I’d like to tell you a story. Let me begin with a disclaimer, it’s not about winning big or how The Great Game of Business® instantly made us hugely profitable and loads of fun. It’s a terrible story about losing. Also, I have not been involved in open-book management or The Great Game of Business very long. Truth be told, I’m about as green as anyone can be.
Here’s the 10 second backstory – AMBAC International has been manufacturing precision engine components for over 100 years. The men and women on the shop floor know what they’re doing. I’ll tell anyone they’re the best in the world, and I’ve got the data to back that up. But, the shop floor wasn’t really connected to the ‘business’ and everyone suffered from poor corporate performance as a result. In fact, we were in real danger of losing the company.
We needed a better way to get the marketplace into their minds. I made the decision to adopt The Great Game of Business. The Design Team implemented under the caring eye of our Coach, Kevin Walter – and the results were AMAZING. People were happy, profit was up 851%, productivity was up 20%, sales were up 21%, we were on fire! Our first year as a Great Game™ company we paid a very nice Gain Share...very nice. And then, to top it all off, we were deeply honored and more than a little surprised when we were named Rookie of the Year at the 2019 Great Game of Business Conference™. From a badly losing business just a couple of years earlier to standing in the winner’s circle. Wow, what a ride!
Everyone loves a winner. When you win there’s beer, burgers, high fives, you’re a ‘genius’ or ‘a business success’, really nice people that you don’t know buy you expensive drinks in expensive restaurants. Even better, you take a big Gain Share check home and your spouse says, ‘I love how you take care of our family.’ It’s the big time, and it’s intoxicating.
Returning from the conference, trophy in hand, reality came to visit us. We knew we were behind on plan, and therefore behind on our bonus program. The team rallied, poured on the coals, and pushed the numbers up, way up. Two critical shipments had to go out to make it, and everyone was on it. The team created a MiniGame™ to hit the target, and towards the end of the final month we were moving fast and off the charts. It was exhilarating.
Our last-minute hail Mary pass was intercepted by Murphy’s Law on the very last day of our fiscal year. We didn’t make it.
The very next week, for our first huddle of our new fiscal year, we had a duty to report that we did not hit our Gain Share bonus. Zero. That meeting was tough, heart in your gut nauseating tough. Compared to our pre-GGOB results it was not a bad year, but we missed bonus and that was a big loss. People were shocked. Angry. Frustrated. Hard feelings. Bitter words. The worst part for me was the team had to go home and tell their spouse’s there would be no bonus. I felt like I had disappointed their loved ones. You might think that is the worst day of your career, it does feel like hell.
You know what? – we found out that we still had problems, and feelings got hurt. Well, every company has problems and black swans are real. When you lose a round, get bruised badly in a round, you face a stark choice. Are you going to quit this GGOB thing? There were arguments for quitting. AMBAC’s old management model was familiar, comfortable, and right there ready to spring back. OR do we pick each other up, dust off, and get back into The Game.
Winning is fun, but you learn nothing in the Winner’s Circle.
Before that huddle was over people that were not ‘at fault’ stepped up to take ownership of the problems, right there in the huddle and in front of a very disappointed team. Then, one of our production guys said, “I’m not here to get a bonus, I’m here to build a great company.” Others jumped into the problems and started creating solutions. No one told them to do that.
Masterfully, the Design Team formed book clubs, with volunteers leading, and together the company re-read The Great Game of Business. Chapter by chapter and in open discussions the company went through the book and everyone had a chance to talk about why we play, how we play, and what did they think should be the next play. In our business, production time is money - a lot of money, and this took a lot of time away from production hours, a lot of time from the leaders of the book clubs, and it took the commitment from everyone to be involved. Yes, we lost a round, but we did not quit, we bought in.
And that ownership thinking continues to deepen.
- Maintenance team members volunteer to run production parts.
- Our planner is creating a better way to teach what is the critical path for us to hit our goals.
- Another person literally worked all night, 20 plus hours in a row, to get us ahead of a problem.
- The warehouse folks have stepped up to do more cycle counts to improve inventory accuracy.
- The sales team is working on even more contingency future opportunities.
- Our tough-as-nails factory team voted to give up fringe benefits to protect our cash position.
- We started baking into our plans much deeper reserves and contingencies.
All this happened before COVID19. However, before the pandemic shutdowns began and the economy was suddenly thrust into uncharted waters, AMBAC was already building resilience, strength, and a foundation of open-book ownership of problems and opportunities. No one can possibly know what will happen these days, but as the global shutdown continues – AMBAC is in a much stronger position than ever because we lost a round. Like many companies we are protecting cash. What does that look like at AMBAC? Once a month the company had birthday lunches for everyone. When the first Cash conversation happened, the Team voted to cancel Birthday lunches. I (the CEO) protested; “It’s only a few hundred dollars – it is not a material impact – enjoy the lunch you earned, and we can find the money elsewhere.” The reply from the floor: ‘It’s not the amount that matters. We are cutting everything unnecessary. Period.’
All this to ask a simple question, when trouble hits the fan do you retreat or advance? In other words, during a crisis, high stress, or when you hit a setback in business, it is a real option and in some ways makes perfect sense to seize the reigns, lock everything down, issue smart commands, control the information, and drive results. That is fast, obvious, and gives everyone a firm sense of control. It is strong “leadership.” But it is a false sense of control, your commands will not be smart, it is a retreat. OR do you tell everyone, bring in their ideas, and get their hands on the wheel.
I was told I was naive when I committed AMBAC to becoming a Great Game company. When we won GGOB's Rookie of the Year and posted the best numbers in anyone’s memory, I was falsely accused of being a turnaround genius. When we missed the Gain Share, I heard that GGOB is a fad and it is going to bankrupt the company, that I had ‘lost.’ Well, I have learned to appreciate a good loss.
I believe AMBAC is developing the capacity to innovate and outplay our rapidly shifting business, the virus, and yet to come economic effects. More than that, we are grateful to be able to lend a hand or encouragement to others. This black swan will be our trophy. This is our moment, we own it.
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