Plastics Pipeline Blog

Ensure Your Team is Rowing in the Same Direction

Are all of your company employees striving for the same target? Do your employees even know what the target is?

Think about this … can you imagine a competitive rowing team being successful if one of the members of the team is turned around in the boat and rowing in the opposite direction from the others? Or, maybe they are all rowing in the same direction, but they don’t know where the goal line is. Would they be successful then? It’s highly unlikely.

You’ll probably agree with this statement: Having your team know what your business target is and then having everyone work together is a key to a successful business.

But, you may be wondering, how do I achieve this?

Consider incorporating Open-Book Management.

“Making the economics of a business transparent, involving all employees to understand and share in the improved financial results, is a recipe for success,” according to Bill Fotsch, Founder and Head Coach of Open Book Coaching. “Labeled, the ‘Open-Book Management Guru,’ Fotsch has helped more than 400 companies boost employee engagement and increase customer retention over the past 25 years.” “The trust and focus on the common good captures the employees’ hearts while the information captures their minds. Open-Book Management creates an empowered, learning organization.”

In the Harvard Business Review article, A Winning Culture Keeps Score, Fotsch wrote, “In many businesses, however, people have no clue what winning would mean. More profits? A higher stock price? How can I affect those? Maybe ‘winning’ just means making my KPIs—or not getting laid off. Employees can’t get excited about winning, because they never know whether they’re winning or not. They need a score to tell them.”

Open-book management can help. It focuses the employee’s attention on a “Key” number — “the one number that, if improved by a significant margin, will leave the business healthier and stronger at the end of the year. If that number is headed in the right direction, you’re ahead. If you hit an agreed-on target, you win.”

Team 1 Plastics, a plastic injection molding company for the automotive industry, adopted an open-book management philosophy with workers in 1999 so that all Team Members would have the information to act like owners in their jobs. This allows them to focus on a “Key” number with regular updates to help guide the company toward success.

What makes a number “Key?” According to Fotsch, “You can’t pick just any old metric and call it a key number.”  He suggested these three attributes: “It’s directly connected to the financials. It’s not imposed from on high. It’s for now—not forever.”

For Team 1, the “Key” number is Operating Profit. Team Members work together to achieve the financial target of the company – surpassing the pre-determined minimum yearly operating profit. Once this target is achieved, everyone who is eligible earns a bonus.

Why is Operating Profit the “Key” number for Team 1 Plastics? According to its Bonus Plan Summary, it is Operating Profit that creates and drives the bonus. Operating Profit is their best indicator of success – accurately reflects how the Company is doing. And, Operating Profit is easy to calculate and understand.

Each month, Team 1 Plastics holds an “Open-Book” Meeting, sharing the company’s finances with the Team members. The meeting allows for open and honest discussion, allowing the Team Members to ask questions and understand how the company is doing. “We have monthly meetings where we go over our financial statements,” said Craig Carrel, President. “All of our Team Members know what it takes to be successful and share in the related bonus plan.”

And the Team Members appreciate the Open-Book management. Andrew Zblewski, from Team 1’s Maintenance department, shared “Team 1 is a very unique company. The monthly open book meetings allow me, the employee, the opportunity to see the vision of the company as well as the knowledge of any concerns that may affect me personally and financially. These monthly meetings also allow us to voice concerns and ask questions in an open and honest atmosphere. This stops any rumors or fear feelings from growing out of control and allows us to feel more secure in our positions.”

Elaine Luca, Accounting Specialist, shared her perspective, “As the Accounting Specialist at Team 1 Plastics, I see on a daily basis all aspects of the company’s financial information.  It brings a ‘trust’ factor knowing that this information is shared with all Team Members. This open book policy gives Team Members an understanding of how the company is doing; it opens the door for them to participate with questions or comments.”

Open-Book Management has worked for Team 1 Plastics. “With a company that is comprised of Team Members who conduct themselves as owners, better decisions are made at all levels because all Team Members have a vested stake in the outcome,” said Carrel.