Why Should Restaurants Embrace Transparency in Management?
As Jack Stack says in his book, The Great Game of Business
, the more employees know about their company, the better the company will perform. He goes on to outline the goal of open book management: to teach people how to work together to achieve common goals.
Open book management is a philosophy of transparency that includes the sharing of financial information with employees so they become aware of the implications of their actions, where the business stands at any given moment and how they can contribute to the business in the future. The concept is popular among many restaurants, originally gaining popularity and prominence with business consultant John Case's book on the subject
While some restaurants have a hard time buying into the idea of open book management and consider the idea crazy, anti-business and a threat to security and privacy, more and more business owners are adopting the style. Open book management styles satisfy the thirst today's workforce has for transparency and honesty in business. It also helps employees feel more vested in the company and its successes by helping them understand exactly how the business works and how it makes–or doesn’t make–a profit. Information is shared as an educational tool and not as a way to intimidate, control or manipulate people. If used correctly, the practice can contribute to a satisfied and productive staff, as well as improve retention.
It’s important to note that not every detail needs to be shared in order for a restaurant to see positive results. Management transparency, when employed strategically, can give restaurant employees direction and help them visualize their own impact on the restaurant’s bottom line. Further, restaurant owners who create a free flow of information will likely see a stronger bond of loyalty and trust with their staff, which helps prevent an "us versus them" mentality.
On the other hand, revealing too much information has its disadvantages. Risks include information security concerns, fraud schemes and potentially overwhelming workers with too much financial information they cannot understand. Restaurants can avoid pitfalls by creating a roadmap for presenting fiscal information to their employees. Consider using a financial whiteboard to post weekly results and metrics, including sales, costs, guest retention figures, customer comments and a sales thermometer. Share and discuss the information at regular fiscal meetings open to all employees.
Explaining the company’s metrics and working through specific line items as a group might require some investment of time and resources. However, improving transparency practices can help management and employees come together as a team, understand how their roles function as parts of the whole and ultimately, boost performance.