What Does Dick Gephardt Know About Management?
May 1, 2010
By Jack Stack
New York Times
May 1, 2010
When we sent out the agenda for our annual gathering of open-book practitioners that will be held next week in St. Louis, we caused a bit of surprise and confusion with our choice for a keynote speaker. People keep calling us and asking, "Why Dick Gephardt?"
Over the years, open-book management has certainly attracted interest from a variety of folks, from the anonymous director of a not-for-profit community theater to the likes of Warren Buffet. But I'll admit that we have rarely drawn interest from the world of politics, which is a shame. So, I understand why people might be asking that question.
The answer is that Richard Gephardt, who served in the House of Representatives from 1977 until 2005 and ran for president in 1988 and 2004, has been a fan of open-book management for some time. In fact, his interest stems from his first visit to SRC in the 1980s. By that time, SRC had begun to be noticed for our operations, especially as they related to pro-worker practices, which Representative Gephardt had always supported.
When he visited our facilities, though, he did more than just take the tour. He visited every department and actually talked to people. He showed that he truly cared what people were doing and why. It was also clear each time he returned that he was impressed with our approach, especially because it embraced the notions of transparency, open communications and employee ownership.
In 1999, he wrote a book called, "An Even Better Place," in which he wrote about SRC and open-book management. He spent almost an entire chapter talking about how our society would benefit if everyone would start thinking more like owners. Open-book management, he wrote, "is an overall approach to corporate governance that treats the employees like co-owners of the business who have to make sacrifices and take on the burdens that any owner assumes. To put it another way, it treats workers like fellow-citizens in a democracy where everyone has a responsibility to participate in and contribute to a successful future."
What's especially exciting these days about Mr. Gephardt's fondness for open-book management, however, is that after retiring from public life, he started a company called the Gephardt Group, a consulting firm based in Atlanta that focuses on "developing and promoting leading edge thought and best practices in the areas of labor management and labor relations." He has always been a fighter for the rights of workers and small businesses, and he's always understood the need for our country to maintain its manufacturing base as a way to create jobs. He has been criticized by some for his decision to leave politics for the for-profit world. He says he eventually decided that he could do more from the private sector to bring about the changes needed to keep America and its economy competitive.
I saw this first hand because Mr. Gephardt asked me to be an adviser to his firm. And, in that capacity, I sat in on several meetings with his clients. One of the first visits I made with him was to Ford's headquarters in Detroit back in the fall of 2005. We went to make a presentation to the company's leadership team about open-book management. I distinctly remember the image of Mr. Gephardt leaning over the table and telling the Ford executives that to remain competitive in a global economy, they needed to make big changes — the kind that can be brought about by opening the books and teaching everyone in the company financial literacy.
It was clear to me, though, that the message fell on deaf ears. I remember feeling depressed as we entered the elevator after the meeting. My mood got worse as we descended. Every time the doors opened, the floors were dark and empty of people. It was clear that the company was downsizing right before our eyes.
Not long after the meeting, however, Mr. Gephardt was asked to head up the search for new leadership at Ford, which led to the hiring of Alan Mulally as chief executive. More recently, Mr. Gephardt was asked to serve on the board of directors. Given how the company's fortunes have changed since that time, it will be interesting to see how things continue to evolve at Ford. I know, for instance, that he has been revisiting the idea of introducing principles like employee engagement, high-performance workplaces and business literacy with Mr. Mulally and the rest of Ford's executive team — topics that could become bigger issues when the company negotiates a new contract with its union next year.
That's also why I'm eager to hear what Mr. Gephardt has to say to the 120 or so companies that will be attending our gathering. We'll let you know.
By the way, the PBS NewsHour did a segment on SRC the other night. It talks about the very same issues — how to get your employees engaged.