Business Operating Systems #2: The Great Game of Business

03
May

In 1983, 13 employees of International Harvester purchased a part of the company that rebuilt  truck engines, called Springfield ReManufacturing Corporation (SRC).

They put in $100,000 in cash and assumed $8.9 million in loans; a share in SRC was worth 10 cents.

Twenty-five years later, SRC group’s revenue had grown from $16 million to more than $1 billion, and the share price had multiplied more than 3,600 times.

SRC’s founder and CEO, Jack Stack, memorialized their journey in two books: The Great Game of Business – Unlocking the Power and Profitability of Open-Book Management (1992), and A Stake in the Outcome (2002). The Great Game of Business sold 350,000 copies in 14 languages.

Stack explains that the way SRC survived the early days and prospered thereafter was to gamify the saving of the company. He engaged and educated employees on how to interpret financial statements and metrics so that everyone could understand what was required and how they needed to contribute.

They called it the Great Game of Business (GGOB) and later set up a subsidiary for teaching the method to other companies.

Stack professed that “the game” could work in any organization that has financial statements, because numbers are a way to tell a story about people and provide a way of keeping score.

(Traditional closed-book management companies ask people to play the game without being shown the score, which Stack considers absurd.)

The fundamental ideas of The Great Game of Business blueprint include

  • How to make money
  • Telling the truth versus being a “nice guy”
  • Starting games and celebrating wins
  • Defining and sharing the big picture
  • Addressing the fears of open-book management
  • Focusing on critical numbers
  • Designing an effective bonus program
  • Involving employees in planning
  • Making staff meetings effective
  • The importance of equity ownership
  • Healthcare costs and ownership

In One Sentence: Be honest and transparent with your people and teach them how to play the game and win together.

admin

Built and sold an investment bank, sold to private equity. Loves working ON businesses of which he has written 6 books. CEO of Steve Preda Business Growth, the innovator in the field.