Your employees feel significantly less anxiety about their jobs if they work at companies that are open and transparent about the firm’s finances, including budgets and profits.
This is especially true if you have less than a dozen employees. That’s because your company may be more vulnerable than an established small business, which may be generating a profit, or at least has investors who are ready to step in if there is a downturn in the business.
A recent study emanating out of the U.K. confirmed my belief. It noted that the benefits of being more transparent are that workers felt more secure in their jobs, more committed to their employers and—most interestingly—said they had better relationships with their managers.
Hui Zheng, lead author of the study and associate professor of sociology at The Ohio State University, suggested that the link between greater transparency and lower job distress was strong and constant even after accounting for a variety of other factors, including hours worked, income rank within the firm, gender, race, and academic qualifications.
“Transparency in disclosing financial information may substantially reduce job distress, particularly by smoothing relationships between workers and managers,” Zheng said.
The researchers used a unique data set with measures that are generally not available for workplaces in the United States or elsewhere, which allowed them to uncover the link between how companies communicate about their finances and worker stress. The data came from the Worker and Employment Relation Study and included 15,747 workers from about 2,500 workplaces throughout Britain.
Job-related distress was measured by asking workers how often in the past few weeks that their job had made them feel tense, depressed, worried, gloomy, uneasy, and miserable. They rated this on a five-point scale from “all of the time” to “never.”
Workers rated how well managers at their workplace did at keeping employees informed about financial matters, including budget or profits. Workers rated this on a five-point scale from “very good” to “very poor.”
Zheng added that it was remarkable how powerful financial transparency was at reducing job distress, even after considering other factors known to impact stress.
“Workers at companies with the highest levels of financial transparency had stress level scores about 15 percent lower than workers at companies with the lowest levels of transparency,” he said. “That was a bigger effect on stress than gender or income.”
Workers reported feeling more commitment to their company and feeling more secure in their jobs when they worked at firms that revealed more about their finances. But those effects were relatively small compared to how transparency was linked to improved relationships with managers, according to the study.
“Even though financial transparency is about disclosing budgets, profits, or other financial matters, the way it reduces job distress is not mainly about the money. It is about the relationships, especially with managers,” said study co-author Vincent Roscigno, professor of sociology at Ohio State.
Such practices will serve the company well and make your job as the entrepreneur a whole lot easier in the long run.
When I was in college, I was lucky enough to spend a summer in Thailand. I saved all year for the trip and tried to keep my expenses to a minimum. Even so, I was shocked when it came time to get my clothes cleaned there. The woman who helped me washed all of my clothes by hand. In exchange for hours of work, she asked for only $2 and refused to take any more.
What struck me most of all was the joy she exuded. Here was someone I shared almost nothing in common with, completing a task I had done hundreds of times, using a method I hadn’t ever tried. Her method, the soap she used, and even her feelings toward the task were new to me. But the end result was the same. This experience has stayed with me. Anytime it’s suggested that there is a single right way to do something, I think of her.
This experience instilled in me a determination to hire based on values. If your interview process gets to the heart of the candidate’s values, you’ll be able to decide if you’ll enjoy working with them, because working toward a shared mission is much more meaningful in the long run than workplace banter about your favorite sports team.
And more importantly, those employees may show you that there’s another path toward your shared goal, something you may have missed out on in an echo chamber of friends with similar backgrounds and experiences.
At the end of the day, you should hire the person who will do the best job, but it’s easy to mistake your comfort with someone for competence. So, make sure that your hiring process involves a few interviewers if you can, and outline the values that are most important to the role before you start interviewing. And when you get together with the hiring team to discuss each candidate, make sure that you each push to bring the conversation back to those values. Don’t let words like “impressive” or “likeable” go unchallenged.
Internal biases are something we all have. I know in my own companies, we are not perfect. But we are striving for better. We don’t just want to beat the industry statistics. We want to create an environment where everyone feels comfortable and like they can express their ideas freely. In doing so, I know that we’ll be better off as a company and will benefit from the sharing of ideas and debate. But I also know that we’ll make a positive impact on every single employee in the building. And that’s something we should all care deeply about.
As the company leader, I am constantly amazed by my team. I have seen the triumphant things they have accomplished, and they remind me regularly of how much I don’t know. We all have a choice when starting a company—hire people just like us who will reinforce what we already believe, or hire people who share our values but introduce us to new ways of thinking.
