I remember the night I decided to go completely open book financially with my entire company. At first, I laughed a little, thinking it was a hilarious idea to give people who could easily jump ship and go somewhere else with really sensitive data.
What was I even thinking? Why was I even contemplating this?
The truth is, my team is extremely dedicated and loyal, at all levels. Each person we hire, as cliché as it may seem, we hire for personality. If they come with some of the skills we require for the position, great, if not, we’ll train them. It’s the entrepreneurial spirit we’re after, not if you can navigate a customer relationship management tool or not.
Therefore, needing to motivate my team wasn’t the reason behind going open book, as many leaders say is the reason they did so. For me, it was more about sharing their work – our work – beyond the small wins.
Sure, a fix for our product or saving a customer who thought about leaving are wins. Landing a huge account? Big win. But, all of these things are done by different teams, or even by individuals. The bottom line? That number is affected by us all. Every single one of my team members, even the entry-level employee hired last week, affects that number. It’s something we can all rally behind. But it’s something that could also break us apart. And that’s where my complete terror in sharing the numbers came from.
Fast forward to the morning I was about to present everything to everyone. I woke up about four hours before I had to be at work…3AM. Not a great start. I was anxious and doubting my decision. Up until this point, I had been confident that sharing this information was a good thing, now I wasn’t so sure. It was almost as if I was holding myself responsible for these numbers. For our wins, for our loses, even though I knew it was a team effort.
“What if showing spending between different divisions pitted them up against one another?”
“What if revenue isn’t as high as they thought? What if the growth wasn’t as much as they expected?
“What if it was more than they expected?”
All of these questions and more ran through my head. Was I making a huge mistake that would either demotivate my team or make them want to jump ship? Worse yet, would it make them think we’re in a ‘good place’ and what we’re doing is good enough? (Spoiler alert: Thinking you’ve ‘finally made it’ and are in a ‘good place’ is the beginning of the end of your success in a start up.)
GoToMeeting powered up and I showed my screen. Painstakingly, I went through everything. Slide-by-slide I detailed our month-to-month revenue numbers, our growth, where we had unnecessary spending, where we came in under budget. I then showed our growth over the past three years, and forecasted out what I expected through 2015.
Everyone was silent. Not one question was asked as I presented.
My throat was dry, and even though it roughly 7:45 am, I wondered if straight bourbon was an acceptable drink at this point. After the last slide, I took a deep breath and asked for questions – and in they came.
I remember team members asking, “Wow, do you think we’ll continue to grow this fast?” “How can our department help reduce that spending?” “What affects that number and how do we change it?” “Is there any way departments can come together on that XYZ item spending to reduce it?”
We. I heard we. Showing these numbers to my entire company impacted them all. It was not a “Well, the customer service department did some heavy spending, but the marketing team is right on point,” or vice versa as I had first feared. These numbers were a combined effort, and it got different divisions talking in a really productive way.
Needless to say, I didn’t lose any team members that day – or to this point. It actually empowered them, and proved to them the trust I had in them as their leader. It was the most incredible experience, to be quite honest. Why, you ask? Well, here are three things I learned from going open book with my employees:
1.) Micromanaging anything in your business will lead to aggravation, inability to produce and sleepless nights.
This includes the numbers. Sure, some numbers I didn’t give out, like individual salaries, benefits, etc. I grouped these numbers together so we could see as a whole how much labor costs us, but I would never give out those details because I don’t deem it necessary. Maybe for your company it is, but not for mine. However, showing our team where we are spending our money, and how we are, was pivotal for me. I would obsess over our weekly numbers before. I’d go to each team leader, telling them where they needed to cut down, or where they could boost, but never really giving them the ‘why.’ By seeing the numbers across the entire company, they were able to understand my guidance on budgets even better.
When I let go and freed the numbers, it led to less wasteful spending because my team now had a good idea exactly how much comes in and goes out. Now, my employees take each spend personally as if it were dollars out of their own pocket. They take complete ownership. Even the smallest expenses get second thoughts now, and it has drastically reduced our costs each month since, around 15-20%.
2.) When you’re a leader, ultimately all decisions made by both you and any other employee are your responsibility, but that doesn’t mean you should hold all the stress of it.
I think I held back giving out total company numbers for so long because I thought I was completely responsible for them. Please don’t misunderstand me, I am in a very big sense. Ultimately though, these are numbers are formed by an entire team, not just myself.
Of course, I approve certain spends, and I look over everything on a day-to-day basis. I also help with major sales. But there are individuals responsible for each department of my company that have the power to make decisions as well. Sometimes, looking over every single line-item expense or new customer sale just isn’t something I have time for every day.
When I step back and look at the big picture, it’s hard to admit that ‘Hey, we could have done better here’ or ‘Hey, I should have given you a little more leeway here’ or “Maybe if I had given a little better review, I could have caught this. Even though I know that I give my best every day, sometimes there aren’t enough hours in the day to overlook every single detail.
When I went open book with my employees, I was admitting just that. I was saying, “This is a group effort that brought us to these numbers, and I’m proud of them, but I’ve made some mistakes along the way. The only way we can resolve them and move forward is knowing together what we’re doing as a whole.”
Scary? Absolutely. But I love the idea of being held accountable even beyond my every day role of motivating and overseeing all operations of the business. It also has made my team feel more accountable in every way, giving us some really impactful and powerful results.
3.) It motivated my already motivated team beyond belief.
I kid you not when I say I already had the most passionate and engaged team on the planet. These guys come from all different backgrounds, but all have a streak of entrepreneurialism in them. Like I mentioned early, it’s what we look for when we hire.
My biggest fear when going open book was that my team was going to see success through the growth, and feel as though we had some opportunity for smooth sailing. Or, perhaps they would misinterpret what I was saying, and think that start-up life wasn’t for them, preferring to return to a more corporate setting with less responsibility.
Either was anything but the case.
At the end of my presentation, I used the last slide to say where I wanted our monthly reoccurring revenue to be, and how many customers we needed to have in order to be there. Now, whenever I video conference with some members of the team, I’ll see those two numbers written somewhere and tacked up on a bulletin board in their home office. Sometimes, employees will remind each other of the numbers through email threads as motivation, which always makes me a little warm and fuzzy inside.
We’ve established hard goals for ourselves. Each month, I tell the team how close we’ve come, and how far we have to go.
I wouldn’t say that going open book ‘changed’ the culture of my company, because it was already one of high-productivity, engagement and creativity. I will absolutely say that it completely boosted the culture, however. Wherever we were before, going open-book brought my team ten levels up from there. It gave them the information they needed to really analyze their every day spending – both of time and money.
Was it nerve-wracking? Absolutely. Worth it? 100%
Lisa DiVirgilio is a serial entrepreneur who currently runs WyckWyre, an online recruiting platform for the restaurant industry. Beyond having a serious passion for business, Lisa also loves working with animal rescues, collecting vinyl, experimenting in the kitchen and exploring her ever-changing city, Nashville, TN.
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