Show them some numbers

I grew up in Minnesota and you don’t talk about money in the midwest. My dad had a fancy title and wore nice suits. We lived in a good suburb with good schools. I assumed we were loaded and my dad’s salary was impressive.

Not because we lived extravagantly but just because no one would talk about it. In my little kid (and later teenaged) brain I looked at the clues, interpreted them and made an assumption.

Turns out the catchy phrase about what happens when we assume is true! When my dad finally shared with me how much money he made, it was nowhere near what I imagined it to be. Don’t get me wrong, we were fine and didn’t have to eat cat food or anything… but my brain had over inflated his earnings.

?Guess what — your employees are exactly the same way. When you don’t talk to them about agency finances and share some top line (AGI, profitability etc.) numbers with them, their imaginations get it wrong.

They multiply your billable rate times the number of employees times 40 hours a week and then they assume that’s your gross billings. And of course, you take the lion’s share of that.

I know it’s ridiculous to you. But it’s ridiculous to you because you know the truth. In the absence of facts, the mind can be quite inventive.

I totally get that many of you keep your numbers to yourself or maybe a key employee or two. But all you’re doing to asking your team to operate in a vacuum where they have no understanding or context.

No, I don’t think you need to share your salary or dividend income with your employees. But there’s a happy middle. A happy middle where they understand some basic agency math and how they can influence the numbers to help you achieve your annual goals.

Every one of your employees either makes or loses you money every day.

Let that sink in. Would you rather they understand how to help you make money or would you prefer them to carry on in the dark?

If you’re a completely closed book shop, think about how you might open the kimono a little. Talk about your quarterly AGI goals. Teach your employees what grows or or eats away at AGI. Talk about profitability and what factors move the needle.

If you share a few numbers, think about how you could educate your team about those numbers and celebrate when someone contributes in a positive way. Use those as teaching moments.

I’ll let you in on a little secret. Your employees don’t begrudge you your salary or dividends. They get it. You took all the risks, so you should enjoy the rewards.

But when you keep it all under wraps — they think your rewards are much greater than they are. They forget about taxes and their bonuses and the new computers and the raises. They don’t factor in all the lunches and the beer in the fridge and the workshops you send them to.

Teach them the numbers. And then let them help you improve them.

Drew McLellan, with Agency Management Institute, produces a weekly newsletter with updates, tips, and market information of value to marketing agencies, owners, and employees. If you'd like to receive the weekly newsletter, follow this link to subscribe.