Leadership transparency is a big deal when it comes to creating a culture of engagement in the workplace. One of the best ways to do this is by sharing your books with your employees.
I know what you’re thinking. There is NO WAY we’re going to let our employees see the “behind the scenes” of my company. That is NONE of their business. Well, in a few words, “yes, it is.”
Face it. Your employees believe that your company and your leadership team is making gazillions of dollars each year. The only time they ever really hear about finances is when times are tough, and cutbacks need to be made. It’s no wonder they don’t believe you. By sharing the “real story” in good times and in bad times, you’ll close the gap that exists between ownership and the workforce.
I recently interviewed the CEO of a large air conditioning contracting company. He went to open book leadership years ago. When he first introduced the concept, his leadership team fought him tooth and nail over the idea. He persisted and little by little they started to share.
The initial reaction from the employees was “Thank you so much for trusting us enough to show us the numbers.” Their company growth has skyrocketed, and their turnover is extremely low. He’s also found that because his employees know how tough it really is to make money in a business of their own, he’s not losing his best people as they start their own companies.
As his employees become more financially educated about the company’s earnings, they are also more willing to share income-generating and money-saving ideas than they were before. The bonus is that it also helps them with financial literacy in their personal lives too.
Here are three reasons to share your numbers with your employees.
- They feel you trust them. Financial transparency builds mutual respect. When your employees feel that you are treating them as adults, they will respond accordingly. Keep in mind, you do not have to share every detail – including everyone’s salary.
- It bridges the gap. When you teach your employees how hard it is to make a profit in business, they may be more willing to help cut expenses or come up with ideas to make additional profit.
- It teaches them real-world finances. You certainly don’t need to turn your employees into CPAs but having a basic understanding of the finances of your business can help them both at work and at home.
When there is a financial disconnect, it leaves your employees feeling undervalued, untrusted, and unmotivated to stay. By opening your books, you not only boost your employees’ knowledge of finances, but you also give them more confidence in understanding how the numbers work and what they can do to positively make an impact.