There is not one correct way to do anything, but you may be tricked into believing there is, especially if no one tells you any differently.
The art of emphasizing time management in the workplace is not new.
But whereas it used to be that entrepreneurs and their managers could keep an eye on employees, which led the employees to be more responsible with their time, the shift to a remote workforce has upset the equation.
A recent study by Canadian academic Brad Aeon, a graduate researcher at John Molson School of Business, Aïda Faber of Université Laval in Quebec City, and Alexandra Panaccio, associate professor of management at John Molson, which analyzed time management literature derived from 158 separate studies spanning four decades, six continents, and involving more than 53,000 respondents, seemed to reinforce that notion.
“People have more leeway in deciding how to structure their own time, so it is up to them to manage their own time as well,” Aeon said. “If they are good at it, presumably they will have a better performance. And if they are not, they will have an even worse performance than they would have had 30 years ago, when they had more of their time managed for them.”
This is where I would recommend a couple things. First, consider a workshop over Zoom with a handful of employees at a time, which explores best practices. Second, explore embracing some of the software applications like Asana, which will help employees manage their priorities, or Slack, which will help them reduce clutter in their inbox.
Another way to move them in the right direction is to help the employees see the bigger picture when it comes to time management. The researchers above found a strong relationship between time management and overall well-being.
“Time management helps people feel better about their lives because it helps them schedule their day-to-day around their values and beliefs, giving them a feeling of self-accomplishment,” Aeon explains.
That correlation, though obvious, is worth restating. The business owner wins because their business is more efficient AND because he or she is creating loyalty in the workforce, which also benefits the company.
There is one caveat to all this: Be gentle.
As the world continues to struggle through the COVID-19 pandemic, resist the temptation to compare time management skills with supposedly more successful people. This could backfire, creating what Aeon calls “time management shaming.”
“You see these social media posts saying, ‘Yes, there’s a pandemic, but I learned a new language or I woke up at 5 a.m. and accomplished more in a few hours than you will all day,'” Aeon said. “It makes the rest of us feel bad and creates unrealistic standards as to what we can and cannot do with our time.”
Instead, focus on how we are all on the same team. Be willing to identify mistakes that you have made, and how you are determined to do better. Your employees will match that determination, and your business will be the better for it.
Fear makes us do some strange things. It can keep us from starting something new. It can stop us in our tracks. Or it can cause us to turn into Tasmanian Devils, trying to do everything we possibly can to fix the problem, and usually causing a lot more problems along the way.
When I see entrepreneurs engaging in all of the unhealthy behaviors we just talked about, it’s usually because they’re scared. They’ve staked everything on the success of their company, and they’re going to do everything in their power to make it work, no matter the sacrifices.
This is personal for me. When I stayed up all night to make sure one of my companies closed our round of funding, I was feeling a mixture of excitement and fear. I didn’t want anything to go wrong under any circumstances. And that fear drove me to sacrifice my sleep (and the next day’s productivity).
Fear can be sparked by just about anything. A top-performing employee quits. A customer gets angry. The internet goes down for a day. You name it. There will be challenges in your business that bring your specific fears to the surface.
And when that happens, the passion you feel for your company may start to turn into unhealthy obsession. The only thing to do in these instances is to call attention to the problem. If you’re conscious of how much you sleep, the foods you normally eat, and the way you like to organize your calendar, you’ll be able to quickly recognize the warning signs of fear. When your routine gets out of whack, it’s time for a reality check.
Admit to yourself what’s causing this fear. Write it down. Say it out loud. Do whatever you need to do to draw some attention to it.
And once you’ve done that, slow down.
I know it feels like if you stop working for a second, you’ll never fix the problem. You’ll never make up the time. But this is rarely ever true. Stop working, walk away from your computer, and figure out how to address the problem. Do you need help? Ask for it. Call a mentor or a family member, and talk through the issue. Do you need deep focus? Turn off your email, go somewhere quiet, and do it.
Ask yourself, “What is the most important thing I need to do to tackle this problem?” Then do that, and only that.
And when you’ve solved the problem and start to feel the fear subside, it’s time for a reset. Just like I instructed my leadership team after a retreat, you need to find a way to make up that time. The reason is that you have to break the pattern of unhealthy obsession. Your system needs a shock so that you don’t continue on in the same unproductive pattern.
