Shortening The Stack

When Jack Stack and his colleagues bought Springfield Remanufacturing from the failing International Harvester Corporation in 1983, he stepped into a company that had huge problems. Sales had slowed to a trickle, overhead costs were through the roof, and the company’s stock price was an abysmal $.10 a share.

To put it lightly: Springfield Manufacturing was in a crisis.

Yet within 10 years, Stack had turned the company around, increasing sales ten-fold and sending the company’s stock price over $20 a share. How did he do this in such a short amount of time? By stepping into the situation with a solid set of professional values. He believed that the biggest gap in business was between management and the workers, and that without closing this gap it was impossible for a business to succeed. He believed that every person at every level needs to feel responsible for the well-being of the company, or else the business will be like a tall stack of pancakes; eventually it’s gonna fall.

In order to shorten Springfield’s managerial “stack,” he instituted an open book policy, so every employee could have access to the same financial reports that management had. He also made sure that every employee knew how to read these reports and how their performance affected the company’s bottom line. By giving the same financial knowledge to every employee, Stack pushed responsibility downward and outward, allowing workers and management to work as a team toward a common goal, instead of against each other as they do in “taller” companies.

And the numbers speak for themselves. By believing in a strong set of professional values, and having the strength to implement them, Stack may have stepped into a crisis situation but he ultimately stepped away from an extremely profitable company, one with solid management and happy, empowered workers.

Peggy Grall is a guest blogger for the OREA Centre for Leadership Development

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Shortening The Stack