The term ‘open-book management’ was coined in 1993 by John Case, of Inc. Magazine.
The idea behind the strategy was that companies would perform better when employees viewed themselves as partners in the business, rather than the hired help.
At its simplest, open-book management means sharing the financial statements with employees in order to empower better overall results.
Corporations are less inclined to share their finances with all three thousand employees, therefore, open-book management can provide small businesses with an advantage over the big guys.
The idea behind sharing histories and information with employees is that it will empower them, encouraging them to do their jobs more effectively, armed with the knowledge of the business as a whole.
The basic rules of open-book management are:
With fewer employees, small businesses reap the benefit of a more close-knit, and therefore emotionally invested, group of employees.
Adopting this strategy means more than simply sharing the financials. You must empower the employee by teaching them how to read and assess the statements.
Most importantly they must understand the overall meaning and be inspired to action, when necessary.
This may seem like a large-scale endeavor for a small business owner. Luckily there are small steps that can be taken towards becoming an open-book business.
Put together a team to work on the planning and implementation. Their goal will be to work out kinks and devise capable plans of action.
An open-book business is about financial and operational transparency. A successful open- book business may well see a boost in loyalty and productivity.
It also cultivates a workplace where innovation problem-solvers are valued and encouraged- motivated to make your business better.
By Mike Reddy, Business Coach
