Open book management improves the bottom line

Open book management (OBM) seeks to get every employee to think and behave like an owner. It
throws out the notion that bosses run things and employees do what they’re told. In the OBM approach,
employees are given the information that historically was strictly kept within the management racks.

There are three key elements in OBM program.

Firstly, management opens the company’s books and shares detailed financial and operating
information with employees. If employees don’t know how the company makes money, how can they
be expected to make the firm more successful?

Secondly, employees need to teach to understand the company’s financial statements. This means
management must provide employees with a basic course in how to read and interpret income
statements, balance sheet, and cash flow statements.

Thirdly, the management shows how their work influences financial results. Showing employees the
impact of their jobs on the bottom line makes financial-statement analysis relevant.

More than 3500 organizations, including Springfield remanufacturing corporation, Allstate insurance,
Amco Canada, Rhino Foods, and Sprint’s Government system division.

The primary benefits is getting your employees completely invested in what they are doing. Having a
critical number that everyone in the company is working toward can generate an attitude of cooperation
—not tension—between departments. While this doesn’t necessarily happen overnight, getting
everyone heading in the same direction while trying to accomplish the same goals can be indispensable
to your company’s success.

Another benefit is that your employees will now believe that they have some control over their financial
destiny. Granted, they will still rely upon their base wage or salary for their personal living expenses, but
that isn’t what separates a satisfied employee from a happy, fulfilled employee. The opportunity to earn
a monthly or quarterly bonus (one that your employee isn’t relying upon for personal or family income)
can create the right amount of motivation to do an excellent job instead of an acceptable job. That is the
primary basis upon which open-book management operates: A company of employees, managers, and
owners who are motivated to work in a fashion that will generate the best results—in other words, the
greatest profits.