Open Book Management: Not an Option, a Must
Updated: May 10, 2018
Open book management can be a lot of work, but it will result in increasing the owners ‘ability to maximize the efforts of their team members. I assert that if you want your employees to be committed, involved and empowered to make a difference, you cannot treat them like cogs in the wheel. When treated like non-thinkers they will not think. If you want empowered employees, give them powerful, accurate information. I received a chorus of counter opinions and comments strongly disagreeing with my position as naive. But my assertions are grounded in performance based fact. Plus The Millennials are coming!
Michigan based Dennison Consulting reported in HR Magazine recently that companies using open book based management on average scored in the 92nd percentile, 35 percentage points higher than the other private companies as measured on a 12 index based cultural index. A score above the 75th percentile is a high performance culture according to Dennison. Additionally, a study by the National Center for Employee Ownership found that open book organizations experience a 1 percent to 2 percent annual increase in sales growth above projections.
So why, according to a study by Robert Half Management Resources, do on 7% of private companies share financial information with all employees? Why do another 17% only share to “select employees”. Therefore 76% of private companies share nothing! Why…it’s HARD, but talk about finding a competitive advantage!’
Still need a reason to consider open book management? There is a new force in the workplace that makes withholding information a dangerous strategy. Yes I said dangerous. Open book management is now a survival strategy. The Millennials are coming! The Millennials are coming!
Born essentially after 1982 this generation is intolerant, and often dismissive of those who seek to control them by withholding information. The Millennials have been in the workforce about 10 years but their prevalence is growing in both numbers and impact. Born living with the internet, they are accustomed to getting the information they need in an instant, at their fingertips. The Millennials are also known as the 9/11 generation who at a young age lost confidence in “authority” protecting them. Even greater than the impact assassinations, Vietnam and Watergate had on the Boomers, the authorities did not prevent the disasters and the Millennials believe they are on their own. Information equals control; withholding information equals distrust and disengagement. The command and control module no longer works.
So how can you make it work?
Understand your employees’ business acumen. Conduct a survey, engage them in conversations. Make it fun! One company leader cited in the HR Magazine article rolled a wheelbarrow of money into a employees meeting. He then shoveled out loads of money to reflect real expenses, payroll, materials, overhead etc. until only a couple of dollars remained.
Develop and report crucial numbers. Focus on numbers employees can impact. Last month’s financials are real, but are tombstones. Nothing can be done. Report forecasts, projections and progress toward goals instead. Create scoreboards.
Increase your team’s financial and business acumen. Offer classes, find peer tutors, create games.
Communicate regularly and make the communication bilateral. Don’t be a talking head, be a listening head. Commit and follow through on information sharing.
Create literal buy in. This is the time and place to introduce correctly designed team based incentives.
Make long range projections. You may be wrong, but the correction process is an education for your team.
Most importantly, be a cheerleader. Recognize and genuinely applaud successes.
Not convinced yet? Look hard at yourself. You reluctance is may be rooted in fear. You may be afraid your competition will find out things you are hiding. You may have to defend some of your decisions that may not be well grounded. Finally, you will have to accept employees’ ideas and input. So turn on the lights and operate with the full and positive power of your team. Seize the competitive advantage it will create.
Russell Lookadoo is the HR Guy for small businesses. His firm, HRchitecture, specializes in helping business leaders accomplish their goals by effectively using their teams. Russell brings over three decades of experience designing Human Resources solutions that achieve business strategies in varied organizations ranging from a small manufacturer to the nation’s second largest bank. Russell holds the Senior Professional in Human Resources designation from the Society of Human Resources Management and earned the Certified Compensation Professional designation from World at Work. Russell attended the University of North Carolina on the prestigious Morehead-Cain Scholarship and graduated with a Bachelor’s in Industrial Relations. Visit his website at www.theHRGuy.biz