Planning for the Challenges of the Future

Posted by Jack Stack on Sep 28, 2021 10:00:00 AM

Jack Stack, President and CEO at SRC Holdings, discusses how the Great Game of Business' living lab SRC Holdings, is using the Game to help get through the current cycle, what Jack sees as the future for SRC Holdings, and trends or concerns we should all be watching out for in 2022.

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Episode with guests: Jack Stack

President and CEO at SRC Holdings

(This episode was recorded in September of 2021.)


Key Episode Take-Aways:

1. Challenges will always be there when running a business, but strategic planning can help soften the blow that they bring. (click to jump to this topic below)  Well, it was ironic that we've been working with this challenge as long-term program in terms of labor shortages. As far back as 2017. We recognize that it was going to be here, it was coming. And we've instituted a tremendous amount of things in order to be able to soften the blow in order to be able to handle the crisis because we had it in a plan and then we were able to execute the plan.

2. Education and training on the Game principles has helped SRC attract talent and be able to focus on attrition. (click to jump to this topic below)  There's a reason that we are able to get people, mostly instead of other communities and businesses in our communities. It was because the foundation that we lived in say, we're not going to be able to execute the next financial planner, the strategy, advice to young people because we're a capital-intensive business. So, now what do we have to do in order to be able to attract talent and to be able to focus on attrition. And then to be able to really get into the heads of the people. I mean, the first thing that we recognized was the fact is that we have to we have to educate our frontline supervisors.

3. Going forward, it is imperative to have a plan in place because the shortages are going to be lasting because, because the labor market is going to be tight. (click to jump to this topic below)  The shortages are going to be lasting because the labor market is going to be tight. I don't know what part of that GDP we'll be able to really experience. It's out there, it's like there's a buffet out there but there's not a waiter there to get everybody to the table and there's not a chair to sit in okay.


Continue scrolling to read the full episode transcription.

Announcer 0:00

Welcome to the "Change the Game" Podcast, where we share stories of open-book management and highlight capitalism at its best. Thank you for tuning in to this episode of the "Change the Game" Podcast with special guest and founder of the Great Game of Business and father of open-book management, Jack Stack. In this episode Jack discusses how the Great Game of Business' living lab, SRC Holdings, is using the Game to help get through the current cycle, what Jack sees as the future for SRC Holdings, and trends or concerns we should all be watching out for in 2022. Here's your hosts Rich Armstrong and Steve Baker.

Steve Baker 0:41

Welcome to the "Change the Game" Podcast where we are changing the Game by doing business differently and highlighting stories of capitalism at its best. I'm Steve Baker, and with me is Rich Armstrong, president of the Great Game of Business and co-author of our new book Get in the Game. Hello, Rich.

Rich Armstrong 0:58

Hello, Steve. How are you?

Steve Baker 1:00

I'm good. We are going to have fun today we're back with Jack Stack, our founder and CEO of SRC Holdings. It's going to be fun. We've been talking to Jack throughout the life of our podcast here. I'm excited to hear what he has to say about what went on at our annual conference what's on his mind. So welcome Jack Stack, how are you?

Jack Stack 1:23

I'm doing very well. I'm doing, I'm excited. We just came off a tremendous event and we're full, we're pumped up and ready to look at the next 20 years, which is a very ambitious thing for a 72-year-old guy to talk about.

Steve Baker 1:39

We got to keep you excited, man, this is great. I love it. I mean, for people who attended the conference, or tuned in for the earlier podcasts with Alan Beaulieu, our rock star economists. You know, a lot of talk about the importance of long-term planning, specifically high involvement planning is really apparent. And I wondered if you could comment maybe on how can people use this knowledge to move forward?

