Momentum Podcast: 258
Team Transparency Creates Momentum
by Alex Charfen
If a business doesn't create profit, it doesn't stay in business. Most CEO's don't transparently share numbers. If you're not sharing profitability with your team, they're likely making assumptions that aren't close. By having a discussion around numbers, it becomes a non issue.
Full Audio Transcript
I'm Alex Charfen and this is the Momentum Podcast made for empire builders, game changers, trail blazers, shot takers, record breakers, world makers and creators of all kinds, those among us who can't turn it off and don't know why anyone would want to. We challenge complacency, destroy apathy and we are obsessed with creating momentum so we can roll over bureaucracy and make our greatest contribution. Sure, we pay attention to their rules but only so that we can bend them, break them, then rewrite them around our own will. We don't accept our destiny. We define it. We don't understand defeat because you only lose if you stop and we don't know how.
While the rest of the world strives for average and clings desperately to the status quo, we are the minority, the few who are willing to hallucinate there could be a better future. And instead of just daydreaming of what could be, we endure the vulnerability and exposure it takes to make it real. We are the evolutionary hunters, clearly the most important people in the world because entrepreneurs are the only source of consistent, positive human evolution and we always will be.
Team transparency creates momentum. This is an intense week for me and my company. In fact, it's weird. It's our week where we do annual planning. Like I said in a couple of podcasts ago, our company plans on a July to June annual calendar, so it's the end of June. We're planning our next year's calendar and we have had a ton of what we call targeted interactions. We got together on our annual. We're getting together on our quarterly. We got together on our monthly all hands results meetings, a meeting where we share everything that happens. In each of these meetings, we are intensely transparent, not a little transparent, not kind of transparent, but intensely transparent.
In each of these meetings, we share what our topline revenue is, what our bottom line revenue is, where we're going as a team, what's happening. In our monthly all hands, we get every member of our team into a meeting. We do this on Zoom because we're a remote team and we share everything. We share where we are as a company, how much money we made, how much money we spent, how much profitability we had, and we show the entire team what's really going on in the organization. It was interesting.
Tonight, Matt Olaya was on the call and you've heard me say his name before. He's our CMO. He's also a good friend of mine and somebody that I've known for years now. Matt worked with us in our real estate business years ago. He shared tonight that the first time he was ever in one of our monthly all hands meetings where we put up expenses and profitability and we showed the whole team where we were, he said he was like looking over his shoulder and thinking, "Does everybody realize how rare it is that we're seeing all of these numbers?" Part of the reason that Matt is back on our team is because he wanted to come back to the cadence and the transparency and being able to see what's going on and understand what's happening and actually having responsibility.
I often tell CEOs, if you want somebody to be responsible, give them responsibility. If you have a team that doesn't understand what the score is, you're going to have a hard time winning. The most important score in a business is how much money is the business actually making? Now I realize what happens with people all the time. You can make the argument the most important number is how many clients we have or the most important thing we do in this business is create a customer effect because without that we wouldn't have profitability. I know. I've heard all of those arguments. But the fact is if a business doesn't create profit, it doesn't stay in business and your business's number one goal should be to survive. By getting everybody together and sharing with them where you're going, it will change everything for you. Not just where you're going but what you actually achieve.
Now here's the big issue for CEOs. Whenever I talk to somebody ... I just had this conversation a couple of weeks ago at our event. When I talk to somebody who isn't transparently sharing numbers, here are the types of questions I get. What will my team say when they find out how much money I make? What if I'm only paying somebody $38,000 a year and they see that I made $300,000 this month? Won't the team get upset when they're not getting raises but they see that we're making more money? Won't this cost all kinds of problems?
Here's my answer to all of those questions. No. Because here is the real problem. If you're not sharing profitability with your team, they're making assumptions that are probably a lot better than what reality is. If you tell somebody I run a $10 million company, I've said that before to someone and said, "Well, our company does around 10 million a year." I've had somebody say, "Holy cow. You make $10 million a year. That's like a million dollars a month." I always want to explain to them like there's this thing called profitability and expenses but I don't. But it's a good indicator of how most people look at entrepreneurs. If you run a hundred million dollar company, people assume you're completely loaded.
