Open Book Management: Why Sharing Financials Can Grow Trust and Profits

by Sean Foster | October 16, 2025  | Business Coaching

Open Book Management for NZ SMEs: Building Trust Through Transparency

For many New Zealand SME owners, financial information is often kept strictly confidential and shared only with the accountant or senior managers. But a growing number of NZ businesses are discovering a powerful way to increase trust and drive profits: open book management.

By sharing key financial details with staff, SME business owners can foster transparency, boost performance, and build a culture of shared success. In this article, we’ll explain what open book management means for NZ businesses, outline its powerful benefits, and show how business coaching can make financial transparency an asset rather than a risk.

Open Book Management Explained: How SME Financial Transparency Boosts Results

Open book management (OBM) is a leadership approach where financial information is shared with employees in a transparent way. Instead of staff working in the dark, they:

• Learn how the business both makes and loses money.
• See how their role affects both costs and profits.
• Take ownership of results by understanding the bigger picture, and their role in this.

It doesn’t necessarily mean handing over sensitive details like salaries or shareholder drawings. It means educating staff on the numbers that they influence, including cash flow, revenue, expenses, and margins. That way, they can connect their work with business outcomes.

For a deeper dive into the basics, see our related article: An Introduction to Open Book Management.

Why SME Financial Transparency Drives Employee Engagement and Profits

1. Greater employee engagement
When employees see the link between their actions and business results, motivation increases. I have witnessed this first hand and my observations are backed up by the Harvard Business Review: Companies that promote financial transparency see higher engagement and productivity.

2. Improved decision-making at every level
Staff who understand costs and margins make better day-to-day choices, reducing waste, improving efficiency, and spotting opportunities for improvement.

3. Enhanced accountability
Transparency creates a culture where performance is measurable and shared. This fosters responsibility across the team.

4. Profit sharing opportunities
Open book management often pairs with profit sharing or similar group reward system. Linking financial results to rewards builds alignment and loyalty. Research from BusinessNZ highlights that SMEs using shared value models improve both retention and innovation.

5. Stronger trust and culture
Trust grows when leaders open up the books. Employees feel respected and valued, which in turn boosts morale.

Practical Steps to Introducing Open Book Management in Your NZ Business

Implementing OBM isn’t about dumping spreadsheets on staff. It requires simplified reporting, education, consistency, and leadership support:

• Start by simplifying your financial reporting - unfortunately the traditional compliance based reporting is not that intuitive to understand, you should develop your own simplified, management-based reporting.
• Train, train, train – help staff understand financial basics such as revenue, margins, and cash flow, and your management reports.
• Share the right numbers – focus on key metrics that matter to your goals and also mean something to your staff.
• Build routines – include financial discussions in team and 1-1 meetings.
• Link to rewards – consider profit sharing or incentives based on overall business results.
• Stay consistent – transparency only works if it’s ongoing, not a one-off.

For more on combining financial transparency with staff innovation, see our article: Unlocking Innovation: How a Suggestion System & Open-Book Management Can Transform Your SME.

How Business Coaching Helps SMEs Succeed with Open Book Management

Transitioning to open book management can feel daunting. An experienced business coach will:

• Help you identify which numbers to share and how to explain them.
• Support you in developing financial literacy for staff.
• Provide accountability to ensure OBM becomes part of your culture.
• Guide you through setting up a profit-sharing systems.

👉 Ready to explore open book management for your SME? Book a session with Sean and learn how coaching can support you in building a transparent, high-performance culture.

Key Takeaway: Why Open Book Management Works for NZ SMEs

Open book management gives employees insight into how your business works, aligning their decisions with profitability and growth. For New Zealand SMEs, transparency builds trust, accountability, and engagement, while profit sharing rewards success across the team and encourages them to focus on what really matters in the business. With the right coaching support, OBM can transform the way your business operates.

Frequently Asked Questions

1. What is open book management in business?
Open book management is a leadership and management approach where owners share essential financial information with employees to create transparency, build trust, and boost accountability.

2. Do NZ SMEs need to share all financial details with their staff?
No. Open book management in NZ SMEs focuses on sharing key numbers like revenue, costs, and margins, not sensitive details like salaries or personal drawings. Owners can choose which numbers to make visible.

3. How does open book management benefit New Zealand SMEs?
It increases employee engagement, improves decision-making, fosters accountability, and often leads to higher profits and trust throughout the business.

4. Can open book management work in small businesses?
Yes, open book management is often even more effective in SMEs because every team member’s actions have a bigger impact on business results.

5. How can business coaching help implement open book management?
A business coach can help SME owners decide what to share, educate staff on financial basics, build accountability, and embed open book practices for long-term success.