SRC Holdings was founded in 1983, when 13 employees of International Harvester (at the time a leading manufacturer of agricultural machinery) bought that part of the company that was into the business of maintenance and repair of diesel engines. That subsidiary had failed to perform for years so it had been decided to divest it.
The new management team of SRC believed in their firm and, investing sometimes their home into it, went for a Management buy-out. As a consequence, the first years of the newborn company were marked by a strong emphasis, sometimes obsession around finances, cash flow, efficiencies etc…
In an interview with a radio channel of the B.B.C., Jack Stack, SRC’s C.E.O. explained that one night when leaving the office late, he was disappointed by the fact that all lights and air-co had been left on although everybody had gone home. It was obviously more the culture than the extra $ which were of a shock to him. He therefore decided to create an intelligent organization where everybody, rather than being told, would understand and act upon the financial situation. Jack organized a kind of “Finance for all” course and invited all employees to take part.
One day, when in the lavatories, Jack met the janitor who asked him: “So Jack getting ready for the downturn? As I am sure you know the US agriculture follows the biblical cycle of seven years of fat cows followed by seven years of hunger”. Jack had no idea, went in his office, looked at the numbers and realized that the man was right. Immediately his team and he acted upon the hint and traveled safely through the downturn storm.
What does this story tell us about intelligent organizations?
- First, there can be no distance to power in intelligent organizations. Imagine if there had been such a thing in SRC, the cleaner never would have spoken to the C.E.O., furthermore in the toilets and about strategy
- Second, if the cleaner had considered his job and duty as “just cleaning” ,he would never have bothered to think about SRC’s future. We are back here to another janitor’s story, the one of President Kennedy visiting what was then know as Cap Canaveral (today Cap Kennedy) and asking a cleaner what his job was, to hear to his pleasant surprise “I am sending a man to the moon Mr. President!” Intelligent organizations intellectually and emotionally align their people on the Purpose. Their Purpose is compelling and engaging. It is a matter of pride and meaning.
- Third, if the janitor had not participated to such a course, he would never have oriented his mind around strategic thinking and its financial imperative in the case. Intelligent organizations develop their people and do not consider strategic thinking as a privilege reserved for the cast living in the isolated top of the building.
Today SRC is a flourishing enterprise (http://www.srcreman.com/). It is a living proof that all the new thinking around engaging leadership and intelligent organizations is not reserved to funky and sexy, silicon valley based software firms. SRC is heavy duty manufacturing operations.
At a moment where we talk about “Thought Leadership”, organic enterprises, self directed teams and engagement, I find the story of Jack Stack and SRC compelling. I hope it made sense for you too.
Two marathon days of conference calls at home this week, a workshop in Brussels. Have a great week too!