Is open-book management right for your operation?

A man named Jack Stack could have the answers to restaurants’ employee engagement and turnover woes. The owner of a struggling engine remanufacturing plant, Stack wrote the book on an organizational paradigm called open-book management. By sharing financial information with every level of staff, the leadership approach emphasizes transparency and ownership. Some restaurants are deploying the strategy to engage and retain staff in the challenging labor market. “Open-book management takes something that can be like ordinarily punching the clock, and instead it treats every employee as vital in the big picture of being a team member,” says Jefferson Macklin, business manager and partner for Bar Mezzana in Boston. Check out why some operators think open-book management is worth the investment.

Bar Mezzana is in the early stages of rolling out open-book management, but eventually, Macklin hopes the business will gather ideas from employees at every level of the operation. The first step is education. Bar Mezzana is giving its managers a crash course on business financials and why they should care about them during weekly meetings. But before distributing financials and engaging the rest of the team in business decisions, the restaurant is helping front- and back-of-house workers get comfortable and confident with sharing. Each shift meeting starts with an ice breaker and everyone is asked to speak up. “It doesn’t matter what position someone has in the company, everyone can contribute,” he says. As an example, Macklin pointed to a story he heard about a restaurant where a dishwasher suggested transitioning to a shareable, all-you-can-eat option after noticing that customers were throwing out a substantial amount of fries. The restaurant ran with the idea and has had a lot less waste in the process, Macklin says. 

Open-book management helps Juliet, a neighborhood restaurant and cafe in Somerville, Mass., confront problems before they snowball. “We encourage our staff to bring up problems and think about proactively solving them by rewarding these actions with a share of the profits of the business,” says owner Katrina Jazayeri. One tool they use to spotlight issues before they spiral is a daily collaborative management report, in which supervisors communicate problems and ideas for solutions.

Some restaurant jobs can be rather menial, but open-book management can help employees feel more invested in the business as a whole, Macklin says. “As they help forecast your business, they share in the uptick,” he says. And open-book management can also help staff understand business decisions and why they need to follow certain procedures. “Business is like a sport,” Ari Weinzweig, cofounder and CEO of Zingerman’s, a food and restaurant business group in Ann Arbor, Mich., told Forbes. “If players don’t know the rules and don’t get anything out of the result, then all you can do is just yell at them to play harder.”