software developers with early-stage, venture-backed startups.