By Milt Vine
Here's what Jack Stack (gotta love that name) writes in The Great Game of Business: 'The best, most efficient, most profitable way to operate a business is to give everybody in the company a voice in saying how the company is run and a stake in the financial outcome, good or bad.' The smartest method of doing that, he believes, is open-book management.
When I read Stack's book recently, my response was positive. It makes sense that any employee with influence who is affected by the bottom line will have a vision of the business that extends beyond a single machine, job or department, and will therefore work differently.
But one of the tenets of open-book management is just that: opening the books. As a CPA, I know full well the importance of the numbers to any company, but giving those numbers to everyone is not an idea I immediately embrace. And I doubt that I'm alone. Most managers have been taught that the numbers are our responsibility.
Stack, however, believes that knowing and responding to the numbers is a part of everyone's job. He suggests creating a 'company of owners.' Again, I like that. Pride of ownership affects performance. That's a concept I can understand, and I'm intrigued. But that's as far as I've gotten. Open-book management is an idea we continue to dance around at Seattle Bindery, but we haven't made the leap.
What it is. So, I do more research. According to John Case, who coined the term, open-book management 'gets everyone focused on helping the business make money. Nothing more, nothing less.'
And the first step, according to Case's Open-Book Management: the Coming Business Revolution, is for every employee to see and understand 'the companyšs financials, along with all the other numbers that are critical to tracking the business' performance.'
As I said, I have my doubts here. But Case makes a persuasive argument. And he recognizes the level of education involved. I have no doubt that everyone at Seattle Bindery can understand the numbers this company generates because wešre a smart bunch of people. But I also know that many of us won't understand everything immediately. And the worst scenario I can imagine is handing out information thatšs not explained adequately and expecting spectacular results.
Secondly, Case writes, employees must assume that part of their job 'is to move those numbers in the right direction.'
With his examples in mind, I've come to picture such proactive employees as bowlers. They throw the ball, watch it crash into the pins and count the result. Cause and effect is obvious. But employees who donšt know everything about the company are bowling with a curtain in front of the pins. They roll the ball and hear the crash, but have no idea how many pins have fallen. Not fun.
And thirdly, Case believes that every employee must have 'a direct stake' in the company's success.
Like Stack, Case means a financial stake. Both authors agree that the strongest tie to any company is to be a shareholder. But Case also offers stories on companies that use profit sharing or bonuses tied to non-profit targets. In those situations, though, he cautions that the payout cannot be discretionary. 'If they earn it, they get it,' he writes. That's how 'direct' the stake must be.
What It Does. So, if those are the three underlying principles of open-book management(all of which I appreciate), I consider what they accomplish. Stack believes that open-book practices allow you to 'communicate by pointing to the opportunities' instead of the negatives. 'It's a way to motivate people without lying to them or deceiving them,' he writes, and calls it 'motivation with realism.'
In addition, Stack's and Case's books are full of examples in which companies big and small, famous and not, have experienced increased productivity and efficiency attributable to open-book management.
But I personally know of no one who's completely engaged in the process. And I havenšt heard much about open-book management in the printing industry. So I'm curious if anyone else is considering this or reading the books I've mentioned. If not, I recommend them. They will certainly get you thinking.
Will We Do It? And so there's the question. Will we do more than think? I honestly don't know. I've considered open-book management for some time, and it's my own mindset that has kept us from acting. Part of my hesitation is that I know open-book management would mark a fundamental change in the way we approach business. Another part is that if we do it poorly, we might not be able to get back to where we are today.
Still, I'm more and more convinced that open-book management is a real and viable method of running a company. It will simply require finding the initiative to do something we donšt have to do.
Anyone have a story that will spur me into action?
Milt Vine is president of Seattle Bindery, a postpress house specializing in custom
tabs and presentation folders; folding and stitching; foil stamping, embossing and
diecutting; plastic spiral, Wire-OŽ and perfect binding. You can reach Milt at
206/682-2558.
Š 1998, Seattle Bindery. Reprinted from Printing Journal, December 1998.