The fact is there's entrepreneurs out there that run a hundred million dollar company that might only make a few hundred thousand dollars a year based on how that company is running. When you share with your team transparently, you show them the scoreboard, you show them what's going on, you give them responsibility and here's what you really do. You make the discussion of revenues a nonissue because everybody knows it. You make the discussion of profitability a score because everybody understands what it is. Instead of them getting more challenged by what you're making, instead of them looking at you and wondering what's really going on, instead of the $38,000 person getting frustrated, when everyone understands with transparency that this is how things work, it becomes a nonissue.
I know that's hard to trust and I know that's hard to understand as a CEO if you've never done it. If you've never shared numbers with your team, it can feel precarious. It can feel like you're putting yourself out there. It can feel risky. It can feel like maybe they won't come back to the way that you want them to. Now, here's reality. If you haven't shared numbers with your team and you have a decent sized team, you might have a few people that don't do well with it. Those are people you want to redeploy. If somebody doesn't get excited about the fact that you're sharing with them ... That's what Matt was saying tonight in our call. He was saying, "A few years ago, the first time this happened and I saw the actual numbers, I was looking around and I was wondering why everybody else wasn't surprised by it." Because Matt was thinking what a privilege it is to be able to see these numbers. How amazing is it that they're actually showing us what's going on. This is a company that trusts us.
If you have someone on your team that sees it any other way, if you have someone on your team that thinks you're making too much or someone on your team that sees the numbers and starts acting weird or someone on your team that once you become transparent, reacts in any way other than positively, then I want to give you full license and permission to redeploy that person because if somebody doesn't have the maturity level to understand the profitability of the business, they probably don't have the maturity level to be in your business.
Because as a CEO, here's what I want. I want every member of my team to understand what's important to me. I want every member of my team to understand the outcomes I want so they can help us drive there. And I want every member of my team to have the same focus and the same drive that I have around the same things. When we get together for our monthly all hands and we share everything with everyone, they understand.
Every morning in our daily huddle, when we share dollars sold and dollars collected, they know exactly what the company is making. Everyday that we share our sales numbers and our lead numbers and we share with a high level of transparency, our entire team understands the momentum they're getting together and creating, and to me, that only creates more momentum.
If you're hiding numbers from your team, if you're holding information back, if you're not showing them what's really going on, I want you to understand something. You are not getting everything you could out of that team because when they understand what's really happening, when they have clarity around what's happening in the organization and where numbers really are, when they know with certainty how the company is doing, they're not going to rebel against you. They're not going to turn against you. They're going to lean in more than you've ever felt a team lean in. They're going to be more enthusiastic than you've ever felt a team be.
When you share transparently and tell people what's really going on, they know that you trust them to help you build your business, which if you're like me, it's one of the most important things in your life. I give my team a tremendous amount of responsibility and information and they pay me back by helping me grow the organization I want to grow.
If you're ready to start growing your business, if you're ready to start really seeing numbers go up, then I have a hack for you. The most important metric for entrepreneurs is net worth, and one of the biggest challenges we have as entrepreneurs is we don't track our net worth. We don't hack our net worth. We don't grow our net worth and I want you to do that. See, if you drive not only for company profitability like I said before, but also to take that profitability to your net worth and improve your bottom line, you will grow a company that's responsible. You will grow a company that's productive. You will grow a company that's effective and efficient, and I want to help you do that.
If you're ready right now to improve your net worth, to understand how to hack it to start growing the actual financial backstop you have in the world, go to billionairecode.com/networth. Again billionairecode.com/networth and find out the three reasons that net worth is the most important metric for an entrepreneur and how you can start hacking and growing yours right now. Billionairecode.com/networth.
Thank You For Listening!
I am truly grateful that you have chosen to spend your time listening to me and my podcast.
Please feel free to reach out if you have a question or feedback via our Contact Us page.
Please leave me a review on iTunes and share my podcast with your friends and family.