By Andy Ostmeyer
Globe Business Writer
When the janitor put down his broom to discuss receivables, recession patterns and the need to diversify with the chief executive officer, Jack Stack knew his message was getting through to the employees.
And Stack's message is straightforward: "Teach people business, and when you get them to the point of getting it, it changes everybody's life."
Stack is the president and chief executive officer of Springfield Remanufacturing Co., and a respected business innovator.
His company, which was a sickly engine and parts rebuilder in the mid-1980s, has been selected as one of the top 100 companies to work for in America and, in 2002, he was named one of the "top 10 minds in small business" by Fortune Small Business magazine.
Stack is also the author of a couple of best-selling books, "The Great Game of Business" and "A Stake in the Outcome," and on Wednesday he spoke to Joplin community and business leaders at the Holiday Inn for the fourth Leadership Joplin Symposium.
It turns out the janitor was no ordinary janitor, but rather a burned-out Merrill Lynch stockbroker who needed a no-pressure job for a while. But, Stack said, it goes to show that businesses often do not realize the caliber of people working for them, and it verified the message he has been pushing to get out: "We wanted people to think and act like owners."
Stack told the crowd that when he went to work for International Harvester in the 1960s, it was a time when business was pervaded by a top-down management style, and owners and managers wanted to pump their ideas into the heads and hands of employees. Consequently, jobs were dumbed down and management became top-heavy.
"We ended up with 12 people thinking for the one person doing a job," he said. "We literally drove innovation outside the workplace."
One result was a manufacturing world where it took 14 months to build a car that lasted 12 months, at a time when Japanese companies and other global competitors were eyeing weaknesses in American business in order to ratchet up their own share of the market.
Stack, who moved to Springfield in 1979 as a plant manager for International Harvester, saw his company losing ground. Market share was shrinking, plants were closing and employees were being laid off, and International Harvester owed $6 billion to banks.
Rather than wait for his turn beneath the ax, he and other employees at the plant bought the operation. Stack said he knew how to make gasoline and diesel engines for the automotive and off-highway markets, which is the company's specialty. But the business education was just beginning.
"Never once did they teach me what it took to make a great company," Stack said. He vowed that if he were successful, "I would teach people what it would take to make a great company."
Eventually, Stack borrowed $8.9 million, with $100,000 down at a rate of 18 percent. "Talk about being stupid - economically illiterate."
He said he had to teach his employees that business was not unlike a game, in that there are rules and scorecards and winning means having a stake in the outcome. It also meant opening the books to his workers.
"We wanted to get people to understand what the game of business is," Stack explained.
All employees, for example, signed off on sales and marketing plans. They all developed their own income and cash flow statements. And they all understood the risk and rewards, and, what's more, their bonuses were tied to company performance.
Before long, ordinary workers were talking to him about inventory turnover, debt-to-equity ratios and other key business components, and that janitor was warning him to prepare for a recession in the truck market that came around every six years on average.
"Everybody has an ownership position," Stack said.
Today, Stack's company has sales of more than $190 million and employs more than 1,000 people. And that original $100,000? It's worth $87 million today, he said.
"This is not about rocket science ... this is just common sense," Stack said.
The next Leadership Joplin Symposium is scheduled for Nov. 25 with Kyle Craig as the featured speaker. Craig has been the president of a multibillion-dollar franchise restaurant chain and the chairman and chief executive officer of one of America's largest casual restaurant companies, and has been involved in a broad spectrum of executive positions in his 25 years of business experience.
By Andy Ostmeyer