Open Book Management – Is it for You?

Jack Stack is probably not a house-hold name, but some business owners might have heard his name referenced as the founder of the business philosophy known as Open Book Management. You may be wondering ‘what is Open Book Management’? To quote directly from the Open Book Management website (http://greatgame.com/tour/what-is-it/ ) ‘Open-Book Management is a way of running your company that gets everyone, at all levels of the business as informed, involved and engaged as you are in making the company successful. It’s about employees understanding how profitability is driven, how assets are used, how cash is generated, but most importantly how their day-to-day actions and decisions can make or break your business.’

The next question you may want to ask is ‘why would I want to share the financial information and the decision-making process with my employees?’ There are several reasons you may want to consider doing so:

• Providing financial details to employees can help encourage out-of-the box ideas for your business.

• Added employee focus can benefit your bottom line, create efficiencies and maximize each employee’s value.

• Employees feel a greater sense of ownership and urgency and, in turn, can jump-start innovation and teamwork.

• If you pay some staff members on a percentage of gross income, financial transparency can help those employees better understand why their efforts directly impact their compensation and help them better understand how they can increase their own reward.

Are there dangers in revealing financial information? Absolutely! If you fail to develop a thoughtful strategy for sharing financial information, fail to educate your employees about understanding the financial information, fail to communicate adequately or have difficulty explaining your financial information, it may result in false expectations and employees fearing for their job security.

If you want to know more about the Open Book Management strategy, you might find ‘The Great Game of Business’, written by Jack Stack, as a good place to start. INC. Magazine has called Jack Stack the ‘smartest strategist in America’ and he was listed by Fortune Small Business Magazine among the ‘top 10 minds in small business’. You might find that he provides inspiration for a new way of doing business!

Article written by Susan Hoosier, Certified Business Advisor and Certified Economic Development Professional, with the Washington Small Business Development Center in Longview, WA 360-442-2946. Susan has owned and operated three businesses and managed a revolving loan fund for a Midwestern Regional Development Commission.

SEVEN CUSTOMER RETENTION STRATEGIES

Do you direct all of your energies to getting new customers? If so, you may want to take a closer look at the source of your sales since it is very likely that 80% of your business is coming from repeat customers. If you find that 80% of your business is coming from 20% of your customers, you may want to consider some strategies for staying in touch with those customers! Retaining customers and serving them over their lifetime can mean thousands of dollars for your business.

Some practical ways to develop action around customer retention strategies might include some of the following steps:

1) Communicate with your existing customers on a regular basis.

2) Show your appreciation for their business and nurture customer loyalty

3)Look for ways to build trust between your business and your customers

4)Don’t make it easy for your customers to switch to the competition

5)Expand product lines to provide more products or services for your customers

6) Anticipate the changing needs of your customers ( selling other parts of your line to the same customers) and up-selling (selling more per order) to increase the average sale to each customer.

If you’ve lost customers, you may want to develop some strategies for getting them back. In order to implement a strategy, you need to have a database of previous customers. So, if you don’t keep a database, it stands to reason that that should be the first step in your strategy: Develop a database!

Next, you need to remind them about your business and tell them you want them back! However, you may first need to find out why they stopped coming to your place of business and, if you failed to meet their expectations, you need to make it right.

You’ve already invested a lot of money in the customers you retain and the customers you have lost. For that reason alone, putting some additional energy into retaining customers, and reactivating lost customers, makes sense for your business.