(FORTUNE Magazine) – BUY A BURGER and catch a disturbing glimpse of America's future. When they ring up your order, those bustling teenagers behind most fast-food restaurant counters are pressing pictures of hamburgers, fries, and drinks. Pictures! Are U.S. kids so illiterate and innumerate that they can't cope with cash registers without visual aids? Far too many are. Motorola estimates that half its factory workers need remedial education just to attain seventh-grade math and English skills. In a 1988 survey by the National Assessment for Educational Progress, American 13- year-olds trailed their counterparts from Britain, Ireland, Spain, Korea, and Canada in math and science. ''Depressing and uninspiring'' is how Roger Porter, the White House assistant for economic and domestic policy, labels America's educational output. And remember, Porter is describing the relative go-getters who at least graduate. About 25% of all U.S. high school students -- some 750,000 each year -- simply drop out. To compete in a global marketplace where mental might is increasingly the quality that separates winners from losers, America must expect more from its schools, its children, and itself. That was the consensus of a group of more than 200 business leaders, politicians, and educators who gathered in late October in Washington, D.C., for FORTUNE's second education summit. As Apple Computer Chairman John Sculley put it: ''After Sputnik, John Kennedy set a level of expectation that went well beyond just catching up. I suggest we ! raise our sights, raise our expectations, and say, 'Why not be the best?' '' In the year since FORTUNE held its first education conference, school reform has begun to climb toward the top of the political agenda. In September, President Bush convened a historic meeting of the nation's governors in Charlottesville, Virginia, to draw up a list of education goals. These included establishing national performance standards, attracting qualified talent to teaching by simplifying certification rules, and giving families more freedom to choose the public schools their children attend (see the following story). While they were encouraged by the Charlottesville conference, many executives and educators at FORTUNE's summit insisted that the White House and Congress still underestimate the urgency of the crisis. Calling for an even more vigorous crusade, Xerox Chairman David Kearns said: ''Education is not a priority to compete with the national defense, the trade deficit, the federal budget deficit, drugs, or AIDS. We must think of it as the solution to the rest of those problems.'' Almost no one denies, for example, that Head Start and other early education programs dramatically reduce the likelihood that poor youngsters will become school dropouts. How do you put a price tag on ignorance? One way is to compare the $14,000 a year it costs taxpayers to keep a prisoner in jail -- two-thirds of U.S. prison inmates are high school dropouts -- with the $5,000 annual cost of sending a child through public school. Despite a recent increase in Head Start's budget, the program still reaches less than half of the children poor enough to qualify. Of course, money alone is not the answer. Since 1960 spending per child in U.S. public schools has risen more than 300%, but average scores on standardized tests have plummeted and failed to recover (see chart). Real improvement, everyone now agrees, will require nothing less than a complete restructuring of U.S. schools. Ernest Boyer, president of the Carnegie Foundation for the Advancement of Teaching, says: ''Both the school clock and calendar must lengthen to reflect America's changing work patterns.'' School days that end in midafternoon and academic years interrupted by long summer breaks still reflect the rhythms of 19th-century farm life. On average U.S. children spend 40 to 60 fewer days in school than their counterparts in Europe or Japan. In problem school districts, traditional management structures may have to be overturned. In Jersey City, New Jersey, for example, the high school dropout rate for years has topped 50%. In October the state government, claiming gross mismanagement, took control of Jersey City's schools and installed a new superintendent. Since then, several other badly run districts that had been tagged as potential takeover candidates by the state have swiftly improved. ''Threat is helpful,'' concludes New Jersey Governor Thomas Kean. Business can't brandish that kind of stick. But FORTUNE's conferees agreed that corporations can do plenty to push U.S. education onto a turnaround track. As Apple's Sculley pointed out, ''Chief executives of global enterprises are becoming as powerful as many heads of state.'' That power could be used in large and visible ways: Coca-Cola recently announced that it is donating $50 million over the next ten years to education programs. Top managers might also play lead roles in supporting reform-minded politicians and maverick educators or in lobbying local taxpayers to join the crusade. Most steps are smaller but no less important. Among them: honoring outstanding teachers; helping schools devise better student performance measures; granting employees flexible hours so they can visit their children's classes; donating science labs; endowing summer fellowships for teachers; encouraging employees to get involved as student mentors. Borrowing a suggestion made almost 200 years ago by the German writer Goethe, New Jersey's Kean offered this advice: ''If you want to make the world a better place, clean your own doorstep.'' The following pages will show some of the ways companies can polish the performance of the schools in the communities in which they live.

