jen briggs

One of the mistaken perceptions of open-book management (OBM) is that leaders can conduct an informational meeting, and, voila, they are practicing OBM. The reality is that open-book management is a broad concept with several different frameworks and fantastic opportunities for organizational action and cohesion. It is a vital part of the way a company can be led. More importantly, it can be a part of the governance system of a business.

My practitioner’s view of open-book management is that information is shared as an informing, learning, influencing, participating, and connecting experience. Employees develop a broad level of business literacy, giving them the ability and agility for well-informed, rapid coordination. This distributing process of informed action creates a more effective and efficient organization with less need for a directive or controlling chain of command (aka: bureaucracy).

{For more: a perspective on servant leadership}

One of the arguments against open-book management is that command-and-control leadership is more efficient. With this view, leaders can roll directives through the organization, people will comply, and work gets done. A saying attributed to Peter Drucker is that leadership is doing the right things, and management is doing things right. In the command-and-control positional-power application of this definition – leaders, managers, and super-smart knowledge workers tell employees what the right things are and then “manage” employees to do things right. A better alternative is to apply the Drucker concept not on positions but as a system. Leaders create conditions for building what the right things can be and set accountability and responsibility systems in place. The same concepts are present in strategy, planning, and monitoring, but the methods of doing so are vastly different. In this more open system, knowledge work can be done by everyone. This system-based concept is what Drucker intended.

A real tension with OBM is about time. One leader said he didn’t have time for open-book management because they already had too many meetings. His argument: in the time it takes leaders to distribute information to employees, decisions could be made and actions taken. Further, teaching employees is a time drain. My opposing view is that once an OBM system is in practice, meetings are more productive, and decision-making is better and perhaps faster. Significant learning happens through work and not necessarily through a complex training program. There are also factors for motivating, belonging, dignity, inclusion, and diversity that are critical aspects of open systems.

However, there is some truth that these OBM conditions can get bogged down with negative organizational dynamics. For example, the hunger to be over-informed can be an issue. Finding suitable methods and amounts of informing takes some practice. A need to be over-informed can reflect a desire to learn and an opportunity for improvement, or worse – the presence of fear and distrust. The call for over-informing can lead to collaboration-paralysis or informational-paralysis. These are major limiting factors for quick pivots and positive risk-taking.

Leaders carry the weight of making decisions based on incomplete information, conflicting statistics, and competing priorities. The same is true in open organizations – there must be a tolerance for the unknown and failure. Decision-making in a business is an art and skill that can be honed. 

Those of us who work in open organizations believe in the voice of the worker. Those of us who practice OBM believe that an informed voice is a more powerful voice. People can make quick, quality decisions when they are literate about how a company makes money, competitive forces, tensions, and constraints. In other words, leadership and management are practiced daily throughout the business. This does not mean that the C-suite abdicates leadership; instead, they build more leadership. Monitoring is necessary for companies, but it works with an achievement and accountability orientation. Failure is addressed with a more nuanced approach. (For more, Strategies for Learning From Failure, HBR)

But, what about in a crisis? What about now? There is discomfort, uncertainty, and volatility. One of the many good aspects of open-book reporting is that people can have a sense of knowing as leaders share information. But what if information is low and volatility high? This is the time to rely not only on information but on thinking. Being engaged and involved can help us have a sense of control. Having a sense of control can give us a sense of stability and comfort. When we have a sense of what to expect, even if it is negative, the knowingness helps us prepare.

Volatility and uncertainty make us feel unmoored and at the whim of the markets and waves of negative economic currents. Many of us have changed our adult-autonomy. Personal control and autonomy have changed, and responsibility has been surrendered or even rejected. Regardless of one’s opinion, it disrupts our usual way of life. This unmooring can manifest as fear and cause us to become closed-minded in an attempt to control and create our stability. Leaders may become more closed because they don’t want to be wrong. Our instincts are misguided in these cases. We can build common ground and be more prepared by opening and focusing on a growth mindset. Humans have a unique and remarkable ability to coordinate, and the best leaders will create conditions that conjure a common-unity and bias for smart action.

Data, information, and wisdom are important distinctions.

Becoming more open isn’t a magic pill. What this could mean for open organizations is that employees will crave more information in search of answers and a defined sense of being “right.” People may seek information that might give them a sense of routine and normalness. Employees in OBM companies have the useful pleasure of being business-literate in a historically information-rich environment. Now, no matter how you look at it, none of us can claim to be information-rich.  It is an odd place with too much noise and too little clarity. Data, information, and wisdom are important distinctions. So, what can companies do to help us feel moored to a shore of expectation?

