Growing Up Entrepreneur: Don’t ask, don’t tell
By Michael Gunther
Don’t ask, Don’t tell – and I’m not referring to the US military policy on disclosing aspects of your private life. I’m referring to transparency in the work place. What do I mean by transparency: sharing your key issues, financials and challenges with your key employees. Basically, having an open book policy with your team.
I’ve come across situations with business owners who are frustrated that their managers are not making strong business decisions or think their employees have no sense of ownership in the business and the work they do. The owners believe they are hitting a wall with employee input and involvement. Yet when I explore the cause of this, I often find the owners have a “don’t ask, don’t tell” philosophy or policy in place. They don’t share critical financial or business metrics with their employees often because they fear sharing this information will make the employees resentful or upset when they see the actual revenue of the business. There is a basic distrust created.
When employees don’t have enough information to make decisions, especially the financial data, they don’t have a sense of ownership in the company. They inherently want to make solid decisions for the business, but they think the owner is hiding information or doesn’t trust them. They can’t make informed decisions, and sometimes have a false belief that business owners holding back information because they are hiding something.
On the other hand, owners don’t want to share certain information because they are afraid of how employees will react. They think their employees automatically equate ownership with wealth, and won’t understand other factors and liabilities that come with the territory. The risks owners assume can be easily communicated and explained, to give employees a clear picture of business operations. When employees know the facts, they understand what it takes to grow the business and how it relates to their own role in making it happen.
I went through this in my own company recently when two of my now partners wanted me to disclose all of the company’s financials. As a business owner, I hadn’t ever shared that information before. I knew they wanted to assume more responsibility, and in order to make solid decisions for the company they had to fully understand that aspect of the business. I was nervous to do it, and even had a fear of embarrassment in sharing such private information with other people.
Once I made the decision to go forward, the result was phenomenal. I instantly felt like there were three of us working as owners, fully invested in the good of the company. This year we’ve more than doubled in size, and I have to believe part of it is because I disclosed and communicated that information I had once kept all to myself. They understood the decisions I made, and we began building and growing the business together.
The Bottom Line
You want your employees to be more involved and make better decisions, so be open with them. They want to grow your business, but may need to understand the data to do so. Remember, the tighter the control, typically the greater the resistance. The more you share, the less resistance and the more growth you can achieve.
