What Is Open Book Management?


By Grant Harrison

“Great things in business are never done by one person. They’re done by a team of people.” -Steve Jobs

The philosophy of Open Book Management (OBM) is that businesses will experience greater success by sharing relevant financial and operational information with every employee. Employees receive information that not only helps them do their jobs well but gives them an understanding of how the company is doing as a whole. According to John Case (who coined the phrase, “open book management”), “a company performs best when its people see themselves as partners in the business rather than as hired hands." The intent is to give employees relevant information about the company so they can make better decisions as workers.


Open Book Management involves four basic practices:

  • Train employees so they become business literate and can understand financial statements
  • Empower employees to use the information to improve efficiency and profit
  • Trust employees as business partners on equal footing
  • Reward employees fairly for the company’s success.

John Stack, who is likely the most successful advocate of OBM, uses three basic principles in his management practice called, The Great Game of Business. His basic rules for OBM are:

  • Know and Teach the Rules: Every employee should be given the measures of business success and taught to understand them
  • Follow the Action & Keep Score: Every employee should be expected and enabled to use their knowledge to improve performance
  • Provide a Stake in the Outcome: Every employee should have a direct stake in the company's success and in the risk of failure

There are significant advantages to OBM, primarily that employees gain an accurate financial picture and feel a greater sense of responsibility for the success of the company. OBM encourages employees to look for ways to improve efficiency, increase profit and avoid mistakes. It teaches them to think and act like business owners. It builds consensus and teamwork as well.

For more information on OBM or how to implement it at your company, feel free to contact me at grant@growthebench.com.

Tags: Leadership , Success , Management ,