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Jack Stack's strategy to expose all aspects of finance and operation to every employee has paid off handsomely. Executives are learning the value of OPENING THE BOOKS

October 29, 1995|MARTHA GROVES | TIMES STAFF WRITER

ST. LOUIS — Fifteen years ago, Denise Bredfeldt was an undereducated malcontent at a down-and-out Missouri factory that rebuilt diesel engines. Then her boss did her the favor of eliminating her job.

He tailored a different one for her and gave her a crash course in finance to demonstrate why her new task of rebuilding transmissions made the company much more money than her old one of building hydraulic valves and pumps. Bredfeldt was sold on the power of numbers.

Today, she holds a college degree and is a manager with that same grubby company, Springfield ReManufacturing Corp. Though Bredfeldt's case might be extraordinary, she nonetheless typifies the sort of attitude adjustment that has helped the company rebound and prosper.

What accounts for the transformation of Springfield ReManufacturing and employees such as Bredfeldt is a little-known but fast-spreading way of running a company: "open-book management."

Perhaps the biggest proponent of this strategy is Bredfeldt's boss, an amiable, improbable management guru named Jack Stack. Looking like a blend of Dan Quayle and a young Jack Kennedy, Stack has become a sorcerer for growing numbers of executives seeking the secret formula for success in today's hazardous economy.

Stack long ago decided that the solution to his company's poor morale and mounting red ink was to expose all aspects of corporate finance and operations to scrutiny by every employee--from janitor to cam-rod rebuilder to inventory manager--and enlist their ideas for enhancing the bottom line. In exchange for improving the business, the workers got bonuses and stock.

The deceptively simple approach has paid off handsomely and given Stack's revitalized company cult status among a growing group of disciples. Once a failing division of International Harvester, the company is profitably on its own, with 14 successful related ventures and a charged-up work force given to discussing "overhead absorption," "labor ratios" and other business arcana. Many of the veterans can boast of stock ownership of $40,000 to $70,000--all thanks to the company's rising fortunes.

"They created the movement from nothing," said Corey Rosen, executive director of the National Center for Employee Ownership in Oakland. "Usually, big trends have their roots in management consulting or universities and are sold to companies. This one grew from the ground up and as a result will be a lot more persistent. It's not a fad."

Stack's open-book notions are anathema to the authoritarian, keep-them-in-the-dark style that, despite widespread dabbling in worker empowerment and other egalitarian approaches, continues to prevail in much of Corporate America. Most executives seem to think that too much information will give employees dangerous ideas.

At a time when corporate downsizing has become a demoralizing fact of life and managers beset by global competition are under unprecedented pressure to accomplish more with less, Stack's methods offer hope that workers in even the most mundane jobs can be inspired to boost their companies' wealth--and, by so doing, their own.

Although unknown to most of America, Stack has ascended to visionary status in some corners of Corporate America in a remarkably short time. He has won converts in mainstream companies such as Allstate Insurance Co. and printer R.R. Donnelley & Sons.

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For executives adrift in today's choppy corporate seas, executive-\o7 cum-\f7 guru Stack offers that rarity far more valuable than any deep theory emanating from a consultant or academic: practical experience with a management model that has worked.

Each month, packs of executives--more than 2,400 to date--traipse to Stack's company in the Bible Belt community of Springfield, Mo., 150 miles southeast of Kansas City. There, at $1,250 a pop, they learn about what sports fan Stack dubbed "The Great Game of Business" in his briskly selling 1992 book of that name. (About 100,000 copies have been sold so far.)

And each year in late September, the burgeoning clan of open-book practitioners journey to St. Louis for the Gathering of Games. At this two-day convention, companies soak up Stack's homespun adages ("You gotta wanna"), get advice from the Inc. magazine co-sponsors and share tips on how to educate employees about business and make them more responsible for their--and their companies'--destinies.

The third annual Gathering, just held, drew 540 proponents from minuscule and mid-sized companies nationwide as well as from software giant Microsoft, Bumble Bee Seafoods, brewer Anheuser Busch and Zambia Consolidated Copper Mines, whose executives heard about Stack's book in far-away Africa and enthusiastically embraced its principles. Participants led sessions about "playing the game"--Stack parlance for setting goals and using fun, motivational challenges to build teamwork and inspire a winning attitude.

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