Transparent Management

Sharing the True Financial Condition of Your Business

I started sharing my true financial condition with my staff out of need.

They thought that I was doing better than I was.

I needed to dissuade them of that perception.

We were hitting some bumps in the road and I needed them to pitch in and help.

I couldn't ask for more effort without a reason.

I needed to lay the facts on the table.

And I have never looked back.

Employees will generally think that you are doing better than you are.

You can share with them the problems you are having with cash flow, collections of receivables, the mountain of payables that you have, etc.

They can give you better suggestions if they have all of the facts.

It is a whole lot of effort to hide the truth.

It builds a great deal of trust because your staff knows that you are open with them.

If you were a publicly traded company, you would be forced to share this information. Why not for a privately held company.

I have not seen it in practice much. In fact I don't know one of my clients who shares his financial data with the staff.

It is a bold step forward and it is very difficult to lay the information out especially with a new employee.

But once you get past the apprehension and fear, it's really no big deal.

Honesty breeds on itself.

It forces me to look hard at the numbers before I share them. I don't want to give the staff the wrong impression by skewing the numbers one way or another.

I share the burden of running the business. It's no longer my problem but now everyone's problem. This may sound a bit unfair but we are a group working together to provide service to our clients. That can't be done in a vacuum.

Once everything is on the table, it's quite liberating. The facts are the facts, good, bad or indifferent. The staff can respond to facts, they can't respond to conjecture or rumor.

I stepped into the process before it had a name. It may be uncomfortable at times but overall, it has improved my businesses performance. Maybe you should put a toe in the water and share a bit more of your financial information with your staff.