SRC's open-book management: teach workers the P&L, post the score, give them a stake

In 1983 International Harvester decided to shut down the Springfield, Missouri plant that remanufactured truck engines, putting 119 jobs on the line. Rather than lose the work, Jack Stack and 12 other managers bought the operation themselves — with $100,000 of their own money and $8.9 million in loans. The debt load made the gamble brutal: the little company had to generate enormous value just to survive.

Stack's answer was not a turnaround program but a transparency program. He reasoned that if only a few managers understood the financial game, the plant would fail, so he taught it to everyone: all employees received stock worth a dime a share, finance training, and weekly huddles where everyone from managers to janitors reviewed the same numbers. A mechanic could now see that a $45 connecting rod was worth repairing only if the job took 90 minutes or less — the kind of decision that used to belong to someone else.

The openness did what incentives alone could not: people proposed fixes instead of waiting for orders, because they knew what the score meant and owned a piece of it. The plant was profitable within three years. By 2002 shares that cost $0.10 were worth $13.60 and 82% of the company was worker-owned; by 2015 a share had passed $199, and SRC employed more than 2,000 people with more than $600 million in sales including joint ventures. Stack's books codified the practice as 'The Great Game of Business' for any company to copy.