Open-Book Management Works. You Just Need to Get Over These 3 Hurdles
My sister and I have selected very different lines of work. She is a nurse practitioner, having spent her career working in nursing homes, operating rooms, and currently in the field of breast health. Needless to say, nothing fazes her about the human body. She has seen and heard it all and she assures her patients there is no way they can surprise her. She tells them she needs to know everything to really help them out.
Her experience with her patients reminds me of what it is like when I first start working with a company. In order to diagnose the underlying problems within a business, you must need to open everything up to view--and the best place to start is the financials. Regrettably, many company owners are hesitant to share this information.
Over the years, I have uncovered the following stumbling blocks to sharing:
They think their finances are a mess.
Everyone has their own special way to manage their finances and it's rarely as neat and tidy as they would like it to be. I assure you, your system for running your business is not crazier than anyone else's approach.
In fact, it's in the explanation of why you keep the books the way you do that a business consultant, financial expert, or coach can learn a lot about how your business works and gain insight into how you think. Walking through the financials reveals much about the owner I am working with. Once I understand from their perspective how money flows in and out of a business I have important clues to potential problems and opportunities for improvement.
They are afraid they will scare others.
One business owner I work with told me she could "never share the numbers--everyone would know how close we are to being out of business." This same individual had successfully kept her doors open for over a decade. Yes, she had times of good cash balances and times of scarcity, but she obviously knew how to manage through. She thought it was her job to carry this burden and shield it from others.
I convinced her to start sharing some key numbers with her staff. Instead of causing major concern, her staff helped her manage through the lean cash times taking some of that burden off her shoulders. Instead of running for the doors, they stepped up and helped out.
They will be exposed as a fraud.
Entrepreneurs and small business owners believe they have to be good at all aspects of their business and that those that work with and for them will think they are a fraud if they don't fully understand or track every aspect of their financials.
Financials may not be your strong suit, and that's okay. It doesn't mean you are flawed or a fraud. In fact, my experience is that the entrepreneur or small business owner is rarely the best at the financials. Your primary and most important role is to set the course for the future. Company financials should be reported to you in a way that helps inform your future decisions without feeling like a burden.
So, go ahead, plan a session to dig into your books with someone else. You will be surprised about what you can learn about business--and yourself--if you are willing to overcome the fear.