Many business owners often take stock of their life and business performance. They spend some time developing clear strategies and plans on how to get the most from their business, the issue of measuring business performance will inevitably rear its head.
However, the discussion on many of our advisory boards has historically been, “I want to get the most from my team so I want to share the performance of the business but what can I share?”
The complexity in this has been around: I don’t want the performance of the business to become common knowledge, or if I share our profit, people will want a pay rise or a bigger bonus. Navigating your way around this issue can be complicated so here are a few guidelines that have come out of our board discussions.
Keep it simple when sharing business performance
As the business owner you are intimately aware of each nuance and subtlety in the numbers you look at. Your staff on the other hand focus just on what they do, so any performance information that you present needs to have straight forward numbers. Compound indices showing a percentage of a fraction relative to something else will not have the meaning you want to convey. If for example you want to show production give a simple number showing how many products have been produced. In short, make sure the number has meaning to them and reflects how the business is performing.
Be relevant
Not everyone does the same job in the business so no one number will work for everyone. You also need to make sure that the number you present and the rewards they derive drives the behaviour you want. For example if you want a sales team to work more closely together to support each other, then presenting a sales league table would not be desirable. Equally if you are not directly involved in sales having sales performance information in front of you will not be relevant.
Be timely
Sharing business performance data cannot be a one off event. If you start this, you will need to continue. It may not go smoothly to start but persevere, improve your approach and keep going. The rewards will come. Show the data at a frequency that people can affect. For example if you make widgets then ideally you will show production staff how many widgets they have made that day, if you show this on a monthly basis then by the time they see what they produced it is too late to affect the number. If you are a salesperson daily information is probably too much. Most likely they can affect the outcome that quickly.
Build Trust
Your staff don’t want to sabotage you or the business. So share the numbers and give them meaning. This does not mean you need to share everything and you don’t want to set expectations of huge bonuses. You can share revenue with an explanation of costs but profit may be a step too far. Think about your targets and what people need to see to help them achieve their goals. This means you can create a company culture based on trusted relationships.
Focus on achievement
When you present a number on its own it does not have meaning, it is not clear if that number is good or bad. If you are presenting a production achieved you may want to show the target, this could be a simple colour code of better than, on target or worse than target. The target may be where you want to be or it may relate to what was achieved in the last period. The number will need a reference to compare against but also don’t under estimate the value of explaining the context and why a number is what it is.
So there are my top tips on how to share business performance effectively to not only motivate employees but to celebrate success.
