Initiating Open Books Management

Oh, my. Change is not always easy. Especially when you change how you conduct business on a fundamental level. And that’s exactly what we will be doing starting in January 2012. Next year, our 12th year of operations, we are implementing an open books management system at Back40 and the Edmond Outlook magazine.

The challenge:

In a business, aligning the employees interest with the owners
interest is possible, but not necessarily easy, and that’s what we are
attempting to do with this initiative.

What is open books management?

Like it says, it’s opening the business books to all the employees. However, we are going a bit further as we are educating everyone at the company on how we make and spend money. We will also be setting financial goals and we all will share a stake in the outcome.

Why do this?

The more everyone here knows about the business, the better it is for the company, the employees, and our clients.

Open Books Management Cartoon

Are you on crack?

No, I am not. I was first introduced to open books management when I visited the offices of one of our clients, Beam’s Seatbelts. I walked into their front office for a pitch meeting and from across the room I see a whiteboard filled with numbers and categories. The categories read: gross, cost of goods, gross profit, orders, returns, labor. It soon becomes very clear to me that not only am I looking at this month’s profit & loss statement in colored markers and smiley faces, I’m also looking at year-to-date numbers for all operations. Now I’m thinking, is that information supposed to be out here in the open? Shouldn’t someone be wheeling that whiteboard into a back office?

Happy to share

Over the next several months, every time I visited Beam’s Seatbelts, there was that
whiteboard again, broadcasting the financials of the company loud and
clear. Now, I have to ask about it, and Mike Bosley, President at Beam’s Seatbelts, is more
than happy to tell me all about it. He explains it like this:

Open book management is about the team. People want to be a part of something bigger than themselves. Open books allows team members to understand what success looks like for the company and how they can use their skills to help.  It helps engage and align more brains and hands in the organization to create success.  Sharing this level of detail in the organization is one of the most effective ways possible to build trust and a team atmosphere and put everyone on the same page. At Beam’s, we have trained a mini-army of accountants (our team members) that understand how the business operates wall-to-wall and floor-to-ceiling.

I picked Mike’s
brain for an hour and he pointed me to a website that developed their open
books program. It’s called the “Great Game of Business” and was
developed by Jack Stack of the Springfield Manufacturing Company.

That’s it for now. We are presenting our plan of action, critical
numbers, and gain-sharing plan to our web team today. Wish me luck. I’ll
let you know how it goes.

More information on Great Game of Business

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