BOM – The Great Game of Business
Welcome to the Real Estate Espresso Podcast, your morning shot of what’s new in the world of real estate investing. I’m your host, Victor Menasce. Happy First of the month. On the first day of each month, we review the book of the month. In order to be considered for a book of the month, a book has to meet a very simple criterion – it has to be impactful enough that it can either change your life or your perspective on the world.
Our book this month is absolutely worthy of the Book of the Month. Our book this month is “The Great Game of Business” by Jack Stack and Bo Burlingham. The book presents a novel approach to business management centered on open book management, employee empowerment, shared financial responsibility, and what I would describe as the gamification of business. It argues that by treating employees as partners and educating them in the company’s financials, businesses can foster a culture of ownership, improve performance, and achieve remarkable results.
The book chronicles the authors’ journey in transforming Springfield Remanufacturing Corporation, a struggling division of International Harvester, into a thriving employee-owned company. Faced with a factory closure, Stack and his team embarked on a radical experiment to buy the plant from International Harvester with a tiny down payment and a massive amount of debt. They needed to turn these assets into a revenue-generating business or go broke.
Rather than use the management methods from their prior career at International Harvester, they opened up the company’s books. They shared the company’s financial information with all the employees and taught them how to understand and influence the numbers. This became the foundation of the great game of business. Central to the philosophy is the belief that every employee, regardless of their position, can and should contribute to the company’s success.
I’ve personally witnessed this approach break down when employees can’t connect the dots between the financials and what they need to do to affect the outcome. There’s something more that’s needed to connect the dots and that’s what they talk about in the book.
The core principles of the great game of business revolve around knowing and teaching the rules. Employees must understand the company’s financial statements, the key performance indicators, and how their actions affect the numbers. It involves ongoing education training to ensure everyone is financially literate.
Employees are given a financial stake in the company’s business, whether it’s through profit-sharing, stock ownership, or other incentive programs, it aligns their interests with the companies and motivates them to contribute their best.
The book emphasizes the importance of creating a line of sight between the employee’s work and the company’s financials. By understanding how their actions impact the numbers, employees are more likely to make informed decisions and take ownership of their work.
The Great Game of Business is not just a management technique, it’s a philosophy that can transform a company’s culture and create a more engaged and empowered workforce. By empowering employees with financial knowledge and shared ownership, you can create a culture of accountability. It’s about building a company where everyone wins.
As you think about that, definitely go out and get a copy of The Great Game of Business by Jack Stack and Bo Birlingham. I encourage you to internalize its messages for a realistic shot at lasting growth. Now, have an awesome rest of your day, go make some great things happen. I’ll talk to you again tomorrow.
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