SUPPORT TEACHERS -- Decentralize. Push decision-making down. Involve the people closest to the customers. Participatory management and its attendant buzzwords may be all the rage in business. But in U.S. schools, handing down orders from the top is still the rule. Recently the Carnegie Foundation surveyed 22,000 teachers and found that one-third had almost no say in shaping the curriculum they taught. Two-thirds were not even asked to help shape their school's policy on whether to hold a student back. According to John Sculley, ''All our reform energy should focus on making the experience of learning more effective and richer. To do that, we need to pay more attention to teachers.'' Just by showing up in the classroom or at school meetings, executives send a signal to students and parents that what teachers do is socially significant. As Kay Whitmore, the president of Eastman Kodak, notes, ''I don't always feel that I have to say anything. But like George Washington at the Constitutional Convention, my presence says to the rest of the community that it's important to be here.'' As guest lecturers, executives often make textbook wisdom fresh and urgent. Says Karl Flemke, president of Junior Achievement, the nonprofit organization that promotes economic education in public schools: ''A teacher might explain supply and demand with curves and graphs. A business person comes into a class and says, 'Okay, we're going to see whether popcorn will sell as a new item in the cafeteria.' '' In Delaware, Junior Achievement is also bringing teachers into the business world. Through a program called the Teacher Academy, sponsored by the likes of Du Pont and American Express, local corporations offer them summer jobs. Says Cathy Waller, an eighth-grade history teacher who spent eight weeks last summer working on market forecasts at the U.S. subsidiary of Britain's Imperial Chemical Industries: ''Now I can tell students that if they don't have attributes such as punctuality and accuracy, a company will say, 'Sorry -- we'll find someone else.' '' Finally, companies can supply the equipment teachers need to do a better job. Computers top the wish lists of most schools -- for good reason. Says James Dezell Jr., manager of IBM Educational Systems: ''With computers, students become active engagers of knowledge rather than passive recipients of information.'' Five years ago all ten elementary and secondary schools in Orangeburg, South Carolina, installed computers. Since then, each one's average achievement test scores have climbed from the lowest quartile in the state to the second highest.

TELL SCHOOLS WHAT YOU WANT -- If you think business has no business advising schools on what they should teach, think again. Says Barbara Hatton, deputy director of education and culture at the Ford Foundation: ''Students who are not participating at school have lost the connection between what they are doing there and the quality of their future life. They simply don't see that it makes any difference -- and in many cases it doesn't.'' Can companies help kids discover that vital link? Yes, says Iowa Governor Terry Branstad: ''Business needs to do a better job of telling our schools what it wants and expects from graduates. You must help us assess and define what is lacking.'' Albert Shanker, the president of the American Federation of Teachers, suggests that companies make a point of asking job applicants for their transcripts. Then, he points out, ''both the business and educational establishment will be saying to youngsters, 'You have to perform in school.' '' In an information age whose only constant is change, many executives worry that the schools do too little to prepare graduates to think critically and solve problems. They want more emphasis on the basics -- reading, writing, and arithmetic. To encourage analysis and critical judgment, they'd like less reliance on, say, multiple-choice tests and more on reports and essays. Says Kearns of Xerox: ''What's at issue is the capacity of the American worker to continue to learn throughout his career. Business will train, if the schools will educate.'' But not every kid is destined for the executive track. What some companies want -- and what may make the lights come on for less academically inclined students -- is better vocational training. Several years ago Toyota USA forecast that its dealers would need as many as 4,000 new technicians by the early 1990s. To ensure a supply of Toyota-ready graduates, the company began working with 56 vocational schools and community colleges around the country to develop a curriculum. Nearly 1,000 students are now enrolled in the Toyota Technical Education Network. So far more than 80% of the program's graduates have taken jobs with Toyota. In Philadelphia a far-sighted business community joined with the school district 20 years ago to create the Philadelphia High School Academies. Says Constance Clayton, the city's dynamic superintendent of schools: ''Academically, we stress the direct link between math or English to a job skill. Vocational skills are linked to a paycheck.'' The academies, which operate as small schools within larger comprehensive high schools, prepare students from low-income families for a career in one of six industries, ranging from electronics to health care. Executives from over 150 companies -- IBM, General Motors, and General Electric, among others -- meet teachers regularly to update their courses. The program clearly works. Only 4% of the academies' students drop out. Eighty-five percent get jobs when they graduate. Because of its success, Philadelphia is now looking to expand the program, which reaches about 1,800 children per year. The goal: 5,000 students by 1993.

