Open Book Management Anyone?

Mike(VA) · 12-12-2008, 08:01 AM

Before asking this question, I did a search for this topic and found very little on the subject, at least it appears so.

How many owners here practice some version of open book management? How far down the foodchain to you 'open the books'? How much of the 'book' do you open? Have you found value in doing so or has it produced some problems for you?

To answer my own question, I do discuss, and show, my 2 project managers what the costs of materials, labor, subs, etc are costing the company. I also show them what goes into overhead and what the overhead impact on the bottom line is. They also know what level of profit we make and where their costs fit into the overall scheme of things. They do understand the impact of wasted materials, lost time, and why I don't make the money I would like to.

I have found that this has helped them to understand that every action they take, or don't take, has a definite and definable impact on the business. I don't get the comments like "if I made what you do, I'd buy luch everday also", or "it must be nice to .........(fill in the blanks)".

For now, I will continue to keep my people informed.

monticellohomes · 12-12-2008, 08:08 AM

If you want a good book on open book management, The Great Game of Business by Jack Stack. We had to read it in college and they treated it like a bible, Jack Stack's done really well with it and is based here in Springfield...so that's probably why.

VitoFromNJ · 12-12-2008, 07:41 PM

to be or not to be

Just a ? would you be so willing to share your books with gravy and curly blonde hairs all over em?

ruskent · 12-12-2008, 07:56 PM

No.

Jason Whipple · 12-12-2008, 08:05 PM

Employees? Show them what you need to get the motivation going.

If you're talking about customers, I know of a large GC in my area that has an open book policy stating that the customer can look at the closing cost of a project and they guarantee that they will not be over a certain percentage of cost.

Either way, it sounds like a PITA to me. Honesty and trust with your customers and employee's is what you should be exhuming to these folks, not more paperwork.

Max Nomad · 12-12-2008, 09:05 PM

Open-Book Management (OBM) is a concept I first read about sometime in the mid 90s; I was still adjusting to the fact that my business partners and I had gone from a team of 4 to 25 employees in less than a year.

A few things to note:

The term makes it sound much easier to practice than it really is.

First off, it requires a very sleek management hierarchy. From the owners down to the employees, if there's any more than 5 levels, OBM will only serve to fuel fires caused by corporate politics.

Owners have to empower management *and* employees by giving them more say-so in the direction of the company. Profit sharing should also be a part of the plan for everyone involved at some point. Because of these two points everyone from the owners to the employees really has to be on top of their game. It becomes a liability to have to fire someone and risk "putting your business out in the street" (literally).

I found that some parts of the OBM concept were good to implement, such as a simplified presentation of what numbers the team needs to hit in order to do things like buy/upgrade equipment, implement benefits or give everybody raises, bonuses. My partners and I couldn't see delving any further with it. Quiet candidly, the decision to fully implement OBM reminded me of a couple deciding to have an open marriage -- sounds great in theory, someone might get their rocks off, but when somebody gets jealous over somebody elses anatomy, everything will go sideways in a hurry. Most of the time people can't handle the truth, especially in an industry where you can have one guy bustin' his ass doing hard labor, his supervisor sits at a desk, and he knows how much his boss(es) are making off of his efforts... and how much he is NOT earning.

In practice, I could see OBM possibly working for, say, a stock brokerage firm or some companies in the IT industry. As a Contractor, I wouldn't try it if I had more than 10 employees -- and all of us would have to have the kind of dedicated bond rarely seen outside of soldiers that have seen combat together.

Just my half-a-nickel...

pcplumber · 12-12-2008, 10:03 PM

It sounds manipulative. When your business is flourishing, there is no way an employee should see the bottom line. When business is slow, you want your employees to feel responsible, obligated, or feel sorry. Employees will never be motivated to make you more money. Employees are not even motivated by the amount they earn. Employees work because they like the job, like the boss, and need the money. Employees are expected to perform and produce without knowing your numbers.

