Some years ago I hired an attorney to represent me on a small matter. He was young and very successful, expanding and running television commercials promoting his exploding law practice. After we agreed to work together it came time to pay him his fee. At that point his elderly father came in to collect my payment. I was a little perplexed, since there were dozens of employees just outside his office. The attorney looked at me and said “What? You don’t think I’m stupid enough to actually trust these people?” His success was short-lived.
Many small business owners are anxious about sharing financial information with their employees. Failing to share the right amount of information with them can kill your business. It sends the message that you don’t trust them. Without trust you can’t have loyalty; without loyalty every person is out for himself or herself, which poisons the culture and leads to business failure. This doesn’t mean that the janitor needs to know how much you and your spouse like to spend on date night; it’s about sharing the right amount of information at the right time. Tell them too little and it breeds mistrust; tell them too much and you could have more problems; during good times they’ll feel underpaid; during bad times they’ll think its time to jump ship.
Find balance within your comfort zone
You have to find the proper balance between being too secretive which breeds mistrust and being too open which can lead to genuine business risks. Unlike other areas of accounting and finance, there isn’t a specific set of rules that work across companies when it comes to openness. Each situation is unique and you have to find the proper balance that works for your business.
I suggest you first identify your comfort zone. Putting aside any business benefits, ask yourself how much are you willing to share? Are you a private person that would feel uncomfortable if your employees know your salary and the company’s profits? Don’t pressure yourself to go beyond your personal limits. If you do then the accompanying apprehension will send mixed messages to your employees about your commitment to being open.
Fine tune your company’s culture
Once you establish your personal boundaries, then start getting your employees ready by building a culture of openness. Not all company cultures are healthy or based on open communications. Evaluate your company’s culture and set a plan over three to six months where you start engaging and gradually sharing more information. Encourage employees to be more open with each other. Add a component to compensation that rewards openness.
Tell them “the why”
Finally share with them your vision for openness and the specific goals you hope to achieve. Sharing for sharing’s sake is a kind way to live but it only works in business if you tie it to specific goals. Increase revenues, lower production costs, higher margins, faster turnaround times on projects and expanding your customer base are the types of goals you want to achieve with your employees who are now bettered prepared to help you achieve them.
By aligning everyone’s interests through more information and tyingthis to specific business goals are you setting your business on the path to long-term success. Why wait? Start today.
