Eight months ago, Critz Inc., a Savannah, Ga.-based auto dealership, made the decision to start living by its critical number. Actually, the owners first made a decision to implement open-book management. The critical number decision followed shortly thereafter.
"We had gone through a Buick program called 'Living the Vision," explains Dale Critz Jr., vice-president and general manager of the 55-employee business. "Manufacturers were trying to get dealers to buy into a work-team, quality-management approach to business. We had three days of training for three key people, then one day for all the employees.
"That day, we broke up into groups and talked about things we'd like to change in the dealership. Everyone made recommendations. But then they looked at me and asked, 'Can we afford it?' That's when I realized the only way this could work would be if everybody understood how to drive the numbers." Dale's father, Dale Sr., had read about OBM, and in September the two Critzes and three others from the company attended the Gathering of Games conference in St. Louis, a seminar devoted to explaining and giving tips on how to share the basics of business management with the entire company. Not long after, they plunged in.
To get things rolling, Dale Jr. launched a 13-week class in business basics. Starting with the dealership's managers, the VP/GM has now given the class to about 36 employees and expects to have everyone graduated by the end of this year's third quarter. Meanwhile, he worked with an outside company, Great Game Coaching, in Villa Hills, Ky., to develop a so-called "critical-number scorecard"--a way to track the most financially important numbers of the company. Here's what Critz Inc. came up with, and what it learned in the process.
The effect of all this? It's early yet, but Critz Inc. has rarely seen so good a year. "By year's end we hope to more than double what we did last year," says Dale Jr. "We're planning on it."
Editor's note: This story was excerpted from Open-Book Management: Bulletin. Copyright 1996, Open-Book Management Inc.
You might also want to take a look at "How to Succeed in Business in 4 Easy Steps", by Bo Burlingham, the Inc. cover story back in July, 1995. Burlingham profiles a couple with a fledgling business idea who learned to get a grasp of their financial numbers.
And if you need really basic financial skills, a lot of people rave about the training video "The Balance Sheet Barrier," narrated by British funnyman John Cleese. The 30-minute video, produced by Cleese's business-training company Video Arts, takes the mystery out of the balance sheet by explaining terms and links to other financial statements in a very amusing, intelligent way. The video comes with a facilitator's guide and costs a hefty $800, but a 5-day rental is $150, and a preview is $50, which may be applied to the purchase or rental price. Workbooks start at $5.35 each; bulk discounts are available. Video Arts is in Chicago (800) 553-0091 and has a full catalog of training products.