Yes, a company meeting, that discusses the costs and budget, is fine. You tell them they are under, or over the budget. No, I'm lying. You always tell them you are over the budget. That is all they need to know, but do they really care? Only when their piece of pie is at stake, but this still won't make them produce more.

Most professional people do the opposite. When an employee asks how much the boss earns, or how much another employee earns, they are terminated, immediately.

Better ways motivate employees are bonuses for beating the budget, free tools, paid days off, and praise.

I never bought into the profit-sharing theory. It is similar to having multiple partners, and too many people, to answer to. Again, this is manipulation and bribery. First, you hire a guy, and pay him top dollar. Then, you have to bribe him, to get a decent amount of production. Worse part; regardless of how much you pay an employee, it is the nature of all humans to want more, and more, and more. An over-paid employee is no more loyal than an under-paid employee. So, don't waste your precious time and money with profit-sharing and allowing workers to be part of your book keeping.

Never!

monticellohomes · 12-13-2008, 10:47 AM

pcplumber, the idea of OBM is to get more out of your employees because they know how the costs affect what they can make...and it can have an affect on the worker's job by bonuses, raises or being able to keep their job. For example, if your employees know how much money it costs you for them to leave their truck sitting and running when it is a warm/cold day and how much that affects the bottom line, which prevents them from getting a raise or bigger bonus...they will pay attention and begin to act like an owner, whether they are or not. The company here in town that has really flourished with OBM does just that. Everyone in the office knows how much stuff costs and how it affects the bottom line, so people are less likely to waste, they act like the owners.

Brickie · 12-13-2008, 10:58 AM

Quote:

pcplumber, the idea of OBM is to get more out of your employees because they know how the costs affect what they can make

Yeah, they know what you charge, make, etc., so they leave, start their own business & work on putting you out of business

monticellohomes · 12-13-2008, 01:31 PM

So you'd rather keep employees who know they only get x amount of dollars and that whether it costs you $5 or $100. So they aren't as careful about waste, etc? There is a fine line and a risk of employees doing that, but you will also get employees that see that you have a job of running the business and are the owner so you are entitled to a larger portion of the pot than them. It doesn't just take a fancy sign to have a business, at some point you have to be able to run it.

Max Nomad · 12-13-2008, 02:40 PM

Quote:

Originally Posted by monticellohomes

pcplumber, the idea of OBM is to get more out of your employees because they know how the costs affect what they can make...and it can have an affect on the worker's job by bonuses, raises or being able to keep their job. For example, if your employees know how much money it costs you for them to leave their truck sitting and running when it is a warm/cold day and how much that affects the bottom line, which prevents them from getting a raise or bigger bonus...they will pay attention and begin to act like an owner, whether they are or not. The company here in town that has really flourished with OBM does just that. Everyone in the office knows how much stuff costs and how it affects the bottom line, so people are less likely to waste, they act like the owners.

What I'm about to say might come of bad at first but just read to the end before having any knee-jerk reactions.

OBM, like Communism, looks great on paper. True Communism, as Marx and his cronies spelled it out, was an almost Utopian ideal. Are there examples of where it has worked? Yes, mostly in small tribes in places like Brazil and Borneo that are still living pretty much as they did thousands of years ago. Everywhere else that "Communism" was adopted, there was usually a bloody revolution allowing someone to take over and it evolved into a government that ruled with an iron fist and formed a hidden Capitalist-influenced layer of corruption beneath the surface.

Show me a competitor that practices true Open Book Management and I'll show you someone I can take down in any number of ways, including psychological warfare that would make them tear themselves up from the inside out. Botulism can't be seen with the naked eye but if you introduce it into a food supply you can bet there will be a body count.

Brickie · 12-13-2008, 03:15 PM

Quote:

So you'd rather keep employees who know they only get x amount of dollars and that whether it costs you $5 or $100.

I keep employees that make me money. In turn, they make lots of money

Quote:

So they aren't as careful about waste, etc?

