How to Use Profit to Promote a Healthy Culture
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Why does Ramsey Solutions believe profit sharing builds ownership and culture?
I've always wanted to share our profits with our team, and I've done it a whole bunch of different ways. And about the only thing I'm sure of is we're going to change it. We change it all the time, but we're always going to be sharing. Now, I'm not into corporate gimmicks or handing out extra money just because it's the end of the month. I've always believed that if you kill something and drag it home, you should eat some of it. That's life and that's business. So if you show up, do the work, create value, and serve customers, and there's something left over, then the people who helped make that happen should also benefit from it. Profit sharing is a way to say, we appreciate you. Thanks for all your hard work.
You're one of the owners. And we made the decision to talk about it openly as a company. Nowadays, we do it every single month because when your team understands how profits work, something powerful happens. They stop acting like employees and they start thinking like owners. But the moment profit sharing becomes expected, entitled instead of earned, It stops doing what it was meant to do. On today's episode, Entree Leadership's head coach, John Falcons, is sitting down with Ramsey Solutions CFO, Jeff Williams, to talk about how we share the profits with our team and how to do it in a way that builds culture instead of entitlement. Let's get to it.
Hey, Jeff, thanks for being here today.
Glad to be here. Thanks for the invite.
One of the hottest topics we get when we're talking to business owners and entree leadership is profit sharing. That's something that we do. A lot of questions, a lot of questions about how. I just want to start with, should people be doing that and why should they be doing it?
I think if your business is healthy enough to where you can reasonably put aside some money to share with your team, you should do that every chance you get. You may not be able to do it from the very beginning, but I would say having an aspiration to doing that at some point in your growth path, I would encourage you to do that.
I hear a lot about, you know, I got a Christmas bonus. Why don't we just give a Christmas bonus? How is it different than that?
Well, you could do that, but it takes away the connectivity and the alignment with how the company's doing. If you call it profit sharing, if you actually calculate it that way and treat it that way, it makes the team feel like they're a part of what's going on. Much more connectivity than, oh, I just got a handout from the boss from Santa Claus for Christmas. It feels way different, and so that's why we pay it out every month. We talk about it every month because it's a big part of who we are. And I'll tell you, it's something incredibly unique. I've never been with a company that paid profit sharing down as far down in the organization as we do.
You actually just talked about it at a staff meeting. I did. Talk a little bit about what goes into that, what you share with the team. And if you could, just go ahead and mention which team had the largest profit growth that you shared this morning.
Are you talking dollars or percentage? Just say the big number, which team it was.
Oh, the percentage.
Oh, okay. It was Entree Leadership. Okay, go ahead. Okay. Yeah, we put a lot of effort into how we communicate that, how we celebrate that, because we want the team to know what the outcomes of their efforts looks like and then also feel the connectivity in their own pocket. to the work that they've done. And it's hard sometimes. People that are within a business unit here that are doing work directly with customers, they can see it very easily. Somebody who sits in the legal department or HR department or something like that, they may not be able to see it as close, but we want them both to be connected to it. We talk about that in our weekly staff meetings. Once a month, I'll get up after we close the books and talk about how we did versus this same month last year and then the month before what we just ended, just so they can see, here's the way things are going.
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