The key for any company to achieve its goals is to attain maximum engagement from its employees. Whether it's making a profit or retaining the corporate vision, maximum buy-in makes that goal achievable. One of the best tools a manager can have to achieve employee engagement is transparency. People have a tendency to give it their all when they understand the why behind the how, in my experience.
I have personally seen the positive effects of transparency through the growth of my startup, Commercial Acoustics. Three years into the company, we had achieved revenue levels we didn’t think possible at the time. However, our cost structure was growing as well, limiting our profit margins and our ability to expand. As companies grow, it becomes increasingly difficult for one person to identify all process improvements and inefficiencies. Because of this, we began to implement an open book management policy. We started showing our employees our revenue, expenses, and profits every month. We assigned each employee two line items that they had the authority and ability to control. This empowered our employees and resulted in significant process improvements and cost reductions.
Similarly, over the years we've had the ability to streamline our bonus and commission structure. Initially, production and installation teams had little incentive to go above and beyond when there was no bonus tied directly to their performance. While sales and commissions are well researched, we found that cost-sharing opportunities with our operations staff worked just as well. Thus, creating a win-win environment for the company and our employees.
It's critical to carefully consider which data points and KPIs to share with the team. Not because of privacy concerns, but simply because not all data points and KPIs are important. You want to provide a clear vision and keep your employees focused and engaged with the most important numbers and figures.
We spend time each month looking at our core metrics, and further refining exactly which numbers and data to provide our team. We take a balanced scorecard approach to traditional financial metrics and pair them with other information such as production quality and marketing.
By developing a transparent culture, you avoid silos, maximize value, and develop trust. This approach can seem a little unorthodox at first, but it can make a significant difference in the growth of your company. Commercial Acoustics started 5 years ago with one product, and we now have 3 divisions. Having a transparent approach to management allowed the company to grow quickly, all with only 13 employees which all felt empowered to push the company forward. Being an entrepreneur is hard; sharing a bit of that pressure with your employees can be empowering, relieving, and incredibly beneficial.
Author's bio;
Walker Peek is the founder and CEO of Commercial Acoustics, a company that specializes in soundproofing and acoustical solutions. Headquartered in Tampa and with a regional office in New Orleans, Commercial Acoustics provides nation-wide solutions to architects, owners, and contractors to cost-effectively improve the sound isolation and acoustic performance of their projects. Contact: walker@commercial-acoustics.com