Money matters: How sharing financial metrics and KPIs builds stronger teams
The all-hands meeting is a staple of businesses for sharing important financial information and progress. Smaller companies typically bring staff together on a fairly regular basis. Larger organizations may sync up several offices at a time or hold an annual company-wide conference. There’s good reason why these meetings haven’t fallen out of fashion – they get everyone on the same page.
However, many owners and CEOs grapple with the question of how much financial data they should share with their teams and how often, regardless of their town hall or all-hands meetings approach. Research studies points to being as transparent as possible, as long as the right context is in place.
More than two decades ago, John Case of Inc. coined the phrase open-book management. He noted, “a company performs best when its people see themselves as partners in the business rather than as hired hands.” He felt employees make better decisions when they have relevant financial information about their organization such as profit, cost of goods, cash flow, expenses, and of course, revenue.
So, what should leaders share? Below are a few examples of what and how to share metrics with your team.
A shared purpose
At the close of 2016, BetterWorks released results of an employee survey in which 92% said they’d work harder if they knew company goals – yet 64% didn’t think their organization was transparent. Visibility on metrics cultivates an environment of engagement, delivering benefits from increased employee retention to better job effectiveness to 2.5x more revenue versus companies without this focus.
Information gains buy-in, a commitment to a shared purpose, and it shows progress towards a result. It turns a staff of workers into a team on a mission.
While a complete open-book approach might give you pause, you might wonder what information to share with the broader team. As a senior agency executive, you’re familiar with tracking project results and costs, reporting on the status of client relationships and projections and more.
Is this detail important?
Of course, the answer is yes, and a static “state of the agency” financial report isn’t enough for employees, either. Common questions owners and leadership teams ask and manage for their companies include:
- Do you have enough resources to meet future demand?
- Do you have the capacity to take on more work?
- Are you under or over-servicing clients?
- Is the right amount of time being spent on the right projects?
- What kind of work is most profitable and where do margins stand?
These questions and the data needed to answer them shed light on a team’s progress and vulnerabilities, and in making relevant information available, employees become vested in finding a solution and moving the needle. And, armed with such knowledge, teams are empowered to identify issues and make decisions, much faster and more effectively.
It’s all there
When you tie finances to functions, you understand if personnel are properly utilized or if outside help is needed. With real-time context on accounts receivable or sales about to close, you can better plan for delivery, handle peaks and ensure you’re not wasting money during lulls.
Employees, with insight – into the agency as a whole, other functions and project status - can do the same. That frees up agency leaders and makes an organization more responsive and nimbler.
And, the fact is, this data is already available at your agency.
The problem owners face is that this data is not all in one place, and often compiled using multiple software tools and manual calculations. It’s time-consuming, error prone and causes unnecessary cycles. Breaking these insights out of spreadsheets or ad hoc, hidden reports and sharing them in real-time is imperative for greater collaboration and decision-making across agency functions.
Further complicating the situation is that there are literally thousands of solutions offered for every possible financial, time billing, project management and marketing function. As a result, pockets of information are created and trapped, making it harder to share across teams and departments.
Owners and their employees need access to the same data at the same time, providing the right conditions for companies to accurately forecast demand, revenue and hiring, resource allocation and more. The data is all there.
Know it, show it
Once you have the ability to integrate technology, you can better prevent siloed information across CRMs, resource and project management, time tracking, finance and other systems. With real-time insight, forecasting is accurate, personnel utilization maximized, delivery of projects is on time and within budget – productivity and margins grow.
The information we’ve discussed should all be shareable with your employees – so show it. Analysts at SPI found organizations with such an integrated approach do better because visibility increases performance, leading to a 31% increase in profitability.
As companies manage ever-changing industry shifts and demands from clients, the need to share financial data on a consistent and ongoing basis is critical to success in today’s agency climate. Putting everyone on a singular path is critical and sharing financial information can increase efficiency and enable precise decision-making.
The all-hands meeting has its place. However, when employees can connect their function back to a unified business purpose - not just for an hour or two year, but at any time – you’ll gain many awareness-producing benefits that’ll also motivate employees every minute of every day.
Find out more about Digital Marketing World Forum (#DMWF) Europe, London, North America, and Singapore.
- » How Mastercard is leveraging its sonic identity – and evolving brand security in the process
- » Using emojis for business communications and boosting customer engagement: A guide
- » Demystifying influencer marketing: How brands can build relationships with a data-driven culture
- » Why security is the key to CMO survival in the C-suite
- » It’s finally time to ditch the vanity metrics – and focus on these measurements instead