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Take Home Quiz AMERICAN IMAGES (AI) THE COMPANY (BUSINESS) PLAN IS EVERYONE'S PLAN (A case study) Most business students will learn of CEO Jack Stack of Springfield Remanufacturing Corporation (SRC) before they graduate SRC has become a leader in American business as a direct result of employee education and participation in every aspect and level of the organization American Images is one of the many followers of Jack Stack's philosophy that, "the best, most efficient, most profitable way to operate a business is to give everybody in the company a voice in how the company is fun and stake in the financial outcome, good or bad. American Images (AI) grew out of two teenage brothers' hobbyflying. Aftet high school, Harlan Accola and his brother, Conrad, both pilots and amateur photographers, began selling aerial photos to pay for flying time. The venture turned into a business, Skypix that grew unexpectedly and so quickly that, by 1986, the brothers had lost control. Skyplx was spiraling downward, unable to pay its debts or its taxes, forcing the Accolas to renegotiate bank loans to reincorporate as American Images. Harlan recalls the primary reason behind their problems: "Wo grew too fast and it was simply from lack of planning." That was when Harlan read Jack Stack's bestseller, The Great Game of Business, and began implementing many of Stack's principles at American Images. It was not as an easy transformation for the Accolas. Admits Harlan," didn't know anything about business, and worse, I didn't think it was importanti thought a financial statement was just something you had to give the bank to keep your loan OK. So I took it looked at the bottom line, and tossed it into a desk drawer. Conrad wasn't any better prepared, his philosophy was "always have enough to pay the bills." After reading Stack's book, Harlan started a system for planning a first for the two entrepreneurial brothers. By 1992, American Images had a powerful computer software systems, but no one really understood how to use it, sales representatives were not generating leads and making sales as well as expected, and Harlan still didn't understand business finance very well. This led to the hiring of finance manager Dennis Kears, a former controller for Kraft General Foods. Under his direction, the company took off again. He now has one-third partnership in American Images They also hired a data processing specialist and a telemarketer to provide needed expertise. With professionals in-house, the Accolas and Kearns set their first annual sales goal of $3 million, which they not only met but surpassed, and exceeded their growth target of 50 percent. AMERICAN IMAGES THE COMPANY PLAN IS EVERYONE'S PLAN (case study, continued) American Images now has formal monthly and annual plans in place. The three partners and nine department heads meet regularly, bringing input form oach person in their departments. Similar to SRC, American Images managers discuss ideas for setting other goals. One goal was to keep the cost of each Job to $72 or less; crews that succeeded received a bonus of 30 percent of the savings. The plan was fairly successful, but employees still didn't have the entire company picture in mind. To meet the goal, some crews sacrificed quality to get shots that were too dark or fuzzy. It wasn't the perfect plan, but it was a start American Images realized it had to educate employees in the various faces of the company to show them how goals affect overall company performance. They set up an educational program on subjects including the income statement balance sheet, and statement of cash flow. Employees now receive a weekly report on sales, accounts payable and receivable, cash balances, Inventory levels, and sales records. Everyone can see the parts of the plan and understand how their performance affects the bottom line. As Harian points out, "I think our planning process will have a bloger payoff as people see more clearly how they affect the big picture. I can't expect miracles, but I'm looking for commitment and involvement from the bottom up." Sources: Jay Finegan, "Everything According to Planinc, March 1995, pp. 78 85: Jack Stack, "Looks Like Up to Me." Inc. January 1996, pp. 39-40. CASE STUDY QUESTIONS: 5 POINTS EACH Explain the importance of a business plan to a small, rapidly growing company like American Images 2) In many companies, planning is a function of top management. Why did American Images choose to involve employees in the planning process