Open-Book Management

One of the lates tools for motivating and empowering and for helping them to improve performance and productivity is open book management. With this tool, employees are taught how to observe progress so that they will have greater understanding of the company’s position, why it might need to change, ow why following particular pathways will to lead to competitive advantage. With open-book management, evevryone gets to understand more clearly that numbers are important

Using this system, employees are empowered because they “learn to think and act like owners, like business people, and not like hired hands”. Open-book management also helps employees learn how to make good decisions. When workers become involved in budgeting processes, they become more aware of the factors that must be weighed into a decision and they learn how to take responsibility for making determinations about spending and costs.

Open-book management “communicates all relevant information” to people throughout the organization on a monthly, weekly, or even daily basic. Its  objective is to help people understand the financial condition of the company, with the belief that enhanced understanding will motivate and empower employees to perform beter and to work together to meet the organization’s goal and objectives. The principles are fairly simple : employees receive information that they are taught to understand. Thus, everyone shares more directly in the company’s success or failure.

Document for open-book management :

• Balance sheet
• Income statement
• Cash-flow statement
• Sales and marketing plan
• Capital plan
• Inventory plan
• Organizational chart
• Compensation plan.