I have incentives that enable them to make more money by keeping the waste to minimum

Quote:

There is a fine line and a risk of employees doing that, but you will also get employees that see that you have a job of running the business and are the owner so you are entitled to a larger portion of the pot than them

You'll also get employees that figure that you can afford to pay them more money

Quote:

It doesn't just take a fancy sign to have a business, at some point you have to be able to run it.

It's only rocket science if you're building rockets.

IMHO, it is iodiotic to do OBM in construction. It's a recipe for disaster.

A perfect example is the quickly dwindling number of Union construction companies.

In my neck of the woods, I know what they pay their workers, it's all public knowledge.

I know where they buy materials & what they pay.

I have constantly beat their brains in on Quality & Price.

The fact that now only about 12% of ALL conconstruction workers in the entire US are Union tells you how insane OBM is

monticellohomes · 12-13-2008, 03:52 PM

I would agree on the unions, I can't stand them and they they are pretty much the mob. All they do is hurt business anymore, at one time they served a purpose but not anymore.

Like I said there is a fine line of this, it is a difficult task to take on because you do run that risk of employees leaving. But it will be totally dependent on the individual company...for a contractor here in Missouri it might work just fine and make everyone more money but a contractor in Mississippi could have a hard time with it. It depends on the workers you have, some people like to just have a good job that pays them well and when they leave work at the end of the day they don't have to worry about anything except being there again tomorrow. My plumber would be a great example of that, his employees like that they have a boss who works to make sure there is work to be done, pays they well, pays their insurance, etc and all they have to do is go where the boss sends them and do the work. And there are other employees who want to always have more, they don't see the value in the bosses job and think they can do all this on their own. Some do make it, some others just start and then a few years later are back working for another boss because they didn't realize the work the boss did while they were out on the job or the time he spent on the weekend paying bills.

And it is a proven system of management, it has worked beyond just on paper. I have studied it extensively in college in Springfield Remanufacturing Corporation, have not seen it in construction but I am sure some form of it would work depending on the company and its employees.

Mike(VA) · 12-13-2008, 04:23 PM

WOW! Methinks there is a lot of mistrust and distrust out there. Just my opinion only, but if an owner distrusts his workers so much that he can't share with them information that will enable them to understand where the money goes and comes from is interesting. Is it possible that this mistrust shows to the employees?

Now Brickie, you said some interesting things just now. I quote:

"A perfect example is the quickly dwindling number of Union construction companies. In my neck of the woods, I know what they pay their workers, it's all public knowledge. I know where they buy materials & what they pay."

How is this OBM? The unions are not your employees, they are your competitors. The knowledge you have of their operations enables you to compete with them the way you do; you are not using this information to help them improve as would your employees with your information.

"I have constantly beat their brains in on Quality & Price."

This is what is interesting. You beat them because you know their quality and price, right? Quality, ok. Sounds to me like you are basing your pricing not on what you need to run YOUR business, but based on what your competition is pricing THEIR jobs. What would be real interesting is seeing how you would price one job, without union competition, and price the same job using the numbers you need to operate. Tell me the price of your job would be the same and I will tell you that knowing their numbers doesn't help you at all, does it?

"The fact that now only about 12% of ALL conconstruction workers in the entire US are Union tells you how insane OBM is"

Not sure, but since you are from the midwest, in a very union oriented trade, my guess is you are pro-union. OBM is a philosophy used in one's own business to bolster one's own bottom line and to equate it with unions having their numbers public is simply incorrect. I guess you are saying that more people should be union so that the rest of us can use their numbers to our advantage.

I am glad I am from a "Right To Work State". (Insert flames here............).

Max Nomad · 12-13-2008, 05:41 PM

Quote:

Originally Posted by Mike(VA)

WOW! Methinks there is a lot of mistrust and distrust out there. Just my opinion only, but if an owner distrusts his workers so much that he can't share with them information that will enable them to understand where the money goes and comes from is interesting. Is it possible that this mistrust shows to the employees?

