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HUMAN RESOURCES

An Open Company? Are You Nuts?

FaxPoll results show that respondents believe open-book management is a good idea, up to a point.
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Results of the April Faxpoll?
Our April FaxPoll asked you to comment on the trend -- described by senior writer John Case in that same issue -- toward companies opening their books to their employees. Turns out most of you think it's a good idea. Up to a point

Do you see evidence of a major management trend toward "open" companies?

Yes 50%
No 28%

Not sure 22%

Many of you do see companies adopting more open-book philosophies and encouraging increased employee participation. And a lot of you are betting the trend continues. "Our entire company philosophy is built on this concept." "We intend to double our sales within five years, and we anticipate that we can do so only by being 'open." But others are less sure of the existence of a trend. "The whole idea is just a measure of a direction -- don't take it to an extreme." And some are downright contemptuous. "I sure hope it's not a trend. It's a pretty dumb concept."

* * *

Is running an open company a good idea?

Yes 81%
No 14%

It depends 15%

Do you share numbers with your employees?

Yes, but only some numbers 49%
Yes, I let them see everything 34%

No, they don't need that information to do their jobs 12%

Other 5%

An overwhelming majority of respondents favor corporate glasnost. "How else can employees make intelligent decisions?" "If you make [employees] feel like owners, they take more pride in their results." "Bringing all our employees into the financial process increased our revenues by 100% over the past 18 months." But while the majority of you say you're in favor of being open, most of you are selective about the exact numbers you disclose. Of those who reveal only some numbers, 48% show sales figures, 34% show the profit-and-loss statement, and only 5% show payroll information. Not all respondents were open-book fans. Some feel rather proprietary about financial information. "Employees who know too much become greedy." Some seem concerned with maintaining traditional corporate hierarchy. "Too much information given to too many people will destroy the organizational structure." One major concern is the possibility that sharing numbers would put a company at a competitive disadvantage. "Employees may go to an enemy company and bring our info with them." Many think financial information is beyond most employees. "People don't understand overhead or return on investment." Employees, some say, just don't need this information to do their jobs. "It's necessary for employees to understand their own work, but it's distracting and counterproductive for them to understand the entire company."

* * *

How much responsibility do your employees have in defining their jobs?

We work with employees to determine their roles and the company's agenda 63%
Management defines roles and sets the agenda 22%

We allow all employees to define their own roles and the company's agenda 11%

Other 3%

An important part of running an open company is increasing employee input and involvement. But while 63% of you report that management in your company works with employees, 22% say that management sets the agenda for employees. The naysayers here were more likely to say, "We run the company -- they do their jobs," whereas those favoring open policies were more likely to have a more empowering attitude. Owners were more likely than employees to say that they see a trend toward open companies (56% versus 39%). But even though they are less aware of companies becoming more open, employees seem rather fond of the notion: 94% say they think it's a great idea. With regard to defining jobs, 61% of employee respondents (versus 22% overall) say that management defines their roles for them. Small wonder they're griping.

* * *

What kind of employee training do you provide?

Job-specific training 88%
Tuition reimbursement 46%

Accounting classes 11%

Basic math training 6%

Literacy training 6%

Other 27%

What sorts of rewards, beyond salary, do employees get?

Bonuses 67%
Profit sharing 40%

401(k) 30%

Incentive programs 28%

Nothing 9%

ESOP 8%

Stock options 7%

Other 14%

You can show employees every number in your books, but it will mean very little to them unless you make sure they know what the numbers mean. "Sharing info isn't enough. You have to help employees understand the implications of the information so you can benefit from their input." As one of you put it, "An individual without information cannot take responsibility. An individual with information cannot help taking responsibility." Of course, some would argue, if all this open-book stuff is going to work, you're probably going to have to give employees a piece of the pie. Some traditional thinking here is that "the person taking the risk is the one who should profit." But especially in a small company, attracting and retaining good employees requires that they know how wealth is created and have a stake in creating it. -- Christopher Caggiano

Last updated: Jul 1, 1993




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