It has been interesting to watch the 2018 NCAA Basketball Final Four with the addition of Google Cloud’s real-time predictions. Not only are real-time stats available online to any spectator, now there are real-time predictions made through artificial intelligence based on those real-time stats. This is the world we live in, and it is the world our employees live in. Accessibility to data whether it is in our personal lives (e.g., sports, smart homes, working out, etc.) or work has become an expectation.
Employees crave information – about their work, about their employer, and about how they contribute to the big picture. As advisors, we are often asked, “Should we start sharing more of our financial information with employees?” The short answer is YES, with education and at appropriate levels. One of the most powerful things you can do is arm your people with information to make a greater contribution to the organization, and that includes the financial picture.
Many years back a partner in our firm created a learning session called “Firm Economics 101”. It did not include the entire set of financial statements or partner compensation, rather it included an explanation of how the firm made money, the five key financial levers that contributed to net revenue, examples of different approaches to these metrics, the firm targets on each lever, and what team members had the opportunity to impact. In one session with our administrative team, the most insightful questions arose about how efficiency and workflow contributed to achieving or not achieving the firm standards. Never before had any of the financial metrics been shared with this group, and yet, in one afternoon, the team identified opportunities to contribute in a positive way. Most importantly, their affiliation with, engagement in, and trust of the organization grew.
As a leader, regardless of role, you must consider how you can be more open to meet the expectation of and desire for transparency. Whether it relates to specific organization or team goals, financial targets, or financial statements, the more information you share that helps people be aligned with the organization and have a “line of sight” to their maximum contribution the better. The answer to how much requires judgment and will differ for each company and each level, but the most important thing is to consider what you are doing to meet the need and achieve the benefits.