Like I said in my initial post, giving employees a simplified overview of the company's finances are one thing. OBM prescribes FULL disclosure of that data which is radically different. If you're married and have kids and you and your wife are gettin' it on doggy-style, if they came knocking at the door would you let them know what you were doing? Would you brag about that trick your wife might be able to do with her [insert anatomy here]? Would you want her telling your neighbors about physical dimensions and sex duration times?

No pun intended but the bottom line is this -- some things are not meant to be fully disclosed.

Quote:

...snip...
OBM is a philosophy used in one's own business to bolster one's own bottom line and to equate it with unions having their numbers public is simply incorrect. I guess you are saying that more people should be union so that the rest of us can use their numbers to our advantage.

I am glad I am from a "Right To Work State". (Insert flames here............).

OBM, in it's truest form, probably will not work for most contractors for reasons that have little to do with the trust level of the ownership. By default you have to trust your team to some degree and vise versa. The thing is, Human Nature comes into play, and some of those people, from owners to employees, can't even trust themselves. That's why in some areas of construction it's tough to find good solid workers that have a valid driver's licenses/registrations with insurance paid up, clean arrest records, and can also pass random drug tests. To exploit any company that practices full OBM, all it takes is finding a single employee employee with something to hide.

Just one of those things...

dirt diggler · 12-13-2008, 06:01 PM

Quote:

Originally Posted by pcplumber

It sounds manipulative. When your business is flourishing, there is no way an employee should see the bottom line. When business is slow, you want your employees to feel responsible, obligated, or feel sorry. Employees will never be motivated to make you more money. Employees are not even motivated by the amount they earn. Employees work because they like the job, like the boss, and need the money. Employees are expected to perform and produce without knowing your numbers.!

agreed. Honestly, I can't think of a better way to put it - so i'll just add this:

many business owners themselves do not understand their own numbers. Why expect someone who has no experience with them - and could care less on top of that - to understand?

While, yes, "they are people" - employees are commodities.

After watching some of this UAW bs on tv - im not to thrilled about employees right now

Brickie · 12-13-2008, 06:32 PM

Quote:

How is this OBM? The unions are not your employees, they are your competitors. The knowledge you have of their operations enables you to compete with them the way you do;

So what??? They're like an "open book". When we compete on the same projects the Unions are at a huge disadvantage:

I know what they pay, I know what the material costs are and that means they are toast!

In additional, as Max Nomad posted:

"Show me a competitor that practices true Open Book Management and I'll show you someone I can take down in any number of ways, including psychological warfare that would make them tear themselves up from the inside out. Botulism can't be seen with the naked eye but if you introduce it into a food supply you can bet there will be a body count."

I totally agree

Quote:

Not sure, but since you are from the midwest, in a very union oriented trade, my guess is you are pro-union

Wrong again. I am a proud NON-UNION Contractor. Back in my younger days I was in the union. Oh well, we all had some types of "youthful indiscretions"

Quote:

I am glad I am from a "Right To Work State".

Cool! I'm glad you are in a "Right to Work State" I'm in Indiana, that happens to be one as well

monticellohomes · 12-13-2008, 07:26 PM

The other thing I don't think some of you are considering in OBM is the fact not any business is all roses. There is outstanding debt, outstanding invoices, etc that come with any business that your employees are going to see as well. They will see that after completing these 10 jobs that pay 100k total that you have only gotten paid on half of them but have had to pay for all the materials and labor already.

orson · 12-14-2008, 12:12 PM

Quote:

Originally Posted by pcplumber

When business is slow, you want your employees to feel responsible, obligated, or feel sorry. Employees will never be motivated to make you more money. Employees are not even motivated by the amount they earn.

I don't ever want my employees to "feel sorry" for anything.

While it is true that happy employees list monetary compensation as 3rd or 4th on their list of positives when they are satisfied with their job, they all so list it as the #1 reason for dissatisfaction when they leave a job.

The problem with free market capitolism differs very little with socialism: the flaws in human nature create flaws in the system.

If our current economic crisis doesn't allow you to see that then someone might as well toss another bucket of sand on the last bit of your neck that is exposed.

