In Australia today, a transport company in Sydney McArthur Express has gone into receivership and has been found to be insolvent. This means the company is not viable and they will sell everything and pay out the creditors as best they can.The plight is a miserable one for workers, the creditors and operators of the business, let alone the customers… so the aim of this blog the idea of creating a secure and solid company through transparency.
I want to provide two ideas here… The first idea mooted is an old one it’s called open book management, the aim being to provide all staff with the opportunity to see exactly what’s happening in the organisation and I mean everything. In short the aim from doing so is to provide an environment and foster a culture of openness inclusion and interest. The second idea is to create a solid foundation for any sized organisation but in this case for a larger employer. The idea is to create a debt reserve fund, or a wealth account.
By being open with the “books” those interested can ask questions, see the stability and get a feel for the organisation as a whole. In reality many people do not take up the opportunity however the resultant positive effects can speak volumes in terms of trust and honesty. It tends to send the message that the company cares. The idea is simple enough but it often takes courage on behalf of the business operators to be so open as for most its “Their baby”. I tend to hold the view that sure its your baby, but the minute you employ someone its a shared baby.
The second idea of a wealth fund or debt reserve fund is to create the ultimate backstop, one that you hope will never be used! The idea is simple, out of the profits the company makes a % of that is put into a bank account, when it grows to a set size some of the funds can be put into other assets that earn a higher return. The amount int he initial account grows again and so on. As the company grows there is a point where the initial account amount should get bigger before the % amount leaves the account for bigger things… this gives the Co the liquidity it requires in an emergency.
The trick with both of these ideas is having the strength to do them, the will power to keep them growing and the sense to make sure they stay in place to build a solid foundation for everyone int he company and not just the owners.
To all involved in the crushing blow to McArthur Express, my sympathy, to those wanting to avoid these sorts of tragedies, I hope the ideas I present are useful…