Jack Stack 2:06

I just can't figure out why I have to even answer that kind of a question. Okay. And why do so many people, as you're almost saying, why do so many people do not like to plan? Okay, or why don't they get involved in strategic thinking and things of this nature? And that was a pretty big thing that was discussed at the conference. Okay. I mean, I know it sounds simple. But you take some of these leading leadership thinkers, these thought provokers, and you ask one question, and that is why do people not like the plan? Okay. They can't answer it. And so much of the Great Game of Business has always been centered around common sense. All right, but the whole idea was is a big push and a big drive was the importance of establishing strategy importance of showing people you're going somewhere, okay. I think having a plan to go somewhere is pretty neat little thing to have people not be thinking so deeply in terms of what's going on at the present time. Okay, that you have this pit time in life that you really want to be going for and you can overcome what's happening. So, what's interesting is that because of the so changing environments that everyone's going through, and everybody was anxious and ease and believe me, there's a lot of fatigue, okay, I mean, there was a lot of tension, okay, and it was mostly external. But once you got into the event, okay, and you got everybody moving and everybody looking at and talking about maybe, no one's going to go into a meeting and that's I tell you about the bad things are going on. Okay. So, you spend a couple of days listening to good things, it's really kind of exciting because you need a break the bad things, right? But getting back to the whole idea of laying out where you're going to go, okay. That is, you know, you see these commercials and you buy this, buy this package, and it's about pain relief, you know, I mean, again, all these famous actors and actresses right now, it buy this package, all of a sudden your knees going to feel better, and your backs going to feel better and their elbow is going to feel better. Okay? You have no idea what happens when you have a plan. Okay, how much better you feel? Okay. I mean, you do alright. And, you know, the plan was genius put together, okay, by, you know, years and years of the constituents at the conference, okay, that have built this idea of where do you go to get the data in order to be able to put a plan together that's believable. And I think this is the second time they brought in a top economist. I know economists give a lot of funny phrases and words, okay, but this guy's got an accuracy level that's incredible. We've been using him for 20 years. We've built 3 ten-year plans around you know how he looks at the world going forward. We listened intently about you know, maybe we're What would you like your company to be at a specific time in those 10 years, and then you know, we have, it has a very heavily influence in terms our high-involvement planning strategy. Okay. And so, one of the first things that we really want our people to be able to give us their opinion on is that what do you think the world is going to be like in 10 years? You know, what do you think is, you know, your, your ideas, okay? And the whole idea behind that is to be able to get the wisdom of the crowd, which we know, you know, I mean, there's going to be these experts, and there's going to be people that really don't have the first idea what they're talking about, but when they sit there, and they get involved with the process, that dialogue is extraordinarily, you know, beautiful, okay, and, and then all of a sudden, you begin this, this period of curiosity, is that if you really believe that the situation is going to be like this, five years from now, 10 years from now, what are the things that you really need to do now? Okay, and I think a lot of people as a result of this, the kickoff speech, walked away, okay, knowing fully well, that it's pretty damn scary out there. But it doesn't need to be as scary as it is if you can do these things at the present time. I know that sounds crazy. Okay, because I don't know how long ago that speaker spoke at one of our previous gatherings. Okay, but it been some time, but I will never forget in our last 10 year run in terms of our strategic plan is that he said to us at any given time, oh, it was 2014. That's right. It was 2014 he was there. So, I mean, that was like, seven years ago, right? So, seven years ago, this guy was actually projecting a downturn in 2020. Okay. 2014. And, you know, we've took this really in consideration, we thought the downturn was going to be for another reason, not necessarily the pandemic, okay. But was made, we've had a recession every 10 years. Okay, so this particular year from 09 to 19, 20. And we really thought, believe me, we thought it was labor shortages. Okay. And that was one of the things that made we clarified at the conference, okay, is that this labor market that we have, this isn't some of those that was concocted as a result of the pandemic. Okay, this was forecasted. In our conferences. I know, as far back as 2017 and 2017. They were forecasted in 2020, and 2021, there would be job openings in the nine and 10 million employee range or associate range. And what's ironic is today or at the conference, it was 10 point 1 million almost hit it to the mark. Okay, so, you know, here we are, have we known about this earlier, we could have prepared so much in order to alleviate all the pain suffering we're going through. Because a lot of people at the conference, okay, were shutting down, they're like, weren't working 40 hours anymore, okay, they had to work 20 hours, because that's all you people that they could get. And they had to figure out new compensation programs. And there was a tremendous amount of dialogue is like, how you going to redial your company up considering the fact that we, our resources are being diminished? Okay, so it's really interesting that everybody went in with the same kind of common denominator is that, jeez, have we really answered whether or not we're going to have people going forward over the next 10 years or not? You know, and I think people basically think, ahh we'll resolve it, and I will figure out, there's somebody out there, build a robot, okay, or figure out how to get productivity. We live in this world of beating the hell out our HR people in order for them to get more people, okay. And then we're processing these people, but the fact of the matter is, is statistically, macroly, there is a shortage going forward. Okay. And we know damn well about so what are you going to do about it? So, from this guy in 2014, not only did he tell us that we had to be prepared for a recession, and what you can invest in. But he also tell us, okay, is that we've got this phenomenal challenge this war on talent, okay. And that war on talent. Five years later, comes the theme of what the 2019 conference was all right. We told everybody at the conference, okay, there's a war on talent. You guys got to do something about it? Again, plan, you know, we got to come, okay. And then everybody gets distracted by silly things like COVID. You know, I mean, they get these small reasons to not keep looking at the big picture. Okay. So, one of the takeaways from 2014 and this is part of our 10-year plan today is the forecaster said a rental income is a really good thing to be when there's a downturn in the economy.