Business models like OBM and EOP work and have been proven to work. It's just like anything else, it only works if you know and understand how to implement the system.

If someone is of the mindset that employees are just commodities then the above systems will never work for them.

monticellohomes · 12-14-2008, 12:40 PM

Very well said Ruby

12-12-2008, 08:08 AM	#2
monticellohomes View Profile monticellohomes Pro Send Message Follow Blogs (0) Threads (215) Photos (1) Reviews (0) Projects (0) Toolbox (0) View All Activity Pro Trade: General Contractor Join Date: Mar 2008 Location: Springfield, MO Posts: 215	Re: Open Book Management Anyone? If you want a good book on open book management, The Great Game of Business by Jack Stack. We had to read it in college and they treated it like a bible, Jack Stack's done really well with it and is based here in Springfield...so that's probably why.

12-12-2008, 07:41 PM	#3
VitoFromNJ View Profile VitoFromNJ Pro Send Message Follow Blogs (0) Threads (103) Photos (0) Reviews (0) Projects (0) Toolbox (0) View All Activity Pro Trade: carpenter Join Date: Jun 2006 Posts: 103	Re: Open Book Management Anyone? to be or not to be Just a ? would you be so willing to share your books with gravy and curly blonde hairs all over em?

12-12-2008, 07:56 PM	#4
ruskent View Profile ruskent Pro Send Message Follow Blogs (0) Threads (1,884) Photos (0) Reviews (0) Projects (0) Toolbox (0) View All Activity Pro Trade: Outdoor D/B Join Date: Jun 2005 Posts: 1,884	Re: Open Book Management Anyone? No.

12-12-2008, 08:05 PM	#5
Jason Whipple View Profile Jason Whipple Restoration Crazy Send Message Follow Blogs (0) Threads (3,308) Photos (0) Reviews (0) Projects (0) Toolbox (0) View All Activity Restoration Crazy Trade: Restoration & Historic Preservation Join Date: Dec 2007 Location: Cincinnati, Ohio Posts: 3,308	Re: Open Book Management Anyone? Employees? Show them what you need to get the motivation going. If you're talking about customers, I know of a large GC in my area that has an open book policy stating that the customer can look at the closing cost of a project and they guarantee that they will not be over a certain percentage of cost. Either way, it sounds like a PITA to me. Honesty and trust with your customers and employee's is what you should be exhuming to these folks, not more paperwork. __________________ Jason E Whipple, General Manager Historic House Restoration, Cincinnati, Ohio Facebook \| Twitter

12-12-2008, 09:05 PM	#6
Max Nomad View Profile Max Nomad (aka 'The Wolf') Send Message Follow Blogs (0) Threads (234) Photos (0) Reviews (0) Projects (0) Toolbox (0) View All Activity (aka 'The Wolf') Trade: Home Improvement / Custom Tile Installations Join Date: Aug 2008 Location: Virginia Beach, Virginia Posts: 234	Re: Open Book Management Anyone? Open-Book Management (OBM) is a concept I first read about sometime in the mid 90s; I was still adjusting to the fact that my business partners and I had gone from a team of 4 to 25 employees in less than a year. A few things to note: The term makes it sound much easier to practice than it really is. First off, it requires a very sleek management hierarchy. From the owners down to the employees, if there's any more than 5 levels, OBM will only serve to fuel fires caused by corporate politics. Owners have to empower management and employees by giving them more say-so in the direction of the company. Profit sharing should also be a part of the plan for everyone involved at some point. Because of these two points everyone from the owners to the employees really has to be on top of their game. It becomes a liability to have to fire someone and risk "putting your business out in the street" (literally). I found that some parts of the OBM concept were good to implement, such as a simplified presentation of what numbers the team needs to hit in order to do things like buy/upgrade equipment, implement benefits or give everybody raises, bonuses. My partners and I couldn't see delving any further with it. Quiet candidly, the decision to fully implement OBM reminded me of a couple deciding to have an open marriage -- sounds great in theory, someone might get their rocks off, but when somebody gets jealous over somebody elses anatomy, everything will go sideways in a hurry. Most of the time people can't handle the truth, especially in an industry where you can have one guy bustin' his ass doing hard labor, his supervisor sits at a desk, and he knows how much his boss(es) are making off of his efforts... and how much he is NOT earning. In practice, I could see OBM possibly working for, say, a stock brokerage firm or some companies in the IT industry. As a Contractor, I wouldn't try it if I had more than 10 employees -- and all of us would have to have the kind of dedicated bond rarely seen outside of soldiers that have seen combat together. Just my half-a-nickel... __________________ Majestic-Tile, a division of Majestic Home Improvement, LLC. http://www.majestic-tile.com/ My Publishing Company and Graphic Design Portfolio: http://www.bgpublishing.com/

