Business owners and managers typically hold their books close to their chests. Restricting the numbers to fewer eyes gives the top people control, avoids issues with disgruntled employees, and keeps information from being leaked to the competition – or so the logic goes.
But as Bob Dylan sang 50 years ago, “the times, they are a-changin’.” Today, more and more companies are adopting an “open-book management” (OBM) approach.
Greg Antonioli, owner of Out of the Woods Construction & Cabinetry in Boston, Mass., started practicing OBM in 2004. His experience has led him to espouse the approach in seminars far from his New England home, including the Scenic City, where he spoke with the Remodelers Council of the Home Builders Association of Greater Chattanooga during their monthly lunch meeting on Tuesday, June 3.
Antonioli said OBM can be a scary step because it exposes a company and its leaders, but says the benefits outweigh any concerns. “When your books are closed, you’re doing your company a disservice. Opening them up shows your employees how they can directly impact the bottom line,” Antonioli said to several dozen remodelers as they enjoyed catered barbecue. “The best ideas for efficiency and cost management will come from the front line.”
The Out of the Woods owner said he adopted an OBM approach because it fit his vision for the company – to build it to be a profitable, growth-oriented business he could someday sell. “I want the company to be less dependent on me,” he said. “If I have to be in the trenches all day, every day, making all of the decisions, that’s not going to happen.”
A skeptic in the audience raised his hand and expressed his concern that opening his company’s books could lead to employee backlash. Antonioli said the opposite happened at Out of the Woods. “For years, my guys whined about how we needed to replace one of the trucks. When they saw how much production would be necessary for us to be able to purchase a $40,000 vehicle, they changed their tune. Now they insist we can get a few more years out of the truck,” he said.
Another business owner also expressed concern: “When I came here, I thought OBM sounded awful. As you’ve explained it, I’ve come to understand it better, but it’s still scary to me as a businessman. What if what I make comes back to bite me? What if my employees leave because the numbers are bad?”
Antonioli showed his gift for changing people’s thinking in his response to this and many other questions asked during his 90-minute presentation. “People are going to talk,” he said. “I would rather rumors be based on fact than speculation.”
To further address the second man’s concerns, Antonioli discussed the big dip in financials his company suffered in 2012. “I saw it coming, and I reacted too late. But my employees saw it coming, too, and they rallied behind me.” Today, Out of the Woods’ profits are back on the rise thanks in part to the efforts of Antonioli’s workers.
“Your employees will come up with more ways of making money than you could come up with on your own,” he said.
Antonioli said each company must decide for itself how to adopt OBM, as each company is different. At Out of the Woods, employees and managers participate in the creation of the annual budget, attend regular sales and staff meetings, perform job autopsies and exit interviews, take part in the hiring process, and reap the benefits of a company-wide bonus program. (Everyone gets a bonus, or no one gets a bonus.)
Above all, Antonioli avoids micromanaging his employees, giving them the opportunity to have more of a hand in the company’s operations. “When you tell people they’re going to be responsible for the financial management of your business, you’re going to lose some people. I lost a few men when I told them things were going to change,” he said. “But that’s okay. Today, my sales people have more confidence, and I’m attracting the right people to work for me.”
The business owners in the room clearly were curious about OBM and interested in exploring the possibility, but a few remained hesitant, judging by their questions. Regardless, Antonioli remained firm that “transparency is the trend.”
“I don’t want people working for me who just want to punch a clock, earn a paycheck, and go home,” he said. “I want people who say, ‘Give me the tools, and I’ll rock this thing.’”
Antonioli came to Chattanooga at the invitation of Stuart Gaines, president of the Remodelers Council, who heard the Out of the Woods owner speak at a remodeling show. Teresa Groves, executive officer of the Home Builders Association, said Antonioli’s presentation was a good fit for the group, which usually meets for lunch at the Association on the first Tuesday of each month.
“The Remodelers Council meetings provide education to the members,” she said. “Speakers like Mr. Antonioli help the members learn how to run their businesses more efficiently.”
Upcoming speakers include Bill Shaw from Houston, Texas, who in October will speak on sales, and NAHB Remodelers Council President Paul Sullivan, who in November will discuss the remodeling industry at large.
The Remodelers Council also hosts local speakers. Previously, Wayne Williams, a Chattanooga-based architect, spoke to the Council about code issues that affect the remodeling industry. Other topics have included utilizing social media, best accounting practices, and legal issues.
For more information about the Home Builders Association or the Remodelers Council, visit www.hbagc.net or call (423) 624-9992.