Build a Successful Business: The Entrepreneurship Collection (10 Items)

Part Eight

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OPEN-BOOK MANAGEMENT

Our suggestions about sharing financial information reflect our interest in a philosophy known as open-book management (OBM). Many entrepreneurial companies—including Setpoint, Joe’s company—are devotees of this approach. For example, several surveys have found that a significant fraction of Inc. magazine’s annual list of the five hundred fastest-growing private companies practice some form of OBM.

OBM involves sharing the financials with your employees and, of course, helping them learn what the numbers mean. But it isn’t just “open the books”; it’s also managing with open books. As everyone learns the numbers, people begin to take responsibility for making the numbers move in the right direction, in ...