Charter Software has always had an open book policy. And with a business system like ASPEN, you can easily make your financials visible to key employees or, if you’d prefer, all employees. According to Forbes, companies who use this rule often see a 30% increase in both efficiency and profits in the first year alone.
What does open book management mean?
This leadership style abides by one simple rule: company financial information is made readily available for most, if not all, employees. Employees of open book management style policies feel empowered. It also helps them make better business decisions and create concrete goals.
This type of transparent bookkeeping might seem intimidating at first, but there are even more benefits to this system.
3 Key Benefits of Open Book Management
- Improve employee loyalty. Dealerships who use an open book management style often see their employee engagement double or triple. Because employees can see the direct effect their actions have on revenue, they’re more inspired to perform at a higher level and feel critical to the success of the dealership as a whole.
- Allow your executive team to take focused action. When executives know where the company stands they can pinpoint weaknesses and come up with more effective plans of action. They’ll even have better resources for measuring and assessing growth.
- Engage in friendly competition. Store fronts and outside sales reps can view and measure their success compared to others. Incent a little friendly competition with a grand prize for quarterly or yearly achievements.
Who should use an open book management policy?
If your goal is to gain the benefits listed above, this might be a great move for your business. The arguments against the management style often point to employee discontent as they may decide they’re being underpaid compared to what they believe to be the executive portion of the revenue. However, this can easily be prevented or remedied by continuing to evaluate employees, their regular contributions, and the average compensation for their titles in order to stay competitive as an employer.
Open book management is a great tool for dealers to consider using for more strategic employee relationships and business success. Regardless of whether or not you use it, remember that communication is key with any employee loyalty strategy.