Business & Leadership Lessons From Jack Stack(The Great Game Of Business)

Jack Stack is the Founder, President, and CEO of SRC Holdings Corporation. The following content is based on his book “The Great Game Of Business.”

INCEPTION: Unveiling the Secrets of Inspirational Leadership

01 TEACH BUSINESS FINANCIALS TO YOUR EMPLOYEES

The first piece of advice Jack Stack gave is to teach employees about making money and generating cash in the business. He also suggests that we reinforce their learning by regularly sharing updated company financials. We have to help them to interpret income, profit & loss statements.

The Effects—

• The employees will feel that they are valued at work.
• Financial transparency builds trust and mutual respect.
• Employees understand the difficulties in making profits.
• Employees can see how their job, work of colleagues/departments influence business profits & cash generation.
• They can perceive the competition and its implications.

Benefits —

• Being valued at work results in highly engaged employees — Improves productivity and innovation.
• As employees can follow the competition and understand the difficulties in making profits, they don’t need external motivation to act. They will be eager to execute the new ideas and plans.
• Financial numbers help employees make smart decisions that would benefit themselves and the company. They can allocate resources sensibly, lower expenses, and optimize tasks.
• The knowledge of business financials helps employees perceive the reasoning behind a business’s financial decisions like mergers and acquisitions. It helps to overcome any resistance and garner support.
• Employees become more accountable.
• As employees can track the health of the company through numbers, they would be in a better position to react to changes in the business environment. They can adapt themselves effortlessly.
• In some companies, financial knowledge has helped employees spot new business growth opportunities and leverage them.

02 ENGAGE YOUR EMPLOYEES IN THE BIG PICTURE

“Just focus on doing this work — Remove the burrs, put the bolt on the screw. Don’t think about anything else. Remember, the company expects you to just do the job assigned to you” My manager told me when I asked him about the product’s applications. It was a long time ago.

Jack Stack, CEO, SRC, says, “Several companies set up the job and call it a job. What you end up with are workers who think a job is just a job. Over a period, most of them become unhappy with their jobs and unhappy with themselves. This is the reason why we have productivity problems.”

Jack adds, “As a leader, I don’t want people to just do a job. I want them to have a purpose in what the hell they’re doing. I want them to be going somewhere. I want them to be excited about getting up in the morning, to look forward to what they’re going to do that day. To do that, you have to get people to dream. You have to show them that there really are pots at the end of the rainbow, and you can get your pot if you want it and are willing to work for it. Business is a tool for achieving your highest dreams. Obviously, there is some dreams business can’t help with. But it can help most people to achieve some success in life. It can give people hope.”

So, what’s the solution?

To help people have a purpose, Jack says that every employee should know how his/her actions influence the business outcomes, how it affects another person’s progress, how it touches various departments, and so on.

Jack Stack claims, “In our organization, we teach everyone about our business. We train them. We try to take ignorance out of the workplace and force people to get involved, not with threats and intimidation but with education.”

Let’s imagine possible benefits from teaching every employee about the business —

• Understanding business strategy helps an employee know the reasons behind the company’s every request to him/her. His/her involvement in the work would grow.
• Understanding the core values of the business helps a person in making the right decisions.
• Knowledge of core competencies of the business drives an employee to focus on the right and relevant activities. It will strengthen the business’s core competency, widening the distance from the next competitor.
• An employee will change the way he/she works when he learns the competitive realities of the market and the low margins the company is fighting for survival.
• When every employee understands the market competition, the customer requirements, and how their product fits in, he/she will become a brand evangelist. His/her behavior can impart the positive value of the brand in the consumer’s mind. Businesses attain rapid growth when employees of the company act as brand ambassadors. It helps in building loyal customers.
• If every employee is knowledgeable, he/she can react quickly to the changes in the market. In some cases, they can predict the changes and alter the course. It means that the whole organization becomes flexible in meeting customers’ changing needs.
• When the employee sees his contribution, he will soon think and act like an owner. Owners, real owners, always go above and beyond their work. They will think about every problem from multiple perspectives and look for a long-term solution. They’ll always have one eye in the future.
• An employee with business knowledge knows that it’s not only about how he or his department fits into the big picture but also about how others influence the whole business. It will force him to think from the shoes of others. Later, he will look for opportunities to help others. It leads to the overall success of the company. Sharing the big picture of business allows everyone to get together and work toward the same goals, building a coherent business.
• Teaching employees to understand the big picture takes ignorance out of the workplace. It entices people to get involved. The knowledge gap between workers and managers vanishes.

