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Questions and Answers
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 long-term strategy of the company comprised of?
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?
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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?
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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?
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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?
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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?
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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?
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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.
