Next Step – Open book management!

Two years ago only three people saw Next Step’s annual budget; me, our CFO and our accountant.

Last year, I opened it up to the whole management team. I wanted their insights and also for them to take ownership of their line-items. It worked well. Everyone took this role seriously and worked hard to make their budgets and/or cut costs.

This made me realize that if you have the right people on the bus, they’ll want to take ownership and make a difference in the budget. So then I started thinking, why not the whole company? If everyone is involved in making budgets and saving money, wouldn’t that be better?

Plus they’d have a better appreciation of what really happens with expenses, revenue and profit.

So I am doing it. Next year, the budget will be open to everyone and most will play a role in managing specific line-items. Jan Resch, Next Step’s VP of Finance suggested to gives bonuses to those who stay within their budget. And even bigger bonuses if they come below a budgeted expense. This will give everyone an incentive to be fiscally responsible. I love that idea and we’re doing that too.

One important thing though. I do not suggest making public everyone’s individual salaries. That could lead to much stress within a company. There is a way show the budget so that people don’t know each others’ salaries.