Open book management

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Open Book Management (OBM) is a corporate management model that aims to increase the efficiency of a company through comprehensive transparency across all hierarchical levels.

The term management was coined by John Case and used from 1993. The visible success of this concept, however, only became apparent through Jack Stack and his team at SRC Holdings, the company in which the model was developed.

Emergence

In 1983 an engine plant in Springfield ( Missouri , USA) could only be rescued from an economically catastrophic situation with a very large loan. In order to increase the motivation of the 119 employees, the company management decided to inform all workers as well as the managers. Business figures and the development of the company should be traceable so that, in addition to their everyday activities, they could help the company to earn money.

Instead of investing in machines or technology, employees were invested in information , which meant that no further financial resources were required so that they could support management decisions and understand the development of the company. As a result, the company's sales increased by 30% over the next three years and the company's value continued to grow sharply until 1994.

Basic idea

The basic idea of ​​open book management is that the company information that employees receive should not have the sole purpose of doing their work as effectively as possible, but should help them understand how the company works as a whole. According to Case, "a company works best when its employees see themselves as business partners rather than just agents or vicarious agents."

Framework conditions should therefore be created so that employees can actively deal with the company's goals and the willingness to "... share information, control of results and financial success" is encouraged. (Tischler, 1999)

The basic elements

  • authentic participation
  • serious delegation of responsibility at all company levels
  • short-term and long-term wage and participation systems

support this.

The technique consists of providing employees with all relevant financial information about the company so that they, as employees, can make better decisions in their area in line with the company's goals. This necessarily includes at least revenue , profit , cost of goods, cash flow and expenses .

At the end of the day, employees should even be given budget responsibility, which also includes training in basic financial knowledge.

Basic principles

Stack uses three basic principles in its management practice:

  • Knowledge and communication of the conditions for success: the factors of business success should be brought closer to each employee and made understandable.
  • Verifiable, target-oriented course of action: Every employee is expected to use his or her knowledge independently to improve the performance of the whole. Conversely, this must also be made possible.
  • Granted participation in the company's results: Every employee should have a direct share in the company's success as well as in its failure.

Case similarly justified the open book approach with three points of view:

  • The company should disclose its finances as well as its critical data to all employees.
  • Employees are challenged to make their own contribution in a direction that serves the company's success.
  • Employees have a direct share in the company's success.

effect

Where open book management is sustainable, employees at every level are fully aware of the impact their job has on the company's financial plan . "Opening up" a normal company is not simply a matter of explaining the company's financial situation to employees with a few figures. The real benefit of open book management comes into play when companies allow the success factors to work from the bottom up (contrary to traditional top-down management). Of course, employees need to understand the income statement and accounting ; The open book approach celebrates the real successes where employees understand the numbers situation to such an extent that they are able to make predictions to the higher-level management.

In order to motivate permanent employees to make change efforts, the open book management is based on the "critical number". This is different for every company, but represents the main indicator for profit or break-even point. Determining this critical number is a main component in forming an "open book company". Once discovered, a structure is developed that collects all the numbers that are required to calculate the critical number (scoreboard). Everyone has a look at this structure and meetings are held to discuss how individuals can influence the score for calculating the critical number and consequently avoid reaching the critical number. Ultimately, a share of the result is created, for example as a bonus plan, which is based on the achievement of an important operational indicator , or as a share of the company's capital, or both.

The annual National Gathering of Games conference in St. Louis , Missouri is the fair for advocates and users of open book management - the only conference to establish an inclusive corporate culture that is about making employees feel like owners, think and let it act. Managing directors who have successfully developed commitment and profitability of their workforce through open book management can exchange experiences with others there. The sessions, speeches and workshops of this conference cover all phases of the open book management process.

See also

Web links

literature

  • Wehrle, Martin: The enemy in my office: the big and small errors between boss and employee, Econ Verlag, Berlin, 2006 (2nd edition), ISBN 3430195438
  • Shaffer, J. (2000). The Leadership Solution. McGraw-Hill pp. 38-40, 98, 159
  • Tischler, Thomas: Strategy and Change: an integrative approach to generating strategies in the company. Deutscher Universitäts-Verlag, Wiesbaden 1999, ISBN 978-3-8244-6831-7
  • Stack, J. (1992). The great game of business. New York, Currency Doubleday.

Individual evidence

  1. ↑ Onpulson - Knowledge for Entrepreneurs and Managers , Definition of Open Book Management (as of March 22, 2015)
  2. ↑ a b Case, J. (1995). Open-book management: The coming business revolution. New York, HarperCollins
  3. ^ A b Aggarwal, R. & Simkins, B. (2001): "Open-book management — Optimizing human capital" Business Horizons, 44 (5), 5-13.
  4. ↑ Homepage SRC Holding , the company in which the model was developed (as of March 22, 2015).
  5. ↑ Davis, T. (1997). Open-book management: Its promises and pitfalls. Organizational Dynamics, 25 (3), 7-19
  6. ↑ a b Kidwell, RE & Scherer, PM (2001). Layoffs and their ethical implications under scientific management, quality management and open-book management. Journal of Business Ethics, 29 (1/2), 113-124
  7. ↑ Wehrle, Martin: The enemy in my office: the big and small errors between boss and employee, Econ Verlag, Berlin, 2006 (2nd edition), ISBN 3430195438 , p. 224f
  8. ↑ Wehrle, Martin: The enemy in my office: the big and small errors between boss and employee, Econ Verlag, Berlin, 2006 (2nd edition), ISBN 3430195438 , p. 225
  9. ↑ J. Case, 1998 quoted from: Pascarella, P. (1998). Open the books to unleash your people. American Management Association International, 87 (5), 58-60
  10. ↑ a b Tischler, Thomas: Strategy and Change: an integrative approach to generating strategies in the company. Deutscher Universitäts-Verlag, Wiesbaden 1999, ISBN 978-3-8244-6831-7 , p. 226
  11. ↑ Knoblauch, Jörg: Die Personalfalle: Weak personnel management ruins companies, Campus Verlag, Frankfurt / New York 2010, ISBN 3593390892 , p. 44
  12. ↑ Tischler, Thomas: Strategy and Change: an integrative approach to generating strategies in the company. Deutscher Universitäts-Verlag, Wiesbaden 1999, ISBN 978-3-8244-6831-7 , p. 227
  13. ↑ a b Stack, J. (1992). The great game of business. New York, Currency Doubleday.
  14. ↑ Handelsblatt (publisher) in cooperation with Campus Verlag, Frankfurt / Main: The best management tools: finance and growth, Volume 3, Frankfurt 2005, ISBN 3593378256 , pp. 105ff
  15. ^ Homepage Gathering of Games , the annual open book conference (as of March 22, 2015).