1. Challenges will always be there when running a business, but strategic planning can help soften the blow that they bring.

Well, it was ironic that we've been working with this challenge as long-term program in terms of labor shortages. As far back as 2017. We recognize that it was going to be here, it was coming. And we've instituted a tremendous amount of things in order to be able to soften the blow in order to be able to handle the crisis because we had it in a plan and then we were able to execute the plan. So, now all everybody's closing down to restaurants, or they got signs at a restaurant saying please be nice to our servers because that's all we've got, you know. We were a little bit further along than most people because I can remember the slide that we put up in 18 and 19, two years in a row that said whoever had the workforce, okay, will dominate their marketplace, okay? And just think about today and I think a lot of people left now hopefully using this labor shortages as a reason that maybe they should be planning out over a long period of time because they want to manage many problems as they have today if they plan on doing it. I mean, we submitted to our associates a 10 year plan on real estate and we tell them that look, we've learned it one of the Great Game conferences that one of the things you do as a hedge against the next downturn and there will be another downturn is to add rental income so he said to our associates Okay, we're going to go out there and we're going to build these properties and we're going to have storage areas and we're going to have office buildings and do you want to buy into the fact and so easily fits into the strategic plan because you know, we don't want to lay off and there's a downturn we don't want to go through the problems. We still want to have a liquidity. So, what we did is we tried to get everybody to understand the importance of planning in the in the through I think there was what 60 speakers, 66 speakers in terms of these two half day events

Steve Baker 11:35

That's good. That's good it's very good stuff.

Rich Armstrong 11:40

Yeah, I just I wanted to add on to that and I think you touched on this just a bit jack but as long as I've known you you've always challenged us to kind of see around the corner so to speak and I'm just curious from a business leaders perspective is there any other specific concerns or trends that you would say hey watch out for?

