By: Zeb Smith & Corey Jay, Zebulon LLC
The days of seasonal manager positions are quickly fading. One of the primary reasons outfitters are embracing year-round leadership is because they want to grow and maintain an engaged, high-performing workforce.
According to research by the recruitment agency Randstad, employees in 2023 crave meaningful work, long-term stability, and roles that emphasize worker well-being.
Although employees might not articulate it as such, today’s workforce wants a healthy employee ownership culture. Global financial leader Morgan Stanley puts it clearly:
“In a world of uncertainty, financial stressors and organizational upheaval, creating a culture of ownership among your employees can go a long way to helping them improve their financial well-being, build loyalty with the organization and become more productive, engaged workers.”
How Leaders Can Get the Greatest Return on Year-Round Managers
Many outfit owners and upper-level managers are trepidatious about hiring year-round staff and building strong employee ownership culture. How will middle managers - who thrive in the “all-hands-on-deck” pace of the summer - stay busy during the calm of the shoulder season?
How can outfitters get the greatest return on year-round managers, you ask? By educating your managers on your outfit’s financials.
In our experience, effective leadership begins with financial education. Financial education not only sets the stage for all future decision-making, it instills a sense of employee ownership in your company’s success.
The 3 Steps to Introduce Financials to Your Managers:
According to the Harvard Business Review, the main steps to develop and retain top talent include: Asking employees more questions about themselves, providing learning opportunities, and providing regular feedback.
In our opinion, and in line with HBR’s advice, here are the three essential steps to introduce financials to your managers. These can be delivered in a pinch right before your busy season, but in our experience managers do better - and outfits realize significantly better returns - when this is nurtured all year long. Below, we’ll go into more detail about each, and why they’re essential for developing and retaining your top talent.
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Make an intentional effort to understand your manager’s personal and professional motivators. This includes understanding their vision for your business.
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Introduce your outfit’s financials via a modified cash flow. (Details below.)
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Embrace collaboration and accountability. This includes setting targets, implementing progress checks, and regularly issuing rewards.
1. Understand Your Manager’s Personal and Professional Motivators
A motivated employee is a loyal employee. Personal and professional motivations directly correlate with an employee’s performance, so it’s essential to adopt an outward mindset and understand what your manager’s needs, challenges, and objectives are.
Pro tip: One of the most effective ways to discover employee motivators - and one we frequently use with our clients - is Gallup’s Q12 questionnaire.
Crucial questions to ask:
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Finance: What are their financial goals? Who (and what) are they supporting with their job?
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Vision: What is their vision for your business? How does their vision as a manager parallel yours as the owner, CEO, or leader of the outfit?
(Pro tip: As the owner or the leader of the outfit, if your vision for the company is not crystal clear, we recommend taking the time to clarify and share anew with all employees.)
If you are an outfit owner, you likely eventually want to hand the reins to your employees. Part of the hand-off process includes letting your key managers make decisions about where the business is going and how it will get there. Thus, knowing what makes them tick both as individuals and employees will help you provide the tools and resources to let their vision for your business flourish.
2. Introduce Your Outfit’s Financials, Starting with a Modified Cash Flow
How can you expect your managers to act in the best interest of your outfit, if they don’t know the financial reality of where things stand?
A full-time manager, with full understanding of the greater financial picture, is a fully invested team member that will act in the best interests of your company. Oh man - that’s a “full” statement!
By sharing financials with your manager, they’ll develop a strong sense of ownership in the success of your outfit and hold themselves accountable to the best financial outcomes. You don’t need to put every nitty gritty financial detail on display here. But giving your leaders a clear look under the hood is an essential part of boosting your employee ownership culture.
The best way to introduce your outfit’s financials is to discuss together the following 10 essential line items from your Profit & Loss and Cash Flow statements:
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Revenue
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Cost of Sales
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Gross Profit
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Overhead Expenses
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Net Operating Income
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Income Taxes
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Debt Services
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Capital Investments
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Owner Dividends
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Funds Available for Manager’s Discretionary Spend
Together, these 10 line items bring awareness to the varied financial components of running your outfit. They also draw attention to the unique demands on cash before any of it becomes available for your manager’s discretionary spend, such as raises, benefits, bonuses, or executing their unique vision for your business.
Look at each line as an educational opportunity to discuss financial realities, and an invitation to brainstorm creative solutions for improving your financials. Encouraging managers to devise solutions to increase revenue, manage overhead, and more, is a surefire way to increase employee buy-in.
Note that you and your manager may favor different styles of solutions. Pro tip: You may think you know the best solution, but the key here is to let your manager’s creative thinking blossom. Then, commit to following through on what they perceive to be the optimal way forward - even if you don’t agree 100%.
Introducing financials is your opportunity to increase engagement and productivity. Remember, managing your outfit is their adventure now. Empowering an employee to act on solutions they devised, as opposed to obligating them to act on a solution you forced on them, will always net better results for your outfit.
3. Embrace Collaboration and Accountability
After determining your manager’s unique motivators and getting on the same page about the financial realities of your business, it’s time to embrace collaboration and accountability.
This third phase is the make-or-break step in the process. Implementing changes and collaboratively developing habits in the shoulder season will turn into consistent returns in the busy season and beyond.
Together with your manager, set specific targets around the financial line items, such as increasing gross profit or reducing specific overhead expenses. Take advantage of shoulder season downtime to implement a plan to collaboratively monitor progress once things start to pick up again.
Pro tip: Weekly check-ins are our favorite interval for progress checks. Meeting once every week to discuss progress allows enough time to build momentum but doesn’t let the season run away from you.
Once the busy season resumes, and as your manager’s dedication begins to pay off, hold yourself accountable by rewarding them generously. Your manager showed their vulnerable side by sharing their motivators and vision, and then they devised and implemented ways to significantly improve your outfit financially. By now, their newfound stake in the success of the business will result in notable progress, so the least you can do is reward them handsomely.
Boosting Employee Ownership Culture Takes Time
Properly boosting your employee ownership culture, and effectively harnessing manager buy-in and financial accountability, are long-term initiatives that take intentional nurturing to thrive.
Learn your team’s motivators, show them under the hood, empower them to make decisions in the best financial interests of your outfit, and everyone will profit down the line.
To summarize Morgan Stanley, a strong ownership culture “encourages employees to have a stake in the organization and its future … [and] can be a powerful driver of employee motivation, performance and loyalty.”
In conclusion: Keep your managers engaged in the shoulder season by educating them on your outfit’s financials. Giving your leadership team the tools to act in the best financial interest of your outfit boosts motivation, increases loyalty, and builds a robust employee ownership culture.
About the Authors:
Zeb Smith, CPA, is a financial executive and strategic partner for outfitters nationwide. He is the founder and owner of Zebulon LLC, which specializes in growing businesses, growing leadership teams, and growing wealth. Corey Jay is Zeb’s Executive Assistant at Zebulon LLC, and she holds a Master of Leadership & Innovation with a background in marketing & hospitality. For a DIY deeper dive into the topics of employee ownership and company-wide financial cultures, check out The Great Game of Business and A Stake in the Outcome, both by Jack Stack.