Kevin Wilhelm

Like many companies, the financial times we’ve been living in for the past year and a half have tested the values and business model of my consulting company. When firms began looking for any way to cut costs, we saw client after client lay off employees, cut travel and advertising budgets to the core, and for many, cancel or delay their sustainability efforts. As a consulting business, we were suddenly viewed as an extra expense, much in the same way as other service based businesses were at the time.

All of this put tremendous pressure on our own company’s bottom-line, and like most CEOs, I was desperate for any way to save money or create new client and revenue opportunities. I decided that one way to do this and to minimize employee anxiety would be to become completely transparent and engage them about our financial forecasts for the year. While conventional wisdom told me to hunker down and hold the company’s financials close to my vest, I decided to fall back on our sustainability values and open up my books to every employee in my company

I never considered this option before. In fact, although I had read case studies of other organizations doing this, I had never known anyone who had personal experience with this level of transparency. But with revenues declining and the feeling that my employees would benefit by having more information about the economic uncertainty, I figured that I had little to lose and much to gain. So on March 1, 2009, I decided to go for it and be 100 percent transparent about every financial and day-to-day transaction within the company.

The first step was to implement “open book” financials. I facilitated an honest and frank discussion about what the recession and financial crisis could mean to our industry and more specifically our company. From there, my employees and I dissected the entire budget and revenue forecasts line by line. We examined every aspect of the organization and I quickly found that by trusting my employees with the financials, we immediately started brainstorming ways to save money, get new clients and improve our process efficiency. More importantly, this new level of transparency led to increased morale, a better financial understanding for my employees and stronger employee buy-in.

Better financial understanding

Up until this time I was solely in charge of the financials as the CEO of a small and growing business.  From time to time my employees would make budget requests for things that would enable them to do their jobs better such as new software, conference registrations and the like, but with little budget available I was forced to say no. What I found by opening our company  books was that my employees began to have a much better understanding of the reasons behind these decisions. Instead of just me just saying “No,” together we’d decide together, “Let’s hold off on that for the next few months.”In fact, in many cases it was my employees themselves who mentioned shifting some expenses into the future and cancelling others.