THOU shall know the truth, and the truth shall set you free. This is the overused verse from the Bible which has the potential to carry a new meaning for business people.
In the original meaning, the verse proclaims the value of truth from a spiritual standpoint. I challenge you to believe that this verse carries a special meaning in business as well.
Truth, it seems to me, sets men and women of faith free, but it also sets an entrepreneur free—free from lying to the income tax department, free from lying to your employees, free from lying to your family. Truth is the short, clear and magical word which will bring peace into your enterprise.
If you replace the first three words in the Bible verse with the word 'tell", you get a new verse that fits your enterprise: "tell the truth, and the truth shall set you free."
I know a guy who runs an SME who ran in trouble with his workers because he was hiding the truth about earnings. Workers kept an excellent record of the turn-over, about operational expenses, about the overheads, about those impromptu petty cash personal entertainment withdrawals, about the gross earnings.
The proprietor was kind of fishy about what was happening to the money--I guess on the assumption that the small enterprise was his own brain child and therefore nobody else's business what was happening to the money from the operations. Well, he was wrong.
As it turns out, the enterprise you form ceases to be yours alone the moment you employ your first worker. And it becomes more and more LESS your thing as you expand.
The workers kept an eye on the gross earnings and thought plenty of money was stashed somewhere. One day when salaries did not come on time, daring workers marched out-- although evidence indicates the only mistake the proprietor had made was to keep financial information confidential.
There are a number of cost factors in an operation workers may not know exist, and which would cushion management from dissent in an operation if workers knew existed by being briefed in meetings, I feel. I believe it helps the business cause if workers are told as often as possible where the money is coming from, how much is coming, where it is going and how much is going, and why that is the correct direction to go.
I am not going to use technical terms like hey, why don't you declare your 'profit elements' to your workers, or maybe just make public your profit and loss account! I am not that much of an expert anyway, although I know what I am talking about. Take my word. The more open you are with your workers on the profit and loss account, the more committed your workers are, and this impacts positively on your productivity. "Tell the truth, and the truth shall set you free."
You may be aware that experts in this area of finances have used this very same concept to force banks to declare their incomes publicly to instill confidence from the public. I am arguing that entrepreneurs can instill among workers’ commitment to the operation, confidence in the management and consequently very high productivity through an honest exposure of the profit and loss account.
The philosophy works well for huge companies listed on the stock exchanges world-wide, for banks and other financial institutions. It should work just as well for a little operation employing three to ten people. Why not? It has something to do with human nature. There are no numbers in human nature. What's innate in one of us is innate in us all. We are created to trust an honest person. We are created to trust an honest company.