Businesses must make money to survive and succeed. Yet, most employees don’t understand business financials nor how their salaried jobs are tied to the company’s success/failure. The Great Game of Business (also known as “GGOB” or open-book management) by Jack Stack is a new approach to business. It’s about opening your books to the entire organization, equipping everyone with the ability to read financial statements and make financial decisions, and giving them a stake in the business. This creates a company where people think and act like owners to grow the business together. In this summary of the Great Game of Business, we’ll outline key insights for unlocking the power and profitability of open-book-management.
For the full details, examples and tips, do get a copy of the book, or get a detailed overview with our complete book summary bundle.
The Great Game of Business (GGOB): How it Started
In 1983, Jack Stack and several colleagues bought over the Springfield Remanufacturing Corporation (SRC), a near-bankrupt division that was about to be closed down by International Harvester. None of the new owners had any business experience; they had to learn to build a business.
In many ways, business is like a game—it’s a competition with rules, strategies, scores, winners/losers, skills and some element of luck. By treating business as a game, Jack Stack and his co-owners managed to demystify business and help everyone to learn and win the game. Between 1983 to 1992 (when the book was first published), SRC’s revenues grew from $16 mil to $83 mil and the company’s value grew from $100,000 to $25 mil. They also created an Employee Stock Ownership Plan (ESOP) with the vision of helping the staff to buy their own houses. Another 20 years later in 2013 (when this 2nd edition was published), the ESOP holdings by hourly workers had grown from $35,000 to $400,000. The company had successfully diversified into a range of businesses from logistics to failure analysis, warehousing and distribution. Its share price had skyrocketed from $0.10 in 1983 to $348 in 2013.
The Great Game of Business: Philosophies and Components
In the book, the authors detailed how open-book management principles/tools were applied to transform SRC. Here’s a brief overview of 9 key philosophies behind the Game. From the the book and our complete book summary, you can get more in-depth tips and examples on each of these 9 components.
Teach People about Money: the Language of Business
To survive, a business must make money and generate cash. Yet, most employees are ignorant about business, and how their work is tied to profits and cash flow. To make money, teach everyone in your organization to make money.
Adopt the Right Management Philosophies
In essence, the Great Game of Business is built on this foundational belief: To get the highest level of performance, you must first appeal to people’s highest level of thinking. The book / full summary, elaborate on (i) how you can enroll the entire workforce to address any business challenge, and (ii) how to break down break down your financial statements into simple numbers that tell people what’s happening and how they can make an impact.
Get People into Game-Playing Mode
Before you can get people to play the GGOB, you must first have (i) management credibility and (ii) a desire to win. Only then can you start to use/design games to build team spirit and a winning habit. Get more details/tips on how to build these components from our full book summary.
Show People the Big Picture
In most companies, employees are told to just do their jobs and leave others to worry about the business. Even if people do their jobs well, there’ll be silos and conflict if people don’t see the impact of their actions on others. In the book / our complete 15-page summary, we cover more details on how to show the Big Picture and break issues down into smaller parts that can be tackled.
Set Standards to Drive Action
To help people to evaluate their progress and action steps, you need to set standards or measurable targets in every area. It’s important to identify your Critical Number, i.e. the number that has the biggest impact on your desired outcomes. Ask yourself: what’s the #1 thing that’ll keep you awake during a recession, or what’s the biggest weakness that can kill your company? Get more tips from our complete summary on how to craft, interpret and use effective standards and develop a standard cost system”.
Back it Up with Bonuses
You can achieve a lot with very little resources when people apply their ingenuity and hard work to solve problems instead of just spending money to buy solutions. A bonus program sends a clear signal on the company’s key priorities, motivates people to achieve those goals and can also facilitate learning and alignment. You can get the book / the full summary to learn how to design a great bonus program.
Develop your Game Plan
To kick off your GGOB, you need an annual game plan, with numbers that reflect what your company intends to do each month. This allows you to assess (i) if your company is on-track and (ii) who’s delivering results and who’s falling behind. What’s involved in the planning process and how do you involve everyone without making it a chore? Get the answer from our complete GGOB summary.
Establish your Rhythm and Cycles
To keep people motivated, you must consistently show them the fruits of their labor. Use “huddles” to keep people updated and drive action. The book explains in detail how SRC uses The Great Huddle (a weekly staff meeting) to drive company-wide action, and supplements it with other cycles within the weekly cycle. You can get a detailed overview of the process and tips from our full 15-page book summary.
Create a Company of Owners
A bonus program is exciting, but real wealth comes from the long-term growth in the company’s stock value. The authors share details about SRC’s employee equity program and how it works with the other components above to create a company of educated owners. Even if you aren’t able/ready to offer employee stock options, you can still use the GGOB to instill ownership and a business-mindset.
In fact, the GGOB isn’t just for senior leaders and business owners. Even if or if you’re a junior/middle manager and your company/bosses aren’t ready for the GGOB, you can still take personal ownership to remove barriers, educate people, set inspiring standards, and create an environment where people can think and act at a higher level.
Implementing the Great Game of Business
In a nutshell, the GGOB can be organized into 3 sets of principles and practices—Know and teach the game rules, stay on top of the action, and offer a stake in the outcome—centered around the Critical Number
In the 2nd edition of the book, you can find a detailed case study on how the various components come together in the implementation process. Or, get an overview from our complete 15-page summary.
Other Details in “The Great Game of Business” Book
Businesses have a huge impact on the economy and society. Not only do they offer jobs and solve problems directly with their products/services, they can also teach people to understand business, take initiative, set standards and become self-reliant. When these people successfully start new businesses, it generates even more jobs and wealth in a positive cycle.
This is a very detailed guidebook with numerous other tools and resources including: examples, tips, checklists, templates and step-by-step walk-throughs of the GGOB components and processes. Do get a copy of the book for the full details, get our full summary bundle for an overview of the various ideas and tips, or check out more resources/details from greatgame.com.
Learn how to unleash your profitability with open-book-management!