There are many levers that you can pull to create an excellent workplace, and whilst not new, 'opening your company books to your staff’ is one that can often be overlooked.
Research in to what makes an excellent workplace has brought to light the effectiveness of an open book management philosophy, as outlined by John Case's work.
This approach accepts that every staff member has a stake in the organisation they work for. According to Case, providing staff with quarterly or monthly reports and updates may not be sufficient. Staff need to be able to access whatever information they want to know about the business when they want it, not when managers say so.
The Open Book Management philosophy and approach argues that no question is ‘off limits’ and staff are to be trusted to have information that is (by some organisations) restricted due to the need for commercial confidentiality. Stack and Case conceptualize open-book principles in similar ways.
A pioneer of the leadership model known as open-book management, Stack (1992) is the author of two books on the subject, The Great Game of Business and A Stake in the Outcome. Stack uses three basic principles in his model:
- Know and teach the rules: Every staff member should be given the measures of business success and taught to understand them
- Follow the action and keep score: Every staff member should be expected and enabled to use their knowledge to improve performance
- Provide a stake in the Outcome: Every staff member should have a direct stake in the company's success-and in the risk of failure
Correspondingly, in 1995, Case made sense of open-book with three main points:
- The company should share finances as well as critical data with all staff
- Employers are challenged to move the numbers in a direction that improves the company
- Staff share in the organisations prosperity
In a company fully employing open-book management staff at all levels are very knowledgeable about how their job fits in to the companies financial plan. However taking a company from "normal" to open is not as easy as just sharing financial statements with staff. The true success of open-book management is when companies allow numbers to come bottom-up (as opposed to traditional top-down management). According to Case, "a company performs best when its people see themselves as partners in the business rather than as hired hands" (Case,1998 as cited in Pascarella, 1998).