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Communicating financials with your team

January 21, 2014 -  By

This post is part of a threefold summary of A Better Way 2 Learn Financials’ 2013 Financial Management TeleSummit.  Presented by A Better Way 2 Learn, Go iLawn and Landscape Management, the event was held in three, live, hour-long segments Dec. 3 to Dec. 5. This is a wrap-up of the conversation “Talking Financials: How Successful Companies Communicate With Their Team,” held Dec. 5 with guests Jim Paluch and Frank Ross.

The most accurate reflection of a sports team’s performance—at any time in a game—is the scoreboard.

A defensive line, for example, can’t dispute it’s tackling up to par if the scoreboard shows its team is down 21 points in the second quarter.

The scoreboard is the No. 1 source holding that defense accountable for its performance. Moreover, the defensive linemen are aware of their poor performance because they can view the scoreboard the entire game. And, with that awareness, they also are able to adjust their tactics and come back to win the game in the second half.

The same concept rings true for Green Industry businesses, said Jim Paluch and Frank Ross, co-creators of A Better Way 2 Learn Financials.

Your company’s financial performance should be communicated to your whole team for it to understand your goals and what it takes to meet them, said Ross, owner-manager of 3PG Consulting.  If you do that, he added, you’ll find that communication becomes a “springboard” for your company to reach its greatest potential.

“As a team, we all love to keep score,” he said. “We want to understand how well we’re doing. When we don’t have a scorecard, we just don’t achieve the heights that are possible.”

Having financials to refer back to—whether to celebrate them or use them as a wake-up call to do better—is invaluable to a company’s performance, added Paluch, CEO of JP Horizons.

But, foremost, relaying that financial information to employees is the responsibility of the business owner, Paluch said.

He and Ross went on to detail who should be in the know about your company’s financials, how to present the information to them and what the payoff is for doing so.

Who should be in the financial loop?

Regardless of company size—whether you’re a husband-wife team or business enterprise of 300 employees—“everyone in the company can benefit from knowing something about the numbers,” Paluch said. “Everybody should be involved in a way that is meaningful to them.”

He encouraged putting that message on a Post-it note: “If it will help them do their job better by having the numbers, then they should have the numbers.”

And everyone, Ross said, can do his or her job better by having some financial record holding them accountable for their performance.

Crew leaders, for example, are interested in what they have control over, which is units of work performed and in how many hours, Ross said. Share that information with them and, most importantly, how their team’s performance affects finances.

How to share the information

“If you use the goals for the coming year as the method to break the ice, it’s a success every time,” Ross said. “(Your team) is going to be so complimented you’ve included them (in) the heavy decisions that guide the company, you’re going to open the door to a brain trust you didn’t even know existed.”

In some circumstances, Paluch said, business owners will have to regain their employees’ trust if they’ve alienated themselves and financials from their team for a long time.

The key in that scenario, he said, is to be patient and ask questions of your employees that naturally break the ice like, “What do you think?”

Another approach, he added, is to phrase those questions in a way that engages multiple employees into a debate.

After you’ve broken all barriers, converse “every single day” about financials, Paluch said.

The payoff

Providing employees your company’s financial information educates them on their performance, Paluch said. And from that information, they’ll be able to take action in the right direction to perform up to par.

Or better yet, Ross said, “get all of our guys surpassing the benchmark we put before them.”

For more content from the 2013 Financial Management TeleSummit, see “Building a business you can sell,” a summary of the Dec. 3 segment, and “Keys to a profitable, financially stable business,” a summary of the Dec. 4 segment.

About the Author:

Former Associate Editor Sarah Pfledderer is a West Coast-based contributing editor for Landscape Management.

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