3 Ways Open-Book Management Boosts Employee Engagement

By now, the news must have reached even the most distant outposts of leadership: Employees aren’t engaged at work. They

5 min. read

By now, the news must have reached even the most distant outposts of leadership: Employees aren’t engaged at work. They feel bored and unfulfilled. Purposeless and unhappy. The latest from Gallup tells us that 85% of the global workforce is either not engaged or actively disengaged at work.

The supporting statistics are almost equally disheartening:

  • Only 50% of employees clearly know what is expected of them at work
  • Only 41% strongly agree that their official job description aligns well with the work they do
  • Only 30% strongly agree that their boss involves them in setting their goals at work

I’ve yet to hear of a leader brazen enough to pass the blame for these problems on to their workers. That said, I have seen bosses who are seemingly uninterested in offering solutions. Which makes no sense: Here, a hands-off approach is bad for people and bad for business. Nobody wins.

I have more sympathy for leaders who want to make things better but simply don’t know how. Disengagement at work is a huge problem, after all, and there’s no quick fix. Where do you even start?

I can’t answer that definitively, but I do have a suggestion: Open-book management.

As Bill Fotsch and John Case put it in Forbes, “open-book management is a way of running a company that engages employees in making money.” Under this model, leaders make key financial numbers available to the entire company: revenue, expenses, profit, forecasts. They empower employees to designate and track metrics that will have a direct effect on these numbers. In other words, they invite their team members to function more like partners.

In my career so far, open-book management has been an unlikely yet inspiring constant. I’ve witnessed first-hand how it can transform a struggling organization into a thriving business with a great work culture.

Here are three ways open-book management can make you a better leader — the kind that knows how to get your employees feeling truly engaged.

1. Open-book management emphasizes the difference one person can make.

Geographically, my first job after college didn’t take me far. I went from studying at the university to working for it (specifically at one of the business school’s several research centers). This is where I learned all about open-book management. While the academics studied how companies were making it work (including a local favorite), my seven-person team was putting it into practice.

During weekly staff meetings, our manager walked us through all the numbers: operating budget, expenses, philanthropic contributions. In terms of donations, we knew exactly how much money we needed to bring in if we all still wanted to have our jobs in two years.

This could (and would) have been terrifying — if we didn’t also know exactly what we could do to help meet our goals.

I was responsible for tracking, reporting and improving web metrics: page visits, email open rates, social media engagement and so on. My job was to figure out how to boost these numbers in order to increase our visibility among key audiences.

This gave me a mission.

And the reason I was doing this particular job was ultimately to help make sure our research center could continue to operate and grow.

This gave me a purpose.

For me, mission plus purpose equaled engagement. Because of open-book management, I almost never felt bored, lost or unproductive at work.

2. Open-book management galvanizes teams into action.

Fast forward a few years, and I was working for a design agency on the other side of the country. The company had a lot going for it: a talent-rich team, great clients, a beautiful office space in the heart of a thriving city.

It also had a profit margin low enough to keep the CEO up at night. And when she finally revealed this number, a lot of us on the team felt scared and powerless. I remember one of my coworkers saying, “I know that number is too low, but I honestly don’t know what I can do to help.”

Not long after, our CEO announced plans to adopt some principles of open-book management. From that point on, the full team got together each quarter for a company offsite. At these meetings, we reviewed revenue numbers and collectively set growth goals. Then we developed team-based plans to reach these goals.

The marketing and sales teams vowed to focus on selling larger projects to higher-profile clients. Meanwhile, the creatives discussed ways to work more efficiently and get more done without suffering burnout. Unsurprisingly, the enthusiasm for doing better proved contagious.

It didn’t take long at all to see major results: About a year later, the company’s revenue had grown significantly, and profit margins had nearly quadrupled. And because we all felt personally responsible for this success, morale reached an all-time high as well.

She never said as much, but by then I’m sure our CEO was sleeping much better.

3. Open-book management makes it easier to create a positive impact.

Torrent’s commitment to open-book management was one of the things that most excited me about joining the team here. In fact, my positive experiences with full transparency made me wary of working for a company that didn’t share the numbers.

At Torrent, we regularly review important financials and goals during daily, company-wide stand-up meetings. Then, within our teams, we develop KPIs directly related to the company’s success and regularly report on progress.

Of course, at Torrent success means a few different things. On one level, it’s about the bottom line. No business can exist without making money, after all. But what really drives us is making an impact. Sometimes that means supporting social enterprise businesses; other times, it means bringing business opportunities to people who might not otherwise have them. We may not be able to solve the world’s problems, but we can do our part.

Because our ability to make an impact is directly tied to the success of the company, I think it’s fair to say most of us are grateful to feel so empowered to drive Torrent forward.

Employees need a way to engage.

The main reason employees don’t feel engaged at work? They aren’t given a way to actually engage.

As I’ve learned, engagement is the result of feeling purpose-driven and mission-oriented. If somebody’s just doing work for the sake of it, or because they’ve been told to do it, they might as well be writing lines on the chalkboard. If there isn’t a good reason for doing something, it’s just busy work, bordering on punishment.

If you want to make things better for you and your team, why not try open-book management? I have faith that you’ll notice a dramatic improvement.

 

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Danielle Sutton