The Great Game of Business
There are thousands of business books published every year in the United States. The Great Game of Business is unique because the theory was forged on the factory floors of the heartland by ordinary folks, hoping to figure out how to save their jobs when their parent company went down the tubes. In a recent Fridays with Vistage webinar, Steve Baker taught Vistage members the fundamentals of “the game” and how it’s played. Steve is the vice president of The Great Game of Business, Inc., a division of employee-owned SRC Holdings Corporation, and co-author of the update of the best-selling book, The Great Game of Business 20th Anniversary Edition.
Steve began by introducing SRC holdings, which remanufactures engines. It’s not a sexy business, but somehow they have full employee engagement, their teams are aligned, productivity is high, and the culture is strong. While other businesses struggle for financial gain and cultural change, SRC Holdings seems to have it all figured out. In fact, if you had invested $1,000 into the company in 1983, you would have nearly $4 million today. They also have thirteen times more employees today than when they started.
How did they do it? By encouraging and teaching their employees to think like business owners instead of employees. The strategy is very simple:
- Identify what’s important to employees. Employees tend to stay up at night worrying about job security, paychecks, benefits, overtime, time off, and appreciation.
- Identify what’s important to owners. Owners tend to stay up at night worrying about financing, cash, revenue growth, satisfied customers, competition, cost control, and return on investment.
- Show employees that the way to get what they want is to start staying up at night worrying about what’s important to owners! If employees focus on revenue growth, the job security takes care of itself. If the employees focus on creating return on investment, the benefits will be there.
As a business owner, your job is to shift everyone’s focus off of superficial symptoms, and encourage employees to focus on the deeper foundation of what it takes to build a successful, thriving business. Your employees will get on board with you; people support what they help create.
It’s necessary to create a common language to bridge the gap between owners and employees. To do that, utilize the one thing we all share in common, and that is the need to win. We’re a game-playing nation, we love to compete, we need to win, and business has all the elements of a game: There’s a goal, there are rules, there’s a scoreboard and there’s a reward for winning. All of these points have a financial equivalent. Steve incorporated them into a three-step system that can be applied at any company today:
- Know and teach the rules. This is about financial transparency, education and involvement. Your employees need to have access to company financial reports, and also be able to understand them. It’s also key that they participate in the company’s financial goal-setting. Encourage your employees to help create something called a critical number. The critical number is the number that defines “winning” for the next year. It should be a number that everyone can connect to on an emotional level. (For SRC, it was the repayment of their bank loan, which meant job security for everyone.) If employees help name the critical number, chances are they will work like heck to help achieve it.
- Follow the action/ keep score. This is where you do all your communicating around the numbers. You do it through a simplified income statement which shows how your company makes money and how it flows to the business. This conversation occurs during regularly scheduled company meetings—similar to a “huddle” in football. Everyone gets together and discusses where they are in the game, next steps, etc. These meetings should be handled in a forward thinking It’s better to talk about upcoming challenges and how to prepare for them, than to report on what happened in the past and try to sort through it or assign blame. The more you practice forecasting the easier it gets.
- Provide a stake in the outcome. This is where we address the “What’s in it for me?” part of the owner/employee relationship. This is not about sharing equity with your employees. There are several ways to create programs designed for rewards and recognition. Many companies have bonus opportunities or profit sharing, etc. Steve shared one way to provide a bonus plan, which was to offer an annual bonus plan but pay it out quarterly. By paying it out quarterly, the company doesn’t put itself in a position where it could be strapped for cash during a big payout, and the employee doesn’t have to wait until the end of the year to access it.
For more information about The Great Game of Business, and to access free resources that you can use within your organization, please visit: www.greatgame.com/intro7
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Category: Business Growth & Strategy