Blog: To Grow Your Business, Share Financials with Employees

677

As a business owner or business leader, no matter how hard you work, you can only get a certain amount of work accomplished.  The limitations we all have in the vital areas of time and energy cannot be understated — both have limits. To get more done, we hire employees.  

Often times, we think the employee should show up and have a long career with us. And all of this should happen, while we assume the employee will be self-managed and self-directed. This is misguided. Leaders — not achievers — recognize that working with and through others to achieve objectives is the key to building a good team and a sustainable business.  

There is a big difference between achievers and leaders. For the great achiever, perhaps a superstar sales person, the focus is all about “me” and reaching individual goals. For the wise business leader, leadership is all about “them” (i.e. the employees) and their success. To quote author and speaker Marshall Goldsmith, “The best leader, the people do not notice. When the best leader’s work is done, the people say, ‘We did it ourselves.’”

This isn’t what most of the conventional wisdom of leadership dictates. Most books on business leadership exaggerate, even glamorizes, the leader’s contribution. The implication being that everything begins with the leader, that he is responsible for your improvement, he guides you to victory, without the leader there is no directing the organization.

Truly great leaders, recognize how silly it is to believe that a leader is the key to an organization’s success. The best leaders understand that long-term results are created by all of the great people doing the work — not just the one person who has the privilege of being at the top.

Some traits of a strong business leader include:

·         The owner eagerly involved his team in this project.

·         Each person took responsibility for creating positive synergy with cross-organizational colleagues.

·         They regularly reported their efforts, learned from their colleagues, and shared what they learned.

·         They thanked people for ideas and suggestions and followed up to ensure effective implementation.

One of the best demonstrations I have ever seen regarding business leadership, and investing in one’s team, was done by Jack Stack, of SRC Holdings Corp.  and the leading pioneer in the field of Open Book Management. 

In 2004, I was fortunate to see Stack speak on his book, The Great Game of Business.  This was the first time I had ever heard for Open Book Management, the approach whereby employees are provided with company financial information to enable them to make better business decisions.

Stack shared the story of how he took the concept in 1983 and used it to turn around a dying division of International Harvester and save nearly 120 jobs. He shared the company financials with his employees, but needed a way to help them understand how they could affect those financials. Stack’s open-book approach to managing the company grew from simply sharing financials to actually teaching his employees the “rules” of business.

Stack’s approach to managing the company became known The Great Game of Business.

I was so inspired by the story, and the results of this approach, I applied several of its features to my business in 2006.

It’s been nearly a decade now since Diversified Industrial Staffing made the move to open book management. The purpose is to teach employees that they impact the financial performance of the organization. From our entry level employees to the vice president level of the organization, each employee can positively — or negatively — impact the financial viability of the company.

I know it’s not the norm to have frontline employees doing anything that has to with accounting, but I can state without reservation that by teaching our entire staff about all financial facets of our business has been one of the most successful changes we’ve ever made. Here are four reasons it’s proven to be such a great thing:

  • Better Employee questions equal Better Results
  • It builds commitment from the team
  • It leads to better decisions
  • It teaches every entry-level person to think like an owner

By investing in our people, they have raised their level of productivity, which allowed us to have our most profitable year ever in 2016.  Leading and investing in our staff has produced some amazing results.

Facebook Comments