"The Great Game of Business"

posted Oct 22, 2012, 12:00 PM by Too Good To Be New Les Landes and Jim Shaffer   [ updated Oct 22, 2012, 2:18 PM ]
The Great Game of Business
The Great Game of Business

By Jack Stack

 

Review by Jim Shaffer

 

When I want a client to experience a near perfect example of open, performance-based communication, I take them on a field trip to SRC Holdings in Springfield, Missouri.  They tell me they’re blown away.

 

Open communication takes on a different meaning there. Every person in every nook and cranny is making on-the-floor decisions based on their impact on the cash flow statement, income statement and balance sheet.

 

That’s life in an open book company. And that’s the story that SRC CEO Jack Stack tells in the classic, The Great Game of Business.

 

At SRC, the main job is to improve the financial numbers. It gets done by selling, designing, engineering, producing, maintaining and supporting products and services in the right amounts at the right times.

 

Take Johnny who I met the first time I visited SRC. Johnny cleans out old truck engines so they can be remanufactured to look and act like new again. When he was introduced to me I asked somewhat rhetorically, “How’s it going?”  His answer sounded like something I’d hear from an accountant. Johnny told me to within a penny or two how the company’s doing against its forecasts and what he and his colleagues have to do to make plan that day, that week and for the month.  Then he was glad to tell me exactly—to the penny—what all of that meant in terms of his pay, bonus and profit sharing. 

 

The “great game” started in 1983 when Stack and 12 other managers scraped together $100,000 in cash, borrowed $8.9 million and bought a failing division of International Harvester. That company has become SRC Holdings, a thriving company of 1,300 engaged employees operating 17 businesses in a variety of industries and producing well over $450 million in annual sales. It’s a company that has increased its value from 10 cents a share in 1983 to more than $240 today.

 

Stack opens The Great Game of Business with what he refers to as the Ultimate Higher Law: “When you appeal to the highest level of thinking, you get the highest level of performance.”

 

Then, throughout the book he addresses 10 higher laws that are core to the way SRC is run.

1. You get what you give.

2. It’s easy to stop one guy, but it's pretty hard to stop 100.

3. What goes around comes around.

4. You do what you gotta do.

5. You gotta wanna.

6. You can sometimes fool the fans, but you can never fool the players.

7. When you raise the bottom, the top rises.

8. When people set their own targets, they usually hit them.

9. If nobody pays attention, people stop caring.

10. As they say in Missouri: Shit rolls downhill. By which we mean change begins at the top.

Stack wants to do away with jobs. “I don’t want people just to do a job. I want them to have a purpose in what the hell they’re doing. I want them to be going somewhere. I want them to be excited about getting up in the morning, to look forward to what they’re going to do that day.”

 

He also believes that the only way to be secure is to make money and generate cash. Everything else, he says, is a means to the end.  The book lays out the infrastructure that perpetuates this people-centric, cash-flowing philosophy. 

 

§  Know and teach the rules: Every employee should be given the measures of business success and taught to understand them.

§  Follow the action and keep score: People should be expected and enabled to act on their knowledge to improve performance.

§  Provide a stake in the outcome: People should have a direct stake in the company’s success and risk of failure.

 

He then vividly describes how the great game is played and won. He talks about management myths, ways to share financial information so people can act on it, how to set standards, set up performance enhancing bonus plans, high involvement planning, huddles, scoreboards and creating real owners in every part of the business.

 

I’ve taken clients and young consultants to SRC so they could establish a new baseline for organizational openness and trust. At SRC, my guests see a near perfect way of managing information, involving people and producing results.  Being able to experience this culture and climate first hand helps them create similar visions when they return home. 

 

The very heart of the concept is about people trusting one another, pursuing a higher purpose and creating the security they need to keep making a positive difference.