ROANOKE TIMES
Copyright (c) 1997, Roanoke Times
DATE: Sunday, January 5, 1997 TAG: 9701070002
SECTION: BUSINESS PAGE: 2 EDITION: METRO
COLUMN: Workplace
DATELINE: CHICAGO
SOURCE: CAROL KLEIMAN CHICAGO TRIBUNE
Your life may be an open book, but how about your company?
Probably not. Most businesses divulge little information about their internal workings and are reluctant to share authority and power, particularly with employees.
But despite frequent corporate paranoia, there is a trend among U.S. corporations toward ``open-book management.''
The term refers to a company's being completely open with employees about its financial status, projections, costs, expenses and even salaries.
It means training employees in how the company is run. It means asking for employee input and acting on it. It means rewarding employees with bonuses when the goals they create are met.
``Open-book management,'' its advocates say, challenges a military style of management and results in increased earnings for the company and empowerment for employees.
``In some respects, open-book management is old, because companies such as Wal-Mart Stores Inc., and Herman Miller Corp., have practiced it without naming it,'' said John Case, author of ``Open-book Management: The Coming Business Revolution,'' (HarperBusiness, $15) and publisher of the open-book management newsletter.
Case, based in Cambridge, Mass., is editor-at-large for Inc. and says he devised the term ``open-book management'' in 1991 when he wrote an article on the subject for the magazine.
``Five years ago, there were about a dozen companies that practiced it,'' said Case. ``Today, there are literally hundreds. It's spreading because companies realize they're dependent on the active cooperation of employees.''
It's also growing, he says, because in the midst of demoralizing cutbacks, ``companies still want employees to act with the best interest of the business at heart.''
Learning the key numbers generates business success, said Case. ``It gives employees the tools they need to use their heads instead of just doing their jobs and going home.''
Among those who utilize open-book management are R.R. Donnelley & Sons, based in Chicago; GE Capital, Stamford, Conn.; Physician Sales & Service Inc., Jacksonville, Fla.; Memorex Telex, Irving, Texas; and Sony Display Tube Inc., in San Diego. (The Donnelley company is building a book factory to open later this year in Roanoke County.)
Though some firms are ``apoplectic'' about it, the author says Patrick C. Kelley, CEO of Physician Sales & Service, started in 1983, cites open-book management as an ``unbelievably important factor'' in the company's enormous success. (Physician Sales & Service, based in Jacksonville, Fla., agreed in November to acquire Chesapeake X-Ray Corp., a Roanoke distributor of radiological products.)
Open-book management also is highly endorsed by Springfield ReManufacturing Corp. (SRC) in Springfield, Mo. The company, which rebuilds diesel and gasoline truck engines for resale, was purchased by its employees from International Harvester in 1983.
In its first year, SRC, which has practiced open-book management from its beginning, had 100 employee-owners and sales revenues of $16 million. Today, it owns 15 companies, has 950 employees and projects 1996 sales at $116 million.
``Whether or not you have equity ownership, open-book management helps employees to feel, think and act like owners,'' said Gary T. Brown, SRC's director of human resources. ``It's a way of developing team players.''
Brown recently discussed open-book management at a conference sponsored by the Institute of Labor and Industrial Relations of the University of Illinois at Urbana-Champaign and by the Japan Institute of Labour.
SRC, led by its CEO, Jack Stack, a strong advocate of open-book management, gives annual conferences on the subject. This year's session attracted about 500 companies.
The question of salary is a sticking point at some firms. ``It doesn't mean you give each person's salary,'' said Brown. ``You list salaries in the aggregate by department. But if an employee wants to know someone's salary and asks management, we tell them.''
SRC employees attend weekly meetings and workshops to track the progress of the company and to project new numbers.
``True open-book management means asking employees what the goals should be,'' Brown said.
LENGTH: Medium: 83 linesby CNB