Open Book Management

I’m not big on information hiding. I’ve always wanted to know what was going on in other parts of the company, so I could better understand how to do my job. I recently read Laurent’s post on Information Hiding, and realized that I when I recently spoke about open book management, some people didn’t understand what I meant. So, here’s what I mean by open book management: share all information about strategies, sales, revenue, and costs so that everyone can help manage the business better. Instead of making locally optimum decisions, everyone can make macro-level optimum decisions.OBM is difficult. How many of us want to post our salaries (including bonuses) for everyone to see? How do you deal with OBM when dealing with individual productivity? I don’t have all the answers. Here’s what I’ve done in the past:

  1. Focus on defining the strategy, the tactics that flow from the strategy, and how we’ll measure the success of those tactics.
  2. Measure the cost of the tactics by team. Since I can’t measure productivity individually anyway, I measure it by team. I can also measure salary plus bonus by team. This requires that I not move people around from team to team too often, or the arithmetic gets too hard to be correct.
  3. Make sure everyone knows what the tactics are, and why.

OBM requires that everyone want to serve the best interests of the company; that the employees are responsible and will make good choices, if they understand the context behind those choices. It’s not easy to do, and if your company is in financial straits, necessary. Just imagine if the airlines had treated their employees are reasonable adults instead of tantrum-holding children. They may not have expanded innapropriately, and they certainly wouldn’t have tried to keep the top management’s excess monies while negotiating for pay decreases with the unions. (I firmly believe unions arise when management witholds relevant information.)Don’t treat your employees as if they were children. Laurent doesn’t treat his children as unthinking beings 🙂 I hope I didn’t when my kids were smaller. Now, I wouldn’t even consider it. Help your employees understand the context and discuss how to make the best decisions everyone can make, so that the company succeeds.

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