By Liz Belcher, CPA
Manager, Tax Services
The start of a new year is a time when students generally receive a report card outlining their progress and shortcomings. As you are perusing your child’s report card, ask yourself: how often you have undertaken similar steps to hold your company accountable for its results in 2016.
January is also when our political leaders deliver a “state of” speech, letting everyone know how we’re doing as a nation or state. You might consider the idea of a report card and giving a “state of the company” speech — Your Accountability Report.
Consider a company-wide meeting, if feasible, in which the leader goes over their 2016 performance along with the vision and goals for 2017. Having this sort of transparent accountability to your employees is a critical component of obtaining their complete buy-in and support.
The Performance Report should include non-financial as well as financial results. Thus, everyone is aware of what segments of your operations are meeting performance standards and which are lagging, and it becomes much easier to focus your team’s resources to improve them.
Many private businesses tend to keep most financial information confidential, for understandable reasons. But there should at least be some key performance indicators that you are able to share with your team. These Success factors should include data that the individual employees can impact on a daily basis. You should also stress the importance of keeping private data confidential, as a trusted stakeholder.
By showing your employees you trust them, you have a much better chance of having that trust reciprocated. When workers have a sense of ownership in a business, a feeling that their actions have a direct impact on the collective success, they tend to be happier and more loyal.
Although it’s not possible everywhere, an “open book” style of management is gaining in popularity.
Possible Key Metrics to review:
- How well did the company do against plans, such as a budget?
- How well did we do compared to previous years?
- What internal or external factors influenced our financial performance?
- Do we have a motivated workforce?
- Were we Innovative enough?
- Have we created a pathway to success?
- Can we measure Employee Morale?
Here at Sponsel CPA Group, we do this twice a year. We gather everyone together and deliver an annual “Accountability Report” at the start of the year, followed by a six-month update. We lay out our accomplishments and our challenges with equal candor. We list expectations of the team and request the team’s expectation of the leaders of the firm.
By giving your employees a “report card” to measure the entire organization against, they will have the sort of buy-in that is critical at times when they are expected to go above and beyond, often making personal sacrifices in the process.
We find this is especially beneficial for younger employees. As a group, Millennials have a deep desire to feel like they are part of something greater than themselves. They want to know that the company is moving forward in a way that is consistent with their vision of their professional life.
As CPAs, we help a lot of people with their tax returns and end-of-year financial reporting. We know there are business owners who think they’re only accountable to third-party entities — banks, clients, investors, etc. We think these leaders are leaving out the most critical stakeholder to their success!
Business owners shouldn’t leave out their employees. Whether your results for 2016 were good or bad, share as much of that information as you can with your team. Knowing where you’ve been will help you build on your successes for a better 2017. Also, clearly define your vision for 2017 and make sure as the leader you also clearly develop the path to that success!
If you need help generating a report card for your organization, please call Liz Belcher at (317) 613-7846 or email [email protected].