Is it time to have an open-book policy with your staff?
The numbers driving our businesses are often seen as precious jewels kept under lock and key – but you could be better off sharing them with staff.
One of the common problems business owners have when they employ staff is that staff simply don’t get why the business owner can’t just pay them more, buy the latest equipment or can’t upgrade the store.
If your staff are only seeing money coming into the business, it’s a valid question.
That’s why more small business owners are running an open-book policy, where staff can look at the company’s books to see the money coming in and all the money leaving the business.
It’s a common frustration.
Earlier this year hospitality veteran Christine Green told The Pulse that one of her common frustrations is that staff simply can’t see the pressure on a business owner’s shoulders.
“I’ve run many restaurants in my time. I’ve had so many staff who saw money go into the till and assumed that the money was all mine to spend,” she said.
“They had no concept or idea that I was up until 3am dealing with bills – and that’s where I see a lot of the burnout occurring.”
“They don’t see the rent being paid. I got to the point where with all my staff I put in a training system where I would explain to them that nothing in this restaurant is free.”
She even described a situation where not recognising costs led to staff wasting sugar.
“I had one girl on waitstaff who, at the end of the day, would start throwing out unopened salt and sugar packets. She just assumed that we replaced everything fresh every day. I was just stunned at that,” Green said.
Getting staff to take note that any business needs to pay for stuff (which can be lost if you’re the one taking customers’ money) is one thing. When this mind shift happens, it can help staff be more effective for your business.
Beyond taking home a pay cheque, sometimes employees can’t connect the dots between what they do every day and the business’s ongoing health.
To continue operating, paying staff and providing products or services for the customers, businesses need to make more money than they spend – and staff can play a key role in that.
One way to link staff to the overall business is to link their KPIs to overall business success. This shows them how their day-to-day roles put a stamp on the business.
This way, staff can understand what the business needs to do and what they need to do to help the business succeed (and continue to pay them).
It’s an approach adopted by Mary Randles when she opened Madame Rouge in Brisbane.
She previously told The Pulse that her mentor, Phil Di Bella, advised her to open her books to staff.
“What it has done in my case, and I’m sure it’s the reason to do it across the board, is that it’s made everybody really excited. They’re really keen about seeing their costs, and seeing if they can keep them under the KPIs or the budget we’ve set in terms of wages, food cost, rent and so on,” said Randles.
“It’s a good exercise because if one week they see they’re falling back against KPIs, then there’s a big surge between the guys to come up with ideas to perform better to get the end-of-week targets.”
If your books aren’t open to staff, then setting a KPI can be confusing.
They may know that they’re there to sell things but exactly why they’re being asked to increase sales by 15 percent month on month isn’t clear.
To achieve maximum buy-in from staff, they need to know why what they do is important.
Boosting an emotional attachment
Employees can tend to show up for work, do their job and collect their pay cheque. That’s valid, but business owners know the best employees are those who feel like the owner and staff are in it together.
They’re the ones who come up with the best ideas to drive your business forward instead of simply thinking it’s not their place to say anything.
Business insight from an employee can be priceless for an employer.
That’s because they’re right at the coalface. They’re the ones your customers interact with first and they deal with those customers’ frustrations.
These staff are a goldmine of information – but getting this information from them can be difficult if they’re unengaged.
If you’ve shown, by opening your books, that you trust your staff and you think they can gain a broader picture, they’re more likely to return the favour.
By linking what they do to the business objectives, they can feel part of the business rather than working for it.