Open book management is a system where financial information is shared with employees so that they can make better decisions. Better decisions lead to better financial outcomes, and better financial outcomes lead to a stronger beer business for everyone.
Open Book Management has four basic elements:
- Train employees in financial literacy so they can read and understand financial statements
- Empower employees to use financial information when making business decisions
- Trust employees as business partners with proprietary company information
- Reward employees fairly for the brewery’s success
To put open book management into practice in your beer business, start with financial training. The Beer Wholesaler Finance School is a great place to start.
Next, set up weekly Financial Huddles to teach the numbers, review financial results, and project future results. Think of the Financial Huddle like a meeting on steroids.
Here’s a quick outline of the Financial Huddle Process:
Main goals
- Teach the numbers
- Share the results of the company
- Use the information to improve. Take action and hold each other accountable
Basic components of Financial Huddles
- Begin and end on time. It’s important that people know what to expect so they can plan their work day. A small thing like beginning and ending the meeting on time shows respect for everyone’s time.
- Consistent meeting day and time. Our meetings were held on Tuesday 7am, no exceptions. No wondering whether there would be a meeting or on what day – every Tuesday 7am. It begins at 7am, it ends at 8am. Be there.
- Prepare and participate. All attendees are expected to prepare in advance of the meeting and participate in the huddle. The huddle is a place to report on results and create action items.
- Numbers first. Keep the conversation focused on the numbers. Take the emotion out of it.
- Represent your team. You are the connection to the rest of your ‘department’ be their voice. Talk to your team in advance of the meeting and bring forward their questions, concerns and ideas.
- Criticisms are welcome, so long as you also bring a solution. The huddles are a place to raise problems and collectively find a solution. No gripe sessions are tolerated without moving towards a solution.
To put open book management into practice, start with financial training for your managers and key employees. Next, implement a Financial Huddle system to review results on a regular basis.
The Financial Huddles serve as the forum to share the numbers and create action plans to improve financial outcomes in your beer business. Because that’s what open book management is all about: It’s a system to create a stronger financial business.
