When employees know what is expected, it’s easy for them to succeed. On the other hand, when expectations aren’t made clear it’s hard for employees to meet those expectations. “If you don’t tell someone what you’re doing and what you’re expecting and how you’re doing it, then you can’t expect them to perform. How could you possibly tell someone they’re not doing their job if they don’t know what’s expected of them?” asks Charlie Gause, retired vice president of marketing for John Deere.
For that reason, Gause says it’s necessary for employees to have some level of understanding of how the business is doing from a numbers standpoint. “You need to take that to every level in an organization. One of the things I always felt was that in a dealership, you had to get everybody involved in the business, feeling like they were a part of the organization,” he says.
Jim Irwin, retired vice president of North American Business for Case IH, agrees. He says it’s important that dealers communicate to their employees how the business works, how they make money and what the expenses are.
“I heard a lot when I was running a company store for International Harvester. You’d go in the shop and talk to the service techs. Back then they’d say you’re selling $60,000 or $70,000 tractors. ‘You’ve got to be making a lot of money.’ But you’ve got to talk to them about where the profitability comes from in equipment sales. ‘It’s not all revenue; we’ve got to pay the light bill, the rent, the insurance, taxes and all the different things.’ A lot of dealers are afraid to give their employees too much information about the operation and the financials of the business, but I don’t think they can give them enough,” says Irwin.
Open book management and financial transparency is one way dealerships can improve their performance, according to Stan Jackson, Jackson Consulting. When employees understand the financial side of the business, they have a better understanding of how their own work impacts the bottom line, he says.
“Have a financial training program and run every employee through it. Start with, what does a business do? Why does a business do what it does?’ And then go through the fact that every transaction that’s made becomes a number in a set of accounting records.
“Explain to employees this is how your behavior influences or affects the numbers. I find there’s a pent up demand for everybody in a dealership wanting to understand the financial implications of what they do,” Jackson says.
To learn more on how one dealership has improved its business through communicating its financials to all employees, go to Farm-Equipment.com/JennerAg.
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