Podcast
Questions and Answers
What is the main purpose of HIP?
What is the main purpose of HIP?
What is the benefit of having multiple small companies according to the Firecracker Factory Theory?
What is the benefit of having multiple small companies according to the Firecracker Factory Theory?
What is the long-term strategy of the company comprised of?
What is the long-term strategy of the company comprised of?
What is the main focus of business at the highest level according to OWNERSHIP RULE #11?
What is the main focus of business at the highest level according to OWNERSHIP RULE #11?
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What was the key discovery Jack Stack made about financial literacy?
What was the key discovery Jack Stack made about financial literacy?
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What is the main idea behind the Great Game of Business?
What is the main idea behind the Great Game of Business?
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What was one of the results of implementing the Great Game of Business at SRC?
What was one of the results of implementing the Great Game of Business at SRC?
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What was one of the benefits of playing the Great Game of Business?
What was one of the benefits of playing the Great Game of Business?
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What was Jack Stack's realization about financial literacy?
What was Jack Stack's realization about financial literacy?
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What was the primary goal of teaching employees about financials in the Great Game of Business?
What was the primary goal of teaching employees about financials in the Great Game of Business?
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What was a result of playing the Great Game of Business at SRC?
What was a result of playing the Great Game of Business at SRC?
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What skill did the maintenance worker at SRC acquire through the Great Game of Business?
What skill did the maintenance worker at SRC acquire through the Great Game of Business?
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What is the primary reason companies may hesitate to adopt open-book management?
What is the primary reason companies may hesitate to adopt open-book management?
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What is the key to unlocking the power of open-book management?
What is the key to unlocking the power of open-book management?
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What is the importance of focusing on the balance sheet and cash flow statement in open-book management?
What is the importance of focusing on the balance sheet and cash flow statement in open-book management?
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Study Notes
The Great Game of Business and Ownership Rules
- The Great Game of Business is a concept coined by Jack Stack and Bo Burlingham, which involves open-book management and creating an environment where employees can think and act like owners.
- In 1983, Jack Stack and 12 managers transformed a failing division of International Harvester into a thriving company, SRC Holdings Corporation, with 1,600+ engaged employees and $600 million in annual consolidated sales.
- The company's value increased from 10 cents per share in 1983 to over $612 (pre-split) in 2018.
Higher Laws of Business
- There are 10 Higher Laws of Business, including:
- If nobody pays attention, people stop caring.
- As they say in Missouri, "Shit rolls downhill" - change begins at the top.
- When you appeal to the highest level of thinking, you get the highest level of performance.
- The Ultimate Higher Law is: "When you appeal to the highest level of thinking, you get the highest level of performance."
Ownership Rules
- There are 14 Ownership Rules drawn from "A Stake in the Outcome" by Jack Stack and Bo Burlingham.
- Examples of Ownership Rules include:
- Stock is not a magic pill - it doesn't change people's behavior overnight.
- It takes a team to build equity value.
- You create wealth by building companies, not by selling products or services.
- Ownership thinking requires a shift from employee thinking, where people think about what is best for the company as a whole, rather than just their job description.
SRC Holdings Corporation and The Great Game of Business
- SRC Holdings Corporation was founded by Jack Stack and has become a thriving company with 1,600+ engaged employees.
- The company uses open-book management and the Great Game of Business to create an environment where employees can think and act like owners.
- The company has increased its value from 10 cents per share in 1983 to over $612 (pre-split) in 2018.
Firecracker Factory Theory
- The Firecracker Factory Theory is a concept that emphasizes the importance of building multiple companies to reduce risk and increase wealth.
- The theory is based on the idea that if one company "blows up," it doesn't destroy the entire organization.
The Story of Springfield Remanufacturing Corporation (SRC)
- In 1982, International Harvester's financial struggles led to the sale of its unprofitable operations, including the Renew Center, where Jack Stack worked, putting 119 jobs at risk.
- The Renew Center's asking price was $9 million, which Stack wanted to purchase to save his own job and others.
Jack Stack's Realization
- After creating 15-20 business plans, Stack recognized that financial literacy was not an impossible task and that anyone could learn it.
- He discovered that financial literacy has a long history, dating back to the 1400s, and holds the power to transform lives.
