1.5 - About University

4.6O PEN- BOOK L EADERSHIP: DEVELOPINGE NTREPRENEURIAL T HINKINGInspired by Jack Stack.Although the ideas behind open-book management had been around for years, Jack Stack tookthem to new levels in his book, The Great Game of Business. “The more people know about acompany, the better a company will perform. This is an ironclad rule,” says Stack. Open-bookrefers to sharing corporate and business-unit information—financial, production, quality—andany other information that would help employees adopt a more entrepreneurial and businessthinkingorientation. This tool contains guidelines for adopting open-book management.Open-book management is designed to assist and encourage employees to act like owners.It does this by:1. giving employees the corporate, financial, and production information they need;2. teaching employees how to understand and use this information; and3. providing employees with a financial stake in the company’s performance.It is possible to underinform or overinform employees. If you provide too much information,employees drown in the details. If you provide too little, employees can’t develop a fullunderstanding of the business. Either way, employees are disempowered. You need to provideemployees with critical information only; that is, information that will help them to betterunderstand your business, to take calculated risks, to make intelligent business decisions, andto feel that they are trusted and valued and play a meaningful role within the organization.InformationBig pictureFinancialProductionBusiness unit/projectSales/marketingOrganizationalBonus/rewardprogramsThe range of business information that youremployees might benefit from knowing(Note: Select and provide employees with the critical numbers only.)strategy and direction, business climate, share price, competition, customers’ businesses and needs,overall business success measures, trendsbalance sheets, income sheets, assets, cash flow, expense accounting, taxation, net present value,cost of materials, labor costs, project financials, business unit financials, overhead, standard costsvolume, rate, cost per unit, materials costing, production goals (and why), quality measuresprofit and loss, investment financing, cost of goals, production costs, overhead costs,competitors’ information, sales and marketing informationrevenue, volume, rate, cost of sales, competitors’ pricing, markups, customer serviceindicators, marketing and sales strategies, sales forecastssafety, lost-time accidents, attendance, environmental, union agreementswhat is available, how they work, how they balance interdependencies with individual rewards,their size and whySECTION 4 TOOLS FOR DESIGNING PRODUCTIVE PROCESSES AND ORGANIZATIONS 121