A financial number is seen, as Mr. [Jack] Stack puts it, as “nothing more than the stories people tell.” […] Financial literacy is simply a way of taking those promises and stories seriously. It provides the missing direct experience of the business specifics, in a way that people have reason to trust, because they know their bosses are looking at the same numbers.
Open-book management is thus an antidote against the brutality of most layoffs. In a typical business downsizing, says Mr. Stack, “the laid-off worker walks out to the parking lot for the last time, wondering, ‘Why didn’t they tell me that the company was in trouble?'” With open-book management, everyone finds out about the troubles ahead of time, because it demystifies arcane accounting statements. In fact, it makes clear what many wage earners would never otherwise understand: the reasons cost-cutting may be the right thing to do under certain circumstances (for instance, in a cash-flow crunch).
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