I’ve worked for ranches that share all their financial information with employees, some that share no financials with employees, and a few that fall in between. A quick comparison of the success of those ranches by sharing level shows that sharing more information leads to better outcomes.
Now, I recognize that talking about financials is almost as much fun as talking to teenagers about sex. Or talking politics with your family from town at thanksgiving. Many of us have been explicitly taught to never talk about money, politics, or religion in polite company. Many of us are shy. Maybe we’re worried our employees are going to know how poorly we’re doing. Maybe they’ll think we take too much out of the business. Some of us can’t share our financial information because we don’t have it.
Sharing financial information goes hand in hand with presenting your team with a crystal clear picture of your vision for the ranch. What does success look like? Are you shooting for a 75% or 95% breed up? Are you trying to get annual cow costs under $500 or $1,500? Do you want to graze 6 months of the year or 10? Often, we don’t share our ranch vision for many of the same reasons: we’re shy or we don’t have one. If you don’t have one, that needs to be fixed right away. WHY ARE YOU INVESTING ALL THIS TIME AND MONEY? More importantly, what are you asking them to invest their time in? And how will either of you know if you’re doing a good job?
When you share your vision, you create an environment where your employees can become your team. Your financials, paired with your ranch performance data (preg rates, weaning %, yield per acre, etc.) is your report card. Sharing financial information helps them know where they stand and empowers them to help you do a better job managing the ranch, just like sharing weaning percentages does.
Of course it’s appropriate to ask for respect and confidentiality. But, in exchange what you really want is their creativity, individual insights, and concern. We all see things differently, let’s get those ideas out in the open. It is also appropriate to proactively explain that you probably won’t implement every suggestion. This is more like brainstorming. Start with as big a list of ideas as you can, then sift later. And, if you want to help employees grow into bigger roles, let them flesh out ideas more fully. Help them develop a draft budget, or a comparison table to evaluate their idea. Maybe it requires a business plan. Maybe if it’s a big project, they get a stake in the outcome.
Rachel Cruze (daughter of Dave Ramsey) often talks about the connections between money management and building a strong marriage (I don’t know if she still leads the Money and Marriage seminar). Although it can be awkward at first, bringing difficult topics like spending into the light can bring us closer as a couple. It’s the same in your business team. Talk about the hard things. Clarify your vision. Enlist team member support in cost control. Get more eyes out on the ground looking for ways to improve the business. Let them have input into the budgeting process and some accountability at the end of the year.
None of us have all of the answers in a business as complex as agriculture. Convert your employees to team members. Recruit their mind, hearts, and backs. The blind leading the blind is a fast track to nowhere good.