How open can you be with open book management?

One reason cited by opponents of open book management -- where all employees see everything in the company's books and actively participate in the business planning and development process -- is the business risks disclosure of confidential information to competitors or others who shouldn't receive it.

This is a real concern, of course, especially as the number of copies of your corporate financial statements and reports increases with the number of employees with access. Obviously, we expect all employees to sign non disclosure agreements in their employment contracts, but what do you do about loose lips (and do loose lips sink ships)?

The answer to that question is another: Outside of specific circumstances -- for example formal negotiations before a business transaction is signed off -- should you put anything in writing that would cause you problems if it is divulged? In other words, if your 'books' get in the wrong hands, will it make any difference, and if so, why?

The answer is that, if you practice true open book management, the risks of inadvertent or unwelcome disclosure are truly minimal. Perhaps people you don't want to share information with can see your sensitive business data, but will they be able to do anything with the information to cause you real harm? I doubt it. We're assuming you are operating an above-board business with only one set of books, of course!

Best of all, if anyone in your organization is either sloppy or careless or wishes to cause intentional harm by sharing business secrets, you'll find you have many allies among the other employees to expose the matter and if necessary 'out' the wrong-doing employee. Notably, if you encounter this situation, you also find that you can uncover other more serious issues and resolve them promptly and fairly.

We discussed these issues at our construction marketing and sales meeting today, with the question: What is appropriate for an employee to share with outsiders, and what is not? One employee said: "Only disclose what you know if, imagining you are sitting next to your boss at the meeting, he wouldn't mind seeing disclosed."

This is an imperfect solution -- especially when you are a boss like me who encourages employee autonomy -- but it is a worthwhile guideline. With open book management, if you share secrets you are not supposed to share, you will encounter the consequences of the open culture within the business. In other words, if your lips are too loose, the company will learn soon enough, and will be able to address the problem before it gets out of hand.