How to effectively use customer testimonials - even if you onl...

Green Framing Presentation - Updated

Greenlee Glo-Stix...

DeWalt Self-Level...

Open Book Management Anyone?

Open Book Management Anyone?

Re: Open Book Management Anyone?

Re: Open Book Management Anyone?

Re: Open Book Management Anyone?

Re: Open Book Management Anyone?

Re: Open Book Management Anyone?

Re: Open Book Management Anyone?

Re: Open Book Management Anyone?

Re: Open Book Management Anyone?

Re: Open Book Management Anyone?

Re: Open Book Management Anyone?

Re: Open Book Management Anyone?

Re: Open Book Management Anyone?

Re: Open Book Management Anyone?

Re: Open Book Management Anyone?

Re: Open Book Management Anyone?

Re: Open Book Management Anyone?

Re: Open Book Management Anyone?

Re: Open Book Management Anyone?

Re: Open Book Management Anyone?

Join Now... It's Fast and FREE!

Already Have an Account?

12-12-2008, 08:01 AM	#1
Mike(VA) View Profile Mike(VA) Custom Stuff Send Message Follow Blogs (0) Threads (859) Photos (0) Reviews (0) Projects (0) Toolbox (0) View All Activity Custom Stuff Trade: General Contractor - Custom Renovations Join Date: Jan 2008 Location: Manassas, VA Posts: 859	Open Book Management Anyone? Before asking this question, I did a search for this topic and found very little on the subject, at least it appears so. How many owners here practice some version of open book management? How far down the foodchain to you 'open the books'? How much of the 'book' do you open? Have you found value in doing so or has it produced some problems for you? To answer my own question, I do discuss, and show, my 2 project managers what the costs of materials, labor, subs, etc are costing the company. I also show them what goes into overhead and what the overhead impact on the bottom line is. They also know what level of profit we make and where their costs fit into the overall scheme of things. They do understand the impact of wasted materials, lost time, and why I don't make the money I would like to. I have found that this has helped them to understand that every action they take, or don't take, has a definite and definable impact on the business. I don't get the comments like "if I made what you do, I'd buy luch everday also", or "it must be nice to .........(fill in the blanks)". For now, I will continue to keep my people informed. __________________ __________________________________________________ ___________ I EXPECT THAT SOMEDAY I WILL SEE THE FRUITS OF MY LABOR. IS IT SOMEDAY YET? Clifton, Great Falls, McLean, Fairfax Station, Manassas, Virginia Renovation Contractor

