Categories
Employee Training Leadership

Think like an owner

Would it impact your business if your employees knew how their work affected your balance sheet / income statement, regardless of their role?

Jack Stack, of “The Great Game of Business” (GGOB) fame has a saying: “Share the insomnia”. In other words, if something is keeping you up at night, why not share that concern with your team?

To be clear, Stack does not mean that you should share something simply to scare or worry your team and provide them with no other information. He also isn’t suggestion you share the cause of your insomnia only when things are bad.

Instead, he advises that you not only share the concern you have, but also educate your staff (leaders and -all- front line employees) on why something is a concern, what drives that concern, which activities in the business drive the outcome you’re concerned about, what market activities impact this outcome, and so on.

This is the primary strategy that drives the GGOB. Imagine how it could change your business if everyone on the team truly understood how their work affected the company’s balance sheet and income statement – regardless of their role.

This isn’t as simple as handing someone a balance sheet and an income statement and expecting them to simply figure it out. Remember, I said “truly understood how their work affected” those documents.

GGOB isn’t a free lunch. Using it involves taking the time to educate your people regardless of their role about why these reports are important and how their department and their job directly impacts one or more lines on those reports.

I’ll bet a lot of owners don’t have that level of understanding about each individual role within their departments. Some may get it at a higher (departmental) level, but most don’t if you asked role-by-role.

As owners, we understand a team member’s role and why their work is important, but understanding specifically how each person’s work drops to the bottom line is another thing entirely.

Time and time again, I hear owners talk about how they want their people to think like an owner, despite their people having no skin in the game other than keeping their job. Sure, they may not be risking what you are, but they also have no shot at a piece of the reward. What should spur them to do anything other than what you told them?

Remember what you told them? “Just do your job.”

Some of us expect our team members to be internally driven like we are. While some are, many owners seem to expect it from everyone. If that’s you, you may wonder what motivates the rest of your team. A better question is “What motivates me?” Is it the possible return combined with the fear of the risk we’re aware of? Maybe it’s the sleepless nights (there’s that insomnia thing again).

If a team member is unaware (or not participating in) the risk, and they aren’t participating in the possible rewards, and they’re unaware of the reason why you have business-related insomnia, how can you expect them to act like an owner?

How can you expect them to think like owners if you haven’t told them how you think and how you make decisions? They aren’t mind readers.

Your people don’t know what you know (mostly) & they haven’t been asked to think about those things – and this often includes things that relate to their role.

When you grumble “Just do your job”, how can you wonder why you can’t get them to understand why the company’s scrap rate matters? Have you bothered to explain in detail how scrap rate affects your COGS, profit margin, etc.?

They can’t unless you explain it.

When you say “just do your job”, are you surprised that’s what you get? You didn’t tell them to “act like an owner” and explain what you think that means. Unspoken expectations are poisonous.

Explain how their work falls directly to the balance sheet and how that impacts the company’s ability to keep them employed, improve their pay and benefits, regardless of role.

Once a part timer sweeping the shop understands that the 39 bolts they tossed in the trash each day cost $1000 a month (at $0.86 each), they understand why it’s important to the company to pick the bolts out of the dust pan. $12000 a year important.

With that education, no job feels meaningless, regardless of role. That’s when people start to think like an owner.

Photo by Etienne Girardet on Unsplash