Growth Strategies
Some Atlanta companies share vital financial information with all employees
Atlanta Business Chronicle - by Erica Stephens Editor
It's easy to tout the motivational benefits of open-book management when there is good news to share. How about when the news is bad? There is a fine line between motivating employees to work harder and motivating them to tune up their résumés.
Open-book management is based on the sharing of vital financial and performance information with employees at all levels of an organization. Open-book advocates say the truth will set you free, even when the truth hurts.
Open-book management can be thought of as emotional equity compensation. Information sharing has many of the intrinsic benefits of equity compensation: Information is motivational and the trust you convey to employees creates loyalty and a sense of ownership.
Since his assets "all wear shoes," Monorail Corp. CEO Doug Johns said motivation and loyalty are important. Johns views open-book management as an investment in his human assets.
Marietta-based Monorail is a manufacturing management company that helps high-tech clients like IBM deliver customized products directly to consumers.
"We are very conscious that people could leave and find something better if they were somehow disenchanted with our company," Johns said.
Johns keeps his employees duly enchanted through constant communication of the objectives and strategies that guide the company. And he keeps them motivated by sharing the financial performance and vital statistics of the company.
Monorail's chief financial officer, Evelyn Hoye, said their employees get most excited about cash flow and profit and loss numbers.
"We do a detailed analysis of cash flow and project it out, and share that frequently with our employees," she said.
The staff regularly studies its 12-month performance income statement, and occasionally they discuss the equity and capital structure of the company when there are significant changes.
Against their nature
Management and leadership consultant Bob Turknett said open-book management doesn't come easy to most entrepreneurs.
"In general terms, a lot of entrepreneurs have a tough time letting go," said Johns, who has at times found it hard to share information himself.
Most of Monorail's 10 employees came from large companies, some public, where they were privy to the vital statistics of the company.
"Most of the employees are comfortable enough with financial statements that we felt comfortable sharing that level of information with them and knowing they wouldn't misunderstand it," Hoye said.
In the past, when Monorail was in the manufacturing business, it had up to 40 employees. Even then, Johns' strategy was to share vital financials with everyone.
Finance 101
Employees of public relations firm The Headline Group typically don't know their way around a P&L statement when they are hired. That's a big reason why the company shares its financials with employees. Account representatives relate better to their clients when they understand the dollars and cents behind the sales pitch, said Kim Boreham, director of operations for The Headline Group.
The Headline Group educates new hires about the performance benchmarks it uses and how to interpret financial information that will be presented to them at mid-year and end-of-year meetings.
As one might expect from a PR agency, Headline takes great pains to not only get the message out, but to get the message right.
"We know that employees are going to go back to their manager or supervisor and ask more detailed questions, so we make sure they know how to respond and that we are consistent in our message to the staff," Boreham said.
When the economy started taking a turn earlier this year, Boreham said, company leadership started asking employees for feedback and ideas on strategies to stay healthy, couched in the message that the company was doing well but that it would take work to stay that way.
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