Welcome
Open Book Management:
10 ways business succeeds when employees
have skin in the game
Presenters: Jeff Jeffery, President/CEO, IRMCO
Chris Turley, President/CEO, Turley Architects
Moderator: Diane Stoneman, Director of Consulting & Training,
Winning Workplaces
© 2007 Winning Workplaces. May not be reproduced or distributed
without expressed written permission of Winning Workplaces.
Founded in 2001 by co-owners of Fel-Pro, an
automotive manufacturer nationally recognized
as a leader for their progressive workplace
practices.
Nonprofit committed to helping small/midsize
organizations build healthy, collaborative and
productive work environments
The “triple bottom line”
Business, People, and Community
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Workplace Consulting & Training
Launching New Webinar Series
Progressive leaders of small/midsize
firms who run successful companies and
have created great workplaces
Future Topic
Flexible work arrangements – Oct. 30
Who Practices Open Book
Management?
Out of the 15 winners:
80% practice open
book management
Of the 15, 13 are
privately-held firms; 7
allow employees to
become stockholders
92% teach employees
how to read financials
Open Book Management Origin
Management technique originated by Jack
Stack & team at Springfield Remanufacturing;
authored “The Great Game of Business”
Popularized in 1995 by John Case
The Power of Open Book Management
Teaching employees how firm makes $$
+
Offering employees a financial stake
=
Greater engagement & commitment
Employees think/act more like owners
Open book
management
is easier said
than done!
“You have got to want it!”
– Jack Stack
Webinar Objectives
The lessons the leaders have learned from
practicing open book management
The pitfalls to avoid
Practical tips for successful implementation
OBM: A Tale of Two Firms
Jeff Jeffery, President/CEO of IRMCO,
an 89-year-old manufacturer of
water-based lubricants for metalstamping industry
Chris Turley, President/CEO of Turley
Architects, a 10-year-old multi-faceted
architectural firm
Jeff Jeffery
President/CEO
IRMCO
IRMCO
93 YEARS OF INNOVATION
Private
Financially stable
Open book culture
Everyone shares risk & rewards
10 million
gallons
of oil
waste eliminated
VIRTUAL CORPORATION
35 countries 26 locations
CHOSEN CULTURE
Socially & environmentally responsible and
proactive
Profitable: High margins for continuous
investment
Shared responsibilities and rewards
Sustainable growth
High performance/High-quality product
Innovative culture, marketing and products
World class company
MARKETPLACE
Worst manufacturing economy in 50
years
70% of the manufacturing jobs lost
since 9/11 were in IRMCO’s market
Record Chapter 11 filings
RESULTS
Able to grow and prosper w/o debt
100% of orders shipped in 48 hrs
99% of orders are shipped in 24 hrs
Six Sigma quality
15% of sales are outside the US
Average share value payout = $7800
LESSONS LEARNED
Nobody ever washes a rental car
Open Book = “OPEN and HONEST”
Some people just won’t get it and they
need to leave
Senior management engaged & honest
about their value
Regular reporting and education is key
Chris Turley
President
Turley Architects
Home or Business it’s time to
make room for your life
Our Workplace
Lean and Green
Work Hard, Play Hard
Team oriented office, all
project managers
Weekly reviews, offsite
retreats
Full benefits in addition to
OBM: 401(k), medical
insurance, Personal Time
tied to hours worked, flex
time
Why OBM ?
Previous employers missed opportunities –
thinking creativity and being proactive and
exceptional was frowned upon
No recognition of hard work, no benefit for
going 110% for the firm – good staff left
Rules were more important than results
Firm’s Challenges
Real Estate market
down
New Staff
Inconsistencies in
accounting discovered
thru OBM
Small firm with labor at
80% of expenses
–
–
–
–
Productivity
Labor
Picking the right projects
Getting into a new market
Results
2006 – ¾ of bonuses paid
during real estate
downturn
Staff strategized on
starting construction firm,
then completing two
projects
Staff helped each other
improve
OBM Experience
Reward owners first for risk,
then staff for efforts
Finding the right measure of
productivity
– Originally gross income
– Now Operating Income
(profit) per project and
office as a whole
OBM Experience
Staff rewards are cash but
defined in “vacation days” to
help quantify
Staff rewarded with additional
responsibilities, opportunities
Confidentiality of salaries
Creating easy ways for all
staff to monitor and
understand program
Lessons Learned
Learn how to steer a
ship without your hands
on wheel
Find distant but
attainable goals – head
for the land of BHAG
Measure your progress
getting there
Lessons Learned
Understand and teach that
OBM is not primarily about
money – it is first about
building a crew to weather
tough times
(saving their jobs)
Cash is just a way to
celebrate
Lessons Learned
Avoid running aground
by measuring the right
things, adjusting your
course
Train, then trust your
crew – encourage great
ideas and hard
comments
Lessons Learned
Have crew-run weekly
and quarterly reviews
and training
Get the right
“on-shore” support –
accountants,
coaches, business
groups
Lessons Learned
Review your
successes
frequently
Lead gently
Set Sail
It is the hardest
thing you will ever
love doing with your
business
Thank You
Upcoming Webinar: October 30, 2007
Making the Flexible Workplace Work
Diane Hessan, President & CEO,
Communispace Corp., Watertown, MA
www.winningworkplaces.org/webinars/
847-328-9798