"It's based on the principal that people support what they help create."
One way or another, every entrepreneur learns there are two things they have to do to stay in business: make money and generate cash. The whole point of business planning is to deepen your understanding of how your business can do these two things.
Yet often, once a company has gotten established, many of its employees will not understand how its business model works. They may not know how the company is really doing, or how the actions they take on the job every day affect performance. They may not know the business plan because (assuming it exists) they had no hand in creating it. Gallup has found that employee engagement in the US has been mired around 30-40 percent for ages. One of the biggest reasons is that people don�t know what is expected of them on the job.
The system of open-book I am trained in (called The Great Game of Business, after Jack Stack and Bo Burlingham�s 1992 book), seeks to change that. It's based on the principal that people support what they help create.
Companies that play the Great Game of Business use the idea of business as a game to teach everyone how to think like a business owner. It's based on four principles:
- A critical number: one big metric that everyone needs to understand and keep an eye on;
- Knowing and teaching the rules of the game: Open-book companies share thing financials and teach people how to understand them. Employees at open-book companies are often very financially literate.
- Following the action and keeping score: Open-book companies also teach people how to forecast the company�s future performance, and work together to exceed that forecast. They do this using very colorful, fun improvement activities called "minigames," which are designed and led by teams of employees.
- Finally, open-book companies reward people with a stake in the outcome, usually a kind of gain-sharing based on how the entire company performs.
As a result, once they�ve mastered the system, Great Game companies are often more profitable but also less stressful to run. Because you go from a command-and-control approach, to one based in self-management rooted in teamwork.
By the way, open-book companies also tend to have great employee engagement. As it turns out, when you share the numbers & wealth, make decisions in teams, and show people why their jobs matter, people tend to like working for you! This is actually why I got into open-book in the first place. I used to work at a foundation whose mission was to identify & promote business practices that improve the lives of working people. Open-book management is the single most powerful approach I found while I worked there.