Great story in the New York Times today as part of their series on small businesses. The post is about how a new factory owner revealed and explained the financials of the company to the staff and placed accountability on them to make the changes necessary to save turn the operation around. A choice quote:
Starting Over in Lexington: Blowing the Doors Off
Seeing an opportunity to diversify the plant’s products and clients, we took it over, saving 100 in jobs in the process. But we didn’t write a blank check: we told the employees that we would teach them financial literacy, that we would open our books to help them understand how the place works and think more like owners, and that the onus was on them to turn the place around. We also told them they had 36 months to turn it into a sustainable operation.
I talked about this in one of the e-mails sent as part of my Orgpreneur Weekly Tip (you subscribe, right?). If staff don’t know where the money comes from and how it gets spent they can’t predict or help with causes and effects that influence the bottom line for your organization.
Show staff the money! This factory in ‘blowing the doors off’ their revenue goals in part because the employees figured out how to make it happen. They were able to do this because they had knowledge they needed to do so and ownership of the results.
I think opening the books sends a powerful message to staff. Trust flows both ways and the members of staff that feel most empowered by the open information will perform above expectations.