Opening Your Books To Employees

If you tell one or more people something, it is not a secret; or at least assume it isn't.

Our society discourages people from talking about money.

  • How much do you make? Sorry it is a secret.
  • How much did you pay for that house or car? Polite people don't ask?
  • How much money does you business make? Where do you spend your money? What are your profits? Sorry all that can't be shared.

If employees know too much they will ask for more money if the company is doing well or panic and leave if the company is doing poorly.

If your customers knew that information, that would impact your pricing and contract negotiations. If your competitors know that information they can use it against you.

The Truth?

Companies that move to opening their books to employees do not suffer from these problems. In fact the act of trusting employees with the numbers helps them make better decisions on their own and feel more engaged with the business.

Every publicly traded company has some degree of open books. Most privately companies that open their books do better, not worse.

And the truth is often better than the guesses and rumours that permeate a company that does not share information.

Why Not Do It?

Fear, or mostly fear.

Fear of the unknown. Fear of being judged. Fear of what could happen.

Why Do It?

When you do it right, generally company performance increases across the board.

I know of a company that is so convinced that this stuff works they offer a money back guarantee on the training and consulting work they do around this.

But it is also the right thing to do if you want your business to run without you there every day making every decision.

We Are Going To Do It

We are not exactly a closed book company. But we are not fully an open book company either… yet.

I plan on formalizing this process in the coming weeks and months. It involves not just sharing the numbers but teaching people what the numbers mean and how they can impact them in their jobs. And to be honest, it means becoming better at understanding the numbers ourselves as owners.

We don't need to share every detail. For instance, payroll costs will likely only be shared at the aggregate and not individually due to privacy concerns. Maybe someday that will be transparent too.

To be a lean and agile business today, you need to delegate decisions and hold people accountable for results. To make wise and informed decisions, people need information and the knowledge to use it.

When the owner can go on vacation for 12 months and come back not just to a company that survived, but one that thrived? Then you have a great company.

That is the one I want to be part of. One where I come to work because I want to, not because I have to.

By | 2017-04-03T11:45:25+00:00 June 9th, 2011|Categories: Doug's Blog|

About the Author:

Doug Wagner is an entrepreneur, President and Co-founder of Sunwapta Solutions. Sunwapta's mission is to help businesses transform from surviving to thriving, sustainable growth. From strategy to implementation, this means marketing, sales, managing your brand and delivering consistent value. Get more clients and keep them.