Should you be an Open Book?
Every shop owner is constantly trying to get ahead, using new productivity tools and bringing in the best people. But what if you could unlock a new level of business success by just giving your employees more information about how the company is doing? This week we’re talking open-book management!
Let’s Have an Open (Book) Conversation
If you started your shop and grew it from the ground up, it’s natural to feel a really personal connection, and to want to keep your books private. And even if you came into an established business, you might not want to share all the financial details with employees. There are good reasons for this -- like not wanting them to worry during the leaner months or get too eager for bonuses or raises when things are good.
Still, there’s a growing trend to give employees financial info to spur motivation and help them feel ownership in the company. Let’s check out some reasons to consider pulling back the curtain with open-book management.
Employees see a line between their performance and business success
There’s nothing more frustrating than being a powerless cog, trying your best to do your job and not understanding why your pay and benefits don’t seem to have anything to do with your work. But when you see tangible results of your efforts, it’s a powerful motivator.
They learn how business works
Part of your job as a leader is to help your people learn new skills and develop into better workers. It benefits them and your company. Financials are a mystery for a lot of staff, especially early career people. If you show them how the company is doing with different clients and share expenses and revenue, it can give them a glimpse into what it’s like to run a business. As an added bonus, it might also help them cut down on waste.
They share a little of the burden you feel all the time
This might seem a bit selfish, but it’s hard to shoulder all the burden of running the company all the time. Even if nobody can make the challenges and frustrations all go away, you definitely feel closer as a team when everyone knows the stakes and the reasoning behind decisions. Shared prosperity or adversity can make a team stronger.
It just works
Finally, here’s perhaps the best reason to give it a try: It just works. According to Forbes, businesses see as much as a 30% boost in profitability during the first year when it’s done right. That alone is worth giving it a try.
So, if you decide to give it a go, how exactly do you go about implementing an open-book approach to management? Most of your staff might not understand how a balance sheet looks or how to decipher profit/loss metrics. So, before you start, you’ll need to give them familiarity with the tools and resources you’ll be using. Then you can run your reports and format them in a way that you can present to staff, either in a meeting or via email. But at least the first time, you’ll most likely want to talk with your people. You’ll also need to determine how often to have the meetings and exactly what info to present each time.
You might be surprised at how much of a difference open-book management can make.
The most effective management is giving your team the motivation to do their best because they feel informed and empowered. Give them a reason to care, and they will care.