Open Book Management presented by Ted Maziejka of the Zweig Group. Presented at the 2014 Hot Firm and A/E Industry Awards Conference in Beverly Hills, CA.

1. Open Book Management
Presented By: Ted Maziejka

2. OBM Defined: What it is
• Sharing meaningful data and not burying people in
tedious detail.
• Educating staff on understanding metrics and how
their actions can impact it.
• An incentive compensation plan that connects
company performance to economic benefits.
• Providing opportunities for ownership.

3. OBM Defined: What it isn’t
• Providing full general ledger access to all staff.
• Sharing payroll / salary data with all staff

4. Why OBM?
of “fast growing firms” practice
open book management36%
of “slow growth firms”
22%
of “no growth firms” practice open
book management8%
of declining firms
13%
According to ZweigWhite’s annual
Financial Performance Survey

5. Why OBM?
of Best Firms To Work For Award winners
shared revenue data with all employees81%
shared profit data with all employees
65%
According to responses collected
from Best Firms To Work For
Award winners

6. Why OBM?
higher growth rates in sales and staff in
firms using OBM compared to their peers1.66%
higher average growth rate overall for
OBM firms9%
According to the National Center for
Employee Ownership (NCEO) Studies

7. OBM and Ownership
• Encourages staff to think like owners.
• Creates a better understanding of the risk / reward
nature of ownership.
• Helps prospective owners understand their control
over the value of their investment.

8. Putting OBM Into Practice
1 Ask yourself if you are committed to this process
• Half-measures will produce few, if any, benefits.
• Timeliness and reliability is key.
• Sharing data only when it suits your firm.
2 Decide what data is meaningful for your staff.
3 Create a schedule and meeting then adhere to it.

9. Putting OBM Into Practice
Employee education is a key component, here a few tips
to assist the learning curve:
1 Don’t assume a high financial understanding
2 A basic tutorial in accounting / finance may be needed
3 Focus on industry-specific metrics.
4 Make the education an on-going process.

10. OBM and Cash Flow
• OBM is not about full financial transparency
• OBM is about giving employees the key measures of
business success and teaching them to understand those
measures to improve business performance.
• It’s about fully engaging employees in the business
• OBM works because employees get a chance to act - to take
responsibility - rather than just “doing their job”.

11. OBM and Cash Flow
• Share fees and expenses, or assign each employee a key metric
and tie it to overall company goals.
• Share group compensation, not individual salaries.
• Weekly discuss the financial results, upcoming goals, and how
to increase profitability.
• Quarterly discuss the company’s progress and review highlights.
• Bi-annually re-educate employees on balance sheets and
income statements.

12. OBM and Cash Flow
• OBM can positively impact cash flow now that employees
treat knowledge like stakeholders
• Incremental decreases in operating costs will increase
profitability, insure greater stability, and increase the
bottom line.
• If employees are responsible for improving the financial
performance, then they will expect a share of the profits.
“Skip the praise, give us the raise”

13. Open Book Management
Presented By: Ted Maziejka