Are you an open book organization who shares your financial status with your employees, or are you a closed book organization?
I have worked in both. My personal opinion is I prefer open book, or as open as you can be. This may scare a lot of leaders but let me share some reasons why it can be a great thing.
1 – It creates understanding. You can teach your employees all about expenses and how it affects the companies bottom line. This in turn makes them think twice about asking for unnecessary items during tough times. For example, if they know that you are having a sluggish profit year, they may hold off asking for that new desk, as they now understand it will affect not only the company’s profit possibly but it may even affect their wage increase, and that is something we all care about.
2 – It helps with sales. If the sales force is paid on commission, bonus or your other employees get profit sharing and they see the numbers being sluggish, they will pull together to make it work. For example, someone in production may pay closer attention to their quality, someone order picking may catch an error and fix it before it leaves the plant, your sales force may call on that small customer to get an order that could lead to more. This of course also requires a great culture where sharing of ideas is welcomed.
3 – It develops trust. If you can get the trust of your employees, then you retain your employees. People naturally like to know information and the answer to ‘why’. Sharing what is seemingly “intimate” financial information allows your employees to feel trusted and even empowered to make proper decisions.
4 – It creates ideas. If your employees want more profit sharing / bonus / higher wages, they will work at creating cost saving ideas – especially if you ask them for them. As leaders we do not always see the waste in some processes, so asking employees for their feedback can and will likely save your company thousands.
Why would you say open book is good for a company?
Still afraid to share too much? Then start simple…tell them if you are doing ok or having a sluggish year. Ask them for ideas to help the bottom line. When you ask for feedback and receive it, that’s a trusting team. When you take that feedback and do something (whatever is within your power), that creates more than trust, but a great culture…and great culture leads to happy employees, higher profits, and great ideas too.
Looking for some help with your small or medium business as a leadership? Book your free Lead. Empower. Thrive leadership consult today: squareup.com/appointments/book/exes44uw8b3fgx/2ATNYSCV452RM/locations
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