Breaking the numbers barrier
Before the recession, I would ask the audience in my presentations how many people shared financial information with their employees. Typically I would get a yes response from around 40% of the audience. Today when I ask the question I get around a 90% yes response.
Why the difference? The great recession forced owners, managers, and leaders of companies to share financial information with the employees to survive. When the company's back was put to the wall they looked to the employees for help. A sinking ship can sometimes be the best way to initiate new ideas and tactics. The real fear of going out of business replaced the many false fears that have been in place about sharing financial information with employees like the following:
- They do not have the knowledge to understand the financials
- They will share it with competitors
- It will create issues because of compensation related numbers
These false fears are easily discounted:
- They know how to spend their own paycheck to survive
- A good competitor knows your numbers
- People talk about wages all the time. There are multiple ways to share the information without sharing individual salaries
In the new economy, companies that do not share financial information will find it even more difficult to compete against companies that do. Sharing financial information with your employees allows them to understand why the company makes the choices it does. It is not about complete agreement; it is about sharing the action behind the numbers. Everyone likes to know why - the two year old still exists in all of us!