OPEN THE BOOKS:

[A] school of thought dubbed "open-book management" advocates sharing all or most of a firm's financial data with employees on a monthly, weekly or even daily basis. Widely promoted since the mid-1990s by the likes of Jack Stack, then the boss of Springfield Remanufacturing Corporation, a firm that refurbished diesel engines, and John Case, a management writer, open-book management doesn't just require bosses to shed their inhibitions when it comes to revealing numbers. It also involves teaching workers to read company accounts. Open-book managers devise scorecards and other tools that show staff how their individual efforts contribute to the bottom line. They also adopt profit-sharing schemes that let workers share some of the wealth they create. The aim is to persuade employees to behave like owners rather than drones.

The Great Game of Business, a training firm that provides advice on open-book techniques, estimates that at least 4,000 firms worldwide have embraced all or most of these ideas, while many others are flirting with them. One or two big companies, such as Southwest Airlines and Harley-Davidson, have dabbled with open-book management. Its most fervent adopters, however, are smaller private firms.

Since small firms are the most vulnerable during downturns, some observers expect to see books that were opened in good times slammed shut, as bosses try to stop workers from seeing just how bad things are. There is no scientific survey to determine whether this is true. But anecdotal evidence from the companies contacted for this column suggests that many have kept on sharing information during hard times. Some have given workers yet more data to chew on, for two reasons.

One is that transparency can calm jitters. For example, during the recent crisis King Arthur Flour, a Vermont-based flour company, drew up a contingency plan with four stages, the last of which involved lay-offs. At each stage, the plan spelled out clearly what King Arthur had to do to get back on track if it missed its financial targets. By sharing this with workers, King Arthur curbed wild and ill-informed speculation about the company's future. 

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