As we close off the first decade of the new millennium, there is a new revolution on the horizon. The buzzword for this ‘enlightened’ management practice is OBM, or Open Book Management.
I believe OBM represents the greatest potential improvement to the capitalist system for hundreds of years because it challenges the belief that workers and management are adversaries.
OBM in its purest sense treats everyone as an adult - no kidding!
There is also lots of sharing of all sorts of goodies, including open information about every aspect of the business, involvement in key decisions and drum roll!!!!!... sharing profits and even equity.
I don’t mean industrial democracy or some hybrid form of communism where everyone gets an equal share of the wealth. I mean the sharing of resources and information in a way that is fair and equitable. Individuals who contribute the most to an organisation should still get a bigger slice of the pie.
Unfortunately for most workers, only a few organisations have embraced OBM principles in their fullest sense. There are only three obstacles stopping the OBM revolution from exploding but they are substantial ones.
FEAR, GREED and POWER.
If you want workers to think and act like owners, then you must make them owners. Give them profit share and equity so that they become motivated to create more wealth for themselves, their families and their co-owners. It seems so obvious to me. But then FEAR and POWER comes into the picture.
No wonder that many bosses and even union officials and their members are slow to embrace this practice because it threatens the status quo, the identity and the power base of all participants directly involved in the production and distribution of economic wealth. Bosses can be GREEDY and fear that if the workers know how much money they are making, then they will demand more pay.
Business ethics is also a major challenge for OBM supporters. Dishonest business practices have been around as long as humans have lived on this earth. However, when all information is shared with all employees, it is much more difficult for any one person or group of people to ‘rip off’ any other person or group external to the organisation – unless everyone tacitly colludes in this act. But then FEAR raises its ugly head once again.
Many employees go along with unethical business practices because they fear that they will lose their jobs if they speak out and many times it is with good reason!
But let me also “balance the books” by acknowledging that some people will steal from their employer, if they think that they can get away with it. Hence the need for tight internal controls and security over cash and other assets. However the best way to deter would-be thieves is peer group pressure and OBM is the best management policy I have ever come across to do this job.
I have been a huge advocate of OBM and wherever possible will support its implementation because my own experience has shown without exception that the vast majority of people are trustworthy and capable of learning how a business runs and this is a win/win for all parties.
It only stands to reason that if people know the rules of the game (business) and know how to keep score (the financials) then they are more likely to be better business people. Imagine playing a game of football where the players have no scoreboard, no idea of the rules, and no idea of what the competition is doing?
OK, business is not strictly speaking a sport, but you get my drift.
In one of my assignments as a contracted CEO of a business situated in the country. I got the whole team together at the first opportunity and shared the financial information on the total business with everyone. The news wasn’t good. The bank overdraft was way over the bank limit, and I didn't have a clue whether the company was making or losing money because of the work backlog and atrocious financial systems.
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