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Open Book Management (OBM) is about sharing business information with employees. It’s about creating a connection through a sense of ownership and responsibility from everyone on your team.

For 20 years now, I’ve been highlighting the importance of OBM. For most of my clients it’s a challenging idea, because:

  1. They never experienced OBM in their formative years
  2. They know their competitors don’t practice OBM
  3. Their team are not used to the idea and don’t initially have the required skills and knowledge to respond
  4. OBM is an exercise in trust and it requires an elevated human response

We’re also Kiwi’s and we’ve always liked to play our cards close to our chest; we don’t like to talk about money – it’s a bit of a showy thing to do.

Nevertheless, we now know that the (small and large) companies that practice OBM are consistently reporting improved FINANCIAL performance. What OBM does is force every team member to work within a business context. In other words, everyone soon learns that their own role does not exist within a vacuum, but within a larger business that must become increasingly productive to be successful. When that reality is clear – then better individual productivity, tools, professional development, business intelligence and communication is required. As the saying goes; the team must think like owners.

Open Book Management is not, however, ‘open book viewing’ – it’s about being involved with the business on a deeper level – not just impassively viewing the numbers and doing nothing. It is about providing transparency and team work. It’s about everyone understanding that they have an important task to do; that they are a critical link in the chain towards a higher profit margin and better business understanding and practice. OBM is enormously beneficial for everyone involved.

There are challenges. For example, what information is important and how do I equip my team to respond positively? Will my kitchen team resent my own wages? Will my Front of House team resent kitchen wastage? These issues are tasks, but not impassable hurdles. The reality is that without OBM – you are standing in the way of your team understanding the business – you are deliberately leaving them in the dark. This is no way to run a business. You need more commitment than that, more initiative and better decisions … you can’t expect any of that if you don’t open the books. Don’t you want a dishy that cares enough to point out your portion sizes are clearly too large?

OBM is a controversial idea, particularly within large corporations, but we believe OBM is transformative and proven enough for you to seriously consider an OBM way forward. OBM rolled out in stages (with measured progress over time) is a good way forward for some businesses. Of course, alongside OBM development –  your workplace culture will need to improve, as will the quality of your team.

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Author – James O’Connell

Co Founder The Hospitality Company