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What Does Cash Flow Mean to Employees?

Feb 12, 2019 by Dave Scholten 1 Comment

What Does Cash Flow Mean

When the company does well, our professional lives go forward. But when the company doesn’t do well, eventually, it will impact the employees. The most common employee response to a company failure is “we never saw this coming!”

Over the last 10-20 years, we have watched large, successful U.S. companies enter into failure mode. It constantly hits our media networks.

It’s painful to see the impact of this demise on the people who have committed their professional life to the failing company. The failure of the corporation never seems to be “fair” to these employees. So, it’s appropriate to propose that the company’s success has to be important to the employees.

Benefits of Employee Commitment

Whether an owner or manager, when you run a company, it is lonely at the top. The problems, challenges, opportunities and struggles are most often brought to you to solve. You wake up every morning and hope you will have the intelligence, power and strength to conquer the challenges brought to you today. Then, when you go home at night, the unsolved problems keep you awake.

There’s a way to share the responsibility and a way to get everyone involved (without diminishing your leadership or authority!).

Related Post: Learn how to forecast cash flow with the help of your employees!

There’s a way to make sure your employees are never in the dark about the status of the company and, therefore, never “surprised” by any drastic measures you might have to take. In fact, there’s a way to get them to see (and support) your decisions before they’re even made.

Here are three statements in which I fully believe:

  1. Cash flow trends can be the ultimate measure and indicator of success and/or failure of the company performance.
  2. Your employees are begging you to be transparent with them.
  3. It is important to your employees that they can TRUST you.

Click to Download a Free-Cash Tool

Put These Three Statements to Good Use

If we can assume (and agree) that the above three suggestions are accurate, then employees really want to know the honest financial health of the company including cash flow.

Don’t ever let your pride convince you to hide the bad news, or get in the way of being honest. Honesty doesn’t have to be easy and doesn’t always have to be good news, but it is necessary and fair in every trusting relationship.

It would serve you and your conscience well if you identified a few of the key “success/failure” financial indicators of your company’s performance, and then plan a way to start sharing the “score” involving those indicators with employees.

You might start with your annual update, and then extend that communication to a quarterly update. You should look forward to when your employees start to ask you questions like:

  • Why did that number go up?
  • How does this element impact that number's results?
  • What can we do to make that trend better?

When this happens, YOU HAVE ARRIVED! Your team is asking the questions, are asking to be more included in The Game, and want to learn more about the numbers and how to positively impact the future. You will gain support and teamwork in the future course of your business. Your entire workforce will be engaged in supporting your quest to “win The Game.”

For those employees who don’t embrace the information and learning, keep a close eye on them. Their heads are in the sand, and hopefully they don’t treat your product/service/customers/clients and fellow employees that way.

In conclusion, here is what your company’s cash flow means to employees:

  • Honesty
  • Trust
  • Confidence
  • Continued employment
  • Commitment to the team and organization
  • Faith in the future
  • Winning

So what are you waiting for? Begin sharing the responsibility, show employees that you trust them, and start seeing engagement and support from your team by getting them involved and invested in the numbers. Good luck!

The first step to help employees learn and understand the numbers is financial literacy and business training

Download Financial Literacy Tools


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Topics: Financial Literacy, Planning, Finance, Sustainable Business

Written by Dave Scholten
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About The Great Game of Business

Our approach to running a company was developed to help close one of the biggest gaps in business: the gap between managers and employees. We call our open-book approach The Great Game of Business. What lies at the heart of The Game is a very simple proposition: The best, most efficient, most profitable way to operate a business is to give everybody in the company a voice in saying how the company is run and a stake in the outcome. Let us teach you how to develop a culture of ownership, where employees think, act and feel like owners.