Workers are increasingly feeling disconnected and unmotivated at work, and a company’s best solution might be to open the books.
To achieve the maximum benefit of open-book financial practices and fully engage employees, mini games provide action-based learning opportunities that help employees understand how their job function affects the company’s bottom line while giving them the tools they need to make more efficient and profitable decisions.
The No. 1 misconception about transparent financing is that the method is only about sharing the financials. In actuality, the method provides a direct line-of-sight between financial outcomes and the operations that create the numbers.
Mini-games — small-scale incentive plans designed to fix a problem or exploit an opportunity — help employees realize how they connect to that bottom line number while developing critical thinking skills. Developing a successful mini-game requires learning leaders to identify the key issues, determine who is playing, develop a way to measure success and choose a reward.
Atlas Wholesale Foods Co., a third generation food service distributor in the Detroit area, considered opening its books and delivering mini-games at a time when the company was losing $25,000 per month. One of the company’s mini-games, Zero Dark Thirty, was focused on reducing mispicks — in the team’s words, the quest to assassinate errors when filling a customer’s order. With each mispick costing Atlas $50, the participating team set out to achieve less than 30 picking errors over the course of 90 days, or three 5-day streaks with no errors.
By focusing on the issue of mispicks and discussing results and process improvements daily, the mini-game yielded a 37 percent reduction in costly picking errors. Since implementing the program, Atlas’ net profit for the past two years is at its highest. Sales grew 13 percent in 2013 and 11 percent in 2014 in an industry where double-digit internal growth is rarely achieved.
But achieving success by sharing the books requires every employee within the organization to have financial literacy. Mini-games also can be some of the most effective ways to teach these skills.
At Springfield Remanufacturing Co., executives developed a version of the Monopoly board game where teams of employees compete against one another over the course of a few months. Each week, teams are asked a different question such as “What is the definition of cost of goods sold?” Only after reciting the correct answer are teams allowed to advance their piece.
Rich Smalling, CEO of oil and gas pipeline compliance organization American Innovations, also found a creative and effective way to teach the basics of financial literacy. Instead of using the checkbook analogy to explain the income statement to employees, Smalling cuts a pipe into four pieces, representing cost-of-goods, people costs, all other costs and earnings to help employees visualize how profits are determined. By getting creative when teaching financial literacy, employees are able to better comprehend and retain the information.
For companies looking to engage an increasingly unmotivated workforce, transparent finances provide a solution that empowers employees to take ownership of their job functions and think critically about how they can add to the company’s bottom line.Filed under: Measurement