In this episode, Marie Davis and I dug into Jack Stack’s book “The Great Game of Business“.
You can find and connect with Marie on LinkedIn or find her organization at GACEO.org.
In addition, here is the video from CBS from 1992 that Marie mentioned during the show:
You can listen to the episode here:
Full Transcript:
We invented the great game of business as a way to help our associates build confidence in becoming business people by running a repeatable system built on three principles. Number one, every employee should be given the measures of business success and taught to understand them, know and teach the rules. Number two, every employee should be expected and enabled to act in his or her knowledge to improve performance, follow the action and keep score. And number three, every employee should have a direct stake in the company’s success and risk of failure, provide a stake in the outcome.
So that was a little bit from Jack Stack’s classic book, The Great Game of Business, and here to discuss it with me today is Marie Davis. So Marie, welcome.
Marie Davis (00:35.848)
Thank you. Welcome. Happy to be here.
Mickey Mellen (00:37.932)
Yeah, so glad to have you. So yeah, as with most of our guests, you picked this book. This is the one you wanted to discuss. So what brought this to mind? This is a classic book I think many people have read, but why did you want to talk about it today?
Marie Davis (00:49.118)
Well, as director for the Georgia Center for Employee Ownership, we know and love the great game of business. And I will tell you that it’s implemented by businesses all across the world, really. But employee-owned businesses especially love this book, love Jack Stack, because he himself started an employee-owned business. And it’s really a great story about why that came about. And from that sprung the game of the great game of business.
Mickey Mellen (01:18.488)
Yep, well said. So why don’t we unpack that story a bit. So why did he go ahead and do this all those years ago?
Marie Davis (01:24.808)
Jack Stack was a mid-level executive with International Harvester, and probably most of us don’t even remember that name. And he was in Chicago, Illinois. Well, at one time, International Harvester had over 100,000 employees and they started going bankrupt. nobody really realized what was going on, but Jack Stack’s…
authority figure said, hey, I want you to go and save this last little bastion of a company, a part of International Harvester in Springfield, Missouri. And he was in Chicago and I’m sure he thought, what the heck is a Springfield, Missouri? But he picked up stakes and went and at some point they realized that International Harbor, everybody was going to lose their job. So.
Jack decided I’m not gonna let these 150 people or whatever it was lose their jobs. So he came up with a plan to raise the money, find a mortgage company who would sponsor it, and the employees bought the business. And of course, many years later, it turned into a very large corporation, which is now over 2,000 employees. But they built this great game of business because
One of the reasons that International Harvester failed and people kept leaving right and left was none of the people who worked there knew anything about what was going on in International Harvester. So the great game of business is about teaching the employees not only about business, but what’s going on in your business and helping you build a company, helping you build a business.
Mickey Mellen (03:07.138)
Yeah, gotcha, well said. And like you said at the top there too, they were surprised when this happened because they had no knowledge from above what the state of International Harvester was. They assumed things were going good because the bosses above only wanted to share good news, which is easy to do as a boss. You want to only share good news, but it’s important that there’s bad news. You share that as well so people can make appropriate reactions to it. And think that was not a big reason they failed. was part of the reason, but it just caught them by surprise because they were unaware of it.
The other thing with this book I thought was interesting is the great game of business is a whole pretty complex game of things put together. Each one seems interesting on its own, but the way he weaves this matters because it affects that piece and that piece affects this piece. And just in this full cohesive game, as it were, this whole system is fantastic. So I think maybe let’s take a few minutes and kind of walk back through those three pieces I mentioned at the top there. So the first one was every employee should be given the measures of business success and taught to understand them. They should know and teach the rules. So what is he talking about with that part?
Marie Davis (04:05.202)
Well, first of all, the company is 100 % employee owned and they fully believe that they live that employee ownership model. So every employee, when they come to work at SRC, they spend a week or so in business school. They don’t go on the floor, they’re a manufacturer, they remanufacture machine parts. Everybody has to go through business school and they are taught to read
income statement and expense statement and all about the great all about the company that they work for which now is huge and has many many companies underneath that holding company of SRC holdings but they really live what they say and say we want you to have a stake and there’s a really one really great story from that is when they started doing this Mr. Stack was walking through the manufacturing floor and
He was talking about involving employees and someone that was walking with him said, well, that man over there whose job was to just stand there all day and repeatedly punch a hole, just holes in little pieces of machinery, that’s all he did. She said, you need to talk to him. And Mr. Stack is why? Well, that man right there is a real estate guru. He is a multimillionaire in the real estate business, yet he’s standing there.
for very low wage punching holes in a piece of machinery. And his point with that was, look, if we don’t talk to our employees and involve them, we’re missing out on that talent. So of course he grabs this guy and takes him and helps, involves him in the running of the business in other areas where he is certainly better served than punching a hole in a piece of metal every day.
