27 Dec Is it possible to be an open-book company without sharing financials? Yes!
Transparency is a word that has been getting more and more attention lately. Customers, clients, and employees, in general, have shown that they value when a company has some sort of open-book policy. While there can be many benefits to having an open-book policy, there are valid occasions and situations when transparency may need to be presented in a different way, while still being honest and truthful- not deceptive, vague, or misleading.
Sometimes sharing actual dollar figures runs counter to the wishes of the company’s owners or senior executives. If your company is publicly traded, you may encounter concerns about running afoul of Securities and Exchange Commission rules. If that’s the case, there are ways you can share information-particularly with employees- to take advantage of the benefits of open-book practices. It’s the trust and accountability it fosters that make it work, not the dollar figures themselves.
A common substitute for dollars, for instance, is to use an “efficiency percentage” to monitor a project or company’s progress. With this method, we’ll assume that the project manager or executive knows the dollar figures but can’t share them. Instead, he calculates the dollar-per-hour figures from the original project budget numbers and then translates that into a percentage number for the team or company.
Here’s an example that shows how it works:
- The project’s budget calculations tell the project manager that the expected gross profit earning rate for the job is $100 per hour.
- The project manager sets the $100-per-hour mark as “100 percent efficiency” for the project.
- After completing his weekly financial calculations, he finds that the team has earned $120 in gross profit for every hour invested during the previous week. In other words, his team has performed at 120 percent efficiency for the week.
- He shares that figure with the team and offers congratulations to all. The team now has a clear metric that quantifies their efforts and provides a hard goal for efficiency throughout the project.
This is one example of how a company might be open-book with their employees without sharing actual dollar figures. Figure out what would work best for your company or team and try it out.
In the previous example, the team doesn’t know that the efficiency percentage is based off a $100-per-hour earning rate for the project, but they are still being given valid, honest, and useful information about the status of the project. While not sharing the actual dollar amounts, the company-and the team- still reap the benefits that come from practicing an open-book procedure.
Even if your company can’t or chooses not to be a totally open-book company, there are still ways to execute the strategy without sharing actual financials, and still experience the benefits that doing so can have.
Source: Project Management for Profit by Roger Thomas, Joe Knight and Brad Angus, together with input from Joe Cornwell and Joe Van Den Berghe from Setpoint Inc. Setpoint has a 25-year history of successfully designing and implementing custom rides and attractions for the top amusement and theme parks in the world.