Our CEO, Shawn Burcham, wrote a candid note on the topic of accounting, transparency and Mission, Vision & Core Values. Transparency has helped PFSbrands rapidly grow over the last 10 years! Below read why he thinks open book management starts with a successful educational foundation and are directly connected to the values of a PFS! [You can find his full article over at ShawnBurcham.com]
A Unified Mission Requires Education
I knew as PFS grew, I needed to do things much differently. I decided the first step was to formalize our mission statement, vision statement, and develop a solid set of core values. I didn’t use a “cookie cutter” template. Instead, I put a lot of thought into my views and what had gotten us to where we were. I came up with the Happiness Rule which consisted of 13 core values that I expected everyone to live by.
At the same time I introduced the Core Values, I took the first step to open book management and assigned every general ledger (GL) code in our company to a particular individual. The point is to assign the line item to the person who can most directly impact it.
At the time, my Controller (the only Accounting Department I had) and I were the only ones trying to review and keep up with over 500 GL codes. I can honestly say that our Controller was not on
board at first with open book approach. In many cases, it is the Accounting Department that holds owners hostage and they are more unwilling to share the numbers than the owner. Many times, the initial reaction from accounting is fear of job security.
To successfully implement open book management, the folks in your Accounting Department must have a great deal of self-confidence and understand the end goal. Looking back, I did not do a very good job of educating this individual.
If I had it all to do over again, I would require this person to read the same books I had read so perhaps they could share the same vision of a vibrant culture and a company where everyone knew the rules.
[SIDE NOTE: Five years later we now have 7 individuals in our Accounting Department. There is still a major need for talented folks in accounting within an open book management company.]
For entrepreneurs who see value in creating an open book management approach, don’t think that you can open your books and expect major changes to occur. What you likely do not realize is that you don’t know what your employees don’t know.
I was extremely fortunate to grow up in a family that talked a lot about business. My parents owned a couple businesses as I was growing up and I was able to work in those businesses. My mother and father both had (and still have) great business minds.
Around the house and around the dinner table, we often talked about business. I went on to earn a degree in Business Management from Missouri State University. What’s my point? I took all of this knowledge for granted and falsely assumed that everyone else knew about business. That was a huge mistake on my part.
Keeping everyone in the company focused on goals and educating everyone from the top to the bottom of the organization on a united mission and vision is of vital importance. Do you have a question for Shawn regarding open book management or this article? Please leave a comment below!