Knowledge is power, or in its original Latin, “Scientia potentia est.” The saying, attributed to the 16th century writings of Sir Francis Bacon may be a centuries-old sentiment, but the idea has significant applications in today’s business world.
A good modern manager should be familiar with the old Latin phrase in its new forms: open-book management and financial transparency. Here’s why transparency in the workplace matters.
A lot of managers make the mistake of overlooking employee morale, but it’s not smart to ignore it—employee morale has an impact on your bottom line. It’s not just issues such as absenteeism or high turnover, which certainly can and will cost you time and money. A motivated employee will also try harder and put in extra effort and increase productivity. One of the top tips for boosting employee morale? Keeping your team informed—and that includes financials.
Sharing Your Vision
You’ve heard the cliche, “the blind leading the blind.” Being transparent and arming your employees with the facts gives them a clear view of what metrics they need to perform, and how your business needs to perform to succeed.
Sharing your vision gives employees an emotional stake in your company. You encourage employee engagement by giving your people a reason to engage. It’s hard to sell something—whether it’s a product, a service or an idea—without knowing how much you need to sell and why. In other words, don’t leave your people in the dark when you need them to light the way.
Today’s Business Climate
The business world today has about as much in common with the business climate of 20 years ago as an iPhone has with an old shoebox cellphone. The idea is the same, but the execution is very different. If business leaders are doing away with old ways of making a profit, why would you keep your employees ignorant of information that affects their end goals? Encourage employee trust by leveling with them and making sure they have a voice.
Setting Goals & Moving Ahead
Transparency allows employees to understand the different aspects of your company, especially how their roles contribute to the larger goal. Transparency fosters trust between employees and managers, and that’s not something to take for granted. One American Psychological Association study found that nearly a quarter of Americans don’t trust their bosses. And a third don’t think their companies are open and honest with them. Without that trust, it's more difficult to set realistic goals and achieve them.
One of your biggest assets is your people—your employees who you hired to do the essential work to make a profit. So, part of your business strategy needs to incorporate human nature, and it’s human nature to want to connect and to trust. Move beyond the idea that monetary compensation is enough motivation. Transparency, trust, and connection are powerful forces that will open doors between managers and workers, and give everyone a stake in the future of your business.
Get your copy of Get in The Game to learn how to open the books and empower your employees in the step-by-step guide to implementing the Great Game of Business.
Jake Hill is an open-book practitioner and the research editor at Wikilawn.com. He has been covering the lawn care industry for half a decade and his expertise has been featured in online publications including The Huffington Post and Realtor.com.
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- Are You Really Opening the Books?
- Jack Stack's Four Pillars of Leadership