Open Book Management LO2701

Gary&Lilly Evans (
07 Sep 95 22:03:54 EDT

The Industry Week (IW) Online Forum on Compuserve is runing
for 10 days on the topics of Innovation and Transformation. An
interesting thread has emerged on Open Book management,
which could be of wider interest to this list. Hence, I have
copied below my note and the answer from the Forum leader,
Joyce Wycoff (e-mail:

<LE note start>

For those who listen to BBC Radio 4 "In Business" programme (last 4
sundays it dealt with "New Organisation") the name of Springfield
ReManufacturing and its methods of operation will be familiar. Peter Day
(the programme creator) has included conversations with company CEO as
well as some of the workers. If people are interested, it would be worth
summarising what "Open Book Management" really is in practice. It is
fascinating to hear how the observations of the cyclical nature of truck
engines market from the janitor can spur creation of a new manufacturing
line to counter its effects.

My question arising from this example and the contributions read so far

What is it that disables so many companies from creating an atmosphere
where the corporate wellbeing is directly linked to the wellbeing and
personal growth of all its employees (irrespective of status)?

Any takers?
<end LE note>

<start JW reply>

Opening a new thread on this subject because I think it is so fundamental
to innovation and transformation.

Open book management (very basically) is where all the employees become
partners in the "game of business." This means more than just passing out
financial reports every month. It means teaching each employee exactly
how the business operates, what increases profits, what the market is
looking for, etc.

It also means that, somehow, the employees share in the successes and
failures of the company.

At Springfield ReManufacturing, I watched a weekly financial meeting where
8 business units created a profit and loss statement, cash flow statement
and balance sheet for the week in 1 1/2 hours. It was NOT created by
accounting ... it was created by the operating managers. At the end of
the meeting people walked out with a hard copy that was to be shared with
their departments by the end of the next business day.

We then toured the plant and talked to people working machines ... we were
given absolute freedom to talk to anyone and ask him (or her) anything.
The level of sophistication about labor utilization, capital requirements,
etc. would make an MBA blink. And this is a manufacturing, grease and
grime, kind of place ... not an investment banking firm hiring Harvard

Something happens when people learn about what it takes to run the
business and have a direct investment in its success.

To echo Lily's question, why wouldn't every organization operate like

<end JW note>

Here appears to be proof that one can have a real growing learning
organisation under current socio-economic conditions - but only if you try
and do it (cf. LO2656).

Any more examples around like this?

Lilly Evans	e-mail:

"Profit is the reward for those who serve society." Kazuo Inamori: A Passion For Success (McGraw-Hill)