Open book management is a term that has been around for years, although there is still much confusion around the subject. The term itself is easy enough to understand – open book management is a business philosophy centered on involving a full staff in making a company more successful. Under the theories of open book management, involving more people in decision-making and planning can make a company thrive financially and organizationally. However, actually carrying out an open book management plan can be challenging, making it important to understand the pros and cons of such a program:
Pros of Open Book Management
Allowing a staff access into company financials is a powerful way to increase transparency among a workforce. Businesses that keep decisions separated by department or allow only the top executives at a company to have any influence on large decisions may be successful, but at these some companies, staff may feel left in the dark.
Open book management, on the other hand, leaves room for employees to contribute to the way a business is run, while increasing transparency and trust in management. When staff members feel they can trust their supervisors and are fully informed on the inner-workings of a company, they may be more likely to trust for executive decision-makers at a company.
Sense of Community
Sharing ideas can bring staff together and foster an environment in which employees feel open and honest with one another. A sense of community can positively affect a company on numerous levels, as camaraderie and developed relationships enable others to connect on a personal and professional level. This can increase happiness and employee engagement at the office, as well as open dialogue for workers to get to know the way other workers think.
By sharing financial and operational information with staff, executives may find more unique and exciting ideas coming from an office. Armed with pertinent information on how a company is working, individuals may be able to give new insights on how to approach a particular problem, or may come up with an idea to streamline operations. Sometimes, it takes a fresh perspective to solve a problem – involving an office in decision-making can provide unique insights and may result in improvements across a company.
Cons of Open Book Management
Too much of a good thing can be a hindrance when it comes to open book management. While some workers may be excited by the prospect of understanding company profits and becoming more financially literate, others may be overwhelmed by the onslaught of information. Some workers are excellent in their current roles because they are focused on the task at hand and do not have to worry about extraneous information.
Involving these staff members in increased decision-making can result in information overload, which can be distracting. If a company is implementing an open book management plan, it would be wise to involve only those who are most enthusiastic about the prospect of more responsibility and fiscal involvement to join in the new initiative.
Increased Worker Demands
Revealing financial and operational information to employees can have some unexpected consequences. According to the Society for Human Resource Management, some employers are nervous to let their employees know how much profit a company makes.This may be for a few reasons – companies that are not performing well may not want their employees to know the ins and outs of a troubled business.
Companies that are beating expectations and bringing in large profits may not want to show their employees this information for a different reason entirely. Some supervisors fear if workers see how well their department is doing, or that the company recently brought in dozens of new clients and has more cash to go around, that employees will be more inclined to ask for raises or become complacent. If a company is worried about this outcome, they may want to take it slow in opening up their management style.
Difficult to Implement
Involving employees in business decisions is a great way to move business forward, but not everyone starts off as a financial expert. Many companies switching to open book management plans offer financial training sessions to acquaint employees with financial operations.
After these training sessions, communication is essential, so weekly meetings and reports are often necessary to keep an open book management plan working. For certain companies, the involved nature of open book plans can prove to be too complicated.
Open book management plans aren’t right for every company, but when they’re used right, they can be the perfect solution for many business needs.