Saturday, July 27, 2019

Open Book or Closed Book?

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.  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 about asking for unnecessary items.  For example, if they know that you are having a sluggish profit year, they may hold off asking for that new desk as they know it will affect not only the company, but their job too.  It may even affect their wage increase.

2 - It helps with sales.  If the sales force is paid on commission, bonus or your other employees get profit sharing, if 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.

3 - It develops trust.  If you can get the trust of your employees, then you keep your employees.  People naturally like to know information.  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.  It affects them too.

Until next time, I can be reached at tara@twinlifecoaching.ca or you can check out our website at www.twinlifecoaching.ca.

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