Mickey Mellen (05:52.706)
Yeah, it will said I’m curious. You guys practice the great game business at your organization. You guys run this.
Marie Davis (05:58.874)
Well, I like to believe I practice it every time I can, but we’re nonprofits and very small. So for instance, the Georgia Center is just me. There are 24 state centers, but I talk about it everywhere I go because I’m not typically asked to speak about employee ownership. I’m asked to speak about culture or how do you retain and keep employees? And this is a classic example of how to do that.
Mickey Mellen (06:07.148)
Yeah.
Okay, gotcha.
Mickey Mellen (06:19.735)
Mm-hmm.
Mickey Mellen (06:28.226)
Yeah, I would think employee ownership plays right into culture and keeping employees as well. It gets them skin in the game. Gotcha. So cool. So number two from the top there was quote, every employee should be expected and enabled to act in his or her knowledge to improve performance, to follow the action and keep score.
Marie Davis (06:32.1)
It absolutely does, and they do.
Marie Davis (06:46.094)
and they practice that. So one of the examples in the book, and please read this book. there’s, by the way, it’s been updated many, many times. And thank you to one of the great game of business authors, Rich Armstrong, who’s on the Missouri board and Steve Baker, another one of the authors of the great game of business, who is on many of our boards. I believe he’s on our national board as well. But so, as I said, they teach the people about the business.
Mickey Mellen (06:54.006)
yeah.
Mickey Mellen (07:08.075)
cool.
Marie Davis (07:15.068)
But not only that, they teach them, they have them hold one of the business sessions like consistency every Friday at eight o’clock or whatever it is, they have a business meeting and everybody in the company has a chance to stand up and explain what’s going on on the income sheet and the expense sheet. So they have to know how to talk about the business.
Mickey Mellen (07:38.67)
Yep, and I think the keep score is interesting too, where everyone has a number they’re trying to hit, which could be a simple number, I’m not sure. You may be able to explain this better, I think for the gentleman that’s punching holes, punching holes is one of the numbers maybe, but it’s also how does that matter in terms of what is the cost of material coming in, the value going out, and you may punch a million holes, but if you’re losing a penny per punch, what are you doing here? It’s helping people see the bigger picture there too, and having their individual scorecards helps with that.
Marie Davis (07:43.774)
It’s good.
Marie Davis (08:02.81)
It is, and one of the things they do is cross train people. have people learn to do each other’s jobs so they understand that if he doesn’t punch all those holes correctly or enough or right, then the people who put the tractor together or whatever it is, they can’t make their standard. They call them standards.
Mickey Mellen (08:06.627)
Mm-hmm.
Mickey Mellen (08:19.02)
Yep. I think that kind of ties into number three here. So the third one was quote, every employee should have a direct stake in the company’s success and risk of failure, provide a stake in the outcome. And so I think, yeah, that’s kind of what you’re saying there is punching a hole is just punching a hole. But what does that really mean for putting the other tractor for selling the tractor for reliability of the tractor for the families that are trying to be fed by the person running the tractor. And they try to see the big picture there.
Marie Davis (08:41.468)
Yeah, and so one of the goals that Jackstack had for every employee was to be able to own a house.
Mickey Mellen (08:50.828)
Yeah, that was…
Marie Davis (08:52.158)
And that was big. And back in 2012, there was enough money in every employee’s account. $400,000. And in Springfield, that goes a whole lot further. And I’m sure back in 2012, way further than it would now. But of course, it’s grown from there. But he had a goal. And he taught the employees what their goal was. I want you all to own a house. I want you to be comfortable. And this is why we’re working so hard now.
Mickey Mellen (09:04.686)
You
Right.
