It’s 12:49 pm on a Wednesday afternoon. The first bell rings. Game on.
The “Game” refers to The Great Game of Business, and like we do every week, today, our entire staff meets to play. Over the next 30 minutes, each of the Tasty Catering employees who “owns a line” on our P&L Statement will call out his or her forecasted numbers.
Everyone in the room records those numbers in their individual binders while one employee records the numbers on a large scoreboard hanging from our operations office.
This is all part of how one plays the game. Together, we celebrate winning scores and generate ideas around variances from the “Plan.” We harness the power of the crowd, call our plays for the following week and have everyone focused on one thing to improve the next score.
By 1:19 pm, everyone is back to work with a direct line-of-sight as to how their daily actions, attitudes and behaviors will contribute to our next “win.”
How Did the Game Start?
A few years back, in a southwestern Missouri city, a savvy manager named Jack Stack and his 12 partners scraped together $100,000 and borrowed another $8.9 million to buy a failing division of International Harvester. The future looked bleak for the fragile engine-rebuilding plant they called SRC (Springfield Remanufacturing Corp.). Its debt-to-equity ratio was 89-to-1. Jobs hung in the balance, and morale was in the pits. Facing potential ruin, the partners needed a way to fire up their 119 employees—and try to engage their hearts and minds as much as their hands.
Stack knew that traditional management practices weren’t going to turn around SRC any time soon. The situation, he felt, called for a bold experiment: a new way of managing more in sync with human nature; a simple approach that could harness the collective knowledge and good sense of his employees. Urgency being the father of invention, Stack took the elements of any game (teams, rules, scores, results), applied them to the daunting task of righting SRC and taught his staffers to read financial statements, work as a team, generate some cash and win.
The results were remarkable in just a few short years.
Revenue doubled, earnings quadrupled and the debt-to-equity ratio was reduced to 5-to-1. Absenteeism, workforce turnaround and the number of product deficiencies and plant accidents—all once very high—dropped precipitously and the Great Game of Business was born.
What is the Great Game?
When it comes to Open Book Management, most companies don’t reap the full benefits of opening the books because they’re simply providing a history lesson to their employees. They share the prior month’s numbers on the 10th or the 15th of the current month, but by that time, there are only two or three weeks left to improve the company’s financial performance!
The Great Game of Business is different in that it is a forward-forecasting approach to Open Book Management. Employees are first taught how to read financial statements so that they can fully, actively and proactively participate.
Companies then post on their walls the Plan (or budget) on the first of each month. Each employee owns a line on the P&L Statement on which they have a direct responsibility. The weekly huddles forecast where each line of the P&L will be at the end the month, giving everyone in the company the chance to move the needle and improve the numbers.
The game also calls for complete financial transparency in everything but individual salaries, which are grouped together in the P&L scoreboard. Every employee has a direct stake in the outcome of the game through a bonus plan tied to the financial performance of the company. With the Great Game bonus plan design, every employee gets the same percentage of their wages as you achieve the different bonus levels. This ensures a fair and simple system with no arbitration. When your company achieves a bonus, you reward everyone quarterly to enhance the winning culture by creating more “wins” than a single annual bonus. If the bonus isn’t achieved in one quarter, it doesn’t go away. It will be added to the following quarter if the employees get back on track for the year’s Plan.
The Great Game of Business in Action
Perhaps one of the best ways to learn how well the Great Game empowers employees is through example.
One of Tasty Catering’s delivery drivers, Hugo Rios, was in charge of the auto repair line on our P&L Statement. On his own, he forecasted a reduction of $20,000 on his line based on a new plan he devised. Hugo’s plan involved developing a maintenance log for every truck in the fleet that allowed our staff to be proactive on repairs. The plan went so well the first year that while he didn’t quite reach his yearly goal, his plan still saved the company $16,000 in maintenance costs.
Another driver and fuel-cost line owner went on to reduce our fuel expense by $20,000 by charting gas prices. He then made sure drivers filled vehicles on low-priced days.
These are just two of a dozens instances where opening the books and holding each other accountable has really paid off with some significant company-wide “wins.”
The Dramatic Effects of the Great Game of Business
Improving the financial literacy of employees seems simple, but the outcome it generates—especially when paired with a competitive game-atmosphere—is outstanding. And playing the game has certainly added a huge effect on our bottom line. In just two years of playing the game, Tasty Catering’s sales have gone up just 6.6 percent, but our net profit has increased by 75 percent. Can you imagine what playing the Great Game of Business can do for you?
Ding Ding! Game on!