The broader the picture you give people, the fewer obstacles they see in their path.People need big goals. If they have big goals, they blow right by the little obstacles. But those obstacles will become mountains if you don’t get people beyond the day-to-day issues— Jack Stack.

So, as a leader, for motivating your employees, teach them all about your business, be transparent, show them the big picture, and reveal how they contribute. Moreover, markets keep changing — customers keep changing — technology keeps changing — customer’s needs keep changing — So, to constantly meet those changes, the employees have to keep learning all the time. As a leader, create an environment in which people learn all the time.

Jack Stack says, “If people don’t know about the business, they won’t understand their contribution, and they won’t do the right things, and they will blame you when the company fails.”

03 EMPLOYEE WORKS, PARTNER OWNS

Sam Walmart(Founder — Walmart) considered people working in his stores and warehouses as partners and called them ‘associates’ rather than employees. He believed that the more he shared profits with his associates, the more profit the company would gain. Other than sharing profits, Sam also provided them incentive bonuses, discount stock purchase plans, and health benefits. If the company treated the associates well, then the associates would treat the customers well.

Jack Stack says that a company should have employees who think & act like owners. Owners, real owners, don’t have to be told what to do — they can figure it out for themselves. They always yearn for more knowledge to make smarter decisions. They take additional responsibilities and initiatives. They don’t make excuses nor blame others for their failures and are self-motivated. Companies with owners, not employees, become flexible. They can respond instantaneously to changes in the business environment and its needs.

When leaders/managers consider employees as equal partners, there’ll be no hierarchy or special weightage given to one person’s viewpoint over another’s — It means that people will become fearless. The employees will find it easy to share their ideas, opinions, and thoughts. Studies reveal that employees working under leaders who displayed partnership behaviors have shown higher performance levels. The employees also felt most positive and confident about the future of the company.

04 BE TRANSPARENT

Jack Stack writes, “Once, my job was to get parts from a supplier. My colleagues advised me not to tell suppliers how many parts really needed. If you’ve got enough parts to last you a couple of weeks, tell them you’ll be out of stock by Friday. The problem with that lie is — Nobody trusted anyone else’s numbers. On the other hand, I told the truth. Suppliers began to trust me. I told exactly how many parts we had in stock, and how long we could go before having problems on the assembly line. The more honest I was with them, the more they relied on me. Because they badly needed reliable information to overcome their scheduling problems. So, they never wanted to let me down.”

Transparency establishes credibility and trust. A business simply can’t operate unless employees believe the leader and believe one another.

Jack Stack writes, “A business should be run like an aquarium, where everybody can see what’s going on — what’s going in, what’s moving around, what’s coming out.” He advises us to share every business information with all the employees, at all levels, all the time. It means that a leader has to build an ecosystem that allows people to be more honest and open to sharing every piece of information. Build transparency into the organizational culture.

The more people know about a company, the better that company will perform.

The benefits of transparency at all levels inside the organization —

• A transparent workplace nourishes a fearless environment, encouraging employees to be open about their ideas, criticisms, achievements, and mistakes. They can be themselves instead of being somebody else. Happy employees mean satisfied customers.
• Transparency in meetings would bring all the hidden problems, information, and insights from the work environment to the surface. Innovation multiplies.
• Transparency bars managers from showing favoritism to anyone. As every essential data was available for others to see, the system forces managers to show fairness to every idea/person. It is a critical factor in building a community.
• Transparency ensures honest feedback about personal shortcomings. It results in improved self-awareness. The more we are aware of our own biases, mistakes, abilities, emotional states, the more we can evolve our relationships with others. We also would have a clearer picture of others’ behavior, interests, desires, needs, and other details. We would know what to expect of others. This kind of certainty is essential in building trust between people. Trust leads to enduring relationships. Relationships help in building workplace community.
• Transparency also reduces harmful office politics and bad behavior.
• People would like to be in control of their lives and career. Information gives that sense of control.

You will always be more successful in business by sharing information with the people you work with rather than keeping them in the dark.

05 DO AWAY WITH TUNNEL VISION

For building a sustainable business, an employee should be good at problem-solving. Research shows that people can learn to be better solvers through exposure to diverse knowledge and meeting people from different cultural backgrounds. One way to help an employee gain divergent knowledge/skills is to encourage him/her to work across multiple departments. It blocks people from having tunnel vision while solving a problem.

