Newspaper article St Louis Post-Dispatch (MO)

An Open-Book Management Style Gives Workers a Stake

Newspaper article St Louis Post-Dispatch (MO)

An Open-Book Management Style Gives Workers a Stake

Article excerpt

Many people who have left big companies say the stifling atmosphere, rigid jobs and overbearing bosses finally got to them and forced a change.

Now some of them are trying a new approach in their own ventures. They're opening the books to employees, rewarding growth and revamping the labor-management contract.

It's called "Open-Book Management," a term coined by Inc. magazine's John Case, who recently wrote a book with this title from Harper Business. He's looked at a number of companies who have tried it and come out winners.

Anyone who has employees and is tired of hearing "It's not my job" should think about open-book management. Employees should consider it if their high-point in the day is lunch.

Under a traditional contract, your boss tells you what to do, you do it, you get paid and you go home. You have no control over whether the company is prospering or sinking. If the business goes under, you're laid off and you try to find another job.

The contract is older than the assembly line.

Case quotes one owner of a specialty coatings company, Jim Sandstrom, groping for a change in this tired formula.

"I was thinking, `How come I'm the only guy staying awake at night trying to figure out how to keep the company from going bankrupt?' I said to myself, `Wouldn't it be great if everybody in the company stayed awake trying to figure that out?' "

That's the point of open-book management: to get employees thinking like owners and to give them a stake in the company so they have an incentive to act like them.

The single goal is to make more money, not only for the company, but for the employee, because only a prospering company will survive. Here's how to do it in a nutshell:

Open the books to all workers and educate them so they understand the numbers. Everyone knows costs, revenues and profits in their area and for the company as a whole. The numbers are tracked daily, weekly or monthly.

Loosen management control so that employees can make improvements and move the numbers in the right direction. Open books are also a form of checks and balances, because everyone can spot when something is askew.

Provide incentives so workers are rewarded when numbers go up. …

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