 By Abigail Gouverneur Carr, Managing Director, BlissPR
If you are in senior management of an independent, privately-held PR firm, you should tell your employees how the firm is doing financially. And I don't mean vague generalities, as in, "We're holding our own, but it's going to be tough." I mean more like, "We did $649,000 in revenue in November. In December, we were down 5% to $616,500, but we will likely still hit our profit targets."
If you are already making this information known to your employees—congratulations, and you can stop reading. In fact, take the rest of the day off, because you are running your firm in an open and transparent way, which you probably know provides substantial benefits and overall reassurance—to management and employees—and it actually makes your life easier.
If, on the other hand, reading the first paragraph makes your stomach tighten and your head pound, keep reading. Here are nine reasons why you should consider changing courses:
1. They don't care how much money you make. I have a funny feeling that this is the number one reason why owners do not share financials. It has been my experience that your people do want to know that you take home a decent salary (if you aren't, what do they have to shoot for?), but don't care what it is exactly, or how much of the profits you keep. This is America, and our people are smart enough to know how capitalism works—owners get the profits. If you are squeezing your staff to wring out more profits than you should, well stop already!
2. You can keep salary information confidential. There's no more disruptive information than salary information, because there are always a few abnormalities. Don't divulge salary information, and keep it confidential to a very small number of those who need to know. Salary is a contract between the firm and the individual, and you can be clear that sharing this information is against firm policy.
3. They want to know. In good times and bad, people want to know if their firm is doing well and if so, how well. They work hard and want to be proud of the success of the enterprise. In bad times, in particular, an absence of information fuels anxiety, which is non-productive. That's what we counsel our clients, and we should keep our own counsel.
4. It helps you set bonuses. At our firm, bonuses are based 50-50 on company performance and individual performance, up to a cap of 10% of salary. If we hit the numbers, then employees know that half their bonus is "in the bag." What a good feeling.
5. It will help them think like owners—which is what you want, right? We want people who can manage a budget, think about utilization, efficiency, client profitability and other management metrics. If you expose staff to the top-line data about the firm, they will be more engaged. They will also want to show you how well they can manage those portions of the business that are within their control.
6. They will respect you. If you have to make tough decisions—and many of us will this year—they will understand why. It doesn't mean that layoffs and cutbacks aren't difficult and sad, but people want to work for managers they trust. Being open about the truth of a situation inspires trust.
7. You will respect yourself. While you may be a PR person, first and foremost, you are also a business manager. You need to run your firm as a business, and that means knowing and being able to report out clean numbers on a regular basis.
8. It will cut off the blood supply to company rumors. Several years ago, one of our media relations staff received a less-than-stellar review and then decided the company must be doing badly. He told his co-workers. Since they all knew how the company was doing—and profits were solid—his comments fell on deaf ears. And yes, he then left.
9. PR needs to be a profession that's transparent. This is a profession that lives and breathes through clear information, direct communication and an overall posture to and on behalf of our clients of "Yes, you can trust what I say." That's also the purpose of the Council of PR Firm's "Code of Ethics" and "Statement of Principles," and an important part of being a true professional. Firm financials are just one more way to model transparency for each other and to the next generation of PR leaders.
Of course, you don't have to tell them everything, nor should you. Financial management (or management decision-making of any kind) should not be conducted as a democratic process. In fact, you don't have to say a word about how you make expenditure decisions, because running the firm and making those decisions is your job, not theirs. But in general, it's helpful to them and to you if they know:
- Annual revenue targets;
- Monthly revenue actuals;
- Quarterly comparisons year over year; and
- Directional information about profitability.
My favorite reason was articulated by an account executive in our Chicago office, Dave Miranda. When I mentioned in the staff meeting Monday that I planned to write this column, he sent me the following email, verbatim:
"Regarding your request this morning for reactions to working for a company with transparent finances, I would say that it's especially valuable during a recession. As PR professionals focused on financial services, we are keenly aware of the negative economic items permeating the news. Knowing that BlissPR is financially stable frees us up to do our jobs instead of worry that we'll lose them. Hope that helps. Have a good day!"
Thank you, Dave. It does help. And you have a good day, too!
Abigail Gouverneur Carr is a managing director at BlissPR in New York, a B2B firm with practices in financial services, professional services and healthcare. She is former chair of the Council of PR Firms' Agency Management Committee, and currently chairs the Council's Leadership & Governance Committee.
The Council refers readers to its own Code of Ethics and its Statement of Principles for additional insight on this topic | 