• Share mindsets. Transcend financial information. Open-book management is more than just sharing financials. It is also creating an understanding of decision styles and leadership perspectives. To one degree or another (see the spectrum of OBM), leaders can share more about their thinking and what is ahead. Leaders should not make promises. Leaders nurture ingenuity to chart a path to the future. But they cannot promise a certain future. In the past, top-level financials and forecasts may have been shared once per month. Now, leaders need to consider more frequent updates that are less about numbers and more about mindset. No, you might not have accurate forecasts (were they ever “accurate”?). But leaders need to share their perspectives on the business, the markets, available cash, supply chains, and employee health. The outlook may change, and that is okay. Remember the concept popularized by Simon Sinek – start with why. More importantly – leaders get to share what they are thinking and be a role model for the company’s mindset. Anxiety is one of the more contagious emotions, and the centered-leader mindset can go a long way to nurture the sentiment of a company. If a company is going through downsizing, it is now the leaders’ job to help the company heal and persevere. Opening the books opens minds. The way to open minds toward trust, kindness, learning on the fly, adaptability, strength, and perseverance is for leaders to master their own mindset. 

• Involve people. Create involvement in solving near-term problems and finding near-term opportunities. Have employees rank ideas and move quickly to action. We have to acknowledge that information-rich forecasts are no longer available. But don’t put people through the drain of uninformed brainstorming. Construct at least three revenue and cash scenarios and have people ideate inside that framework. We don’t know what’s ahead, but we can estimate and plan for changing conditions. Open book management creates more informed influence and participation in taking ideas to action. Leaders in open companies know the value of skilled facilitation.

• Begin continuous improvement efforts. One thing that drives me crazy is when leaders spend 75% of a meeting talking about what happened and 25% of the time talking about the forecast and next-level planning. The reverse should be true. One of the many things the pandemic taught us is that historical analysis does not equal scenario planning and forecasting. We cannot, and perhaps in some cases, should not, recreate the past. Learn from it, yes!

• Hope is not a plan. I was recently in a meeting where I heard a leader say that everything was going to be okay. I shuttered. I also heard another leader tell people not to worry because the stock market always recovers. I put my head down on my desk and closed my eyes in virtual disapproval. These were well-intended statements but unhelpful. Hope is not a plan. But you can’t have a plan without hope. We need both. Timeframes for planning need to change. Five years is an eternity, and one year is a facade. Values should transcend time, but for some critically affected businesses, the vision may be to keep the doors open. Planning efforts need to galvanize short, mid, and longer-term visions. Don’t get academic about vision statements. Save that for better economic times. A short-term vision might need to be … what will our business look like in six to eighteen months while not comprising our values?

• Help people be critical thinkers. One business decided to roll a cost-cutting effort of 20% equally through silos (also known as departments). These generic approaches are one-size-fits-none. Informed employees can be critical thinkers about preserving and generating cash now, building value in the next year, and focusing on the physical and emotional health of one another. Use problem-solving situations as on-the-job training. For example, one business is pivoting part of its business to health-centric building materials and technology. It may take investment for the pivot, but there is a critical look at the risks and rewards based on current financial conditions. They are risking monthly cash-flow to make a plan to lift the next 6-month cash flow. A generic cost-cutting effort would have negated any of this more holistic problem-solving and opportunity-finding.

• Choose dialectic over debate. Don’t let perfect be the enemy of good (Voltaire, Confucius). In the past, we may have had the luxury of pro-and-con-ing things to death, but that time is over. In my more pragmatic moments, I know life is a combination of tradeoffs. Never tradeoff your values or safety, but there must be a pragmatism of minimal viable products. Dialectic, generally, is an idea that all thought is based on pieces of previous thought. Encourage people to build on ideas. Encourage a community of solving and finding. Consider these tools:  Loomio.org, Democracyos.org, or Consider.it. Frame up scenarios to help elicit helpful reactions and generate future-thinking dialog. Make your timelines for responses quick and encourage dialectic-building discussion boundaries and norms. Even under normal conditions, there is the naysayer. These perspectives are important and should not be excluded. However, they should not necessarily block decisions. Should one downvote stop something from moving forward? Consensus is sometimes a good idea. But, your decision-making process may need to adapt and become an action-generating process. Consider different methods of decision-making that can reflect the complexity of our moment.

While employees may be voraciously hungry for more information, that may not be possible. Not only do we not have information, but we are also struggling to determine the factuality of said information. We used to have historical data that may give us a basis for more sound decisions, and now the best we have is the data-of-the-moment. The idiom nature abhors a vacuum (Aristotle) is real and present. We are in an information vacuum, and humans are always inclined to fill it. Consider filling that vacuum with action, real-time learning, support, and understanding inspired by an all-encompassing definition of the employee-stakeholder.