Friday, October 5, 2012

What Flavor of Open Book?

Many organizations say they're doing Open Book. Some claim to be doing Open Book Management (OBM). Those that really are doing OBM have experienced some  marvelous and remarkable gains even through this last recession. What flavor of Open Book does your company practice?

Vanilla: you share some financial numbers--gross margin, maybe a few others. At minimum, you're sharing sales numbers. We might even call this the single scoop in a dish--not even a sugar cone. If all you're showing are sales numbers then people still don't know if they're winning. As you know, sales is just one side of the equation, and it's not even all of the considerations on that side of the equation. Your company wins if it's generating profits, preferably in the form of cash. Profits in the form of tax credits, depreciation, and gains in sales that are sitting in Accounts Receivable are not 'take it to the bank' profits.

Imagine you're playing poker or blackjack. You can't see the dealer and you don't know how many other players there are. You have a manager who slides you some chips once in a while. Sometimes it's a big stack; sometimes, it's not. You will end up speculating about your success based on the size of the chips (your budget, your project approvals)--and you'd be wrong. The amount of financing for different efforts is not based on the company's overall success. As a leader, you know strategic plans and other priorities needing resources will influence budgets and project approvals.

Chocolate: you share some financial numbers, and you teach some financial literacy so people understand the numbers. This is a bit better. They know how to read the numbers. They know if we're all succeeding or not.  This is a good start.

Your favorite flavor of ice cream: you share the numbers, you teach financial literacy teach them how they contribute to the organization's success. You offer opportunities for them to manage their contributions. You support their efforts, coach them and reinforce the lessons as to strong and weak contributions. This is Open Book Management. Everyone sees the numbers that indicate success, watch the trends and take action to achieve the targeted levels. You've heard that engagement and empowerment are important. OBM not only does this, it also creates alignment because everyone is working together for the common good.

Companies operating at the level of their favorite flavor have been creating jobs in the past two years, and more.

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