Open The Books - The Minds Will Open

In far to many instances companies drive performance through emotional and subjective processes, reviews, and management. 

There is nothing worse than being told you are not performing as expected and when you ask why there is no valid reason.

Smart companies have recognized that using open book management helps eliminate the emotional and subjective conversations.  Open book management is based on the numbers - the facts (unless the organization is so corrupt it cooks its books).  Business is about numbers - sales, expenses, inventory, profits, cash, stock value and more.

The fundamental purpose of a company is to offer a service that makes money.  If your employees do not understand how their every day actions contribute to the bottom line, I will venture to say that you have a lot of unresolved issues in your company that drive you nuts.

Many owners, CEO's, and management people fear that sharing numbers will destroy their business.  There are thousands of ways to practice open book management and you have to evaluate which way works best for your company.  Start today before your competition beats you to it.  It will give you a competitive advantage!

 

Comments

[Doug Mitchell]

You can ask Bill Witherspoon of The Sky Factory about this open book concept. His company has taken this to a new level of employee ownership/open book management by actually making company decisions by consensus. He's in Fairfield, IA and I heard him speak at a DSM Entrepreneur Meetup event at the Pappajohn center. It works for them...but takes a level of commitment that most companies will not be willing to abide by. Their culture is pretty unique.

[Timothy Johnson]

I first read about open book management in "The Great Game of Business" by Jack Stack back in the 90's. It's an excellent tool, but as you've pointed out, Victor, it takes a special kind of leader who is very secure to make sure it is implemented correctly.

[Pete]

Interesting information. I am in the sales arena so numbers are all I go by. But, I know other areas of our business are not the same and some of the direction is very vague.