How can you boost efficiency in your business?
One way is through a system called open-book management.
Open-book management is great for companies the emphasize transparency. In this system, everyone can see the company’s books. Therefore, everyone shares an interest in the workings of the business.
By seeing, tracking, and forecasting key numbers, everyone gains an understanding of what is driving the business forward—or causing it to lose steam.
The entire team stands to gain when they help nudge the business’s numbers in the right direction. Here’s a look at why.
Employees Feel Like Owners
Although employees don’t necessarily own a stake in the business in open-book management, they feel like they do.
Some businesses that rely on open-book management ask employees to report on key areas of the business. When it comes time to report these numbers, they must face scrutiny about why they are making certain estimates or why the cost is up or down in an area from a previous meeting. Everyone in the company can ask questions.
Employees who own a certain area are encouraged to make efficient decisions, such as finding ways to save or to fuel growth. This helps them feel like they have a part to play in the success of the business.
Everyone Can Rally Behind Open-Book Management
OBM serves as a rallying point for employees. When companies are doing great, it provides momentum for them to continue doing what they do. When companies are falling behind, it encourages employees to be creative in finding additional revenue streams in the hopes of earning a profit, or lessening the loss.
Employees and Leaders Hold Themselves Accountable
One quality Gen Z employees value in a manager is honesty and integrity, according to a survey from Robert Half.
Nowhere is honesty best on display than a company’s open books.
For example, the founder of a landscaping company found that employees began to look at company sales and expenses with a more watchful eye.
“Employees review the numbers, compare them to the budget, and come up with ways to cut expenses and get work done more efficiently,” according to a CBS News article.
Every Employee Has A Stake
Companies who use open-book management typically create a goal for employees to reach.
It may be reaching a certain dollar amount or selling a certain amount of widgets. Whatever the goal is, employees should know what the goal is and be reminded of it on a regular basis.
Then, when the goal is reached, employees receive some type of reward.
Better Customer Relations
Last, but not least, companies that implement open-book management have the potential to improve customer relations.
When employees have a stake in the company by sharing common goals and being rewarded for those goals, they are likely to support their customers better. It doesn’t matter whether a company sells products or services: customers will benefit, allowing a business to cultivate a strong relationship.
If you’re looking for a way to boost efficiency in your business, consider open-book management. Your employees and leadership team will be held accountable for their decisions, allowing your business to take more thoughtful actions to improve your company’s bottom line.