Try going to bed at seven o’clock one night. Turn off your phone for a whole day. Don’t set an alarm one morning. Read for fun. Take a short vacation if you’re able to.
After a reset, you’ll be better able to get back into your routine of healthy eating, sleeping, and exercise, and take control of your time again. Keep to that routine, and you’ll find yourself more productive and, just as important, happier.
In sum, don’t ignore the fear that pushes you into unhealthy habits. Do face your fear head-on and reset.
We constantly underestimate the value of words to build up or tear down.
While this is certainly true in everyday life, it is especially true in the workplace. And it is one of the reasons why I, as a serial entrepreneur, embrace the idea of bringing my employees together at least once a week to talk about their successes. It is validating.
Last month, a recent study out of Ohio State University (OSU) supports this practice. And not just once a week, but on an ongoing basis. Telling your employees something as simple as “I understand why you feel that way” can reinforce both their initiative and confidence.
In quantifying the value of positive reinforcement, the OSU researchers asked participants to remember a real-life incident that made them angry. When researchers did not show support or understanding for the anger participants were describing, the storytellers showed declines in positive emotions, the researchers summarized. But when the researchers validated what the participants were saying, their positive emotions were protected and stayed the same.
Similarly, study participants reported dips in their overall mood as they recalled the anger-provoking event, and only those who were validated reported a recovery of mood back to their starting point.
This speaks to the value of focusing on protecting positivity, according to Jennifer Cheavens, senior author of the study and a professor of psychology at The Ohio State University.
“We have underestimated the power of positive emotions. We spend so much time thinking about how to remedy negative emotions, but we don’t spend much time thinking about helping people harness and nurture positive emotions,” Cheavens said.
“It’s really important to help people with their depression, anxiety, and fear, but it’s also important to help people tap into curiosity, love, flexibility, and optimism. People can feel sad and overwhelmed, and also hopeful and curious, in the same general time frame.”
The full study, which was published online in the Journal of Positive Psychology, uncovered findings that are relevant for all relationships, she added.
“When you process negative emotions, that negative affect gets turned on. But if someone validates you, it keeps your positive affect buffered. Validation protects people’s affect so they can stay curious in interpersonal interactions and in therapy. Adding validation … helps people feel understood, and when we feel understood we can receive feedback on how we also might change.”
The results of such a practice are a healthy and profitable workplace, something all entrepreneurs can aspire to.
There’s been a lot of failure among small businesses in 2020. It’s been one of those years. As history tell us, those who do not learn from their failures may be doomed to experience failure again.
The first step to learning from failure is to put it in context.
If failure is met with chastisement, disappointment, or punishment within your organization, your team will take a risk-averse stance. In the case of 2020, the reasons for failure may have been beyond your control as a business owner or CEO. In most cases, however, there were actions you did take or didn’t take that contributed in part or whole to failure.
The next step is to put processes in place that maximize the benefits of failure.
When you try new things and explore new ways to grow, you will inevitably fail. You’ll sink some money into a software solution that doesn’t really work. You’ll try to overhaul some processes, only to realize there was actually no better way of doing them.
Failure happens. As a leader, you need to be okay with that fact and create a culture that celebrates failure. In fact, failure should be openly discussed and encouraged. Your team should love running experiments and testing their ideas as much as you do. And they should be taught to test their ideas in confined time periods, so that the consequences of failure don’t grow too big.
This latter approach is commonly referred to in the land of large enterprises as the Agile Approach, where incremental steps are taken, and then success or failure are measured, before another step is taken.
The last step is to stick with this philosophy and be patient.
Creating the kind of culture in a small or medium-sized business that applauds failure requires a lot of coordinated effort. Your employees don’t just show up to work each day and comply with everything you say. They also bring all of their past work experiences with them, influencing how they behave and what they think about work.
Culture is all about hiring the right people and creating the right environment to bring out their best, most creative work. It’s the key to making sure that your company can evolve, change, and outlast the typical business lifecycle.
Installing a culture that sees the value in failure doesn’t happen overnight. But it is within reach, and it will transform your business if you believe in its value. You’re in this for the long run, and investing in culture will ultimately lead to your company’s long-term success.