Improve Employee Engagement With Open Book Management

Jeff ChaffinUncategorized

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Imagine watching a baseball game where runs, outs and the current inning were not displayed and shared with you, the viewer.  Now imagine being a player in that same game.  Who’s winning?  Who is the next batter?  What’s the score?

Similarly in business, leaders expect employees to perform at their best when they don’t know the score and, often, what game they are playing.  Using our baseball analogy, players can field ground balls and hit, but without the knowledge of the overall situation they can’t contribute at a higher level as a part of the team, e.g., turn a double play or execute a suicide bunt.

Employee Involvement:  Staff is recruited and trained on the tasks geared to getting the output that is required of their position.  Once they have become consistent and reliable in their tasks they begin to review their contributions to the company (“Do I matter?”) and the company’s performance, overall (“How can I contribute to the success of the organization?”).  A sure fire way to gain employee commitment and improve company performance is to share financial and operational information with them.  Employees function at a higher level with more purpose when they have an understanding of the company’s operating results and how they can help improve them.

What to share?  Many owner/operators shudder at the thought of sharing financial information with employees.  The top three fears owner/operators most commonly have are:

  1. Employees will discover the owner’s income level
  2. The company is profitable and employees will ask for substantial increases in pay
  3. “Things” at the company aren’t as good as the owner/operator portrays

While an owner/operator’s income is private information, nearly all other concerns can be addressed, misconceptions can be explained, and rumors can be prevented simply by sharing information directly from the owner/operator.

Real financial data such as the income statement, sales breakdowns by profit lines, accounts receivable, accounts payable, inventory levels (and turns where applicable), quality reports, safety reporting and any others that would convey the condition of the company are relevant and important to share with employees.  Establish a standard time frame for the review and ensure that the meeting with employees is met without fail or exception.  Even if the news is not totally positive, sharing it for common understanding is extremely important.

Take time in the first few meetings to educate staff on what the data represents, how to analyze it, why it is important and how they can have an effect on improving it in their work. Without an understanding by employees, then the reports are just numbers, charts or meaningless diagrams.

Nervous?  Of course.  Opening the books and sharing that information with employees is a change that most owner/operators wrestle with.  Getting started can be challenging.  Owners starting down this path should reach out to other business owners or leaders to get their feedback on the ups and downs of implementing an open book program.  A business coach or consultant can also help to get you started and answer your questions.

Here are a few other tips to remember:

  1. Be consistent in meeting times, what information is shared, and the format of the information.
  2. Ensure that the reports released are fair and balanced – in other words, present the data whether it is positive or negative and be prepared to begin discussions on how to improve.
  3. Don’t use the meeting to “beat up” underperforming groups, individuals or clients!
  4. DO use any and all reasons to acknowledge exceptional contributions!

Increasing the level of employee engagement is a very hot topic today and a common goal for many business owners – an easy and effective method to reach that goal is to implement an open book management system.