What if there was a way for you to get your employees are truly invested in helping your company make a profit and achieve their key goals? You'd just tell your employees what they are trying to achieve and how you're progressing, and they become angry supporters i.
Does this sound too good to be true? Well, it's actually happening in some companies where management has been able to adapt to your way of thinking about employee-employer relationship and the practice of true Open Book Management, or OBM.
Think about it for a minute: Public companies share their financial results with the world, but primarily because they have to be free to sell their shares. However, most privately owned companies do not share their financial results with any , unless you have to get a loan, file their tax returns or sell the company.
Public Communications: Good or bad
By definition, public company financial information is available to every employee of the company. Is this a bad thing? Given the extraordinary efforts that the majority of private company CEO to go in to far more financial information from their employees, you would think so.
feelings of mutual distrust between employers and employees often run deep, perhaps resulting from a lack of loyalty they perceive each other. Employees feel that their companies will fire them at the drop of a hat (or net income) and employers think their employees focus mainly on what little as possible, while the pocket office supplies and looking for a better deal elsewhere. Administration thinking often sounds something like:
O: "If they know that we are making a profit, they will demand raises, bonuses and membership in a local health club ."
O: "If they know what our goals and we do not come, we will have to explain why ."
O: "If an employee leaves and goes to work for a competitor, there goes our competitive advantage, when he tells them all about our plans and strategies ."
O "Explaining these things in layman's terms is a lot of work and periods of bad earnings can create anxiety that we can bear, but our employees can not ."
O: "If our employees know how much money we make, our customers will know and we'll get a request to reduce our prices or our suppliers will find they will want us to pay more for what we buy ."
Now consider this: On any sports team, every player knows the game plan, their evolving role in it and what is the ultimate goal. And everyone knows at all times whether they are making progress toward achieving this goal, goal.
So why do so many business owners and managers consider it anathema to retain their employees (ie their team) informed about progress? Or in other words, why are so few owners Practice Open Book Management? Ironically, it seems that companies are more likely to OBM practice when they get into trouble.
I tried to find a publication, speech or article that discusses problems with OBM-pros and cons analysis, if you will. I could not. On the contrary, there are volumes describe improvements that companies have made in productivity and profits as a result (either directly or indirectly) of making a move to share more of its financial and business planning information with their employees using OBM.
What about your company?
Are you practicing OBM in your company? If not, it may be because you are afraid that the risks such as those described above are greater than the potential benefits of your employees you really invested in the success of your company? You might not think that your employees really want to you succeed. Or maybe you do not believe that employees' feelings about the success of the company really have anything to do with actual results.
If you were not prepared to consider practicing OBM in your company, whether you have not heard any success stories from companies that have or do not believe it. I'll go with 'you have not heard,' so here are a few:
Pool Covers Inc. - The company, which is used OBM since 1994, was featured in Wall Street Journal article last year. CEO loan OBM to help companies grow the value of an average 23.8 percent per annum 1997 to 2007. During the recession, the company had to consider its first-ever layoffs. Surprisingly, six employees volunteered to be laid off based on the financial information they saw, but the company match, and maybe not make it and everyone else lose their jobs.
Dorian Drake International - When the employees started seeing Finance in 2002, they realized that some departments are getting better deals from suppliers than they were for similar procurement . result of changes in procurement procedures helped the company go from $ 500,000 to $ 200,000 loss of income in the year-s or an increase in sales .
Springfield Processing Corp. - It was a painful division of International Harvester, when the new CEO took control as part of the employee under the leadership of purchase. The biggest change is directed by culture. company created and embraced an environment of open communication, learning and development, and trust.
management taught employees how to read a balance sheet and began to share key financial information with them. As a result, employees learn how to be key measures such as rates and lack of order backlog affected the bottom line. The result? From 1983 to 2004, the company's sales rose from 16 million U.S. dollars to more than 160 million U.S. dollars.
So, you think OBM might be worth a try in your company? Experience has shown that the rewards far outweigh the risks. Come on, give it a try-I'm willing to bet that, like thousands of other entrepreneurs, you'll be glad you did.
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