Jack Stack 12:01

You know, the minute you started saying this I go back to this theory of muscle memory okay. You know that the whole idea is about it's truly a repetitive process okay because we believe that we had cultural and behavioral changes the repetitio, repetition, repetition, okay. But what people don't understand when they play the Game is that this is a continuous improvement process. Okay, we're continually coming up with more better ideas as a result of continually evolving and playing the system okay. And the system is continually expansive, but you have the fundamental basics there the foundations of the system it's like we told people like the way we handled the COVID crisis when I first came out is it and we went right to the rules we went right to the scorecards, we went right to the stake in the outcome okay. And that we put a process into our people that were scared to death in terms of what was going to happen to hit him out of the cold and tried to drive the behavioral changes okay to do everything right for each other as well as the sake of the other business and the community. Okay, I'm in that that process, okay, that you guys you know, do such a really good job of trying to explain to people is that you're trying to get them muscle memory, okay, that when you ever face something, okay, you immediately apply the same principles or the same application so the problem or the deviation that you're experiencing at that particular point in time. So, I mean, I don't know if I'm specifically answering your question, maybe I'm taking a very broad approach to it. Okay, but I just think we were growing again, we're growing through our fifth crisis, okay. We're trying to figure out how to be able to create the next 10-year run. It's automatic in terms of how we think okay, I've tried to tell people that because of this craziness, this curiosity of trying to fill in the blanks on macroeconomics and microeconomics you're always looking you call it looking behind whatever it is behind the column or looking behind the corner behind the building is really similar that you know, I learned to have key economic indicators okay. This curiosity says I mean, two years ago copper was $2.40. Today it's 430. Okay, you know when copper has gone up again the markets really, really hot okay. I mean, you look for what's going on in terms the ag industry you know. We look in terms of your business in terms of what could go wrong and and if it can truly go wrong, okay, what goes up, right? Okay. You just, and I think this is the thing that was trying, we are trying to bring out through the whole conference, okay. The whole idea of this strategic thinking, this curiosity to fill in a plan. You can't do that unless you really have some kind of a plan, I, but it's really fascinating that the way you would consider to be an impediment how easily you can resolve it, if you're convinced that there's key indicators, right, or you know what your key indicators are, in order to best forecast with the future is alright. I mean, look, my biggest problem is, is I'm probably too old and have been through too much. And I don't do very well trying to figure out how to tell somebody something's happening that hasn't lived through it before. Okay, I mean, I'm this is very similar to what happened in the 70s. Okay, when we outran our capacities, and we could not deliver and we had extensively times, and it led to inflation, and then inflation led to a depression because it had high interest rates, and that consequently led to a depression, okay, and the unemployment went to 12%. I mean, we know these things, okay. So now, converting that and trying to convince your people that if they want a true answer and inflation, it's an economic nightmare to try to explain to them but it comes down to this. When unemployment goes down, when the hours were per employee goes up, and when lead times go up, you're going to get inflation. Don't listen to whether it's transitory or not, it's going to happen okay, so plan on how you're going to impact your strategic plan. Is your margins going to shrink? Are you going to have the pass those on in terms of the marketplace. There's a whole inner reaction that goes on by looking at what these do. You make it almost sound like Superman looking through kryptonite. This is not what it's all about. It's about the small things that you have experienced, the small things that you've witnessed, the small things that you applied. You know that you're pretty certain that, okay, and then to pass them on to other people, and if other people pass those things on to you. You know, you guys had a speaker who wrote The Wisdom of the Crowd. He came there, Steven, I forget what his name, he was tremendous speaker. But it was fascinating. Yes, right. Exactly. And what was fascinating is that his studies had shown, okay, the power, the power, okay, in the crowd, okay. A power of transparency, the problem of giving everybody the problem without any strings attached, believe me, every problem, we guys got a string attached, where we don't believe what the freaking problem is the first place. But that said, everybody in a room and then come out with a conclusion is one of the most powerful things that you can have. Okay, and then you have it with respect and dignity. And it solidifies what your, what nuggets you bring to the table to be able to make the right decisions relative to the direction that you're going in. So again, another long answer.

Steve Baker 18:01

Great stuff. I mean, you just touched on it a moment ago, you know, we're talking about, you know, people and there is this war for talent, as you've said several times now, where are we in the war for talent? And what are the keys to winning?

Jack Stack 18:20

Well, we knew there was a shortage in 17. And so, I remember critical numbers being like retention, as early as 2018. And we made that a big impact and then we put it together a long, long, lengthy program, in terms of what we really had to do. I mean, that we showed a commercial at the gathering, okay, that we did in 2018. Okay. We never had done a commercial on hiring in our entire life. Okay. And it was, it was to show people that we got out there in front, okay, we change compensation programs, we change flexible working hours, okay, we change, probably admission requirements in terms of what's coming in, we build new factories that have that some of the nicest amenities that you possibly can maintain people in organizations, okay. We, I mean, we really, really focused on a lot of stuff. Did we get to, you know, ultimately, where you really want to go? No, but in the last year, our companies hired over 500 people in a market where you can't get people. In the last two months, we've been able to hire 218 people.