Jack Stack writes, “Tunnel Vision is a big problem in business. When people spend all their time in one function, they see every issue from a single perspective. They can’t appreciate other departments’ needs. Walls go up, communication is terrible. That makes it harder to accomplish anything.”

He adds, “As a leader, I got around this obstacle by getting my people jobs in other departments. They learned to see different aspects of the business. I found out that people who had worked in two or more jobs had a whole different attitude about business. The cooperation was great. They were much better at seeing other person’s perspectives. As a result, my department could function better.” Jack calls this process Cross-utilization where employees are encouraged to gain experience in different parts of the business.

06 TREAT BUSINESS AS A GAME

Jack Stack advises us to treat the business as a game so that employees can sustain interest, fun quotient, and innovation at work. He adds that it’s a way of tapping into the universal desire to win, making that desire a powerful competitive force. Winning the Great Game of Business has the greatest reward — constant improvement of your life and your livelihood. You only achieve that reward by playing together as a team. It’s a team sport.

Playing a game demands a winning attitude. A leader must have a winning attitude and aspire to succeed with his people. It is the only way to overcome mediocrity. It is the ultimate criterion for success. The steps a leader will take to win are different from what he or she will take to maintain the status quo(or “not to lose”). Trying not to lose is like reacting to the circumstances. It will prevent a company from winning.

Winning is empowering. A winning attitude will force an employee to make hard choices, apply dedicated effort, be driven, be inventive, be resourceful and invest a considerable amount of time in improving himself and the colleagues that will better his chances of winning.

07 CELEBRATE SMALL WINS

Winning is a lot of fun. It makes the whole game stimulating to play. However, many people may not know how to be winners in their jobs. So we have to show them. We have to make winning a habit. For that, we need to celebrate every victory. Jack Stack always looked for opportunities to celebrate with his team — whenever his team members or subordinates got promoted, every bonus, every raise for team members, every order milestone. Jack strongly felt that celebrations at the workplace are a great way to energize an organization.

By celebrating a small series of wins, Jack Stack believes that people would realize how it feels to be a winner. The feeling of winning is a great motivator.

Why do we need to celebrate small wins? Most times, we might have a goal that would take a long time to achieve. Will you wait till you achieve that goal to celebrate? How will you measure your progress? How will you keep yourselves enthusiastic, energetic, and motivated?

The research shows that when a big win is a rare event and would take a long time to achieve, the chances of people losing motivation and giving up is very high. Without motivation, an employee is like a dead mountain.

Focusing only on the end goals would sap employees’ energy if the goals were for the long term. So, a leader should focus on the small and significant steps that would show progress and also would motivate the team to reach their goals. Celebrating those wins is a way of imprinting the progress in our emotional minds.

Teresa Amabile and Steve J.Kramer write in their HBR article that the more frequently people experience that sense of progress, the more likely they are to be creatively productive in the long run. They further add “The power of progress is fundamental to human nature, but few managers understand it or know how to leverage progress to boost motivation”.

08 MANAGER AS A FACILITATOR

There’s a common belief that managers/leaders should have solutions for every problem on their watch. Jack Stack says that it can get leaders/managers into deep trouble. It will set them up for failure. He/she will lose credibility. The hard fact is that no one can have all the answers.

Give Confidence By Appearing As A Follower — A manager’s job is to train his people to become effective problem solvers. He/she has to build confidence in them. To do that, he/she has to show people that he/she is a human and makes several mistakes. A leader/manager has to seemingly appear like one of the followers — like an ordinary person similar to them — that would give confidence to them to improve themselves.

So, a manager’s role is more of a facilitator. He/she has to host the gathering, take a step back and let the members lead the discussion and run it. Jack Stack says, “You are much better at sharing problems, using the people you work with to come up with solutions.”

Jack adds, “Employees solving the present problem frees up the managers to think about the future problems. You focus on future problems, you eliminate surprises. And, it’s good for everyone.”

09 FOCUS MORE ON POSITIVE, LESS ON NEGATIVE

Jack Stack writes, “Managers have a bad habit of focusing on the negative. They react quickly to everything that goes wrong and overlook everything that goes right. You may highlight one problem but forgot to praise ninety-nine. You may miss a big opportunity to inspire people, to get results that you wouldn’t have dreamed possible.”

Bill Taylor, in his HBR article, writes, “We humans are wired in such a way that there is a universal tendency for negative events and emotions to affect us more strongly than positive ones.” The level of reaction to negative things varies from person to person.

