By: Lee Boyland
In the built environment industry, the current climate seems to be booming. Design professionals are hammering away right now! So how does that translate to businesses’ financial success? It doesn’t necessarily mean their books are in good shape.
One tool we’ve added to our belt in the past few years is embracing and teaching open book management to our associates. Unfamiliar with this concept? Check out The Great Game of Business, which is the source we have used as a teaching tool. IDO has implemented a basic financial literacy course, and with this baseline level of understanding of financial terms such as assets, liabilities and profit, we are able to share our financial statements with the whole team and therefore, as a company, we can make sense out of our financial wellbeing. You may wonder how spending time educating everyone on basic business financials is beneficial. I have to say, I’ve experienced a new level of clarity with seeing and understanding this information. Instead of just relying on the feeling that “we’ve all been working really hard this year,” we can see the full picture of our cost of goods/services sold, what our expenses are and then what our net income is. We can see our profit margin and how we are tracking toward our annual goals. Seeing and understanding our financial progress is much healthier than leaving employees in the dark, and it takes some of the subjectivity out of why business financial decisions are made!
What questions do you have about open book management and creating transparency?