ASQ - Team and Workplace Excellence Forum

November 1997


Quality Is No 'Easy Rider'
Accountability, Confrontation two keys to success at Harley-Davidson

Rebel With A Cause
Who is accountable for productive meetings.

Measure for Measure
Merrill Lynch relies on measurements for success and customer satisfaction


When Change Is No Change At All
by Peter Block

The Balance Sheet: Hidden Costs of Open Book Management
by Cathy Kramer


Brief Cases
Business News Briefs

Views for a Change

Book Review

Letters to the Editor


The Balance Sheet
Hidden Costs of Open Book Management

by Cathy Kramer

Every system wide change effort takes you into open book management and business literacy - where everyone in the unit, department or organization understands the business so they can make meaningful contributions. This makes so much sense that most organization are investing in this kind of education, right? Wrong. According to a study conducted by USC Professor Edward Lawler, III and sponsored by AQP, most employees do not know about the performance of their own units, of the larger organization of which they are a part, nor do they have information about their competitors.

Why don't more organizations practice open book management? Maybe managers don't believe employees have the skills to really learn the business. If this is the case, then substantial workplace change is unlikely. Like the wolf in sheep's clothing most people can sense management's lack of authenticity.

But let's assume you are willing to move toward business literacy, what are some of the costs of open book management, since the benefits are obvious? We have been trying to establish true business literacy at AQP for some time and the costs are not insignificant.

One, it takes lots of time and it's an endless process: once you start, you can't stop. So much for reducing cycle time here. Two, it requires the commitment of everyone in the organization because it blurs the boundaries between departments and levels. Three, when you distribute information, you also distribute anxiety and accountability. This sounds like many participative practices doesn't it?
First, how do you deal with the time investments. We have tried various ways to reduce the amount of time it takes to create an open book culture with little success. In fact, we have found that it either takes very little time, for which the organization receives little demonstrable benefit or it takes lots of time. There doesn't seem to be a middle ground. We have extensively discussed the annual budget/business plan, as well as strategic and marketing plans. We have had product presentations and Gallery walks where staff members could pose questions and concerns regarding other department's products and procedures. This is not enough. Unless there is a chance to connect personally with the material, little learning takes place which will help the business. And once people start receiving the information, lapses in communicating both good and bad news can be interpreted by employees as "they must not want me to know."

This year we are doing something different. Each week we have a meeting where everyone participates in a discussion about a product or service we offer. Thirty people in a one hour weekly meeting is a big investment.

This brings me to the second point which we've struggled with: the appropriate amount of 'interference' by staff in each others' areas of expertise. What I hear is, "There is such a thing as over involvement in everyone else's business. This can be a real distraction." This has to be balanced with the idea that contributing to each part of the business is what we all need to be doing: "It would be nice if we could really make suggestions, department to department, about how to save costs. The outsider view can be useful."

As several staff members noted, educating everyone about the business is not worth doing if all staff can't ask the hard questions, such as: 'why are you getting these numbers,' 'what is your data to support pursuing this strategy.' It takes a lot of knowledge of the business to ask the hard questions and keep constructively challenging the answers. And it takes a culture where questioning is not perceived as disloyalty or antagonism.

Third, not everyone feels comfortable with the expectations that an open book culture demands. It is stressful to care about things which, to some extent, you can't control. This is exemplified in comments such as 'It's more stressful to know about the numbers. In my past job, we were rewarded with little things - employee of the month, etc. We got recognized and we never knew when it was bad.' Freely sharing the numbers also means that we are all visible - our choices, our rationale, our mistakes. Being accountable to each other as well as the organization creates a different level of involvement and with that, anxiety.

Before you work toward achieving widespread business literacy, there are some questions you may want to ask: What is the knowledge we expect from all staff? How much are we willing to invest, time-wise, and how can we measure the payoff of the investment?

The other articles in this issue - such as having truly productive meetings and using balanced scorecards - relate to these ideas as well. They are methods or practices for 1) revealing the connection between an individual's work and it's effects on the business and 2) caring about the whole organization. All of these practices attempt to harness the knowledge and learning that occurs everyday and share it throughout the organization. So we all know where we are and where we are headed.

Nov. '97 News for a Change | Email Editor
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