management
Open Book Management
 

And finally, Stack believes in sharing the gains, in creating "a company of owners". Bonus plans, Gainsharing, should be short term goals and equity participation the long-term goal. This follows, inevitably, if employees have an intimate knowledge of the financial performance. Of course, employees also share the risk of failure but at least should be able to see failure coming and be able to take timeous and sensible decisions. If you believe that change results from necessity, there can be no more powerful force than OBM, where everyone has almost as detailed a picture of the market and financial performance as the managing director.

 

For John Case, an OBM author, OBM has four principles: sharing information (everyone has to know what is going on), business literacy (everyone needs to understand the numbers and to use them), empowerment (true responsibility for their own numbers, and last, a stake in the business. Case has also pointed out that many companies, Wal-Mart for example, have long shared extensive performance information, financial and otherwise, with employees, Over the past decade visitors to man lean factories, Japanese and Western will have noticed a greater sharing of financial, sales, and performance information amongst employees. Typically this information is shown on display boards or in company newsletters, These are the first steps to full OBM. John Case also notes that programs on JIT, TQM, and technical training provide the how, but OBM provides the why.