Open Book Management (OBM) is about sharing financial business information with all of your employees. It’s about creating a connection to the purpose of the business and a sense of ownership and responsibility from everyone on your team.
Once implemented correctly it creates an unstoppable momentum driven by all members of a hospitality team, rather than relying on a top down approach from the owner and managers.
For a number of years now, we’ve been studying the world's best hospitality businesses up close and personal. Ari from Zingerman's featured above runs a phenomenally successful business and are huge advocates for OBM as an operating philosophy.
For most OBM is a challenging idea, because:
1. They've never seen OBM in their hospitality experience either as an employee or owner.
2. They know their competitors don’t practice OBM.
3. Their team are not used to the idea and don’t initially have the required skills and knowledge to respond productively.
4. OBM is an exercise in trust and it requires patience and an elevated human response.
A hospitality management platform makes the implementation of Open Book Management significantly easier and more effective.
Nevertheless, we now know that the (small and large) companies that practice OBM are consistently reporting improved FINANCIAL performance.
What OBM does, is force every team member to work within a business context. In other words, everyone soon learns that their own role does not exist within a vacuum, but within a larger business that must become increasingly productive to be successful. When that reality is clear – then better individual productivity, tools, professional development, business intelligence and communication is required.
As the saying goes; We want the team to think and act like owners.
Open Book Management is not, simply, ‘open book viewing’ – it’s about being involved with the business on a deeper level – not just impassively viewing the numbers and doing nothing. It is about providing transparency and team work. It’s about everyone understanding that they have an important task to do; that they are a critical link in the chain towards improved profit margins and better business understanding and practice.
OBM is enormously beneficial for everyone involved.
There are of course challenges.
- What information is important and how do I equip my team to respond positively?
- Will the kitchen team understand why people are paid at different levels ?
- Will my Front of House team understand kitchen wastage?
These are challenges to work through, but not impassable hurdles. The reality is that without OBM – you are standing in the way of your team understanding the business – you are deliberately leaving them in the dark. This is no way to run a business. You need more commitment than that, more initiative and better decisions. You can’t expect any of that if you don’t open the books. Don’t you want a waitress that cares enough to notice and to communicate that your portion sizes have clearly got larger recently or that wait times have increased during a weekend lunch service?
OBM is a controversial idea, particularly within large corporations, but we know OBM is transformative and the results are so proven that it is the best path forward.
OBM rolled out in stages (with measured progress over time) is a good way forward for almost all hospitality businesses.
If you're looking at where to start have a look at Zingerman's the absolute experts of Hospitality Open Book Management.
If you want a Hospitality Management System that gives you all of the key information in one place to run Open Book Management from then you will really want to get more information from the team at Loaded.