2. Education and training on the Game principles has helped SRC attract talent and be able to focus on attrition.

There's a reason that we are able to get people, mostly instead of other communities and businesses in our communities. It was because the foundation that we lived in say, we're not going to be able to execute the next financial planner, the strategy, advice to young people because we're a capital-intensive business. So, now what do we have to do in order to be able to attract talent and to be able to focus on attrition. And then to be able to really get into the heads of the people. I mean, the first thing that we recognized was the fact is that we have to we have to educate our frontline supervisors. Okay, they're the gatekeepers and the demographics in terms of our ages inside of our organization saying we're going to be hiring hundreds and hundreds of people because we have the baby boomers leaving in the marketplace, okay. So, the first thing we did is we put in the principles the Game we just re-educated everybody on it, frontline supervisor standpoint, because they had to be able to understand what the, you know, what was coming at them again, out to be able to handle them, okay, the training that we put in, in 18 and 19, okay, really had significant payoffs, okay, because they got aligned to the Game and, you know, they were focused on in terms of really what, what people were to the impact and success of the company. And those things got to constantly be revitalized. Create more winning opportunities on the understanding that, you know, when you got tensions, okay, or when you got hot weather, or you got fear in terms of pandemics, okay? Sometimes to breathe easier, sometimes to create win, sometimes to play Minigames, sometimes to be exciting, is all part of getting people through those particular point of times to get to the next level, in terms of the strategic plan that you want to produce. So, there's a cohesiveness there that's got to all work together. But I think because of the Game, we're in, I don't, I don't worry as much about the challenges of labor, I do think they're going to go on for the next 10 years. All right. And I think there's going to be a remarkable demographic change in terms unless you open up a border, you're probably more people. And I mean, there are some solutions, but I doubt if government is ever going to listen to business relative to solution. So, you know, it's good to have business that now competes against the job market. Okay. I mean, you asked what's different, okay, when we started the company, it was to protect jobs. It's no longer about creating jobs, okay. I mean, the jobs have been created, we got to figure out how to handle the shortages of jobs today. So,

Steve Baker 22:18

Love it,

Jack Stack 22:18

But that was what, we had takeaways of the conferences. Okay, I'm regards to the challenges that we have today. Again, we talked about the living labs, we're all living labs, you know, we're all really practical people going out there trying to get through a given day with all the challenges that we have, and to be able to talk to each other and how you get over those things. I think that's the priceless part of the conferences, you know, the networking.

Rich Armstrong 22:42

You keep coming back to the idea that repetitive practices of the Game, you know, that muscle memory. Yeah. And, and using those in times of crisis, and, you know, other cycles. I'm curious if you could talk a little bit more about some ways SRC has used the Great Game of Business lately, just to get through all this is current cycle.

