Embracing Open Book Management at HigherRing
We are excited to introduce OBM as a transformative approach to operating and succeeding together.
What is Open Book Management?
This philosophy emphasizes transparency, empowerment, and collective success, aiming to enhance our understanding of company operations and reward the team for their collective efforts towards our growth. It is designed to:
Empower Team Members: Engage everyone in understanding and managing our company’s financials.
Foster a Culture of Ownership: Cultivate a sense of ownership and responsibility among team members.
Drive Financial Success: Achieve financial success through openness and active participation.
To implement OBM effectively, we are committed to:
Educating: Provide comprehensive onboarding and ongoing education about our financials.
Updating: Share monthly updates on our financial status, including wins, losses, and critical numbers.
Setting Goals: Establish clear success metrics for each engagement and provide clear performance feedback.
Michelle’s Personal Why
“When Susan and I founded HigherRing, we envisioned everyone owning a piece of the company through our Employee Stock Incentive Plan (ESIP). However, without imminent plans for a public offering or sale, we found this less motivating than anticipated and very expensive to manage. Discovering Open Book Management after reading “The Great Game of Business” and seeing it in action at one of our client companies was an exciting shift for us. By providing team training on our financials (wins, losses, metrics, and goals), we aligned our dreams for wealth transfer to something motivating and more immediate.”
HigherRing’s Goals with OBM
Over the years, we’ve experienced various client successes and challenges that have taught us valuable lessons about hiring, communication, and the importance of addressing issues head-on. We believe the implementation of OBM is a direct result of those valuable learnings.
Open Book Management is exciting because it aligns with our values of transparency and shared success. Our goals include:
Enhanced Benefits: Offering more benefits to better support our team.
Reducing Stress: Encouraging self-management to alleviate stress on administration.
Team Partnership: Increased transparency so team members learn to think strategically about client work.
Planning and Development: Focusing on strategic planning and business growth.
Building Savings: Creating robust savings to minimize financial stress.
Reinvestment Fund: Establishing a fund for new initiatives and opportunities.
Profit Sharing: Rewarding team members who drive our success.
Understanding Our Financials
Our financial health is tracked through key metrics:
Total Income (Revenue): Monthly income from client services and tech costs.
Total Cost of Sales (COSS): Costs related to producing our services.
Administrative Labor Cost (ADMIN): Fixed costs for our administration team.
ADMIN/COSS Ratio: The percentage of administration cost to the cost of the greater team.
Expenses: Operational costs, including equipment, software, and marketing.
Interest: Costs or earnings related to borrowed funds or savings.
Net Profit: Remaining profit after all expenses can be reinvested or distributed.
We will regularly share these financial metrics to keep everyone informed and engaged.
Moving Forward Together
We believe HigherRing is a team that demands excellence and thinks strategically, especially when provided with all the tools and transparency to do so. With Open Book Management, we provide those tools and support so our team feels more knowledgeable, empowered, and rewarded. The continued efforts of our team are crucial as we strive to maintain and accelerate our success, navigating challenges together and celebrating our achievements.
Author Bio
Hiya! I’m Heather, and I’m the Marketing Manager here at HigherRing. I enjoy bringing my marketing expertise to a brand focused on balancing the triple bottom line of people, planet, and profit. I’m passionate about storytelling around corporate social responsibility. When I’m not supporting HigherRing with our communications I’m listening to a comedy podcast, taking a hot yoga class or tending to my (many) plants.