To be sure, all such potentials won't immediately be realized everywhere: open-book management is a process, not a packaged product, and not every practitioner will be willing to take it as far as von Matthiessen. But even early-stage experimenters such as Re:Member's John Davis and COMPS's Michael Arabe are learning something of its power and are laying plans to extend their sharing of information deeper into their organizations. A year from now both businesses are likely to be further down the road toward what might be called the open-book company. A year from now, too, a lot of other CEOs are likely to be taking those first commonsensical steps toward sharing information -- toward letting their employees work with them as well as for them.
And when the old, keep-'em-in-the-dark attitude finally disappears, there won't be many mourners.
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Research assistance was provided by Anne Murphy.
MANAGING BY THE OPEN BOOK
As employees think more like owners, owners can think more like leaders
The main claim for open-book management is that it makes for better employees. Sharing company plans and financial results -- costs, revenues, productivity numbers -- is said to promote initiative, innovation, commitment. Reason enough, it would seem, for any business to drag its inner workings into the open air. But that is only part of the open-book benefit. If sharing information empowers employees, it liberates managers. As employees think more like owners, owners are free to think more like leaders.
Here are some reasons why:
1. Banished Ego
"I feel incredible pressure on performance from inside the company when everyone sees the results -- and it minimizes your ego involvement in decisions that don't work out. You recognize your mistakes sooner. If the results are kept secret and not shared, there's a temptation to let ego drive the decision and to stay with a strategy longer than you should. But when everyone sees the score, it requires managers to put their egos away. Sharing results focuses my attention on facts, not emotions."
-- Cecil Ursprung, president and CEO of Reflexite Corp. in New Britain, Conn.,
a reflective-materials manufacturer
2. A Smarter Company
"Maybe people like H. Ross Perot and Harold Geneen are smart enough to think of everything themselves, but I'm not. I don't want to do it by myself, and I'm not going to. If the team wins, I win. That's good enough. I am willing to suffer the discomfort of doing business this way -- the potential morale troubles if results are off -- because now the owner isn't the only one thinking. Our people have started coming to the table with ideas. We're working together to create value here. The idea of an aloof manager who knows it all is a lie."
-- Michael Arabe, CEO of COMPS Inc.,
in San Diego, an information-services provider
3. Tougher Oversight
"Every month after our board sees our presentation, we make it to employees. But they're a tougher audience than the board. They're not afraid to ask how much money we have in the bank or what funding sources we're lining up.
If we've lost a key deal, we have to be ready to explain why we lost it. If we're considering a new market, they're quick to ask, Why are you entertaining that idea? I'm getting a report card from 90 people, not just 9 board members. So I really have to be sharp. And anything that makes me sharper is better."
-- Mike Allred, president and CEO of Visual Information Technologies Inc., in Plano, Tex., an image-processing systems maker
4. Emotional Support
"When the company wasn't making any money and the banks weren't applauding, it was all on my shoulders. I wanted a company that was a success, but I couldn't do it by myself. I had to start sharing the burden. It meant showing employees the holes, showing them your dirty underwear. And that's tough. But because I share information and problems now, people care more. They have a sense of dignity they never had. And the burden is lifted some. I am not lonely anymore."
-- Karl A. A. Reuther, CEO of Reuther Mold & Manufacturing, in Cuyahoga Falls, Ohio, a machine parts maker
5. The Right Role
"Traditionally, every idea had been bounced off me first. But now that people have information, they'll come in and say, We've done this, and here's why. I went from being a quarterback to a cheerleader. So I can focus on integrating two new acquisitions that have nearly tripled our size. And I've finished our five-year business plan. I'm able to concentrate more on new trends and the long-range aims of the company -- the jobs I should be doing.
-- David Becker, president of Re:Member Data Services, in Carmel, Ind., a provider of computer products and services
OUTLINE FOR AN OPEN-BOOK COMPANY
Writing chapter one
Open-book management doesn't mean overhauling a company overnight. In fact, it's rarely introduced as some full-blown program or thoroughly mapped re-formation that upends every policy and practice in its path.