Jack Stack 23:05

Look, the minute, the minute, I mean, it was ironic that the pandemic hit where it was because we were changing our communication styles and we're decentralizing them more than we had and we were running, you know, a lot of day, monthly meetings, okay. And I mean, talking of the really broad executive staff, okay. And you're allowed to come in on a Wednesday, every Wednesday, and it really didn't matter what position you had, okay. And the whole idea was to be able to have a consistent message and a consistent update on what the 10 or 10 subsidiaries were doing where everyone gets to know everybody else, everybody has the same kind of information and has said, and we wondered whether or not that was a very healthy thing and it was ironic that we're going to go in there we are only having like once a quarter, those kind of things and boom, the pandemic hit. And all of sudden we understood that the rules of the game are changing, okay, it was going to change really fast. Again, we didn't even I mean, I cannot tell you the number of hours per day we sat just checking facts, okay, just finding roles, okay. Who are the sources? Okay, what's the distribution channel? Okay. Is it the hospitals we ought to be listening to as the CDC we need to listen to is that the government that would be listening to, is it the president of the United States. And so the minute we sat down, we said, okay, let's develop the strategy. Let's get the high involvement planning here. Okay. Let's figure out what we're going to do in order to be able to communicate to everybody and try to control the fear. Okay, and try to answer the unanswered questions. Okay. And the only way we could do that was to institute our own scorecards. Again, we have the scorecards of terms of how many positives we had, how many people were waiting, how many people were quarantined. Okay, we build you know, statistical systems that we can try to estimate our own product to our own probabilities we went in and we changed our working environments. Okay, we change the we went out and got temperature thermometers okay, and then we got automatic ones where you shoot it from a distance. Okay? I mean, we went into a full scale. How do you how do you be the statistics? Okay? I mean, how do you beat the game? Right? How do you get this thing under control? Because it's a significant deviation, right? Now we went. And we did three things, which basically is the fundamentals of the Game, we went out, instructed people, right? Use all hospitals use the communicators, used all the health departments, then we did is we educated people, you know, by putting in a nine o'clock phone call, very similar go to a huddle. We huddled in nine o'clock every Wednesday, right here, it was the antithesis that we were trying to get away from this communication process. And we're back into it because of the crisis, right? It is a big critical number now is the health and safety of the people inside the organization. And meanwhile, all the walls are crumbling, everybody's batten down the hatches and the sales are going down. And there's no trucks on the marketplace running. There's no cars in the marketplace running. The only thing our business was thriving out was agriculture, because the and so we had to figure out how or what was our deliverables. And we decided that at the nine o'clock, we would talk about the pandemic, and we talked about the commercial side of the business. And then we would develop this this routine, this repetition that they could count out that they get to hear one voice, okay, that regardless of all the noise that was going around the TVs and radios and you know, the newspapers and the crisis that are going on there could be a sense of consistency. That right or wrong, okay, then we're going to get the facts. So that's what the thing about the Great Game is, is that it's not about emotions, okay. It's about facts and facts, facts, facts, facts. And we would spend countless number of hours Okay, trying to develop that, those nuggets that you call looking around the corners, okay, is to try to figure out well, who do you trust? You'd really trust New York, okay. I mean, is New York, the center of what the practices aren't here, you got a governor, and it's hiding nursing home? That's the numbers. And you're like, no, no, we got to figure out how, and we have good access, because if anybody got sick, you know, we're self-insured company. So we had additional statistics that that we were we were prying into anybody's lives because we do have HIPAA regulations that we have to follow. And we do, okay. So the whole idea was that put the scorecards together, okay. And the whole idea was we gave everybody where everybody was at relative to covid. How many people were on roll. How many people work today, how many people were, were there, we didn't have any outbreaks which was amazing. Okay, we got 2,00 people here we haven't. I should knock on wood because it's not over. But you know, there is this, there's this control, okay, the control comes in with the numbers. And then all of a sudden, we get the numbers under control, and all sudden the sales comes back in the middle of the year, and boom, we get hit with the Delta virus, right. And Jesus ran to Joseph, the Delta virus goes up as high as what it was in March of 2020. Oh, we got a new game, we got to get in, in the play. And we but we did have the systems of getting people to understand there was a place that they could go. And the final aspect of the Game is the results, the outcomes, okay. And we were able to get really fast controls on the Delta side of it, because we then realize that the vaccinations were working, so we put a drive under another critical number, which is to get the vaccination. And then we played the biggest Minigame you ever saw in your life in terms of putting $250,000 for the prizes on the marketplace? If we could get to 75% participation in vaccinations? So, what do you want me to tell you about how is does the Great Game of Business work? or What is this muscle memory? or What is this process that you're talking about? or What is this system that you're saying can apply to anything? Okay? Did I explain it.

Rich Armstrong 29:13

Oh, that's a perfect example. Exactly.

Steve Baker 29:15

Great example, great example.

Rich Armstrong 29:17

Lean on it.

Jack Stack 29:18

But the fourth part of the box and let me tell you part of the box. Okay, we talked about the instruction, the education, the incentive program. The other step of the plan was the financial impact it was having on everybody in the company. Right now we got two other ones in the boxes, okay. And then what have been going to the mask, the mask mandates and going into the vaccination mandate. And that's still out there if we have a surge in the fall, okay. So, there is a strategic plan relative, which is the high-end mountain planning piece and, you know, people are going to sit there and say, Well, why aren't you asking quicker? Or why aren't you vaccination quicker? We got a very diverse workforce out there. We started out with 32% vaccinated, and then we went to 59. Okay. And then we keep working at it to get it to the 75. And we'll get to the 75 eventually, but that's how the Game works. That's how the Game is played.

Steve Baker 30:14

It's a great illustration, Jack, you know, this time of year, a lot of our listeners are heading into their urine planning cycle just like SRC is, what do you think our future will look like here in SRC?

Jack Stack 30:28

Well, it's on sales. I mean, there's no question that the consumer demands going to be there and in our businesses, if anybody mentions GDP, we're the GDP, okay. I mean, we were in automotive, and we're in trucking and we're in voting and we're in eating and construction, we're in electricity, and we're in the anything that really has an impact on GDP, and the GDP is really strong, it'll be 3 to 4% and realize it was 1.15% or 1.5%, from 2009 all the way through 2020. Okay, and then all sudden, it's now popping up at 3 to 4%. The consumer has the savings account of the consumer, let's say a year and a half ago was like a trillion, 200 million bucks, around that area. And today, it's $6 trillion. That's how much is in the savings account of Americans okay. So, consumer has got some money, okay.

