This post is about the overall philosophy we use at Coffee Hit.
For the first 7 years of Coffee Hit’s life, I made all the decisions. It felt like the weight of the world was on my shoulders. I was mentally and financially drained, I was at breaking point.
I somehow came across a book called The Great Game of Business by Jack Stack. It started my journey to better business education and helped change the way I ran the business. If the below description of how I implemented the concept appeals to you I highly recommend buying the book and reading it several times. I think I’ve read it about 20 times and listened to the audiobook about the same. It’s my bible.
The concept is that business is a game. There are winners and losers and there are scoresheets. Except in this game you can affect the outcome! To succeed in the game you need to learn the rules, master the fundamentals and play the game as a team. Mind blown!
Open Book Management
People cant help affect the outcome if they don’t know the score. The score is your Balance Sheet and Profit and Loss Statement.
So I sat the staff down and explained how I was going to implement Open Book Management. Open Book Management is where you teach the staff the fundamentals of business, how to read financial statements, how they can individually affect the financial statements.
Over the course of the next 3 months at our weekly meeting, I would teach them. We would both learn as we went. It was an amazing experience.
Now some business owners may say things like “Oh I can’t show them financials they will know how bad we’re doing.” Or maybe you don’t understand the financials yourself. I certainly didn’t and I had to learn before I taught my staff. But the great thing with financials is there not that hard to understand. In fact, they are easy. I’ll explain how to in the next blog post.
If your business is struggling then now is exactly the time to show your staff the financials. You can’t fix this problem on your own. You have great staff who work day to day in the business and know their area expertly and are best positioned to affect change and bring a positive outcome.
The change in my personal mental wellbeing was huge. I no longer felt I was fighting this battle myself. I had a bunch of great staff helping to fix problems in the business. The change was epic and it was quick. That’s the other thing I’m very impatient. The result was very rapid.
So now every week we meet at 2pm every Wednesday. No ifs no buts.
I present the key numbers in the business and how they have changed from last week to last month to last year. We look at the Balance Sheet and Profit and Loss statement.
We spend about 10% of the time looking back and 90% looking forward.
The ultimate goal, and it doesn’t take long, is you have a team of owners. Every staff member acts and thinks like an owner of the business. They know how to make a profit and generate cash. They know the basic fundamentals behind these concepts and implement them in everything they do, every decision they make.
And I don’t get involved. What they do doesn’t occupy my mind at all. They have the skills needed to perform like an owner. Any big decisions they feel like they want a second opinion I’m here for them. This change led me to have much more headspace to focus on the business. I felt like a great weight had been lifted off my shoulders.
Fundamental to any business is to make a profit and generate cash. Everything else is a means to these ends.
You cant do this on your own, you need to educate and include your staff in this process. They may hold the key to freeing you up emotionally and financially, if only you let them.
In next weeks blog, ill discuss in more detail the implementation of the Great Game of Business. How we introduced the Critical Number and started the game!