Deliverables: Open Book Management and Team-Based Performance Compensation

For more than 20 years, SAI has worked with homebuilding companies committed to improving operating performance and business outcomes.  We tell them the key lies in getting the job done – viewing the issue, sustaining the effort, and obtaining results – in three critical dimensions we call discipline, context, and perspective.

The discipline to focus the business model on delivering exceptional levels of distinctive value demanded by a narrow segment of homebuyers;  a perspective towards the natural, horizontal, process-centered manner in which work is performed and value is created on behalf of homebuyers and other stakeholders;  a context created by a business logic that underlies everything else, using Open Book Management.

Open Book Management flows from the work Jack Stack did in the 1980’s as CEO at Springfield Remanufacturing Corporation to rescue this former International Harvester (Navistar) division from almost certain bankruptcy.  Following a 99% leveraged employee buyout, Stack opened the company’s books and made it everyone’s business to improve performance.

Stack recounted the effort in two books (The Great Game of Business and A Stake in the Outcome);  John Case reported on open book thinking in other industries and companies (Open Book Management and The Open Book Experience);  Steve Wilson developed the basics of OBM-inspired team-based performance compensation at Mid-States Technical Staffing Services (The Bucket Bonus Plan).

We are specific in our application of the principles of Open Book Management.

We push our clients towards transparency (openness) and candor (the courage to tell and hear the truth) in the internal disclosure of operating and financial data, whether in meetings, or through dashboards and heads-up displays.

We push our clients towards imparting business literacy (understanding) to teammates, so that they understand the business of homebuilding, not just the homebuilding business;  we do it through the teaching of business and production principles.

We push our clients towards a team-based approach to performance compensation, via an all-inclusive, self-funding, progressively-weighted milestone plan based on achieving targeted performance above a baseline in a specific business outcome;  precisely the type of performance compensation plan we would expect to participate in, under a results-based approach to delivering consulting services.

As far as we are concerned, the deliverable of Open Book Management is a savvy, mutually-accountable, motivated homebuilding team.

Next:  Deliverables:  Continuous Improvement, Urgency, and Results

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