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Posted by Recently, I came across a video in which an entrepreneur explains how he solved the management and decision-making processes in his company. Decision-making, such as spending company resources, is delegated to the lowest level, and employees are motivated to act as efficiently as possible from the perspective of both the company and the project. This is achieved by the fact that employees know 60% of the company’s profit is redistributed back to them.
Link to the video:
https://www.youtube.com/watch?v=bJHO2cyz8cA
The main motive that led Fero Baník to set up his company this way was quite simple. In his own words: “I want to have peace of mind.” A few years ago, he was frustrated that, as the owner of the company, he was overwhelmed by having to make decisions on every somewhat significant issue that came up in the company’s daily operations – meaning hundreds of calls daily with 50 employees. He started thinking about how to set incentives in the company so that every employee would make decisions as he would in a given situation. He realized that to achieve this, the entire company’s and each project’s economy must be fully transparent, and employees must become profit sharers. Thanks to the fact that they can see the full economics of the project they are currently working on, his employees make autonomous decisions in a way that is optimal from the customer’s satisfaction and the company’s profit.
Tamed Costs
A typical example of more optimal decision-making is in project execution. During installations, for instance, when it is necessary to bypass some obstruction, there are two ways to proceed: bend the pipe, which only costs the employee’s effort, or use an elbow joint, which can sometimes cost up to tens of euros. Fero’s employees, thanks to the prospect of saving costs, make optimal decisions without being handheld. If, for example, a project starts running over budget or time, employees see this in the company’s systems and escalate the situation immediately if needed. This leads to an immediate re-evaluation of the project in collaboration with the customer, preventing projects from ending up in the red due to delays.
Another great example of how things work better for Fero is when the employees suggested it would be good to buy a coffee machine for the company because they were spending too much time at gas stations just to get coffee every day. After they got the machine, they faced the question of how to charge for the coffee. Initially, they tried offering it for free, but this quickly proved to be a bad decision due to overconsumption – refilling the machine in this mode would cost EUR 8,000 per year. Once this was realized, the employees themselves initiated raising the coffee price to 20 cents, which reduced coffee consumption and also the costs of refilling the machine.
Collegiality in Profit Sharing
The owner fosters a spirit of fairness and collegiality in the company through special activities, such as publicly highlighting certain positive actions that took place during the completion of a project. The fact that a much stronger sense of collegiality has been cultivated than is usual is demonstrated by the story of how employees in one department treated colleagues from another. When the profitability of one department was recalculated, it was found that the profit-sharing key for the department was set incorrectly, meaning that the department was supposed to go into the red. However, it was clear that the mistake was just a poorly set ratio. The employees of the department that was supposed to benefit from this recognized this, and the profit-sharing key was voluntarily adjusted.
Fears of Business Copying
Fero says he isn’t too worried about excessive transparency leading to someone copying his business model. He has things set up so that if one of his employees were to calculate how much they would earn if they took away customers with better prices, while also factoring in the costs of marketing, customer support, and other necessary expenses for running the company, they would realize that their current position is more advantageous. According to the owner, each of his employees is in a kind of equilibrium, maximizing both their earnings and their comfort, which includes ensuring that there is no work after hours or on weekends.
Conclusion
From my perspective, the story of Baník and Son is unique. It demonstrates in real life that complete transparency within a company, at least toward its employees, is not only possible but beneficial for the peace and satisfaction of both the owner and the employees. Mr. Baník Jr. has essentially implemented the core principles of Visible Money in his company. The way his company currently operates is how most companies will function in the future. Such a model is the future because it maximizes the position of every individual and thus makes it stable. I can’t imagine a more advantageous employer than someone who guarantees that 60% of the company’s profit will be redistributed to employees and then actually delivers on that promise.
No more scheming and figuring out how to secure the highest salary at the owner’s expense – your salary will purely depend on the value you bring to the company, and all your colleagues will know this information. Any objections will be explained by your added value to the company. Such an environment, where nothing is hidden, is the perfect breeding ground for collegiality, an ideal space for the most skilled to realize their potential, and it provides a model for the rest of society to look up to and be inspired by. This crystal-clear spirit of mutual support and fair cooperation is something we desperately need in society.
I wish the company the best, not only because it is a living proof of the partial correctness of the Visible Money idea but simply because this is how modern people of the 21st century should function and get along.
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