Think Like an Owner
At our company, it used to be that many of our employees thought that most of us drive Porsche's and Lamborghini's, shop at Oscar de la Renta, and are rarely in the office due to playing golf or one of our many vacations in Europe. Some of them were thinking that you wouldn't expect anything less when you work for a large cleaning company that probably makes millions every year in net profits?
Well, that is what some of our employees used to think anyway. No matter how much we explained that it "takes a lot run a company,” they still envisioned sports cars and extravagant vacations with all the extra money we were making as a company. The challenge was for us to figure out a way to enlighten our employees along with engaging them.
Back in 2010, we adopted a concept called Ownership Thinking; the premise is to engage employees to think more like owners through financial transparency. A more palatable way of explaining "it takes a lot to run a company" put in understandable terms. All the numbers are laid out from revenues to expenses in consolidated categories (e.g., revenues, labor, supplies, general and administrative) along with specific key performance indicators (e.g., cost of turnover, number of A/R collection days, sales, workers comp). Each member of the team is responsible for the numbers related to their area of the company.We meet as a team monthly to review the previous month's numbers along with forecasting the upcoming month. Each team member is responsible for the category assigned to them. They are expected to answer the variances between their forecasts and the actuals along with answering team members questions. Practicing this concept has allowed a Human Resource Manager to understand the nuances of sales or an Area Manager to understand the real cost of employee turnover. Overall, it brought a reality to the numbers and the phrase, "it takes a lot to run a company" took on a whole new meaning.
The more you think like an owner, the more you realize that thinking like an owner means that if we truly delight our customers, and pay attention to all facets of the business, then we are a successful and long-term company. Now our employees know that we don’t make a huge profit. Our industry statistics tell us that in a good year the pre-tax profit is in the 3-5% range. In addition, we share a percentage of the net profits (pretax) each year with the team members adding an incentive to thinking like an owner.