HELP KIDS GET TO COLLEGE -- Here's a news bulletin to make every young parent prematurely gray. According to the American College Testing Program, only 6% of U.S. families today can afford to send a child to a four-year private college without financial assistance. By the year 2007, the average cost of sending a child to college for four years could zoom beyond the ozone to $300,000. But as fast as the price tag of a college degree has soared, its relative value -- measured by the gap between average earnings of college vs. high school graduates -- has risen almost as quickly. Aspiring students from poorer families who only make it through high school will increasingly find themselves condemned to second-class citizenship. That's why Merrill Lynch -- an outfit that knows a bit about investing for the long term, as Chairman William Schreyer points out -- is bullish on college scholarships. Working through the Urban League, the company last year selected 25 6-year-olds from each of ten cities for its ScholarshipBuilder program. That's right, first-graders. Each year the Merrill Lynch Foundation will contribute $2,000 to an investment fund for each student. Upon graduation from high school, the child will receive either a college scholarship or tuition to pay for other advanced training. Any student who wants to join the armed forces or go to work can take a one-time stipend instead. All the kids in Merrill's ScholarshipBuilder come from poor communities where the dropout rate exceeds 30%. The company hopes that its remarkable incentive will keep many of them in school. Says John Jacob, president of the Urban League: ''Just think. These kids are only 6 years old. They aren't on drugs. They aren't pregnant. They haven't been arrested, and they haven't flunked anything. And we've got them.'' For many inner-city youngsters, money isn't the only barrier to college. Each year millions of dollars of financial aid go unclaimed because students do not realize the money is there or don't know how to apply. Benjamin Rosolowski, a senior project engineer for VME Americas, a Cleveland construction equipment manufacturer, was once among that crowd. Says Rosolowski: ''My parents, who didn't go to college, didn't understand all those forms. When you're young, it's just so easy to walk the other way. Filling out the applications takes time away from football.'' For Rosolowski, the push to tackle college came from Carol Keske, one of 20 counselors with the Cleveland Scholarship Program. CSP is a 22-year-old venture, backed entirely by the business community, that tries to ensure that every Cleveland high school graduate who wants to go to college gets there. To meet that goal, counselors seek out students who they know have not applied and spend hours advising on financial aid and explaining how to fill out forms. Impressed by CSP's success, businessmen in New York City, Boston, Miami, and Baltimore have started similar programs. Since its inception, CSP has helped more than 60,000 students go to college. Even better, thanks in part to the follow-up support that counselors provide, 80% of those who start earn degrees. That's considerably higher than the national average. Two-thirds of the graduates return to Cleveland as doctors, lawyers, and managers. CSP is particularly proud of one alumnus: Mike White, the newly elected mayor of Cleveland.

