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Thursday, February 14, 2008

How open should you be?

Boise, Idaho remodeling contractor Jim Strite (photo lifted from Remodeling Online), of STRITE Design and Remodel practices open book management.

Sonny Lykos in a comment to a previous posting provided this link to a Remodeling Online article, "Open Up", which suggests that open book management is still a rarity in the construction/remodeling industry -- and the type of open book management practiced is not the extreme version practiced by Jack Stack, tied to employee ownership and equity.

The article touches on two of the most common concerns employers have about opening their books: The issue of salary disclosure (not!), and the threat that the data might find its way into the hands of clients or competititors. Renovators quoted in the article say they handle the latter threat by limiting the amount of paper actually distributed to employees (numbers are posted screens) or giving only the overall financial statements, not explicitly detailed versions.

The cornerstone and rationale behind the open book concept is that it is a necessary supplement to any profit sharing plan -- without an understanding of the books, and how the comany achieves profitability, the profit sharing system would not have any meaning to employees, the article says.

I enjoyed the story but right now am tending to think of Open Book in the bigger picture. In June, I expect I'll be in Springfield, MO with a key employee to learn how the system works -- and in the meantime, will be preparing the implementation with our accountants and business consultants, tied in with the bi-annual planning meetings where, indeed, employees see and participate in the number crunching exercises.

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