BUDGETING & The Case For Open-Book Management

by Bill Fotsch and John Case, Business Insider, 7/25/17.

Open-book management is a way of running a company that engages employees in making money. People learn to understand the economics of the business. They track and forecast key numbers. They figure out how to move those numbers in the right direction, and they share in the rewards of better performance…

…open-book management nearly always improves near-term financial results. In our experience, companies register as much as a 30% increase in productivity and profitability in the first year alone, when they implement the approach properly.

But the real business case for open-book management is that it makes a company stronger over the long haul. It improves the lives of employees, building loyalty and commitment. It helps create a business that can thrive year after year in today’s mercurial economy…

More engaged employees. Every company would like its workers to put their shoulders to the wheel. Engaged employees go the extra mile for customers, come up with new product ideas, figure out how to save money. But very few companies get this kind of involvement. It’s a well-known statistic: only about 30% of US workers say they are engaged in their work.

An open-book company can double or even triple that figure, because employees see the effects of their actions on the business’s performance and know they will benefit when results improve. “I don’t have employees in my plant anymore,” says Roger Grommet, co-owner of Boardman Inc., a specialty manufacturer based in Oklahoma. “I have entrepreneurs who are looking to find ways to make more money.”

Read more at … https://www.forbes.com/sites/fotschcase/2017/07/25/the-business-case-for-open-book-management/#16f001458831