Emotion and Confidence — A person’s productivity depends on his confidence levels inside the organization. A manager focusing on negative things crashes his/her confidence levels. It becomes a demotivator and affects morale. So, a manager has to talk more about positive factors/experiences. Joyce E. Bono and Theresa M. Glomb write in their HBR article, “What most people don’t realize is that positive experiences — even small ones — provide you with valuable resources that can be used to reduce stress, including physical symptoms such as headaches or muscle tension.”

John Gardener writes that the most effective leaders are the ones who go out of the way to remind colleagues of their positive things, the progress they’re making, and to celebrate small wins as frequently and colorfully as they can.

Negativity eats away the organization. It becomes a demotivator. You can’t motivate if you focus continuously on the negative.

Create an environment where people focus more on positive things/experiences and less on negative things.

10 BUILD PRIDE IN THE WORKPLACE

To feel like winners, people must feel proud of themselves and what they do. Having an employee who takes pride in their work brings several benefits — not only to themselves but to the customers and in turn, the company.

Jack Stack writes, “Pride is all about caring about the work and the company. If you don’t care, you are not going to do what is necessary to be a winner or an owner.

How are you going to get them to care about their work or their company?

Other than teaching and sharing about business, Jack Stack introduced several programs like team games, social gatherings, competition for operational efficiencies, discipline(example -competition for punctuality, attendance), and safety. One of the successful programs was the Open House event. It is a day where employees invite their mothers, fathers, and children to come in and see their working place. The management encouraged employees to decorate their work area by offering them buckets of paint, colored papers, and other materials. Some of the employees involved their family members in decorating their workplaces. The employees began to see the workplace as an extension of their identity, and they loved to put it out there for everyone to see. They were proud to show it to their family and others.

The workplace customization also encouraged good housekeeping. People kept their places clean. Soon, vendors and outsiders began to tour the facility. It further fueled employees to take extra care in keeping their areas clean and safe. They became proud of their work areas.

Jack Stack also ran a program called Employee Awareness Day. On that day, different departments conduct workshops/exhibitions. Here, employees exhibit & explain their work and show how they contribute to the company’s overall growth.

Jack also encouraged employees to take part in competitions against other companies.

11 MARKET YOUR PRODUCTS/SERVICES TO YOUR EMPLOYEES

When we think of marketing, we most likely think about marketing our products/services to customers. How about marketing them to our employees? What would we gain?

Customer Experience — Employees of a company act as brand ambassadors — they are the interface between internal and external environments. They can influence the powerful perception of the brand in the consumer’s mind. Their behavior can reinforce the brand value, and if it is inconsistent, it will undermine the credibility of the brand. Whatever the brand perception senior management likes to create in a user’s mind has to be reflected in their employees.

Sam Walton(Walmart founder), in his earlier years of retail business, realized that his employees(Store-front employees, Truck Drivers, etc.) had the potential to influence customer experience as they were the interface between the store & the customers. So, he wanted them to believe in the product or service and feel proud of it.

Colin Mitchell in an HBR article, writes, “Employees who fully understand the customer requirements would fully support the company’s initiatives towards providing a better customer experience.”

The Big Picture Motivation — We’ve already seen the benefits of showing the Big Picture to our employees. Jack Stack says that employees can see the Big Picture only if they understand what his/her company does — what products/services it delivers to customers, how it helps customers solve their problems, and take care of their needs. The employees need to believe in the product/service. When they see how they are changing the lives of customers, their motivational levels soar high. They find a new purpose in their job. They become proud of their work.

Studies also show that when people care about and believe in the brand, they’re motivated to work harder, and their loyalty to the company increases. Employees are also inspired and united by a common sense of purpose.

So, it is essential to market your products/services to your employees.

Note To Leaders — In some companies, HR professionals were given the task of presenting the product/service to employees. Unfortunately, they simply share information. They couldn’t sell like marketers with passion. The content won’t reach the subconscious mind of employees. So, the marketing team would be the right team to communicate about the product/service to employees. Jack Stack advises us to spend some of the marketing budgets on our employees.

CONCLUSION

Concluding with a quote from Jack Stack “The best, most efficient, most profitable way to operate a business is to give everybody in the company a voice in saying how the company is run.” The ways to give them a voice — First, give them a stake in the financial outcome. Second, share the whole picture of your business and allow them to participate in decision-making.