Transparency? Yes!
At the risk of oversimplifying, owners of small businesses don’t often share financial results with their employees because they don’t want them to either (1) know how good it is or (2) know how bad it is. And that makes sense. It sucks to be resented because you’re rich just as much as being pitied because you’re poor.
But I will advocate for transparency with this story about our COO Mark…
Back in a previous life Mark took over a struggling business unit at a big company. This was a business line that should have had 40%+ net margins, but was instead trying to avoid tripping a bank covenant. Fast-forward a few years and the team had 10x’d the bottom line. Was it rocket science? Not as he tells it. Rather, the things he focused on were surprisingly straightforward:
1) Transparency: We started openly sharing our numbers and our challenges with the entire company.
2) Accountability: We made sure each key part of the business had a capable leader and they knew what their goals were.
3) Unity: That leadership team met regularly to talk about their challenges and solve them together.
In other words, he changed very little about the business other than how honest and open it was between and among the people working in it. But why did that work?
One explanation could be dumb luck. Maybe the industry took a turn for the better and whatever Mark and his team did would have been successful no matter what. But I think that underestimates what people can accomplish when they are armed with information.
Because even the rocket scientists among us can’t solve problems or optimize opportunities if they don’t know that those problems and opportunities exist.
