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Should you be using open-book management?

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HC Online | 10 Jun 2015, 08:10 AM Agree 0
Is it time for a management overhaul in your workplace? HC outlines the key steps to making open-book management work for your company.
  • denisc | 10 Jun 2015, 11:43 AM Agree 0
    Once upon a time AFR led with a similar story, which I responded to but was never published

    The simple proposition was the question what if the books are/were wrong

    Accountants are forever finding misallocated transactions and fixing them with journal entries in later periods, generally without drawing others attention to them

    In an open book environment these misallocations can affect the whole of the work force who are not sophisticated and may cause untold damage to morale and therefore productivity

    Besides who wants to be regularly telling their workers; "We have had to revise the numbers"

    Think of the view the commentariat take of ABS numbers which are revised maybe a quarter or two later

    the real problem then arises on year-to-year comparisons unless the corrections are filtered back into the core data

    One instance I know of was a government instrumentality which discovered it had not been recording Superannuation payments correctly after nine months and then put in teh journal entry in the tenth month

    Managers who had been praised for their efficacy, and some even attracting bonuses, were hauled up before the executive and berated for dismal performance in the month

    But a year later it was still continuing because each moth on a year-to-year basis everyone was seen to be underperforming against last year even though on a true basis they were ahead.

    But imagine the celebration in the tenth month when the current month was compared with the month when the adjustment was recorded. Wow how the senior management preened in the light i\of such a turn around -- when all the time it was a recording error the year before

    In my view Open Book can be a very perilous journey
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