The Great Game of Business

During the 1997 Asian financial crisis, I was a young manager running part of the Malaysian business operations of a global IT technology company. Revenues, when reported in US Dollars, were dramatically hit – not only because customers were re-negotiating and delaying their purchases but more so of the pressure on the Malaysian currency against the greenback.  

We had to keep our profits in check to avoid implementing drastic measures such as employee retrenchment. It was during this time that I decided to educate my managers and my engineers about the basics of business management – the difference between orders and revenues, the various operational cost elements and its linkages to operational processes and that often forgotten basic rule of business - profits shown in the income statement do not necessarily mean cash in the bank.

In my monthly review meetings that involve managers and engineers alike, I flashed the financials and go through the revenue streams and the cost items line by line. This little piece of activity always seemed to be the highlight of the meeting. It got everyone excited and there was this new found drive and willingness to contribute. We discussed about various ways to be more efficient in our business operations and spun off process improvement projects. Process improvement teams saw the fruit of their labour reflected in the financial bottom line in the following months. This kept the momentum and excitement of participating in the operations of the business going.

The point is this. In order to ensure that your employees are totally aligned is to keep score. When employees understand how a company functions and how it makes money, they will not be tasked oriented or reduced to “doing their job”. They are most likely to take responsibility as they know enough about the company to understand how their individual or team actions (or the lack of it) affect the company.

The concept of educating employees on the business and how their roles impact the bottom line first came into prominence in a 1986 edition of Inc. magazine and eventually became known as “Open Book Management” (OBM). The book on the topic entitled “The Great Game of Business” was first published in 1992. It describes how SRC, a dying division of International Harvester beat the odds to become America’s most competitive small companies.

In 1983, SRC did not have a choice; it had no money, no resources and there was very little hope for the company to survive. Everyone had to learn the game of business, or it was game over. Jack Stack, a young manager at the time, realised that they could teach business through the analogy of a game.

Business as he sees it has all the elements of a game: rules, a scorecard and a reward for winning. The purpose of playing The Game was to save jobs. The outcome was a company that not only saved jobs, but also created wealth and shared that wealth with the entire team.

So, before embarking on an employee engagement or a team building programme, it pays to have your employees understand the rules of the Game - ‘The Great Game of Business’

Sekar Shanmugam is the MD of ProfitAbility in SE Asia. ProfitAbility based near Oxford in the UK designs and delivers fully blended and customised business simulation programmes to some of the world’s leading organisations, such as Siemens, Nestlé, Roche, Volkswagen and GKN.