Open-Book Test

Not-So-Full Disclosure

Skeptical? Although businesses nationwide are thriving under open-book management, first-glance dubiousness about the idea is common, according to Case, who says a primary fear--at least in privately held companies--is that employees will quickly decide the boss makes too much money. But, he adds, that fear is usually groundless. "They probably already think that," he says, "and in most cases, they think you make more than you do."

The second common reservation is that, given the numbers, employees will be in a position to turn this sensitive information against you, perhaps by job-hopping to a competitor. It happens, admits Case. "People leave companies all the time, and they take secrets with them." Even so, the fear is overblown. "The fact is," says Case, "most companies already know more about their competitors than the competitors like to think. Yes, employees might take away information, but it's generally less secret than owners believe."

Still a third hesitation is that there are some financial secrets you want to keep secret. Does that bar you from implementing open-book management? Nope, says Minnick, who has helped many American Express TBS companies, most closely held, open their finances to employees. That's because disclosure doesn't have to mean full disclosure. The numbers you give employees should be limited to those that are meaningful to them and that they can influence. That way, their focus is narrowed to their own spheres of influence--the areas where they can potentially make a difference.

Like this article? Get this issue right now on iPad, Nook or Kindle Fire.

This article was originally published in the June 1998 print edition of Entrepreneur with the headline: Open-Book Test.

Loading the player ...

Shark Tank's Daymond John on Lessons From His Worst Mistakes

Ads by Google

Share Your Thoughts

Connect with Entrepreneur

Most Shared Stories