Marie Davis (09:22.11)
Also, you know, people don’t typically realize where the profits in a company go. They have no idea that 40 % of the profits go to income tax, which an employee on business, I’m sorry, in corporate tax, which an employee on company doesn’t have to pay federal tax. But they might not know. think, oh, wow, we’re making so much money. Look at all these tractors we sold or whatever it was. When in reality, the margin may be like a grocery store, 1 to 3%.
Mickey Mellen (09:27.65)
Mm-hmm.
Mickey Mellen (09:34.702)
You
Mickey Mellen (09:46.499)
Yep.
Marie Davis (09:52.346)
And so the more people know about why they don’t throw the screws in the trash, why they turn the light off when they go out the door, why they don’t throw out paper clips, they’re gonna do it.
Mickey Mellen (10:02.05)
Yeah, well, because they have a direct stake in that. They reap some of that money from it, from saving those screws and paper clips.
Marie Davis (10:03.89)
They have, they do, and they know why. And everybody has a chance to teach something to everyone along the way. They get a chance to say, you know, this is why, this is what a screw costs us over so many years, and this is why I clean them up and reuse them or whatever it is. And we know that a company of owners up forms a company of employees any day of the week.
Mickey Mellen (10:25.964)
Yep, now for sure.
Mickey Mellen (10:33.388)
Yep, they just have a different different interest in it. Yeah, making people feel like an owner is yeah that says getting people to think and act like owners goes far beyond giving them equity. So giving them equity helps them get there. But then he does so much more to help them actually feel like owners and again really care about not throwing the screws in the trash. And yeah, it makes a big difference with all the different pieces he puts in place. He said another place he said quote ownership is not a set of legal rights. It’s a state of mind. You can’t give people that state of mind in one fell swoop. You can only nurture it through a process of education. And so.
Marie Davis (10:36.286)
They do.
Marie Davis (11:01.854)
Absolutely. And that’s what they do. And they give them incentives and frequent bonuses and make a big deal out of it. And there is another great story in that book about the year, and this was many, many, years ago, certainly not now, where they all voted. And of course, they’re all owners, so they get to vote on certain things. Some companies only let the board do it, but not Jack Stack. So they all voted not to take a Christmas bonus. And you can imagine if you’re expecting
to be able to buy little Johnnia, the newest bicycle or whatever. But you know that if you don’t take that Christmas bonus, the company’s gonna do better the next year. That is a perfect example of why the people who work at SRC Holdings understand that if they give up their Christmas bonus right now, and again, this was many years ago, how it affects the bottom line. And that’s really what it’s about is it’s not just working for a company that’s great.
It’s understanding how to make the company greater.
Mickey Mellen (12:01.72)
Yeah, which again serves them too, because a lot of companies will say, hey, we’re to give up Christmas bonuses to help the bottom line. They’ll say, what does that matter to me? Like, but in this case, they get the bottom line effects then they know their bonuses next year will likely be bigger if they can keep the company healthier. And so it gives them incentive there. Whereas, yeah, I think I see a lot of people complain in places like Reddit where the company does so great, but we didn’t get bonuses and like, where’s the money going? And, know, in this case, because the books are open, they can see what’s happening and it makes a difference. Like in our company, we don’t follow a great game of business exactly, but we do follow some of the metrics of it. And one is
Marie Davis (12:22.642)
Is it?
Mickey Mellen (12:31.616)
semi-open books where people can all of our team can see revenue and profits and all that stuff and they get profit sharing based off that and so they know like hey we had a tough quarter so there’s no profit sharing and they’re bummed but they also realize that’s keeping the company healthier so we’ll have our job longer we can profit more next year and versus just saying hey no bonus this quarter sorry see you later it’s you know hiding hiding the data really makes that worse and makes people wonder what’s what’s really going on behind the scenes and he does a great job of keeping it open
Marie Davis (12:58.3)
And there’s a lot of discussion too. And by the way, I would recommend that you hear Jack Stack read the great game of business, not just read the book. It is, it’s just, I saw him in person and I was like a, you know, fan girl. couldn’t help it because I know what he’s done for those people that work for him. But he gives, you know, a lot of stories in the book that just don’t have the same zing unless you’re hearing him do it. So I…
Mickey Mellen (13:05.876)
Okay, I just did the Kindle one, that’s good to know, okay.
Mickey Mellen (13:16.568)
Yep.
Mickey Mellen (13:25.058)
Gotcha.
