“Open my books to my employees? Are you crazy? If they see how much profit we make around here, they’ll want a raise!”
If that’s your sentiment about sharing numbers, I have a news flash for you: They already want a raise.
There is a flip side to this argument. It goes something like this: “Open my books to my employees? Are you crazy? If they see how much money we’re losing around here, they’ll leave!”
Regardless of your position on financial transparency, here are some tips for making this transition smooth and worthwhile.
Lay the groundwork
If you have a work environment characterized by drama, gossip, back-biting, finger-pointing and excuses, chances are open-book management will do nothing but create additional problems. You may want to share your financial information with responsible adults who are interested in playing a part in your company’s success. You probably don’t want to share it with selfish whiners with poisonous attitudes. If this is your situation, a good house cleaning is in order … whether or not you intend to share financials.
A discussion with your team is also a good idea, explaining why you’ll start sharing certain financial information.
Just in case it’s not widely known throughout your company that you don’t print money - nor do you have a money tree in the parking lot – go ahead and point that out. Explain that we’ve got to take in more than we spend. (By the way, this is a dead-simple definition of profit. It’s likely this will be the first time most of your employees will have had that concept explained to them.)
Let them know that if they want raises, improved benefits and new computers on their desks we all have to play a role in funding those expenditures … by attracting and retaining customers, keeping costs down and being productive.
Done right, this kind of frank discussion leads your employees to the inevitable conclusion that only if the company is financially successful can it help its employees be financially successful. And helping the company succeed is everyone’s job.
How much information is enough?
You’ll have to decide how much transparency is right for you, but some things – like salaries – can and should be private. When in doubt, ask yourself, “Can my employees use this information to do their jobs better or otherwise help the company?”
Start small. Identify one problem area that most of your team can impact. Reveal that number and ask for help bringing it into line. You might even consider a small reward for everyone if you are able to hit a predetermined target in that area. Use that small “win” as a model for future successes.
Another “start small” idea: Put individuals in charge of specific expenses. Office supplies. Paper towels. Magazine subscriptions. Give them some guidance and let them see what they can do.
Not a quick fix
Opening the books is a big deal, not to be taken lightly. And, it’s not an overnight cure for what ails your company. But combined with leadership and common sense, a dose of transparency might be your formula for success.
Bill Collier is the author of “How to Succeed as a Small Business Owner … and Still Have a Life” and is the St. Louis area coach for The Great Game of Business. He helps businesses improve their financial results by teaching employees to think and act like owners. He can be reached at 314-221-8558 or email@example.com.