Quality Progress - December 2016 - 46


Open-book management is an old concept that means

the GGOB means all staff levels participate in improving

opening financial statements in an organization to pro-

communication, ensuring there's individual accountability.

vide transparency for employees. It's aimed at building

Playing departmental games called "mini-games," setting

trust and giving employees new insights into the organi-

goals and planning become extremely important in estab-

zation.1 Opening your books to your employees, however,

lishing the rules of the game.

doesn't guarantee it will help you. This is because it only
provides details of the past.

Mini-games are smaller games played within an organizationwide game. Departments usually play mini-games

If you open your books and teach employees how to

to accomplish cost-saving goals, such as improving work

use the information in your financial statements to play

flow and purchasing supplies at lower costs. Mini-games

a game, it could become a competition for them to ap-

are played for 30 to 90 days and ultimately contribute to

ply strategies and win prizes. This is the approach Jack

organizationwide goals.

Stack, owner of Springfield Remanufacturing Co. (SRC),
used to save his failing organization.

The rules of mini-games and organizationwide games
include tasks such as educating employees to understand
the organization's costs and revenue drivers, planning ses-

A brief history of the GGOB

sions that contribute to reducing costs, and setting goals

Stack and several partners pooled their money to save

that make bonus levels attainable as well as provide a

their business. It was out of sheer desperation that Stack

clear improvement to the bottom line. Communication

decided to do something different and remarkable, and

among employees is paramount to understanding the

he counted on the knowledge and contribution of ev-

goals and what must be done to meet them.

ery partner to make it work. He opened his books and
taught his employees how to make decisions to help the

Playing the game

organization be successful. If their decisions helped, he

I was first introduced to the GGOB while working at In-

rewarded them.2

duction Heat Treating Corp. in Crystal Lake, IL. I attend-

SRC's results continued to improve, and Stack had

ed a local networking event while working on a sales

stumbled on what is now known as the GGOB. It starts

and marketing project, and met Kevin Walter, owner of

with the concept of open-book management and goes be-

Tasty Catering and a GGOB coach. Walter demonstrated

yond just improving transparency: It teaches employees

how Tasty Catering benefited from using this strategy to

how they affect an organization's bottom line and suc-

improve its business culture, engage employees and im-

cess. As a result, more organizations have started using

prove the bottom line.

their financial statements as teaching tools to engage employees at all levels.

He explained that organizations that play the GGOB
see results in their bottom lines through increased sales,
improved efficiency and reduced costs. To reach these

Game on

goals, he said organizationwide collaboration is neces-

Sharing financial statements allows employees to review

sary.

an organization's income and expenses. They can see

Induction Heat Treating Corp. began playing the

first-hand its current financial condition, and this knowl-

GGOB in January 2014 and experienced an unprecedent-

edge is invaluable for encouraging employees to make

ed 20% net profit in the first six months. Before those re-

decisions about how they contribute to their department

sults were realized, however, President Dave Haimbaugh

and the entire organization.

was both intrigued by and skeptical of the concept after

Financial acumen allows employees to participate in

being introduced to it.

process improvement and cost-cutting efforts they can

To learn more about the GGOB, Haimbaugh contacted

directly affect. An employee's ultimate reward is a bonus

Walter, and they met with Induction Heat Treating's man-

for his or her hard work and a drive to improve the orga-

agement team to explain the GGOB and to hear feedback

nization's bottom line.

on how it might help business. There was immediate re-

Organizations that use lean methods have an extra
advantage when they incorporate them with open-book

sistance to the idea, and many wanted to know how it
could work for this type of organization.

management because lean focuses on cost savings and im-

Haimbaugh and the management team had their work

proving efficiencies at all levels of an organization. Playing

cut out for them as they adapted the game to suit the or-

46 QP * www.qualityprogress.com


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Table of Contents for the Digital Edition of Quality Progress - December 2016

Quality Progress - December 2016 - cover1
Quality Progress - December 2016 - cover2
Quality Progress - December 2016 - 1
Quality Progress - December 2016 - 2
Quality Progress - December 2016 - 3
Quality Progress - December 2016 - 4
Quality Progress - December 2016 - 5
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Quality Progress - December 2016 - cover3
Quality Progress - December 2016 - cover4
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