3. Going forward, it is imperative to have a plan in place because the shortages are going to be lasting because because the labor market is going to be tight.

The shortages are going to be lasting because the labor market is going to be tight. I don't know what part of that GDP we'll be able to really experience. It's out there, it's like there's a buffet out there but there's not a waiter there to get everybody to the table and there's not a chair to sit in okay. But God darn does that food look good, right? That's kind of where we're at, our behind schedule conditions are mounting, we're afraid that there could be a double ordering. If you're going to ask me what my fear is, is that we may have a false economy out there because we're in a patient society. And I think what happens is that many places are double booked, if you can't get lawn furniture until November, you do whatever you can, and the minute you get it, you can cancel what you have. So, we're going to have to watch that, all right, in terms of going forward. But I would say that, unless we get some really, really horseshit regulation, which is a distinct possibility. We should have it fairly, fairly decent run, you know. And again, it's continually improving the quality of our associates and it's improving the quality of our products and services to our customers and if we can continually remain there, you know, we're in a pretty good spot, and, you know, we're got a healthy balance sheet, you know, we're so much stymied, because of the long lead times of commodities that we have, we'll get that under control and, but I think ultimately, again, the real estate plan is in effect, that's a 10 year plan, okay, we already got all marked. We got the properties, we got the, you know, the investments. We would like to accelerate the properties but our inventories are growing because of the fast pace of the economy and the shortage is that exists because of a gasket here, or a filter there. But you know, it's, it's, it's going to be a challenge to work with the resources and prove the resources only prove those, we'll be able to grab the brass ring, you know, so I see steady growth.

Rich Armstrong 33:59

That's good. It's, it's good. The we always try to wrap these podcasts up with a question Steve calls it the Oprah question but it's not, we're not going to try to get you to cry or anything Jack, but

Jack Stack 34:12

Which is not hard to do.

Rich Armstrong 34:15

But what questions should we be asking you right now? What are we missing?

Jack Stack 34:19

What question should you be asking me right now? I don't know. It's a good question. You know, why don't you answer the question is that this thing is so damn good, why aren't more people doing it, you know.

Rich Armstrong 34:35

I always wonder that question

Jack Stack 34:36

I think that's the question I get all the time and I have a very difficult time answering it, you know. All I do is, I see the results okay. I see the effect. I mean, I see the fact that it works, okay. It's failure rate is really, really small. You know, I mean, I mean, I studied systems and other it's TQM or WCM or you know, the best practices in the marketplace. I said, but you know, eventually they end up dying. You know, when you've got a financial reporting system by which is going to be going on and on and on, it's it wouldn't be when you think it would be much easier if you had everybody working on it, and everybody improvement about it and everybody understanding about it, and then the multiple effect is that it goes on and you begin to help other people. And you know, we need some kind of reason to be more compassionate. We need some ground reason to be more caring, you know. And I think we need to really define what transparency is all about. Okay, so I don't know. I think the question is, and I probably will continue to, it's like, I don't know why people won't take the COVID. Okay.

Rich Armstrong 35:49


Jack Stack 35:49

You know, or take the vaccination? I don't know, you know, I mean, you're asking when I ask me tough questions. I don't know. I mean, I mean, the fear is COVID could affect somebody over a long period of time. Again, I mean, that that is significant that the immediate impact of what could happen, we don't know what's going to happen okay. So I don't know. Maybe it's comes down to why? What's happened to common sense? Okay. Great, great. It's the greatest questions, and it's in our legislation, and it is in our media. And we're a divided community. Okay. And maybe the question is, what is it going to take for us to get back together again? Yeah. And I really think it's the accuracy of the information. I always think it's all about the accuracy, the trail of the other transparency, is laying out to people and let them decide, statistically, what's the right thing? So, maybe you should ask me that? Or don't ask me any question at all.

