Originally Posted by 94gt331
Just curious on open book management? Does this mean you show all your team members the finances, bills, how much you make on each job, and what your costs, etc, etc are? I find that to be a interesting idea, especially in this buisiness where you need your guys to work hard to keep the bills paid on a day to day basis. This year I started being more open with the things going on in the buisness so they are in the know more, and that really helped alot with the employee morale, allways thought about opening the books to my team, just wasn't sure about that yet.
We start the year with an annual strategy planning session. Division managers, their key people and some administrative staff are invited. The previous year is reviewed and financial goals and the strategy to hit them are recorded.
We have a weekly meeting where each division managers P&L is projected up on a screen in our conference room. They are expected to break down the P&L based on goals they have in place for the year/quarter. Specifically, they are responsible for sales, materials and direct labor. At the end we look at the whole company financials - so 100% transparent with that layer.
The division managers share a collapsed version of the P&L with their next layer, be it an account manager, foreman etc. This is done on a monthly basis, usually over lunch.
When it comes to much of our direct labor, it's blank stares when discussing financials. I did try an interesting exercise once with a cross section of all divisions. I had two employees come up to a large white board with very generic P&L items written without numbers. They were given $100 that represented the previous years total sales. Then in front of their peers we asked questions like - how much did we spend on materials and supplies? - how much on insurance? - how much on fuel? They had to give me dollars back based on the % of sales the specific line item was. At the end of the exercise they had $8 dollars in their hands - I then asked for $3 more to cover taxes. I then spent a few minutes explaining that the $5 left over was needed to fund growth - you service debt with after tax profits. Pretty cool experience for those who were there, you could see a couple of light bulbs turn on.