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The Great Game of Business!


© Stuart Bourhill

Open Book Management

Perhaps the modern version of the Scanlon plan is the Stack plan which is a well-publicized application of open-book management at Springfield Remanufacturing Corp. (SRC) in Springfield, Missouri. In his book, "The Great Game of Business", (Doubleday: New York, NY, 1992), Stack provides a complete picture of the philosophy and the best ways to implement a successful performance-based compensation and equity program. A few key points from his book will be presented here. When a company plays the "Great Game of Business", all the employees -- from the janitor to the CEO -- know exactly what they contribute, what they cost the company, and how they depend on one another to be successful. This is true because they're all working from the same scorecards -- the income statement, the cash flow statement, and the balance sheet. Everyone starts thinking and acting as owners, not as traditional employees who are just "doing the job".

Players of the Game are unstoppable, as Jack Stack and his colleagues at SRC discovered in the early 1990s. Since taking up the Game, SRC's annual sales have grown from $16 million to $83 million while a share of stock worth 10 cents in 1983 is now worth more than $20, an increase of almost 20,000 percent. Open-book management challenges the recent fads and uses a company's financial statements to show people how the business really works. The important point to remember is that the Game is a journey, not a destination. The Great Game of Business fails only those who quit - or those who stop changing.

The Game is based upon a couple of critical factors in running a business. One is to make money and the other is to generate cash. Everything else is a means to that end. "At SRC, we teach everybody those rules, an then we build on that simple knowledge and take people all the way to the complexity of ownership. We constantly strive to paint the Big Picture for the people out on the factory floor and to knock down the barriers that separate people and that keep people from coming together as a team."

SRC has developed some key reasons for playing the Game: (1) they want to live up to their end of the employment bargain in terms of providing employment and keeping the company alive; (2) they want to do away with jobs and provide people with a purpose in what they are doing; (3) they want to get rid of the "employee" mentality and enable the organization to become a more educated and more flexible by having employees think and act like owners; and, (4) they want to create and distribute wealth by teaching employees why it is important to make money and generate cash by having them continually improve productivity. The idea is to provide secure employment and reward those responsible for the company's success.

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