20 Jun Why you should share operational financials with your team leaders

Hospitality profit margins are being squeezed from all directions – many establishments are experiencing a reduction in revenue as cost-of-living pressures impact their customers’ spending habits. It’s not just wages, food & beverage costs that need to be carefully managed, but seemingly everything else – insurances, gas, electricity, laundry, rent, contract cleaning, etc. There aren’t many lines on a P&L that don’t need close attention these days.

When every decision can influence the bottom line, the importance of sharing operational financials with team leaders cannot be overstated. The old school financial management approach – with only owners and senior managers seeing the financials – neglects the pivotal role that team leaders play in the financial success of a business. If you want a culture of commercial astuteness, providing real-time financial insights to team leaders is not just beneficial but imperative.

Team leaders are the frontline ambassadors of your business. They interact directly with customers, oversee day-to-day operations, and lead frontline staff. They possess a unique perspective on the intricacies of daily operations, customer feedback, and employee performance. Equipping them with real-time financial data allows them to align their decisions with the broader financial goals of the business. When team leaders understand how their actions impact the financial health of the company, they are better positioned to make informed decisions that drive profitability and efficiency.

Sharing operational financials with team leaders should foster a sense of ownership and accountability – it helps if you have well written position descriptions and clearly communicated financial targets. Why should team leaders care about the profitability of your business if they have no idea how carefully it needs to be managed to deliver a profit margin? When team leaders understand the financial implications of their actions, they are more likely to take ownership of their responsibilities and strive for excellence in their performance.

If you’re interested in realising the full benefit of sharing operational financials, consider giving your team leaders responsibility for choosing, onboarding, training & leading their team. You then remove a very common excuse for poor performance – ‘I didn’t recruit them’; ‘I didn’t train them’; ‘I can’t fire them’, ‘don’t blame me’. Most of our clients will vouch for this approach, it’s one of our key recommendations when installing systems. After appropriate training, team leaders are given access to relevant operational financial data, and responsibility, authority and accountability over their team – how they’re chosen, trained, performance managed and led.

When supervisors and team leaders are privy to financial metrics such as revenue, expenses, and profit margins, they gain valuable business acumen and develop a deeper understanding of the factors driving financial performance. This enables them to identify areas for improvement, propose innovative solutions, and contribute meaningfully to strategic discussions.

How many of your team leaders can generate accurate revenue forecasts, then a roster (costed to meet budgeted wage cost %), then manage actual wage costs during the rostered period, to ensure the budgeted wage cost percentage is achieved?

By investing in the development of team leaders, business owners not only elevate individual competencies but also cultivate a pool of future leaders equipped with the necessary skills to navigate complex business environments.

Take-away: sharing operational financials with supervisors and team leaders is a strategic imperative for a successful hospitality business. Your ability to fill future senior roles internally will increase as your team leaders default levels of financial awareness, ability and ownership is strengthened.

Ultimately, why should team leaders care about your profitability and careful cost control if you don’t share the information they need to understand and measure their own performance?