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Issue: 57 - Sep 15, 2013
Warning! Do Not Try Open Book Management of Sharing Any Numbers Until You Read This!
By: Louise S. Dunn
Snowgoose Veterinary Management Consulting

The past three articles detailed various ways Open Book Management (OBM) can be used in a veterinary practice.  This final article wants you to put the brakes on and consider some important points before you decide to try OBM in your practice.

  • Keep in mind; metrics are always changing – what used to be standard trending in the past in not necessarily usable now or next year.  You must look at your business and the numbers, which are critical for your success, when setting up your OBM program.

This is the most powerful tool in business for the last 75 years according to the Harvard Business School.

What’s Good for the Goose…

Is not always good for the Gander!  OBM is not for everyone.  OBM may not be for you – especially if you just dive in and start printing out P&L reports and other financial statements without first deciding what you want to share wand training the team to understand the numbers.  OBM requires prep work.

Some companies try OBM only to have a negative experience.  Issues such as employee discontentment over wage percentages and not getting a piece of the profit pie, or complaints that Big Brother is watching more and more are experienced by some ill-prepared companies.  Others jump in only to jump out just as fast due to the feeling of being overwhelmed by all the numbers and reports to compile.  Moreover, some companies, complaining that employees have lost interest, fail to see that it was the company who lost interest by not updating numbers or paying attention to changes in the scorecard.  OBM is not for everyone.

OBM is actually for those practices striving for business success through team engagement.  Jack Welch (former CEO of General Electric) stated that employees “feel a greater sense of ownership and loyalty” when they are involved with OBM practices (Henglein).  It is important to note that not all financials are shared – only numbers critical to business success and affected by the actions of team members are presented to employees for discussion, brainstorming and goal setting.  If you and your team can form groups to tackle certain projects that will change critical numbers then OBM may be right for you.  Notice is says, “may be” – read further before deciding for yourself.

What Gets Measured Gets Done

You have heard that adage repeated over the years, but are you really taking it to heart?  OBM encourages measuring, monitoring and action plans.  OBM requires the involvement of everyone – owner, manager and employees.  OBM lets everyone see the effects of their efforts.

Using OBM makes it easy to trend yourself to yourself and to other industry benchmarks via the use of scorecards.  (See attached scorecard example).  OBM helps the business discover its strengths, weaknesses and opportunities by easily trending the benchmarks.

For instance, a metric you deem critical to the business is over time hours.  Trending to yourself, you see those OT hours last year was 8 hours/payroll and this year it is 20 hours/payroll.  You meet with your team to discuss your concerns with this increase.  Analyze and brainstorm a few cause & effect ideas with the team.  You may find that management isn’t watching OT hours, team scheduling isn’t in sync with appointment scheduling and client needs, there is a need to have cross-trained employees to cover call-offs, or you need to hire another employee.  What gets measured gets attention.

Once the team successfully changes the numbers, consider rewarding them for their efforts that have improved business financials.  Creating bonus and incentive plans linked to certain OBM metrics provides employees with a stake in the outcome (Meinert).  Incentives can range from a team lunch party or extra vacation days, to monetary rewards like gift cards or bonuses in the paycheck.  Just be certain to discuss plans with your Human Resource Manager or Accountant prior to announcing any bonus or incentive (you want to avoid legal risks).  Think this is outrageous?  Jim Brown and Joe Clark, owners of Chick-Fil-A franchises, have implemented OBM practices to improve employee performance and found that paying monthly bonuses per hours worked has benefited them and their employees (Carney).  However, they did not jump in without proper preparation.

You Can Lead a Horse to Water…

Warning, you can post all the scorecards and numbers you want in the break room, but it does not guarantee that your employees will “drink” it all in and understand their role in it – unless you take some time to train the team and engage them.  (See example of a Training Chart for OBM)

Most members of the team have very little experience with financial reports; therefore, you need to take some steps to prepare them for the OBM experience.  The following are important guidelines prior to posting scorecards (Meinert):

  1. Find out how much your employees know about financial reports and set up classes to explain Key Practice Indicators, Financial Reports and how practice activities show up in financial reports.  Train the managers first and use their help in training the entire team.
  2. Choose the critical numbers the business needs to watch or change.  OBM is not about ALL of your financial data – just critical numbers the employee plays a role in.
  3. Design scorecards with those critical numbers but remember “KISS” (Keep It Simple Stupid).  Provide the team with simplified financial records and scorecards (Henglein).
  4. Create a safe environment for employees to participate in OBM decision making.  Brainstorm without criticism.  Listen to ideas without belittling or dismissing before considering.  Many companies are using gamification techniques to teach and engage employees.  Explore ways you can make the OBM process fun and educational. 
  5. Establish regular meetings and assign responsibilities for gathering data and presenting information.  Do not drop the ball – many OBM processes fail due to a lack of follow through.
  6. Create incentives and rewards when goals are reached.

One company CEO, Jay Goltz of Artists’ Frame, found he could reach employees with examples that puts the topic on the level of the employee’s pocketbook and does not depend on extensive financial reports.  He uses play money in oversized dollar bills and presents the income from services; he then starts removing expenses as a percentage of income to show the team what they are left with after expenses such as advertising, health insurance, materials, labor, utilities, etc.  Presenting topics in short, focused meetings have proven very helpful with their OBM process (Fenn).

By now, you should realize why OBM is not for everyone.  It takes preparation and dedication to the OBM process to see success with its use.  It is not for the faint of heart – are you one of them?  Or are you eager to involve your team in improving the bottom line of the business?

There is no “I” in “TEAM”

Being an entrepreneur is not without risk.  Managing a business is not easy.  Often times, it is nice to have a few people on your side watching your back.  OBM is a “good tool for companies to get people working together as a team” says Sun Design’s HR manager, Sandy Harris (Meinert, p. 44). 

Stop shouldering all the responsibilities yourself and develop your team into a cohesive group looking out for the best interests of the patient, the client, themselves AND the business.  OBM is not for everyone – but it may be just right for you.

Download the worksheet.


Carney, K.  Franchisees Thrive with Open-Book Management.

Fenn, D.  Communication:  Open-Book Management 101.

Henglein, G.  The Pros and Cons of Open-Book Management.

Meinert, D.  April 2013.  An Open Book.  HR Magazine.  P43-46.