12-12-2008, 10:03 PM	#7
pcplumber View Profile pcplumber Pro Send Message Follow Blogs (0) Threads (853) Photos (0) Reviews (0) Projects (0) Toolbox (0) View All Activity Pro Trade: Plumbing, heating, real estate, general contractor Join Date: Oct 2008 Location: Los Angeles Posts: 853	Re: Open Book Management Anyone? It sounds manipulative. When your business is flourishing, there is no way an employee should see the bottom line. When business is slow, you want your employees to feel responsible, obligated, or feel sorry. Employees will never be motivated to make you more money. Employees are not even motivated by the amount they earn. Employees work because they like the job, like the boss, and need the money. Employees are expected to perform and produce without knowing your numbers. Yes, a company meeting, that discusses the costs and budget, is fine. You tell them they are under, or over the budget. No, I'm lying. You always tell them you are over the budget. That is all they need to know, but do they really care? Only when their piece of pie is at stake, but this still won't make them produce more. Most professional people do the opposite. When an employee asks how much the boss earns, or how much another employee earns, they are terminated, immediately. Better ways motivate employees are bonuses for beating the budget, free tools, paid days off, and praise. I never bought into the profit-sharing theory. It is similar to having multiple partners, and too many people, to answer to. Again, this is manipulation and bribery. First, you hire a guy, and pay him top dollar. Then, you have to bribe him, to get a decent amount of production. Worse part; regardless of how much you pay an employee, it is the nature of all humans to want more, and more, and more. An over-paid employee is no more loyal than an under-paid employee. So, don't waste your precious time and money with profit-sharing and allowing workers to be part of your book keeping. Never! Last edited by pcplumber; 12-12-2008 at 10:12 PM.

12-13-2008, 10:47 AM	#8
monticellohomes View Profile monticellohomes Pro Send Message Follow Blogs (0) Threads (215) Photos (1) Reviews (0) Projects (0) Toolbox (0) View All Activity Pro Trade: General Contractor Join Date: Mar 2008 Location: Springfield, MO Posts: 215	Re: Open Book Management Anyone? pcplumber, the idea of OBM is to get more out of your employees because they know how the costs affect what they can make...and it can have an affect on the worker's job by bonuses, raises or being able to keep their job. For example, if your employees know how much money it costs you for them to leave their truck sitting and running when it is a warm/cold day and how much that affects the bottom line, which prevents them from getting a raise or bigger bonus...they will pay attention and begin to act like an owner, whether they are or not. The company here in town that has really flourished with OBM does just that. Everyone in the office knows how much stuff costs and how it affects the bottom line, so people are less likely to waste, they act like the owners.

12-13-2008, 01:31 PM	#10
monticellohomes View Profile monticellohomes Pro Send Message Follow Blogs (0) Threads (215) Photos (1) Reviews (0) Projects (0) Toolbox (0) View All Activity Pro Trade: General Contractor Join Date: Mar 2008 Location: Springfield, MO Posts: 215	Re: Open Book Management Anyone? So you'd rather keep employees who know they only get x amount of dollars and that whether it costs you $5 or $100. So they aren't as careful about waste, etc? There is a fine line and a risk of employees doing that, but you will also get employees that see that you have a job of running the business and are the owner so you are entitled to a larger portion of the pot than them. It doesn't just take a fancy sign to have a business, at some point you have to be able to run it.

12-13-2008, 03:52 PM	#13
monticellohomes View Profile monticellohomes Pro Send Message Follow Blogs (0) Threads (215) Photos (1) Reviews (0) Projects (0) Toolbox (0) View All Activity Pro Trade: General Contractor Join Date: Mar 2008 Location: Springfield, MO Posts: 215	Re: Open Book Management Anyone? I would agree on the unions, I can't stand them and they they are pretty much the mob. All they do is hurt business anymore, at one time they served a purpose but not anymore. Like I said there is a fine line of this, it is a difficult task to take on because you do run that risk of employees leaving. But it will be totally dependent on the individual company...for a contractor here in Missouri it might work just fine and make everyone more money but a contractor in Mississippi could have a hard time with it. It depends on the workers you have, some people like to just have a good job that pays them well and when they leave work at the end of the day they don't have to worry about anything except being there again tomorrow. My plumber would be a great example of that, his employees like that they have a boss who works to make sure there is work to be done, pays they well, pays their insurance, etc and all they have to do is go where the boss sends them and do the work. And there are other employees who want to always have more, they don't see the value in the bosses job and think they can do all this on their own. Some do make it, some others just start and then a few years later are back working for another boss because they didn't realize the work the boss did while they were out on the job or the time he spent on the weekend paying bills. And it is a proven system of management, it has worked beyond just on paper. I have studied it extensively in college in Springfield Remanufacturing Corporation, have not seen it in construction but I am sure some form of it would work depending on the company and its employees.

