Finances

Building understanding of the team’s finances

Our team operates at its best when everyone has got the same information

Impact measured against UN Sustainable Development Goals

08 decent work and economic growth S 09 industry innovation and infra S 10 reduced inequalities S
View impact report

Intention

If everyone has the same information, more equitable conversations can be had - and ultimately better decisions to be made.

A notable gap in this area was our discussion of financial information. Many people in the team had individual sight of specific project budgets and costs, but only a small number saw the full financial performance of the team on a regular basis. We would do end of year updates for everyone, but without ongoing context these were always a bit tricky to understand.

We have now created a Financial Dashboard which everyone can access and that is broadcast with commentary once a month.

The dashboard includes:

  • Gross profit – confirmed

  • Gross profit – projected

  • Gross profit per person

  • Gross profit v people costs %

  • Gross profit %

  • Overhead cover (months)

  • Client concentration

These metrics give a picture of how we are performing financially - and combines with how people are being rewarded. Of particular note is Gross profit v people costs % - which shows if the team is being pushed too hard or the balance between renumeration and company profit is disproportionate.

This shows everyone in the team the reality of our situation which means better conversations can be had when discussing topics such as costs, investments and salaries.

Results

These metrics give a picture of how we are performing financially to the whole team

Of particular help has been the times during the year when finances are a bit tight - in this instance towards the end of the financial year.

Whilst natural and expected when running a business, this can be a bit scary for people if they don’t have all the context. As we have been speaking to the team about the finances throughout the year, they had a better idea of the situation and its impact.

This allowed us to have a more measured and effective conversation about what could be done to address the financial gap. From keeping a tighter handle on costs, to everyone getting involved with new business pitches, it gave the team a better sense of how they could contribute.

I find the updates really valuable. Being able to see the health of the agency across the year helps me understand why we might be taking on more or less work than usual, and what I can be doing to help. I also feel like a trusted member of the team having access to this information, which can only be a good thing.

Ellie, Senior Product Manager

What’s next?

There is still a fairly centralised process for overall costs when it comes to jobs and the wider team. Decisions tend to be made by Directors - those people furthest from the detail.

Combined with our experiments with sociocracy, we want to further devolve decisions about money to the people who are going to make the best choices.