Unlimited vacation time. Dogs in the office. A casual work environment. Weekly happy hours. Employers know that workplace perks are a must when it comes to employee retention and satisfaction, but they’re often so consumed with trying to “wow” their teams that they miss out on the most basic employee benefit: transparency.
Today’s news cycle is a reminder that transparency is a rare commodity. Our feeds are filled with stories about veiled truths, questionable business deals, and unscrupulous figureheads. Wouldn’t it be nice if the office — the place your employees spend the majority of their waking hours — offered a transparent, purpose-driven environment? Wouldn’t it be empowering for them to know exactly what they’re worth and how they personally contribute to the company’s success? Business owners who embrace transparency in the workplace cultivate trust-based cultures that have positive effects on both employee well-being and the bottom line.
What is a transparent business?
A transparent business seeks to bridge the gap between managers and employees by offering everyone the same access to information. One way to promote transparency is by adopting open-book management, an increasingly popular philosophy among cutting-edge business owners who want to elevate awareness in the workplace. Business owners have learned that when they open the books and give employees access — and the financial literacy — to see how the work they do personally affects the bottom line, they take greater ownership in that work.
One of the most well-known advocates for open-book management is Jack Stack, creator of the Great Game of Business (GGOB). The GGOB website reads, “Open-book isn’t just about opening your financials to your company, it’s about responsibility, ownership, results, and growth, all of these things can come together to drive the needle forward in your organization.”
Stack has influenced business leaders across all industries, including Michael and Nikole Rose, owners of Mojo Media Labs, a Texas-based digital marketing agency. Mojo implemented open-book management in early 2017 to create a strong culture built on trust and transparency. “We put years of energy into creating a values-based culture,” Nikole Rose shares. “To further enhance the culture, we felt it really important to be transparent around the numbers so the team better understood how the company makes money and why certain decisions are made.”
The Roses’ commitment to transparency paid off: Their employees work hard, are dedicated to the business, and look for new ways the business can grow in the future. “Our team members not only know, but are part of the conversation on how and how much of our dollar falls to the bottom line, how profits are invested, and in exchange receive part of the pie for their contribution,” says Ashton Adair, director of culture and first impressions for Mojo. “Most importantly, our team will organically rally to effect cost savings during tougher months with no questions asked, because there’s absolute clarity.”
Regardless of industry, transparency can be a great equalizer and motivator. Business owners who shift closed-door conversations about budgets and revenues to company-wide financial reviews build a greater sense of community among employees.
Since embracing open-book management, Nikole Rose says, “The response has been more positive than Mike or I ever thought it might be.” She goes on to describe the recruitment and engagement benefits, as well as a boost in camaraderie. “We’ve had several people who admitted they joined Mojo in part because they were so inspired that we are open book. We witness all sorts of statements around the office now, like, ‘Do we really need to buy more snacks this month, or can we hold off making that expense to next month?’ or ‘We don’t seem to be using this tool, can we cancel?’” When employees have access to the same information, they take on a team philosophy where everyone is working toward the same goal. Moreover, they look at ways their personal footprint affects the business as a whole.
Some business owners have trepidations about being transparent when it comes to finances — losses aren’t as easy to share as wins. Rose also admits, “My biggest concern was the fear of sharing bad news. In business, there are tough months, and I was afraid what team members would think if they saw the numbers. Ultimately, though, Mike and I put the fear aside and focused on the goal of building our trust-based culture. We had to be vulnerable, let go, and trust our team.” Once trust has been established and transparency is an expectation, the gap between managers and employees narrows and a collective consciousness is born.
How to be transparent
Open-book management and transparency in the workplace doesn’t have to be complicated or intimidating. Many business owners enlist a strategic partner to help them adopt the concept and stay committed to the cause. Mojo works with Accountfully, an outsourced accounting and bookkeeping firm. (Full disclosure: I work on marketing efforts at Accountfully.) Brad Ebenhoeh, the company’s managing partner, says, “Open-book management is a great option for business owners who want to invest in their greatest asset — their employees. In addition to keeping our clients’ books up to date and running reports, we do a fair bit of business-owner education, so when they go to share financials with their team they can do so confidently. And it’s done in a way that will empower their staff and help them understand how they fit into the bigger picture.”
The Accountfully team works with business owners and entrepreneurs across all industries and expects to see open-book management continue to gain popularity. Here are Ebenhoeh’s tips for adopting open-book management as a means to increase office transparency:
Be consistent: Once business owners have committed to transparency, consistency is a must. Plan on hosting monthly meetings to review and discuss financials with your team. Even if the news isn’t great, these are opportunities to start a dialogue about the bigger picture. We find that monthly check-ins are more effective (and feasible) than weekly or quarterly updates. A week’s worth of metrics don’t show enough data, while quarterly numbers can be overwhelming.
Be patient: Your best developer isn’t necessarily the most financially fluent. Remember that your team will benefit if you slow down and spell things out. Start with the basics, and explain what balance sheets and profit and loss reports mean before you start looking at the numbers. Most importantly, carve out plenty of time for questions to create a positive environment that encourages the team to get involved in the conversation.
Set goals: In addition to reviewing reports and analyzing company data with your team, set measurable goals and track their progress during each monthly meeting. We suggest setting both team goals and individual goals to encourage ownership — when big wins (and big losses) are recognized, it fosters a sense of community and camaraderie.
Pass the mic: In an effort to be inclusive, share the stage. Have different team members from different departments report on how their team contributes to the bottom line. We find employees are more engaged and interested in taking part in the conversation when they are being represented by someone who understands their challenges and hurdles.
Share your why: Adopting open-book management and making transparency a foundational part of your business is not an overnight decision. Share your motivation and journey with the team — the more transparent you can be, the more likely your team will be to get on board.
The bottom line
Many of Accountfully’s clients are entrepreneurs who abandoned their corporate jobs to create businesses that are more transparent and empowering than the places they left. “It’s only natural that these new business owners value transparency — for many of them, it was a motivator to strike out on their own in the first place,” says Ebenhoeh, who is hopeful this trend will one day become the norm. He cites numerous examples of how clients have found different ways to adopt transparency. Some are going as far as offering employee stock-ownership plans and tying bonuses to company goals so people will work together to reap success as a collective, not as individuals. Ebenhoeh sees this pay off first-hand as clients who chose transparency as a cornerstone of their businesses gain noticeable annual revenue growth and an increase in company value.
Business owners looking to expand their benefits package and increase employee retention should consider workplace values before workplace perks. Open-book management is a commitment to transparency in the office. While the financial investment is small, the positive impacts have rippling, immeasurable effects. At the end of the day, transparency and honesty in the workplace always supersede kegerators and all-you-can-eat snacks.