The Great Game of Business: The Only Sensible Way to Run a Company, Jack Stack, (Redfern: Currency Publishing, 2013).
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The Great Game of Business Synopsis
In The Great Game of Business, author Jack Stack teaches readers about how to succeed in business by framing the experience as a game. He leverages his experience as the founder and CEO of Springfield Remanufacturing Corporation (SRC) as an example company in the book. Readers learn about how SRC increased the value of the company by creating a company of owners (all employees act and behave like business owners). One of the fundamental principles he uses is Open-Book Management, where management openly shares all the details of the financial statements with all employees. Furthermore, he focuses on the importance of every employee understanding how to read the financial statements. This way, employees can understand how they contribute to the profitability of the business.
Know and Teach the Game Rules
In the book, Jack Stack believes that businesses are like games. Like a game, business entails rules, strategy, and competition. By teaching all employees the rules of the game and how to play, leadership can better align team members to work towards the same goals and overcome barriers to growth. One way Stack achieves this is, is through the literacy of financial statements.
By having leadership empower each employee to understand the financial statements, they can understand how their role, actions, and behaviours drives profitability and generates cash. Moreover, it provides employees with the bigger picture of the organization, which can help break down silos, making teams more collaborative and efficient.
Stay on Top and Take Action
In addition to empowering employees with the rules of the game, leaders need to take action. There needs to be a plan in place to drive everyone towards the same goals. Leaders should identify the critical numbers or performance metrics that will tell them how the business is doing. A good way to understand what the critical numbers are is to ask yourself this question: what is the number one thing that keeps you awake during a recession?
Once you have your critical numbers, develop a game plan on what the business intends to prioritize each month and how it intends to reach its goals. Having metrics will give all employees an understanding of how far the organization is from reaching its objectives. Also, ensure that you have performance reviews with employees regularly. This will serve as a way to realign their tasks as necessary.
Finally, build a rhythm and cycle within the organization. This should be done through huddles and/or regular meetings. Huddles and meetings serve as a pulse check for tracking performance and course-correcting alignment as needed.
Offer a Stake in the Outcomes
One of the best ways to make employees feel like business owners is to give them a stake in the businesses. There are different ways that companies can do this, including bonuses or even equity (ownership) in the business. Bonuses are useful for rewarding employees who act and behave like business owners. Additionally, an Employee Stock Option Plan (ESOP), where employees receive some ownership of the company, is one of the best ways to instill a sense of ownership. Other ways to drive owner-like behaviours are: include autonomy over decisions and setting standards. Overall, having a company of owners can help elevate the organization.
Key Takeaways
- In order to align all employees towards a single goal, leverage open books, where all financial statements are available to employees so that each team member understands how they contribute to the organization’s profitability and capacity to generate cash.
- Identify the key performance metrics (or critical numbers) to help individuals understand what drives the business.
- Create a company of owners – use rewards and recognition as a way to drive business owner-like behaviour within employees.
The Great Game of Business Author: Jack Stack
Jack Stack is the founder of Springfield Remanufacturing Corporation. He is the author of The Great Game of Business and A Stake in the Outcome. Both books detail his leadership experience and his management practices.
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Professional Leadership Institute (PLI) is an educational website providing professionals from all types of businesses with practical leadership education. To keep evolving your leadership toolkit, additional PLI resources below will be useful:
