What makes a great company culture? It’s a question leaders often ponder, since they understand the tangible and intangible value that a great culture can have for an organization. Owners want a great culture. Employees want to work at a company with a great culture. Those who have gone from an “ok” culture to a “great” culture know that the difference matters. With today’s remote and hybrid arrangements, keeping the finger on the pulse of culture is challenging yet more important than ever.
A great culture is exhibited in many ways. Employees don’t like their job; they love their job. They don’t like their company; they love their company. Your colleagues become an extension of your family. There is less stress, less anxiety, less angst, less unpredictability, more smiling, more laughter, and more celebrating. A strong culture increases employee engagement and contributes to greater business success.
As a start-up, Elevation Talent Group has the luxury of starting with a clean slate and defining the culture we want to nurture. The foundation for our culture rests on our ELEV8 values, and we hold ourselves accountable to unwavering consistency in embodying those values.
Today I’m focused on one of our values: Transparency. More specifically, let’s explore how financial transparency can have a unique and significant impact on company culture, a concept often overlooked by owners and leaders.
Financial transparency ranges from not sharing any financial information to an “open book” philosophy. For public companies, financial transparency is literally mandated. There are detailed financial statements, laborious footnote disclosures, hundreds of pages of SEC filings. If it’s deemed even remotely meaningful to potential investors, it’s publicly available.
This begs the question: If the largest companies in the world are required to share all their financial information, why don’t private companies do the same? The answer is obvious: Because they don’t have to. Those owners and leaders develop reasons to rationalize and justify this philosophy. Although some of those reasons are valid, it would be beneficial to ask, “If we share this information, will the positives outweigh any potential negatives?”
There are many benefits to financial transparency; three stand out to me:
- It improves the financial acumen of the collective organization. This is a good thing. Share the P&L. Share the balance sheet. Share the cash flow statement. Not only that, discuss them. Explain them. Encourage questions. Debate. Believe it or not, if you ask a typical employee at a typical company, “How do we make money?” there’s a good chance they can’t articulate a reasonable answer. Eventually “the numbers” become interesting instead of being boring. Concepts like return on investment, opportunity cost, and operating margin are no longer foreign. You want your employees to understand your business model. You want them to know your financial condition. You want them to know what you spend and why. They will make better decisions every day within your business as a result.
- Financial acumen translates to deeper relationships with clients, prospects, and vendors. Lightbulbs go off with your sales organization. The ensuing dialogue with clients and prospects is far more meaningful. Clients and prospects are often stunned — in a good way — when they hear something other than the standard, surface level questions they always hear. They want to work with people who understand their business and care about their success.
- The third benefit of financial transparency is the most important: Trust. Creating a culture where information is shared openly and discussed frequently simply creates trust (another one of our ELEV8 values). When financial transparency is absent, it creates a shroud of secrecy. Questions like, “What is the executive team meeting about now?” Answers like “I don’t know” eventually become “I don’t care.” An organization with trust becomes healthier, engaged, motivated, and productive. You discuss the fruits of the labor in the financial transparency. You dissect the missteps collaboratively. It’s a cycle that becomes part of the bedrock of your business.
Culture means everything to us at Elevation Talent Group. We want our employees to have a deep understanding of our business, our results, our decisions, and our mistakes. We take it a step further by having not just one but two different long-term incentive plans for our employees. We want our team to be proud, loyal, and feeling like they are sharing in the success we have as a company and team.
To conclude, I’m struck by two quotes; one of them well-known and one less so. First, Peter Drucker long ago stated, “Culture eats strategy for breakfast.” A great culture is the ultimate defense against any strategic blunders. Second, as I’m anxiously awaiting the President’s Cup and watching hours of Golf Channel coverage in anticipation, I heard a quote from Arnold Palmer relayed by the President of Quail Hollow Club. In his esteemed wisdom, Arnie said, “Greatness is always under construction.” That’s a hole-in-one, Arnie!