The ESOP After a year of full-time employment at SRC, people become participants in the Employee Stock Ownership Plan (ESOP). The ESOP, in turn, is the single largest shareholder in SRC, with 31 percent of the stock as of January 1, 1992. (It started out with 3 percent of the stock and continues to grow every year.) There is a vesting period of abo

WARNING: DON’T ACCEPT ANY NUMBER AT FACE VALUE. Numbers are not magical, and they aren’t sacred. They are important only as clues to the reality that produces them. To use numbers effectively, you have to strive constantly to understand that reality—to move from the abstract to the specific. Many a profitable company has gone out of business becaus

KEY POINT: Numbers are not a substitute for leadership. What’s important is how you use them.

In the process, we’ve come up with a checklist of what you should do, and what you should avoid, when you create your own bonus plan.

BE POSITIVE, BUILD CONFIDENCE. Managers have a bad habit of focusing on the negative. I’ve seen statistics showing how managers tend to react quickly to anything that goes wrong and overlook everything that goes right. Let’s say you have a hundred people, and one guy is constantly complaining. It’s easy to start thinking morale is bad because of th

1. Income Statement 2. Balance Sheet 3. Cash-Flow Analysis 4. Sales and marketing plan 5. Capital plan 6. Inventory plan 7. Organization charts 8. Compensation plan You can undoubtedly get by with fewer—we did for years. The essential documents are the Income Statement, the Balance Sheet, the sales and marketing plan, and the compensation plan (which

My own goal is to generate wealth for the people I work with, to distribute it in a way that makes the world a better place. It’s one thing to want the world to be better; it’s another to come up with the resources that let you do it. What I’m trying to do here is raise people’s standard of living by showing them how to create wealth and keep it. T

The definition of open book by itself implies a company is merely sharing financial information with its associates. Sharing this information does not necessarily mean those associates understand or realize how their work affects the numbers. Just because you have a profit-sharing program at your company, for instance, isn’t good enough until you t

must do to get to the next level on each goal. You can always come up with a few thousand dollars extra in some area, if that’s what it takes.