Want a fast way to jump-start your workers' productivity? Open your books to them--that means the P&L statement and much of the rest of your financial recordkeeping. Can it really be that simple?
Apparently so. Since we wrote about the subject four years ago, numerous companies have jumped on the bandwagon. "Companies that have done this have seen higher productivity and large increases in profits," says Craig Minnick, managing director of American Express Tax and Business Services Inc. (TBS) in Chicago.
"There's no question that productivity goes up in an open-book business," agrees Terry Lauter, a principal at Humanomics Inc., a Granada Hills, California, human resources consulting firm that helps companies implement open-book programs.
"The bottom-line advantage," adds John Case, author of Open-Book Management (HarperBusiness), "is that it focuses employee attention on what matters to a business: money. People have talked about various goals--Total Quality Management (TQM), teamwork and so forth--but if you don't put the business numbers out there for employees to see, those objectives are meaningless. When you put the numbers out there, you're involving your employees in the guts of your business and helping them see how they can play a role in the business' success."
At the end of the day, how do you judge your business' success? Not by how great the teamwork is or how successful the TQM initiative is, but by the bottom line. You sift the numbers and look for ways to increase profits, perhaps by cutting costs or raising productivity. Study the numbers closely enough, and, odds are, the route to greater business success will emerge. And if this works for you, why not for your staff, too?