Company CEO tells why he hates the traditional relationship between workers and bosses, and explains his solution.
How Jack Stack's approach to business lets him avoid the problems of the traditional manager
Here's the plot:
A middle manager at one of America's worst-run companies is sent on a mission to shut down an ailing plant in Springfield, Mo. The guy is barely 30 years old, a college dropout. When he shows up at the plant, he finds a work force so demoralized the only real question is whether the Teamsters or the United Auto Workers will win the upcoming union election. Somehow he is able to rally the workers, stave off the union, and save the plant. Four years later he buys the division with his fellow managers and builds it into the star of its industry, using an original -- some would say revolutionary -- approach to management. He becomes a celebrity. Inc. names him chief operating officer of its Dream Team.
Such is the unlikely saga of John P. Stack, a man who has fascinated us ever since we first ran into him back in 1985, less than three years after he negotiated the leveraged buyout of Springfield Remanufacturing Corp. (SRC) from International Harvester Corp. At the time he was still in the process of inventing what came to be known as the Great Game of Business, SRC's unique management system (see "The Turnaround," August 1986), but we could already see he was onto something. His way of running a company seemed so simple, so logical, so obvious that it was hard not to wonder, Why isn't every business run this way?
Stack's approach is based on the premise that business is essentially a game -- one that is no more complicated than, say, baseball or football, probably less. Yet most people don't understand it, he argues, because they've never been taught the rules. At SRC everyone learns the rules and plays the Game, from the receptionist at the front desk to the guy who cleans engine parts. They follow the action through weekly income statements and react accordingly, homing in on their annual goals. They also share in the risks and rewards: how they perform determines both the size of their quarterly bonuses and the value of their stock.
It's a system that transforms every aspect of the business, from compensation to marketing to finance. Its effectiveness is a tribute to its creator, Jack Stack. Yet as extraordinary as Stack is in one way, he is typical of a whole generation of managers in another. After all, he didn't set out to be the chief executive officer of a $50-million company with 475 employees. In the course of becoming one, he's had to deal with a range of difficult issues.
Stack talked about being the boss with Inc. executive editor Bo Burlingham.
INC.: I think most company presidents we know get a certain charge out of occupying the top slot, despite all the aggravations. Do you like being the boss?
STACK: Well, no, not really. Because a boss is forced to set examples, and I'm not a good example setter. I really don't like living in a glass house. People pay a lot of attention to the guy who's in charge. What he says is always being compared with what he does. And that's the way it should be. If I'm going to say something, I'll do it, too. But I'd rather not be under that microscope, because I know one day I'm going to slip.
INC.: Are you worried that the company will turn on you?
STACK: I hope not. I've worked pretty hard to keep that from happening.
INC.: What do you mean?
STACK: Well, you can go back to the buyout. I don't own 100% of SRC. I own 19%. The rest is owned by the employee stock ownership plan and various employees. I could have had more, but that was plenty for me. Not wanting to be accused of being greedy probably had something to do with it. But more important, I didn't want to be alone. I was going to be leading the charge up the hill. I wanted to make sure that when I got to the top of the hill and turned around, there was a bunch of people coming with me.
INC.: A lot of company founders would say you're crazy. Do you really think you're safer as a minority stockholder than as the sole owner?
STACK: I've learned that there are certain higher laws in business. One of them is "You get what you give." And here's another: "It's easy to stop one guy, but it's pretty hard to stop 100." I don't know where I got these laws. You don't learn them in college. You pick them up on the street. I probably got them from supervising 2,000 or so people at International Harvester and then here. But I know they are real laws.
INC.: It sounds as though you had already developed a lot of your ideas about business before you came to Springfield.
STACK: Absolutely. I learned a lot at Harvester.
INC.: Give us an example.
STACK: One of my first big lessons was in 1972 or '73. I remember, we had to ship out 800 tractors to the Soviet Union, and I was in charge of scheduling the parts. At the time there was a severe shortage of the parts we needed, but without those parts the tractors wouldn't go to Russia, and our department would get killed. As I recall, we had until November 1, and this was October already. On paper, it couldn't be done. So I put up a big sign, saying "OUR GOAL: 800 TRACTORS," and I explained to my guys exactly what was going on, what was at stake. That was unusual, because Harvester was a very quiet company. I'd go to meetings, and the understanding was always, OK, here's what we have to do, but don't tell anybody.
INC.: How did your people respond?
STACK: They were amazing. They went into the factory each night and crawled over those tractors and figured out what parts were needed and how many tractors were short those particular parts. Then they got the parts any way they could. On October 31, we hit 803. Boy, did we send up the balloons.
INC.: Why was that such an important lesson to you?
STACK: Because it showed me what people could do. I saw these guys get hungry. I saw them push and accomplish things they never thought were possible. I saw satisfaction on a daily basis. I mean, these guys didn't know they were working! I thought, My God, if I can get people pumped up, wanting to come to work every day, what an edge that is! That's what nobody else is doing. Suppose I could run the right numbers, so that a guy wakes up in the morning and says, "Man, I feel like shit, but I really want to go in there and see what happened." That's the whole secret to increasing productivity.
INC.: In a way, that's the definition of a good boss, isn't it? Someone who creates an atmosphere where people want to come to work in the morning.