Marie Davis (13:27.538)
did have the opportunity to hear him in person. And let me tell you, that’s a treat.
Mickey Mellen (13:31.726)
That’s fantastic.
One other area I thought was interesting too, we touched on it a little bit, was cross training and helping people understand the other parts of the business. I’ll read a quote from the book that I think does that and I’m curious to hear your thoughts. So says, quote,
Marie Davis (13:56.094)
Thank
Mickey Mellen (14:04.184)
You get quality by making sure people pay attention to details, not by telling them how the company works. This argument sounds logical enough, but it’s wrong. Project stack. So why is that wrong? Why is it wrong to say, I do my job, you do your job, and let’s just keep a wall between us? What’s the problem with that?
Marie Davis (14:19.228)
Well, I think the whole point of this is to teach everyone to be an owner. And if you own a business or you run a business, you should know what everyone does. It’s like Waffle House makes every executive learn how to cook everything on that menu. It’s logical. And he also gives an example of, know, if the quarterback, let’s just say you have a small football team, which of course doesn’t happen anymore, but let’s just say quarterback can’t play and there’s no backup.
Mickey Mellen (14:34.754)
Mm-hmm.
Mickey Mellen (14:42.945)
Hahaha.
Marie Davis (14:48.058)
If the tight end knows how to be a quarterback and can step in, you get a successful team. And again, it goes back to teaching that ownership mentality. Whoever’s running a business should know how much those screws, those nuts and bolts affect the bottom line. And if you put people in an opportunity to learn that.
Mickey Mellen (14:54.062)
Mm-hmm.
Marie Davis (15:14.012)
The people on the line at his company understand that when they see something that needs to be put on Facebook or wherever, they’re going to go tell the marketing people because they want to see their company. They want to, you know, they want to brag. He tells the story of a little boy that’s out with his dad somewhere and a truck goes by that they built. You know, it’s got the name of the company on there. They did the parts for it.
Mickey Mellen (15:30.231)
You
Mickey Mellen (15:36.174)
Hmm.
Marie Davis (15:42.85)
And the little boy looks at his friend and says, my dad built that truck. And of course, the little boy wouldn’t know that if he hadn’t spent time telling his son, this is what we do. This is why we do it. This is the piece of machinery that goes in some company’s truck. It’s just promotion really and pride and ownership.
Mickey Mellen (15:47.662)
Yep.
Mickey Mellen (16:05.582)
Yep.
Yeah, I think that’s a big piece of it. The other part I like with that too is understanding where little mistakes can add up down the line. If you’re punching holes, you think every now and then I miss a hole, it’s okay, it’s close enough. I’m getting my job done, I’m doing what I can. But if he works the next step and he goes, my gosh, when that hole’s off center just a little bit, I have to stop the line and read, you you see the cast that leads, it’ll make him when he goes back to punching holes, I gotta make this perfect or it’s gonna really hose poor Steve down the line trying to do his job. And so think just understanding everything that goes together is important. Kind like in our business, we do web development.
Our developer doesn’t know storytelling and messaging and stuff. That’s not her job, but she does because she knows it matters. If she’s building out a site, it should be done perfectly. She can still have the perception, say, you know what? I don’t think that’s quite right at this point because it doesn’t flow correctly. It’s not her job. Her job is just to build it out. But if she has that knowledge of the other roles, can help make everyone have another set of eyes on things. It can make it better, similar to assembling carburetors and whatever they do at SRC there. So can make a big difference if you’re knowledgeable, just like your tight end.
can play quarterback and again even if he doesn’t play quarterback he’s playing tight end he still knows the challenges the quarterback has and can help like block harder on that play and you know understand how to how to help make their job easier too and again making other people’s jobs easier makes everyone succeed and you all win in the case of a great game of business you all make more money than two so it’s a win all the way around
Marie Davis (17:24.336)
And again, this, and he tells this story many, many years ago where people from all over the world came just, and they do have a tour. If you can go see SRC Holdings in Springfield, Missouri, you can take the tour. But he tells a story of how impressive it was that all these other countries would send delegates over here to learn the great game of business. So it really would, as you said, you.
And it sounds like you practice it more than you think you do. But there he has coaches who teach this, who will come in and help a company play the game. And they don’t have to do the open book management. And he addresses that quite a bit, you know, and by the way, they don’t tell people their salaries. They don’t tell other people’s salaries. They talk about, you know, here’s what all the salary cost is.
