If you want your employees to think more like you do about your business, you should give them the same opportunities you’ve had. These include:
- The chance to profit when the business profits
- The experience of suffering when the business loses money
- The chance to see how the bottom line is actually produced — how, for example, revenues and expenses translate into profits
- The experience of raising money, either by borrowing it or by selling stock
- The chance to read financial statements, including P&L numbers and balance sheets
Most attempts to include employees offer them only one or two of these opportunities to learn, at best. And that’s fine as far as it goes. But if you want more from your people, it seems logical to assume that you have to give more to them. And I’m not just talking about financial incentives.
You may be worried about sharing financial information with your employees. You may think it is a waste of time or puts your business in jeopardy. I haven’t found either of these two things to be true. Experience has shown me that most employees have naive and often cynical ideas about how profits are made. And the more they know about what’s really going on, the more loyal they become.
[Ed. Note: Mark Morgan Ford was the creator of Early To Rise. In 2011, Mark retired from ETR and now writes the Palm Beach Letter. His advice, in our opinion, continues to get better and better with every essay, particularly in the controversial ones we have shared today. We encourage you to read everything you can that has been written by Mark.]