MOBILIZE THE WHOLE COMMUNITY -- What happens when you start sweeping your doorstep in a whirlwind? Goethe didn't say anything about that. But educators struggling to cope with broken families, drugs, teenage pregnancies, homelessness, crime, lousy health care, and the other social pathologies that blight America's cities know the answer. You get grit in your face. Says Philadelphia's Constance Clayton: ''The challenges facing urban school systems today are so great that a total community effort is needed.'' Consider Chelsea, Massachusetts, an ethnically mixed community of 25,000 people just north of Boston. Average annual per capita income is less than $10,000; one in four teenage girls is pregnant or already a mother; and the drug business is a major employer. Not surprisingly, the dropout rate at Chelsea High School is 52%. Of those who graduate, just 10% go to college. Desperate for help, two years ago the Chelsea school committee asked Boston University to take over management of the district. President John Silber, whose earlier offer to assume control of the mismanaged Boston schools had been rebuffed, said yes. To keep poor health from holding students back, Boston University's schools of medicine and dentistry are trying to improve care for Chelsea youngsters. For now, children who've never been to a dentist get free checkups from faculty and recent graduates. Pregnant teenagers will receive prenatal care and counseling from Chelsea Health Center, in hopes their children might enter preschool healthy and ready to learn. Since 60% of Chelsea schoolchildren come from families headed by a single parent, who usually works, Silber eventually plans to keep the doors open all year for preschoolers and move to longer days for first- through fifth- graders. Boston University is also encouraging parents to get more involved in their children's lives by setting specific goals for them, such as eating dinner at home with the kids at least three nights a week. By computerizing Chelsea's school budget, Boston University has saved a bundle. But to meet its ambitious goals, it must raise about $20 million over the next four years. Not a retiring sort, Silber says: ''I think it would be wonderful if 200 FORTUNE 500 companies committed a small amount of money -- say, $25,000 a year for five years -- to the Chelsea Project.'' How much difference can comprehensive reform make? It's too soon to tell in Chelsea, and business has yet to get engaged there. But the experience in Rochester, New York, suggests the payoff may be a long time coming. Three years ago Kodak, the city's largest employer, as well as the Urban League and other weighty locals, backed a sweeping series of initiatives that turned Rochester into a national testing ground for education reform. New middle schools, stocked with planning teams of administrators, teachers, parents, and students, were created to meet the special needs of sixth-, seventh-, and eighth-graders. For the chance to earn as much as $68,000 a year, teachers signed new contracts that demand greater responsibility and accountability. One new duty: offering guidance to families at home. Through the Rochester BrainPower program, spearheaded by Kodak, local companies provide management training for teachers and principals. Though each element of the Rochester experiment seems sound, so far evidence of progress is as tangible as cold fusion. Teachers are balking at doing social work, and school-based planning teams show an unsettling tendency to stick with the status quo. Warns Rochester Urban League President Bill Johnson: ''In the euphoria of reformism, we made a lot of claims without realizing how difficult they would be to accomplish.'' But Kodak President Kay Whitmore, who has been involved from the beginning, remains determined. Says he: ''This is hardly a massive revolution. The resistance to change we've encountered is as powerful as any I've ever experienced. But it's only driving me to become more and more of a revolutionary.'' THAT SORT of determination, buttressed by old-fashioned American optimism, was ultimately what brightened the gloomy realities discussed at FORTUNE's second education summit. (For a list of participants, see page 144.) Says New Jersey's Tom Kean: ''I believe the people who tamed the West and won two world wars can rebuild our schools.'' As with those challenges, rebuilding America's schools is a task that will take years to complete. The battle to restructure can be fought and won only classroom by classroom, school district by school district. Will business stay the course? Admits Kodak's Whitmore: ''A lot of educators distrust whether the business community will continue its involvement with the schools. My answer is yes.'' With the stakes so high, no other answer is acceptable.

CHART: NOT AVAILABLE CREDIT: NO CREDIT CAPTION: As U.S. spending rises... ...test scores fall