Jack Stack is the CEO of Springfield Remanufacturing Corporation, one of the great turnaround success stories of this generation. Stack is also the author of The Great Game of Business and A Stake in the Outcome.
I recently interviewed Stack in Springfield, Missouri for a forthcoming issue (February 2011) of Kaizen.
“Open-book Management” is addressed to these standard problems: Unmotivated employees. Authoritarian management. Workers who feel like cogs in a machine. Bosses who feel like they have to do everything themselves.
Open-book Management’s solution is based on these premises:
* Nobody really likes working for someone else; they like ownership.
* There’s wisdom in crowds; everyone in the business has local and specialized knowledge that can be used to everyone’s advantage.
* Employees can be taught big-picture financials that connect what they’re doing to the company’s overall success and failure; they are not dumbed-down cogs in a machine.
* Employees who know how the business works should be empowered to make their own decisions and be accountable for them.
* Compensation, including bonuses, should be tied to measurable value added to the company, and when it does so it is a powerful motivational tool.
* Like games and sports, one’s work life should be great fun.
Of course, the idea of opening the books scares most managers to death. At the same time, many businesses, including Fortune 500 ones, have experimented successfully with it.
So check it out for yourself. Here’s a website devoted to the Great Game of Business. And here’s a recent interview with University of Michigan professor Wayne Baker who teaches open-book finance in his courses.
Stephen, thanks for this interesting post. Have you come across Ricardo Semler’s books (“Maverick” and “The Seven-Day Weekend”)? His approach is a variant of open-book management. His success implementing these principles at his company in Sao Paolo, Brazil has been spectacular and has led to guest lectures at Harvard Business School amongst others.
I will check into Semler’s work, Johann. Thanks.
I learned, and always tried to convey to higher management, that most “everyone wants to do a good job.” Management’s job is to clearly explain and measure what that is. Surprising how ambiguous this message often is, causing conflicts among groups and departments.
The ambiguity stems from the top, but any supervisor can improve the morale and productivity within his area. Builds self-esteme in everyone. Or rather, lets each person build self-esteme.
Why do you think the message is often ambiguous, Jack, and what in your experience is behind the conflicts?