Mickey Mellen (17:54.766)
It could be, yeah.
Mickey Mellen (18:02.378)
Mm-hmm. Yep, getting set up properly is the right way to go.
Mickey Mellen (18:13.646)
Mm-hmm.
Marie Davis (18:21.934)
add-ons and everything, the taxes we pay. But they don’t discuss individual people’s salaries. So that’s one myth of open book management. Like, you know, all the dirty little secrets. Well, maybe there wouldn’t be any dirty little secrets if everybody knew what was going on. So that’s…
Mickey Mellen (18:40.706)
And there are companies that do that. They disclose everything. yeah, generally speaking, you don’t have to. You can be open. Yeah.
Marie Davis (18:44.422)
Generally speaking, you do not. they do, perhaps not the salaries, but maybe they do now. anyway, when the book was written, they did not. Everything but salaries.
Mickey Mellen (18:56.131)
Yeah.
In our case here, we’re open book, but we generally just say, hey, here was our total revenue, here was the profit, here was the expenses, let’s work together to make this better so we can see what’s going on. But yeah, I could see a case for breaking it down a step further saying, here’s the cost that went to employees as a lump sum, here’s the cost that went to software. I could see some value there, but it gets tricky to figure out how much is just too much information that’s just wasting time versus getting the numbers that matter. And I think he’s good about that too, where he talks about setting those goals and the numbers, like not getting into the weeds, but just hitting the main metrics that matter and getting
Marie Davis (19:01.405)
Right.
Mickey Mellen (19:27.632)
getting it done.
Marie Davis (19:28.83)
And explaining to people that the 10 cents that they, of course this was long time ago, but 10 cents that they save that equates to a dollar in stock. And they had a 348,000 % growth in their stock price. went from, it went to $348 and just boom. And it was because people understood
Mickey Mellen (19:34.807)
You
Mickey Mellen (19:49.742)
Yeah, I remember seeing that,
Mickey Mellen (19:55.266)
Yeah.
Marie Davis (19:58.234)
how that 10 cents could translate into money in their pocket, which at SRC Holdings goes right into their retirement plan.
Mickey Mellen (20:02.402)
Yep.
Mickey Mellen (20:07.436)
Yep, for sure. Makes them a lot of money. Now they all have the money for houses and yeah, he’s done a great thing there for sure. So yeah, so it’s a fantastic book. As Marie said, we certainly recommend you read it. Any closing thoughts? Any other anecdotes from the book you wanted to share before we wrap up here? I bet.
Marie Davis (20:22.062)
wow, I have just got pages here. So hard to, you know, I guess I would say read his other books. He’s written, changed the game in 2020 and there’s updates to this and he’s written a stake in the game, building a culture of ownership for the long-term success of your business. I know we’re talking about the great game of business, but people, you you might not find it if you just.
pull his, you’ll have to pull his name up on Amazon. I just tried it so I know. and check out his YouTube from many, many, many, many years ago. I’m gonna say it was the late 70s. On YouTube, he’s on NBC Nightline or something. And they had this tiny little company from Springfield, Missouri come on because they’re successful not because of the pieces of machinery they redo.
but of the culture of their business and how they brought that stock price up 348,000 times. It’s amazing. So do look up at the YouTube and just Google Jack Stack and you’ll find him.
Mickey Mellen (21:20.718)
Right. Awesome.
Mickey Mellen (21:29.07)
Awesome, yeah, we’ll check it out. Well, cool, Marie, this has been fantastic. I appreciate your insights on this. How can people find you if they want to connect with you and learn more?
Marie Davis (21:36.178)
Well, on LinkedIn, I’m Marie B. Davis, or you can look for Georgia Center for Employee Ownership. And our website is gac.org. And love to talk with you. If you click for more information, you won’t get anybody but me. And I’d love to talk with you about your business or about connecting you with a great game of business.
Mickey Mellen (21:46.798)
Cool, awesome.
Mickey Mellen (21:56.014)
Awesome, that’s fantastic. We’ll put those links in the show notes so y’all can find them there. So Marie, this has been great. Thank you so much. I appreciate your time. Thank you.
Marie Davis (22:01.864)
Thank you, Mickey.
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