This article is an excerpt from the Shortform book guide to "The Great Game of Business" by Jack Stack and Bo Burlingham. Shortform has the world's best summaries and analyses of books you should be reading.
Like this article? Sign up for a free trial here.
What’s the importance of information sharing in the workplace? How do you create an accessible business?
Sharing information in the workplace has proven to encourage employee ownership. According to Jack Stack and Bo Burlingham’s book The Great Game of Business, there are three main steps to creating an accessible business: explaining the business, explaining the numbers, and keeping employees updated.
We’ll dive into these three steps below.
Step #1: Explain the Business
The first step to fostering information sharing in the workplace is ensuring employees understand what the company does (the specific products or services it offers), what its goals are, and what its purpose is. This may seem like information employees would already have, but Stack and Burlingham say many employees only really understand the part of the company they’re directly involved in. They may not understand the company’s purpose—its reason for existing beyond making money—or what its goals are. This narrow view can stop employees from taking ownership or supporting the company’s larger goals.
In contrast, Stack and Burlingham imply that knowledgeable employees are more likely to take ownership and work hard to support the company’s goals. When employees understand the company’s operations, goals, and purpose, they can better understand how their actions are significant to its success or failure. This encourages them to feel proud of their contributions and work hard to affect the company in a positive way.
For example, let’s say Shelly is a car saleswoman. When her company increases accessibility, she learns that its purpose is to decrease crashes and protect its customers. Shelly realizes that she’s contributing to this purpose by selling features that are designed to protect customers—for example, upgraded mirrors or airbags. This inspires her to be more passionate when selling upgraded cars to customers, since she now knows the features exist to help and protect people, rather than just existing to make the company more money.
Stack and Burlingham argue that directly stating the company’s goals, purpose, and operations is the most effective method of education. Tell employees what the company as a whole cares about and how it’s supporting those things. The onboarding process and meetings with established employees are good opportunities for sharing this information.
Step #2: Explain the Numbers
Once employees understand the big picture of the company’s purpose, goals, and operations, introduce them to the numerical details of how the company works toward these goals—particularly financial numbers. Stack and Burlingham say that numbers are the language of business, and employees must understand them to effectively take ownership and help the business succeed
(Shortform note: Understanding financial statements is arguably important because it reduces misunderstandings between employees. For example, if two colleagues, Sarah and Hank, weren’t taught how to read and understand financial documents, Sarah might define ‘sales’ as transactions that have already been completed, while Hank may believe ‘sales’ include promised future transactions. If Hank tells Sarah that they’ve sold 30 copies of a book, she’ll order enough copies to replace those orders. However, if only 20 of those sales have actually been completed, they could end up over-ordering and clogging up their inventory.)
Explain Balance Sheets and Income Statements
The most important numbers for employees to understand are balance sheets and income statements, Stack and Burlingham argue.
Balance sheets expose financial problems in the company, Stack and Burlingham explain, while income statements can help diagnose the cause of those problems and find a solution. With access to this financial information, employees can diagnose and solve these problems as they occur, rather than waiting for upper management to notice and diagnose them.
For example, let’s say a car company’s balance sheet shows that the company is losing money. Employees look at the income statement and realize that the manufacturing department’s expenses have been increasing over the past several months. A closer look at the manufacturing department’s expenses shows that they’re over budget because one of their suppliers increased prices. The employees alert upper management and recommend a cheaper supplier that they know makes quality items. Thus, the company can offset the increased expenditure quickly and effectively.
Offer classes and tutoring in reading balance sheets and income statements, Stack and Burlingham recommend, both for new employees and established employees that need a refresher. The authors maintain that the increase in productivity and problem-solving that knowledgeable employees offer is worth the cost of educating them.
Step #3: Keep Employees Updated
Teaching employees about the company and the numbers that dictate its success or failure are just the first steps to information sharing in the workplace. Stack and Burlingham note that going forward, employees need a constant flow of updated information. A company’s goals and numbers are always in motion as it adjusts policies, tries new manufacturing or marketing techniques, and adapts to any changes in the market. If employees make decisions using outdated information, they can harm the company, meaning it fails to meet its goals and may stagnate or even collapse.
For example, let’s say last year, a car company focused on making as many types of cars as possible to keep up with customer demand. However, over time, the market shifts as customers decide they want higher-quality cars, rather than a greater number of options. To keep up with the market, the company has to shift its focus to improving the quality of just a few of its cars. However, if employees only have access to information about last year’s goals and policies, they won’t realize this shift has occurred. They’ll continue manufacturing as many types of cars as possible, leaving the company stagnant and failing in the wake of a changing market.
To mitigate the risks of employees having outdated information, the authors recommend creating a schedule of regular staff meetings to keep everyone updated on the company’s evolving status. These meetings should be frequent enough that everyone in the company remains informed. Stack and his management team met once a week to discuss the company’s progress toward its annual goals, and managers scheduled meetings with their subordinates in turn. This short time frame kept everyone informed and let them adjust their plans and strategies in real-time.
Posters, scoreboards, and charts are valuable tools for keeping employees updated, Stack and Burlingham add. These provide a clear visual of the company’s current status and what employees must do to meet their goals. (Shortform note: This is called a visual management system, and it caters to humanity’s natural affinity for processing information visually. Humans can process colors, shapes, and pictures faster and more accurately than words. These systems are used in many industries. The most well-known is likely traffic control: Every driver in the US knows a red octagon means “stop”, while a double yellow line means “do not cross”.)
———End of Preview———
Like what you just read? Read the rest of the world's best book summary and analysis of Jack Stack and Bo Burlingham's "The Great Game of Business" at Shortform.
Here's what you'll find in our full The Great Game of Business summary:
- The best and most efficient way to create a successful business
- Why employees should see the company as theirs rather than just somewhere they work
- The principles of fostering employee ownership
