People learn vicariously. Remember, babies learn language by watching lips, observing adult reaching behavior and listening to the sounds from our mouths. It’s an amazing feat. Then society sends children to school to make them dumb, but that’s another story.

Adults also learn vicariously. You would think leaders would know that. Leaders model behavior for everyone they lead.  The lack of awareness on the part of unscrupulous leaders, or let’s say insensitive leaders, provides observers with frequent comic relief.

This humorous commentary on the number of private jets owned by corporations, and the number of hours logged on those jets for person use (vacation and weekends) by company officers, is entertaining reading.

The commentary makes fun of the idea that executives need the private planes for personal security. More importantly, the number of hours flown for private use doesn’t go unnoticed by employees. If it’s wrong for an employee to pad the expense account by 25 bucks, then using company jets for personal use must also be wrong.

Many executives obviously don’t see the connection. Even if the moral and ethical issues are ignored, if you look at the big picture and count all the costs, this is a no brainer. Stop the personal trips, eliminate the private jets.

For the sake of completeness, you need to hear the executive’s perspective. The argument made by officers, not stated in the editorial, is that the private jets save time, and since the executives’ time is so valuable, the purchase of private jets makes economic sense. Take a $10,000,000/year salary. Assuming 47 weeks a year (52 minus vacation, holidays, and sick leave) times 50 hours per week, and that comes to $4,255 per hour. If each trip saves one to two hours each way, the lost “productivity” is $8,510 to $17,020 per round trip. It would waste company money for these important people to drive to far-away airports, fit their schedule to the commercial airline’s schedule, wait in security lines, and so forth. Sounds so rational, you might even buy it.

Many years ago, a young financial analyst (who looked like me, but much younger), received an assignment from the director of international finance to analyze all the expense reports of the European GM. He too used a corporate jet for personal use. BTW, this GM was the brother of the CEO. Although the GM was married to Ginger Rogers (yes, THE Ginger Rogers-Fred Astaire’s former dance partner), the GM enjoyed flying his girlfriend to the French Rivera on weekends.

In those days, corporate jet rides didn’t even show up on expense reports, but his expensive gifts and dining habits did. Let’s just say he loved entertaining; it was a personal genius.

Of course, the analyst swore an oath not to reveal the data, and of course, the Director of Finance would do nothing with the hush-hush report. The big joke was that none of this was secret, nearly everyone in the company knew about the affair and the trips to the French Rivera. My job entailed supplying details and exact figures to well known rumors of extravagant spending by the European GM.

Returning to today’s debate over private jets and personal trips by executives, the full costs of executive perks (and sometimes abuse) isn’t in the financial statements. The huge missing calculation is loss of employee engagement. The “do as I say, not as I do” approach to corporate governance undermines trust. Firing the employee for padding the expense account by $25 is a good thing, but it’s total hypocrisy when the decision is made from the corporate jet on its way to Aspen. Leadership is impossible without trust, because without trust, there’s no followership.

Using company assets for personal use, even if the executives pay the fuel costs, is way out of bounds.

The argument for the jets in the first place doesn’t work either. Most corporations don’t have core competencies in jets. Private companies own jets for flying anyone, anywhere. Charter the flights; get out of the jet ownership business.

If executives are so concerned about “saving” the company money, perhaps they should cut their executive salaries by a few million each. Who wouldn’t be in favor of that? However, the real cost, the unaccounted for massive cost, bubbles up at the water coolers and the coffee machines.

Employees are spending time gossiping about what’s wrong with the behavior and thinking at the top of the company. Directors of Finance are asking analysts to figure out the true costs of escapades, out of soap-opera like curiosity. Everyone is pulled off focus from what helps the companies compete and create value. If salaries are $1 billion a year, what’s the cost of a 1% drop in productivity? Ten million bucks buys quite a few jets, or you could buy a second CEO for the heck of it.

Seriously, the low trust and lost focus costs far more than 1%. These executives are flying high and low at the same time. Remember people learn vicariously and make judgments all the time. If you sit on a board, you know what to do. If you run a company, do the right thing. Come back to earth,.......so your company, people, and customers can soar.

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Michael Cushman, The Engaging Guru, wants you to master enrolling others in your truth, get the goodies of life, and change the world.  www.engagingchange.com