Steve Baker 36:54

Man, I've got so many good nuggets out of this conversation. You know, you started out by asking a question, why don't people like to plan? And you, you pointed out, you have no idea how much better you feel when you have a plan. I think it's a huge takeaway. You talked about the importance of planning because it's really important to show people where you're going, and you talked about in a world of tension and anxiety and fatigue, it was really great to go to the conference, and people need to look for these kinds of opportunities. Take a couple of days to hear some good news. I thought that was a big takeaway for me, it's pretty scary out there. And what are the things we should be working on and doing now? As usual, you mentioned the whoever has the best workforce will dominate the marketplace. That's a huge deal right now. And you mentioned muscle memory again, which I think is a really neat analogy, this idea of cultural and behavioral change. And improvement happens through repetition and discipline to the system.

Jack Stack 37:52

And the key to that, though, is it can't be boring, okay. That's why repetition often fails. And I think it's another one of these nuggets that we took in this process of learning from each other. And that was I think it was one of the conferences that someone said, well, what makes you be a good coach, he said, we know how to work be on the border. And I'm going Holy shit. That's really brilliant. You know, I mean, he played his football team out there. And while everybody was like quitting at five because everybody's worn out, this guy was creating Minigames at five o'clock, okay to go till seven. All right. And he figured out how to, you know, do something repetitive and make it exciting and making fun. That's what the game of business is all about

Steve Baker 38:32

Love it and figuring out how to train through the boredom. And that's what champions are made of. This came up again, the idea of by always looking around corners, you can eliminate a lot of surprises. You mentioned something I thought was really interesting, too, that learning the right KPIs, the ones that really matter, can really help, and use an example of you know, if you learn that when lead times go up, inflation is going to go up? Are you planning to increase your margins? So we get up in our own little tiny KPIs. What about the bigger ones that are out there that we can look at and really inform the business?

Jack Stack 39:08

How do they affect the future? How do the affect the future? How can you take one KPI and back down 10 at the same time?

Steve Baker 39:14

And then harnessing the wisdom of the crowd by you know, teaching people how to use that stuff creates a lot of a lot more power, a lot more leverage, and also it adds to the respect and dignity of the organization. Just a couple more that I wanted to share with the listeners that I pulled it out, addressing the war for talent, so recruiting, retaining and training should be foundational elements of your long term strategic planning that I capture that.

Jack Stack 39:41

Yeah, I think you got to realize that you got to get on the first day start. Yeah, and that's where your frontline supervisor got to come in and say, look, it's okay, there's that 10 people out there you can draw from. Yeah, there may be one out of 10 you know, 90 of them aren't going to show up for the interview. Hey, we all heard that at the conference, okay?

Steve Baker 40:08

Yeah, absolutely

Jack Stack 40:10

They're ghosting us, they don't even show up. You know, what they're doing, they're applying because the government says they got to go do 10 applications in order to be able to get a benefit, you know, so they call you up, they ask for an interview, and then they don't show up.

Steve Baker 40:26

Oh, here's another nugget that I just love to cut through the noise with one voice with the facts, the scorecards, and the incentives to make the difference by working the system. I really liked that one voice cuts through the noise with the real facts. And then finally, a really good message of, of, I think some positive positivity. steady growth, you're seeing the GDP is really strong. Consumers have money shortages will be around for a while. But watch out for a false economy. That's some great stuff, Jack. Thank you for sharing it with us.

Jack Stack 41:03

Well, if you guys like it, I'm happy.

Steve Baker 41:07

We really like it.

Jack Stack 41:10

That's good to hear. That's good. Well, it was really enjoyable.

Steve Baker 41:13

Well, thanks for being on the podcast with us again, Jack. We really appreciate it.

Jack Stack 41:18

Good, have a great weekend, you guys. All right.

Steve Baker 41:21

Let's keep the conversation going. Send us your questions, your stories, your best practices, your ideas, your challenges, and of course your victories because that is capitalism at its best. Thanks for joining us, and we'll see you next time.

Announcer 41:36

The "Change the Game" Podcast is produced by the Great Game of Business. To learn more, visit

Topics: Company Culture, Leadership, Manufacturing, Transparency, Planning, High-Involvement Planning™, Jack Stack

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Hosted by Rich Armstrong and Steve Baker the Change the Game podcast highlights true life stories of organizations influencing positive change by doing business differently. They’re teaching people how business works and closing the gap between the haves and have-nots. It’s capitalism at its best. Inside each episode, you’ll discover stories of entrepreneurs who are Changing the Game.

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