Sharing information about performance with employees has become common place; quality information, customer service performance measures and productivity measures are widely shared in most enterprises. If we want employees to be part of the team, we need to keep score on how the team is performing. In thousands of public and privately held firms, company leaders have taken this trend one step further, they are providing the actual financial results of the company on a monthly or even weekly basis to all employees. These companies, some call themselves open-book management companies, are asking employees to judge company performance by the same scorecard used by shareholders, lenders and their management peers. Is this practice dangerous? You bet it is!

After all, disclosing detailed financial information exposes weaknesses, creates opportunities to be challenged and generates questions from people who do not fully understand the business and its operations. Why would a company leader step into this dangerous territory?

Consider the opposite. In most firms, a few leaders receive full financial information and understand how the company makes money. They take responsibility for the company's future and try to "motivate" all employees to make the company successful. Since employees don't have their leaders perspective or focus, all they can do is spend their energy trying to please their bosses, sometimes hiding problems, sitting on ideas and generally keeping their heads low; they become apathetic and disconnected from the business. Worrying about corporate performance is not their job. If you keep a tight reign on performance information, ask yourself which is the more dangerous environment?

For companies plunging into open-book management, the dangers of an ill-informed, apathetic workforce outweigh the dangers of disclosure. In these companies, employees learn how their job contributes to the company's success and how they can share in the rewards of success.

Open-book management firms enjoy the tremendous benefits of having everyone watching the same scorecard. For example, Physician Sales and Service, a national distributor of medical supplies, racked up an annual 50% growth rate for 15 years; Southwest Airlines has been tremendously successful operating in a niche where other airlines failed; SRC, which started as a money losing division of International Harvester, increased its stock value by 20,000 percent over 10 years. Inc Magazine reported that open-book management firms outpace their industry in sales and employment growth.

So why doesn't everyone do it? Below are some common stumbling blocks. You may want to explore if they are real or imagined obstacles for you.

What about the information reaching competitors? A common fear of companies considering open-book management is that it damages a firm's competitive advantage. Open-book management companies see more danger in keeping their people in the dark about business operations. As people become more aware of how the business makes money and share in the rewards of success, employees will safeguard essential information. Many companies find that the information they were protecting was not a key factor in their competitive advantage. As one CFO puts it, "We were spending a tremendous amount of energy hiding information. We should have been putting that energy into running a successful business."

Will people participate just to learn my compensation? When people look at financial statements for the first time, they often look for something with which they are familiar and curious. Compensation fits the bill. Most open-book management companies share aggregate compensation information but do not share individual salaries.

Will sharing information cause more problems than it solves? It can if done incorrectly. Opening the books must be connected to shared business objectives and shared rewards. It must be coupled with skills knowledge and processes for improvement. If done properly, financial information focuses employees' energy on areas where they have the greatest impact. Imagine the power of having everyone in your business concerned about doing their best to improve cash flow, profits, and return on investment.

Don't people get scared when they hear bad news and greedy when they hear good news? Absolutely, in open-book management, you're counting on this. Sharing rewards is a key component of success. The best open-book companies are clear about how variable rewards (bonuses, profit sharing and other incentives) are tied to performance. When the news is good it is no longer a question of whether it will be shared, people already know what their share is. If the news is bad, employees in open-book management will take the action necessary to make it good.

Is Open-Book Management too dangerous for your company? Whether open-book management is right for your company comes down to your beliefs about people and their role in the business' success. If you believe that employees make a contribution to performance, can learn how the business makes money and deserve to share in the rewards - open-book management may be an effective tool in your firm. You may find there is more risk in workforce apathy, secrecy and inaccurate information than in opening the books.