In September of 2021, Jack Stack, President and CEO of SRC Holdings, discussed the future for his company, upcoming economic trends, and concerns business leaders should watch out for in 2022. Now that we’re halfway through 2022, these trends and concerns are now today’s reality.
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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.
Jack Stack 9:39
Well, it was ironic that we’ve been working with this challenge, this long-term program in terms of labor shortages as far back as 2017. We recognized 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 everybody’s closing down their 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.
2. Education and training on The Game principles has helped SRC attract talent and be able to focus on attrition.
Jack Stack 19:35
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.
3. Going forward, it is imperative to have a plan in place because the shortages are going to be lasting because the labor market is going to be tight.
Jack Stack 31:38
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.
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