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This CEO changed to Open Book Management, and hasn’t looked back

Why Michael Redman shares everything with his team

"The whole concept is that you empower the team to act just like business owners." - Michael Redman

Would you open your books up to your staff?  Michael Redman, CEO of Redman Solutions did, and in the process of doing so discovered that half of their clients were from one industry—local government— and that accounted for 75% of their revenue. So, they decided to concentrate all their efforts, and diversify within the local government sector. 

Redman Solutions has now worked with 200 councils across Australia and New Zealand on website design, credit card redaction, email archiving, and myriad digital solutions to planning and design services. 

Its purpose is “To help people in local government thrive, so that communities flourish.”

Here, CEO Michael Redman shares his passion for reforming local government, some great advice from The Growth Faculty events he's attended, and his company's Open Book Management model. 


What’s the founder story of Redman Solutions?

My dad Geoff Redman started the company 15 years ago. He was looking for the next opportunity while working for a large local government supplier of document management services. He came across some people in New Zealand who’d developed an email archiving solution, and he thought “That’s it! That’s the challenge of email right now.” He resigned, and set up Redman Solutions.  

My dad’s mistake was that he employed me, and I had a bit more ambition. I think he was happy with the lifestyle business, and it was going well, but I always had that burning desire to make a difference. I joined a couple of years after he started, just to help out. I said I’d do anything as long as it wasn’t sales, and lo and behold I ended up in sales, and moved down to Sydney for a couple of years selling down there. I guess it was a good grounding for any business manager to understand the sales process.

What steps did you take to find your purpose?  

Because it was a small business to start with, I was involved in lot of the day to day, and the decision making, but I didn’t really understand how or why we were making those decisions.

So, I went on a bit of a journey.  I ended up reading an article by Ari Weinzweig of Zingerman’s delicatessen in Michigan (named the Coolest Small Company in America by Inc. Magazine in 2003), in which he talked about creating a vision story. It resonated with me, and I sent an email and obtained a copy of his vision story for 2020, and we started creating (our vision). Through that, I got connected with The Great Game of Business, a concept by Jack Stack begun in the 1970s, and that’s about Open Book Management, and we started that about 2012/13.  

[Wikipedia definition of Open Book Management: The technique is to give employees all relevant financial information about the company so they can make better decisions as workers. This information includes, but is not limited to, revenue, profit, cost of goods, cash flow and expenses.

Basic rules for open-book management are:

  • Know and teach the rules: every employee should be given the measures of business success and taught to understand them

  • Follow the Action & Keep Score: Every employee should be expected and enabled to use their knowledge to improve performance

  • Provide a Stake in the Outcome: Every employee should have a direct stake in the company's success-and in the risk of failure]


What do you share with your team? 

We are fairly open, we share our financial information – Revenue, Gross Profit, Expense category totals and Net Profit (or loss). We share this with the whole team. The key to being able to share this information is that you need to teach the team the ‘rules of business’ and the difference between things like Profit and Cash Flow.
 
We don’t share individual salaries as they are personal and some other items are sensitive by nature.
 

What’s that done for the company?

The whole concept is that you empower the team to act just like business owners. In the U.S. they’re quite big on employee ownership schemes, they’re a little more difficult, from what I understand, to do in Australia. When you have buy-in from the team, that makes them take some ownership of that, they they feel like it’s their business, and they start to take to take ownership of some of what keeps you up at night.

[In 2018 Redman Solutions was a finalist in The Great Game all-star awards. Their published case study describes how in the company’s first year of implementing the Great Game, their net profit grew to $112,000—which they topped the following year with a net profit of $152,000. Over the past five years, the company has also doubled its gross revenue while increasing gross profit margin from 50.18% to 60.21%.  It's 2017 revenues were $4.5 million and it has 16 employees.] 

You’re a keen attendee at The Growth Faculty events and a committed lifelong learner. What are some of the best pieces of advice you’ve gleaned from our events?

  • Simon Sinek, author of Start with Why.  We had five or six of the team there. I think that was a bit of an epiphany. We always knew about Start with Why, but (benefitted from) going through that process with Simon  – like, how do we help a lot of people, not just an individual.

  • Jack Daly has been another huge inspiration. I was always cautious of sales, and if anyone said the words sales or selling, I would think of used car sales people. What Jack did for me was really redefine the definition of sales, which is: sales it is nothing more than a transfer of trust. We started to educate the team is that it’s around trust, and goes back to relationships, and so if we want to do $100,000 of business, then we need to have a $100,000 relationship, and what are doing to enhance that?   

Who’s responsible for culture at Redman Solutions?

I see culture as my responsibility; it’s my number one focus. Everyone has a culture by default or by design. We’ve set out to have one by design. We understand that people are the most important part of our business.

It’s an observation of the market in which we work, local government. It’s changing, but in the past they haven’t focused a lot on culture, and we can see there are a lot of opportunities for them to grow and learn from outside the sector. I’m not sure how we’ll do that, but it’s a passion of mine and the team - we’d love to help influence the culture of the local governments in Australia and New Zealand, and move them in the right direction.

How are you changing the way local government does business?

We’ve always had relationships with local government, and what we realised was that we didn’t need to diversify into other industries; we just needed to diversify within local government.

The thing we’ve observed is that local government is good at strategic plans and strategic thinking, but they’re not really great on execution, and sometimes they put tech ahead of people and process. We’re a tech company but we’re really focussed on the people part of that.

How’s that going?

It comes back to relationships. Like a lot of industries that have been trained by other vendors in terms of what a sales process is, quite often they want to start with a product demonstration. So it’s been a journey to re-educate, to some extent.

It’s not about the technology – they all have functions and features - it’s around what’s the result. We started as a software reseller, but we saw that a lot of the technology that we sold never got deployed or deployed well, or it was being underutilised.

So, we changed our approach, and made sure that they got value out of the investment that they made. We want them to share the good stories. And, we’ve been getting some really great results.

 

Thanks Michael, and finally, the Great Eight – eight getting to know you questions we ask all our interviewees:

What’s a book you’d recommend? The Great Game of Business by Jack Sack

If you could co-author a book with anyone, who would it be, and what’s the book title?  Maybe the team could co-author. It would be about the future of local government. How culture could impact communities globally.

What’s a great bit of advice you could share?  Process and technology can be copied, but people can’t be, so focus on the most important part, which is: people.

What’s been your lowest moment, and how did you recover? The transition moving into CEO of a business was definitely one that was difficult, but having people around me and having a business coach helped. It was a steep learning curve, and I didn’t know what I didn’t know. I’m still on that journey.

How do you relax?  I have a young family, so sometimes going to work can be relaxing! Definitely going on family holidays, so I can switch off.  

What’s a fun fact that’s not well known about you? I played basketball as a junior, and I got the opportunity to meet Shaquille O’Neal, the NBA player.

What’s the secret of success? I don’t know that there’s a secret as such. I think it’s being prepared to make mistakes and to be vulnerable enough to share those mistakes, and to learn from them.

What’s a prediction for 2025? 2025 might be a bit early, but there’s a good chance that there will a few major organisations controlling all of the business, and we’ll all be working for, or a sub-organisation, of those businesses.



Interested in stories from CEOs? The Growth Faculty is hosting one of the most famous and most radically candid CEOs in the world, the former CEO of PepsiCo Indra Nooyi in June 2019. Responsible for running the second largest food and beverage business in the world by net revenue for 12 years from 2006-2018, Nooyi will speak at an exclusive dinner An Evening with Indra Nooyi for corporate executives. More information, click here.

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