The impact of letting employees see how they make a difference

One of my favorite business books is “The Great Game of Business” by Jack Stack. It tells us how the Springfield Remanufacturing Company (SRC), a then nearly bankrupt division of International Harvester, was acquired by its employees.

The company’s young and inexperienced manager, Jack Stack, created a management system that generated great wealth for the company and its employees, opened additional business opportunities, and eventually even an educational program.

The heart of its message is the power of information — letting people know how what they do makes a difference and giving them a stake in the outcome. It is a “game” because it should be interesting and fun.

Here is how their website describes it:
“ . . . Jack Stack didn’t know how to ‘manage’ a company, but he did know about the principles of athletic competition and democracy: keeping score, having fun, playing fair, providing choice and having a voice. With these principles he created his own style of management — open-book management.

The key is to let everyone in on financial decisions. At SRC, everyone learns how to read a P&L — even those without a high school education know how much the toilet paper they use cuts into profits.”

Need more encouragement to try this game? Had you invested $1,000 in the company back in 1983, you’d have $3.4 million today — far better than an S&P index or shares in Berkshire Hathaway. Have I got your attention?

Here are some of the key points of the “great game”:
  When you appeal to the highest level of thinking, you get the highest level of performance.

  Business is a game of fractions. The more employees know about your company, the more capable they are of making it better.

  When the people who create the numbers understand those numbers, communication between the bottom and top of the company is phenomenal.

  Numbers are not a substitute for leadership. Numbers tell you where the problems are —and how worried you should be.

  If you can develop a critical-number game plan, you can create a lot of momentum very quickly.

■  When people set their own targets, they usually hit them. Planning is all about making commitments. Without them, there is no game.

  If you can’t stabilize a sales forecast, you can’t control your company. If you control a forecast, you control the world.

  If nobody pays attention, people stop caring. Weekly huddles signal to employees that management cares about what they’re doing.

  Know when to push, when to hug, when to cheer, when to boo and when to kick people in the butt.

  The game is about continuous innovation. The more successful you are, the bigger the challenges you’ll face.

In the Great Game of Business, as in life, there is nothing more powerful than self-awareness — awareness of how what you do makes a difference.

Luis M. Proenza is President Emeritus at The University of Akron