Ask Your Doctor if Open Book Management is Right For You

In this, part 3 of 4, with Tom Root, he shares the benefits of using Open Book Management (OBM) in your company.

Tom is Managing Partner, Zingmerman’s Mail Order, continuous improvement leader and creator of a business maker space called Maker Works in Ann Arbor, MI. 

Click here to join the community of crazies who believe that work can be meaningful again. 

Music is “LA All Night,” GG Riggs, Courtesy of Shutterstock

Notes taken during the editing of the show:

Is this “sharing” of stress just a way for the man to one over on the workers?

It would be if it didn’t also entail giving the employees a way to influence the outcome and results.

Servant Leadership – The coach doesn’t carry the football. 

Management is DEPENDENT on the front line who touch the product and work with the customers. 

This is information to make better decisions. 

To make Open Book Management work you have to buy into a few things about employees:

They can self-govern


Thinking employees

Power and ability to control their destinies

Empowerment and control are nice rewards. But they don’t buy the groceries.

Gainshare program – Financial success is shared.  And a lot is based on the work of Jack Stack and The Great Game of Business. If you believe business is a game, then you must:

Know and teach the rules of the game.

Keep Score

Share the Winnings

When it wins, there’s an expectation of sharings.

Right now they’re trying to pay people more. 

Promise of ownership 

Community shareholder

Everyone can buy a share in the intellectual property of Zingerman’s. Your ownership allows you a dividend if there is profit. Only buy one share. Buying it as a community. Every 6 years you may buy a share. $1,000 a share. 

Cross functional team got together and designed the program. Staff and all levels represented.

43.10.348 How do we start if we’re in the muck?

approach from both directions

Management – why should we run these experiments?

Staff – get them interested and how this will address a problem/need.

Approach – it’s just an experiment. Just know that you are looking for a better way. Define it in terms of a vision. If the following things happen it will be a success. 

Look at it from the view of the scientific method: What is your hypothesis, how are you going to design the experiment, what does success look like in relation to the hypothesis, look at results, change.

4640Q Financial benefit of OBM – Unless there’s a philosophy of allowing people to act on the information, then you shouldn’t undertake OBM.

The famous french fries story. Food costs were going up and the revenues were going down. Through a huddle (weekly), the staff looks the numbers as presented by the owners of those lines. What are the drivers of food cost? Waste is a big one. A dishwasher noticed they threw a lot of fries away. What’s the alternative. Half the portion size, but offer unlimited quantity. The single change saved the extra cost.

Teaching them enough, giving them a way to talk about it, and a venue to discuss it. 

And there’s a stake in the game.

What did I do to detract or attract that profit? So that bonuses are understood.