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Thursday, June 18, 2009

An example of Open Book Management at work

This article from the Great Game of Business, Doing More with Less: Seven Lessons From A Recession, describes how Anthony Wilder Design/Build, Inc. in suburban Washington, D.C., has coped with the recession -- including what many might see as painful salary cuts for its employees.

In reading this story, I'm saddened to realize how in the past year I failed in many ways to live by the principals here.

When times were good (I thought) late last year, I allowed myself "extras" without fully appreciating their cost to the business and their implications for cash flow.

When times turned tough, I refused to cut my own salary and fought over cuts in personal discretionary expenses. Then, for reasons which are too complex to report publicly here, I "shot the messenger". (Employees however know the reasons.)

The paradox is that I "thought" I was applying the principals of Open Book Management through the whole story. For example, at our weekly business meetings everyone in the organization saw and could review the financial statements and cash flow.

And when times turned tough, we started working hard to make cuts, slashing unnecessary expense and waste.

Regarding salaries, I suppose you could say we applied the principals fairly. I'm sure my managerial salary is far below the norm for most business owners, and employees were not expected to take salary cuts. And we sought the fairest way to distribute the load as things grew more challenging.

As things reached a critical stage, as well, I prepared for the personal salary cut which would have been far greater than that experienced by other employees. (That has for now been proven not necessary, but we laid off our writer for a couple of months, something I don't think would have been necessary if I had truly embraced the principals in this story.)

But if I look into myself, and do some true soul searching, I can't say that I have "walked the walk" here.

It is good, however, to learn from others who understand and apply the principals correctly.

2 comments:

George said...

Mark,

How true it is. It is definitely harder to walk the walk then talk the talk, but the principles are useless unless we put them into action. Thanks for reminding me how important that is!

Mark Buckshon said...

Thanks for your comment. It can be easy (and is often tempting) to take the short-term selfish course, but the longer-range consequences remain in place.