Are you running your business by the numbers? If so, great. We’re going to take a look at how you can communicate your business’ financial performance to help your employees feel truly connected to, invested in, and rewarded for the company’s success. If you don’t typically keep close track of the numbers, realizing their ability to strengthen your company culture may change your mindset. Here’s how to tap into the human side of business finance.
Simplify the Metrics
Financial data and decisions can be extremely complex. For the benefit of you and your employees, identify the three to five key metrics that paint the general picture. Too many metrics can take up time and create more meters than necessary to measure success. Most owners will choose between revenue, gross profit, net profit, client retention, employee retention, and, perhaps, an industry- or company-specific data point—for example, percent of work completed on each construction job or equipment utilization in manufacturing. By any measure, keep it simple to avoid analysis paralysis.
Communicate the Goals
Within your three to five key metrics, choose one or two that you will consistently report on for everyone in the company to see, whether weekly, monthly, or quarterly. Use your discretion in providing other key metrics to the appropriate personnel. In sharing the numbers, also share the goals. When employees have a clear view of both, their goals become aligned with those of the company, rather than based on their own subjective perspectives.
Your employees want to be responsible for helping your business succeed. When people see the quantified, positive impact they are making, it validates their work, provides a sense of security, and enables them to be a part of something bigger than themselves—things we all want in life. Your organizational chart can double as a responsibility chart for business performance, empowering your employees to make decisions in daily operations.
Budgets are a great way to delegate work and hold team members accountable. For example, by giving your sales team a budget, they can freely take a client to dinner without first seeking approval from the CEO. Likewise, the COO can purchase office equipment without consulting the CFO, and so on. What does it all mean for you as the owner? More efficiency; less micromanagement!
Grow Your Team Strategically
It is a beautiful thing when a business is running like a machine, from each person to each department to the company as a whole. When your people and numbers align, you can expect your business to grow. From there, the key is to continue putting the right people in the right positions around you. More on that here.
By Andrea Steinbrenner, Chief Operations Officer, Exit Consulting Group