Marco has intentionally supported a culture of transparency for over 20 years. So what does that mean? To us, it means that we share relevant financial and performance metrics with all employees to help them better understand how our business operates.
Through our experience acquiring companies, we have found that most of the managers were not informed of the financial details beyond some sales metrics. In fact, the majority didn’t know if they were making or losing money. I think the biggest reasons companies don’t maximize their performance for growth in revenue and profitability is because leadership hasn’t been exposed to information relative to effectively running a business. Therefore, the results are simply best efforts.
Although opening the books does open a company up to scrutiny, it also drives accountability and that’s transformational for a company.
When employees know how the company is performing by location, by product and even by salesperson and technician, they can impact results. Each month we share these detailed reports indicating our company’s performance. As I shared in my blog on the finance metrics that matter, it’s a practice we started long before we became employee owned and I’ve found it to be essential to any high-performing organization. Employees need to have real-time information if they’re going to impact future results.
Although I feel sharing financial reports are a significant part of a transparent culture, there are also other important elements that impact results. Here are some suggestions that have helped Marco achieve a high-performing transparent culture.
Openly share the information.
On the first day of every month, Marco’s vice president of sales leaves a company-wide voicemail recapping our performance. During those three minutes (that usually come on a Saturday morning), every employee has the opportunity to hear about our financial results. Not all employees know what all the details mean, but it gives everyone a feel for how the company is doing. The benefit is that when employees have a better understanding, they can make more informed decisions related to their primary area of responsibility.
Expand the involvement.
We present and discuss detailed financial information with over 25 leadership team members at our monthly MOR (monthly operating results) meetings. This group includes leadership from sales, operations, finance, marketing and service. Each team member is required to report results for their primary area of responsibility. They also indicate highlights and concerns that impact decisions that can affect our ongoing performance. This takes some time (over 3 hours), but I feel it is time well spent. While content is always different, the purpose is always the same: to be transparent about what we’re doing and the results we’re getting.
Don’t wait for feedback — seek it.
Although we accomplish a lot informally, it seems more effective when we formalize the feedback process. We do that through a 100-question annual employee survey. I recently reviewed the results of how employees evaluated their managers, which indicated we had some work to do in a couple of areas. We met with the leaders and employees of these areas to better understand the situation so we could make informed decisions on how to improve it. The goal is not to call someone out, but to identify challenges and solve them so they do not hinder future success.
Employees feel comfortable asking direct questions.
There’s a difference between being invited to ask pointed questions and employees feeling comfortable enough do so on their own. Most leaders would say they have an open door policy, but do the employees feel the same way? At Marco, we’re no different. We. too, feel we have an open door policy, and we work hard to make sure the employees feel that way, too. A transparent culture isn’t just sharing financial information. It also needs to be demonstrated by leaders whether they’re in the hallway, lunchroom or the grocery store. Be approachable whenever you interact with employees.
Leaders publicly respond to questions and issues.
Another way to demonstrate transparency is to openly address complaints and issues when it’s a company-wide matter. After hearing “issues” about our new building in the hallway just days after we moved in, I sent out a voicemail to everyone in the building so they knew we heard them and more importantly, we were addressing the issues. None of them were big, but they all warranted attention and the employees needed to know we had an action plan.
Develop a business strategy that engages all levels of the organization.
It’s not enough to just engage senior leadership or managers when developing our annual strategic business plan. We believe employees at all levels have a responsibility for strategy; so we lead a series of planning sessions that involve a cross section of team members in developing a plan that considers all aspects of the organization. In my opinion, this is a best practice that helps achieve buy-in for executing the plan.
Transparency boils down to communication, involvement and execution. Sounds simple, doesn’t it? It takes a commitment; but in my experience, the investment has been a catalyst for our success at Marco.