The Great Game of Business
- Stack's innovative approach, The Great Game of Business, aimed to educate employees on how a business generates revenue and operates.
- By teaching employees to think like businesspeople, Stack believed they would take ownership and make decisions that benefit the company.
- The Great Game of Business is based on open-book management, where employees learn to understand financials and make decisions to improve them.
Implementing the Great Game
- Stack began educating employees about financials, involving them in decision-making processes, and created an incentive plan.
- Regular meetings were established to discuss issues and concerns, leading to astonishing results, including increased employee engagement and motivation.
The Results of Playing the Great Game
- Companies that adopt The Great Game of Business experience improved financial performance.
- The game teaches employees valuable skills that can be applied throughout their lives, beyond their job.
- Former hourly workers at SRC have successfully started their own businesses.
The Impact on Lives
- One SRC maintenance worker achieved financial freedom and paid off her house using the skills learned from The Great Game.
- The game helps individuals develop a plan for their lives, applying business principles to their personal lives, leading to greater financial security and freedom.
The Story of Springfield Remanufacturing Corporation (SRC)
- In 1982, International Harvester's financial struggles led to the sale of its unprofitable operations, including the Renew Center, where Jack Stack worked, putting 119 jobs at risk.
- The Renew Center's asking price was $9 million, which Stack wanted to purchase to save his own job and others.
Jack Stack's Realization
- After creating 15-20 business plans, Stack recognized that financial literacy was not an impossible task and that anyone could learn it.
- He discovered that financial literacy has a long history, dating back to the 1400s, and holds the power to transform lives.
The Great Game of Business
- Stack's innovative approach, The Great Game of Business, aimed to educate employees on how a business generates revenue and operates.
- By teaching employees to think like businesspeople, Stack believed they would take ownership and make decisions that benefit the company.
- The Great Game of Business is based on open-book management, where employees learn to understand financials and make decisions to improve them.
Implementing the Great Game
- Stack began educating employees about financials, involving them in decision-making processes, and created an incentive plan.
- Regular meetings were established to discuss issues and concerns, leading to astonishing results, including increased employee engagement and motivation.
The Results of Playing the Great Game
- Companies that adopt The Great Game of Business experience improved financial performance.
- The game teaches employees valuable skills that can be applied throughout their lives, beyond their job.
- Former hourly workers at SRC have successfully started their own businesses.
The Impact on Lives
- One SRC maintenance worker achieved financial freedom and paid off her house using the skills learned from The Great Game.
- The game helps individuals develop a plan for their lives, applying business principles to their personal lives, leading to greater financial security and freedom.
The Great Game of Business
- The author started working at Central States Manufacturing on January 30, 2006, and was given a book report assignment on "The Great Game of Business" by Jack Stack.
- The book introduced the concept of open-book management, which was new to the author.
The Author's Previous Work Experience
- The author had previously worked for companies with a "command and control" mentality, where employees only knew their job tasks and not much about the overall business.
- The author thought this was the normal way businesses operated.
The Impact of The Great Game of Business
- Reading "The Great Game of Business" and working at Central States changed the author's life over the next 14 years.
- The author learned that business is more than just doing a job, and that employees should have a stake in the outcome.
- The author realized that open-book management and teaching financial literacy can work in any organization.
Central States Manufacturing
- The company had a culture that drove the success of the organization and its employees.
- The company implemented the concepts of "The Great Game" fully, and it relied on having the right people.
- The company's success led to a better quality of life for the author and their family.
The Psychological Effect of The Great Game of Business
- Working for "command and control" companies left the author feeling empty and unhappy.
- The author felt helpless and had no impact on what they were creating.
- The author realized that people need to have a sense of purpose, decision-making authority, and a reward for reaching goals.
The Methodology Behind The Great Game of Business
- It focuses on people and teaching them financial literacy.
- The approach is life-changing and can work in any organization.
The Book Report
- The author wrote a book report on "The Great Game of Business" in 2006.
- The report highlighted the importance of open-book management, financial literacy, and the power of giving employees a stake in the outcome.
- The report mentioned that Jack Stack's approach had increased SRC's annual sales from 16Mto16M to 16Mto70M and increased the stock value by 18,200%.
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Description
A quiz about the principles outlined in The Great Game of Business and A Stake in the Outcome, including the 10 Higher Laws of Business and The Ownership Rules.
