I’m often asked how much financial information you should share with your team.
Agency owners generally want to be open in such matters in order to engage their people in the running of the business.
Transparency is common today, but it’s not always been that way. When I ran my agency we were very transparent with the figures, ahead of our time in my opinion. That said, we didn’t share financial information down to net profit level and I don’t recommend my clients do now either.
Albert Einstein said “Information is not knowledge”.
The complexities of running a business and the nuances of financial performance took me a long time to grasp. Even then, the numbers didn’t always behave in the way I expected them to. I still found myself struggling to understand how even in a very profitable year, our bank balance wasn’t always as healthy as I expected it to be.
If you share too much, the information can very easily be misinterpreted or misunderstood. When a junior member of your team hears you are making 10 times their salary in EBITDA, it’s very easy for them to think “well I deserve a bit more for all my hard work” etc.
Far better to try and educate people on the business performance in other ways using year on year comparisons and visualisation.
STANDSTILL agencies share information.
STANDOUT agencies share knowledge.
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