Some remodelers have found a growth engine in open book management.
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Making the Grade Does your company have what it takes to succeed with OBM?
The term “open book management,” or OBM, was coined in 1990 by John Case, a former editor-at-large for Inc. magazine. It was the brainchild of businessman Jack Stack, who used it in the early 1980s to transform a near-bankrupt division of International Harvester into an extremely profitable, independent company.
Since then, OBM has swept industries from manufacturing to airlines, and experts have identified some key attributes of a successful open-book company. To find out what those are we talked with Beth Miller, director of communications at The Great Game of Business ( www.greatgame.com), a consulting firm that helps companies adopt OBM. She identifies five key attributes. Not surprisingly, all of them are embodied by the companies profiled in this article.
1. They know and teach the rules of business. They teach every employee to understand the big picture of how the business works and where they fit in. Lessons include not just how to read and understand income statements and balance sheets but how to use these as drivers of individual and company performance.
2. They involve employees at every level. Successful companies work to create a team atmosphere and use the financial statements to let everyone know how the team is doing.
3. They empower their employees. These companies are committed to helping employees understand and develop their own capabilities, set personal goals, track their own progress, and take accountability for the results.
4. They provide a stake in the outcome. The best, most efficient, and most profitable way to operate a business is to give everyone a voice in how the company is run and a stake in its financial outcome, good or bad. Simply making employees stockholders or handing out bonuses does not get them thinking like owners.
5. They build businesses of businesspeople. Open book management teaches employees to stop thinking of themselves as “hired hands” and to realize that they are businesspeople who have a direct effect on the success of the company.
