In case you haven’t heard of it before, open-book management (OBM) is the business practice of creating transparency by sharing financial information with employees. But, if you’ve ever been a part of a corporate presentation, you know the blank, glazed-over stares are likely an indication that someone is sharing financial information. The finance team generally gets hyped when talking about gross income, depreciation schedules and EBITA. It’s what we eat and breathe. It’s the world we live in, and we are willing to take everyone else along for the ride. On the other hand, listening to a presentation on company finances isn’t something most non-financially minded people willingly want to do.
As more companies adopt open-book management, employees are involved in financial presentations more frequently than they have been accustomed to in the past. Opening the financial books to employees to help them understand how the company operates does yield positive results. Stephen Fisher of Mojo Media Labs says it well:
The power of open-book management is that financial transparency and ownership helps your employees not only do their jobs more effectively, but it helps them understand how the company is doing as a whole.
Access to financial data improves employee accountability
Setting expectations and consistently measuring employee achievements holds employees accountable. Access to key financial data fosters a better understanding of how your business operates and helps employees gain a better understanding of corporate finances in general. With a better understanding of the financial data, when employees see something that warrants attention, they feel more enabled to act.
Open-book management provides a revenue boost
Transparency with financial information can provide a lift to finances by building trust and leading to a workforce that is happier and more productive. Employees who believe they are trusted by management can better see the big picture and are more engaged. Management sends the message that every employee is a valued stakeholder.
Getting past the “boring” stuff
While the benefits of shared financial information are notable, there are common complaints about financial presentations. They can be boring, difficult and confusing, and employees don’t always feel the need to understand the numbers. If financial information is presented with these complaints in mind, corporations can reap the benefits. Financial presentations can be improved by telling a story and making the presentation relevant to the stakeholders.
Tell a story and keep it brief
Simply rattling off an extensive list of facts and figures will make it difficult for the audience to focus and you will quickly lose their attention. Instead, focus on key themes and conclusions and use these as the basis for the narrative. Everyone is busy, so be as succinct as possible but remember to allow time for questions. Also, remember that succinct doesn’t equate to speaking faster. Slow down and let your team absorb what is presented before moving on. Make the most important data points clear and visible, keep slides short and remove unnecessary expressions from your language. Finance jargon can be off-putting to those not familiar with it.
Speak the language that resonates to the stakeholder
Teams will have different ideas about how they measure success and what outcomes they value. Identify these interests in advance and adapt your presentation to fit. Teams will also differ in how they like information delivered. Some will prefer a big picture, brief overview while others want information explained on a micro-level. So, adapt to this. Similarly, consider visual information such as graphs instead of detailed spreadsheets.
It can be a challenge to get employees who are busy fulfilling other aspects of work to pay attention to financials. But with perseverance and some creativity, it is possible to get everyone engaged and make numbers come alive to everyone in your company.
Communicate open-book management to your employees
If you need a little help in communicating a transition to open-book management, our creative team can help you find the right way to share it with your employees. Reach out to us and we’ll be in touch.