Successful businesses are transparent when it comes to their performance. They embrace being honest about results: good or bad.
I’m regularly surprised by the number of business leaders who are afraid to share their financial results with their employees. Believe it or not, if you don’t give them the information, they will make it up on their own and typically overestimate things in either direction. They will think you are doing much better than you are OR they will think things are worse than is the case (especially over the last few years). For some strange reason, human beings will jump to negative conclusions when they don’t have the requisite information. Correspondingly, they will think they are getting taken advantage of OR in a vulnerable employment situation. Therefore, you need to dispel fiction with the facts when it comes to financial outcomes.
The more knowledgeable people are about the basic metrics of the business, the more they will be able to make a connection between their work and the actual outcomes of the company. If you are a fair and reasonable employer, they will take pride in the organization when things are going well and pitch in when you need them to make an extra effort. In addition, multiple studies have proven that your top performers want you to keep score. They want to be part of a high-performing organization that meets (and ultimately exceeds) its goals and/or addresses problems proactively. You shouldn’t hide from success or failure. Instead, bring your people along on the business journey with you and provide a clear picture of where you’re heading, how you plan to get there, and how you are progressing.
- What Is Financial Transparency? (smallgiants.org)
- Seven Benefits of Financial Transparency in Business (completecontroller.com)
- Five Steps to Help Employees Understand – and Care About – Your Metrics, Scores, and Targets (customerthink.com)
- Focusing on Metrics that Matter (cloudave.com)
- Set People Up For Success (capacity-building.com)