12-13-2008, 04:23 PM	#14
Mike(VA) View Profile Mike(VA) Custom Stuff Send Message Follow Blogs (0) Threads (859) Photos (0) Reviews (0) Projects (0) Toolbox (0) View All Activity Custom Stuff Trade: General Contractor - Custom Renovations Join Date: Jan 2008 Location: Manassas, VA Posts: 859	Re: Open Book Management Anyone? WOW! Methinks there is a lot of mistrust and distrust out there. Just my opinion only, but if an owner distrusts his workers so much that he can't share with them information that will enable them to understand where the money goes and comes from is interesting. Is it possible that this mistrust shows to the employees? Now Brickie, you said some interesting things just now. I quote: "A perfect example is the quickly dwindling number of Union construction companies. In my neck of the woods, I know what they pay their workers, it's all public knowledge. I know where they buy materials & what they pay." How is this OBM? The unions are not your employees, they are your competitors. The knowledge you have of their operations enables you to compete with them the way you do; you are not using this information to help them improve as would your employees with your information. "I have constantly beat their brains in on Quality & Price." This is what is interesting. You beat them because you know their quality and price, right? Quality, ok. Sounds to me like you are basing your pricing not on what you need to run YOUR business, but based on what your competition is pricing THEIR jobs. What would be real interesting is seeing how you would price one job, without union competition, and price the same job using the numbers you need to operate. Tell me the price of your job would be the same and I will tell you that knowing their numbers doesn't help you at all, does it? "The fact that now only about 12% of ALL conconstruction workers in the entire US are Union tells you how insane OBM is" Not sure, but since you are from the midwest, in a very union oriented trade, my guess is you are pro-union. OBM is a philosophy used in one's own business to bolster one's own bottom line and to equate it with unions having their numbers public is simply incorrect. I guess you are saying that more people should be union so that the rest of us can use their numbers to our advantage. I am glad I am from a "Right To Work State". (Insert flames here............). __________________ __________________________________________________ ___________ I EXPECT THAT SOMEDAY I WILL SEE THE FRUITS OF MY LABOR. IS IT SOMEDAY YET? Clifton, Great Falls, McLean, Fairfax Station, Manassas, Virginia Renovation Contractor

12-13-2008, 07:26 PM	#18
monticellohomes View Profile monticellohomes Pro Send Message Follow Blogs (0) Threads (215) Photos (1) Reviews (0) Projects (0) Toolbox (0) View All Activity Pro Trade: General Contractor Join Date: Mar 2008 Location: Springfield, MO Posts: 215	Re: Open Book Management Anyone? The other thing I don't think some of you are considering in OBM is the fact not any business is all roses. There is outstanding debt, outstanding invoices, etc that come with any business that your employees are going to see as well. They will see that after completing these 10 jobs that pay 100k total that you have only gotten paid on half of them but have had to pay for all the materials and labor already.

12-14-2008, 12:40 PM	#20
monticellohomes View Profile monticellohomes Pro Send Message Follow Blogs (0) Threads (215) Photos (1) Reviews (0) Projects (0) Toolbox (0) View All Activity Pro Trade: General Contractor Join Date: Mar 2008 Location: Springfield, MO Posts: 215	Re: Open Book Management Anyone? Very well said Ruby

Thread Tools	Search this Thread
Show Printable Version Email this Page	Search this Thread: Advanced Search
Display Modes	Rate This Thread
Linear Mode Switch to Hybrid Mode Switch to Threaded Mode	Rate This Thread:

Similar Threads
Thread	Thread Starter	Forum	Replies	Last Post
Client collaboration/project management software	kevins9999	Technology	23	06-18-2009 12:10 PM
question about E-Myth Contractor book	dirt diggler	Business	42	10-17-2008 10:03 PM
Advertising in the Local Book (Yellow Pages)	72chevy4x4	Marketing & Sales	22	12-11-2006 10:00 AM