For some, the scariest topic in workplace conversation starts with the letter $. So, at the risk of creating panic, should companies share financial information with their staffs?
I say yes. In eight years of experience with two companies practicing open book management, I’ve found that the more people know, the better they are at their jobs. Business decisions seem less arbitrary, and less threatening. Reasons for making or postponing necessary purchases are better understood. People feel they are part of the picture instead of being a puzzle piece, creating an environment where the best ideas can come from people who previously weren’t even asked the question.
Interested? Consider the following rules of the game: Be honest. Don’t share salaries. Get your staff involved. Be consistent in what is presented, and how. Ask for feedback. Answer questions. Keep it simple. Accept that some people will tune out. And be prepared to share the bad news along with the good.
Does OBM instantly change everything for the better? No. But it takes what is, to many, an elusive frightening beast and puts it in a cage. It may be no less scary, and it may bite you if you’re not careful, but at least you know exactly what it looks like, and where it is.
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As Karen notes, a key to OBM is making it a regular part of your operations. You can’t throw open the books only when things are good — to show off how well you’re doing — or only when things are bad — to explain to people why you’re cutting benefits, salaries, budgets, etc. If you make it a regular part of communications, employees learn to fear neither the communication nor the silence. And they get more invested in resolving problesm rather than simply blaming and complaining.
I’m with Karen all the way on this one. While the upfront commitment to determining how OBM should work at your company isn’t any small task, I think it’s completely worth it for all the reasons mentioned so far.
An added bonus for employees, which they may not realize until they’ve gone on to other posiions of responsibility and perhaps even at other companies, is that they benefit from a greater understanding of what goes into business management that they might never have seen otherwise. OBM makes everyone at a company more well-rounded and better business people.
Works on a personal/family basis, too. Teenagers are not nearly so demanding when they know the dollars in and out. They are a part of the process and know when they are asking for something unreasonable. They also appreciate more the effort that is being put in on their behalf and may become more willing to contribute their work for the greater goal. Finding out that Mom and Dad trust them with information about the money matters in the family helps them grow into good business people later in life…or right then, if we’re lucky!
I agree with Karen’s comments. The OBM style eases a lot of second guessing and some grumbling in the workplace. As an overseer of part of a public company, when I opened up more of the management financial goals and objectives, it started to let people better understand how they fit into the big picture. It also helped them take more responsibility for the little cost savings in the office that have a positive impact on the bottom line. Some items should remain the domain of ownership/management but most financial items can be shared.
I’ve worked at companies where the financial info was a closely guarded secret, available to only those who knew the secret handshake. When everyone is “in the know” it helps level the playing field and ease worrisome minds. Working at a company with OBM has gone a long way to helping me understand how I personally impact the bottom line; I’m much more cognizant of my efficiency. I’m not saying I was inefficient before, but when I am included as a member of of the team, and not simply as a worker bee, I have found I feel like an integral part of the team and act as such.
I second Steven’s notion. In my experience, OBM goes a long way in creating buy-in to an organization’s goals and leads to a more productive and happy workforce.
I, too, have worked for an employer where financial information—and most other managerial thinking, for that matter—was very closely held. It creates an environment where things are done “because I said so,” leaving employees in the dark regarding the financial health of the organization and how their daily work affects it. If you operate in an industry such as communications, where the exchange of information and ideas is critical to your mission, you should be prepared to act in kind.
Karen, I think your point is, if you’ll excuse the expression, right on the money. At its core, this is all about leadership. The role of a good leader is to share the company’s vision with all employees. And part of that vision, in any business enterprise, is going to be financial goals. I’ve had the opportunity to work for some great leaders who did just that, and, unfortunately, for LINOs (leaders in name only) who keep almost everything, especially financial info,on a strictly “need to know” basis. Now, which employee do you think is going to be more productive, engaged and happy: the one who hears The Boss say “Hey, we made $10 million last year! And this year, with your help, we can make $12 million!” or the boss who says “Hey, we had an OK year this year. Trust me.”? When employees know where the company is going–and what the company’s financial rewards can be when they get there–they feel a greater sense of accomplishment when they find out they’ve helped the company reach its goal. Everyone wins. Rising tide. All boats. You know the cliche.