0313338868

The Way We Work
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The Way
We Work
An Encyclopedia of
Business Culture
Volume 1
A–L
Edited by Regina Fazio Maruca
GREENWOOD PRESS
Westport, Connecticut • London
Library of Congress Cataloging-in-Publication Data
The way we work : an encyclopedia of business culture / edited by Regina Fazio Maruca.
p. cm.
Includes bibliographical references and index.
ISBN-13: 978-0-313-33886-1 ((set) : alk. paper)
ISBN-13: 978-0-313-33887-8 ((vol. 1) : alk. paper)
1. Corporate culture—United States. 2. Work environment—United States.
I. Maruca, Regina Fazio.
HD58.7.W3328 2008
658—dc22 2007040510
British Library Cataloguing in Publication Data is available.
Copyright © 2008 by Regina Fazio Maruca
All rights reserved. No portion of this book may be
reproduced, by any process or technique, without the
express written consent of the publisher.
Library of Congress Catalog Card Number: 2007040510
ISBN: 978-0-313-33886-1 (set)
978-0-313-33887-8 (vol. 1)
978-0-313-33888-5 (vol. 2)
First published in 2008
Greenwood Press, 88 Post Road West, Westport, CT 06881
An imprint of Greenwood Publishing Group, Inc.
www.greenwood.com
Printed in the United States of America
The paper used in this book complies with the

Permanent Paper Standard issued by the National
Information Standards Organization (Z39.48–1984).
10 9 8 7 6 5 4 3 2 1
Every reasonable effort has been made to trace the owners of copyright materials in this
book, but in some instances this has proven impossible. The editor and publisher will be
glad to receive information leading to more complete acknowledgments in subsequent
printings of the book and in the meantime extend their apologies for any omissions.
Contents
Alphabetical List of Entries vii
Entries by Subject xi
Preface xv
Acknowledgments xxi
The Encyclopedia 1
Appendix 395
Bibliography 423
Index 431
Alphabetical List of Entries
Action Learning Budget

Age Discrimination Business-to-Business/Business-to-
American Association of Retired Consumer (B2B/B2C)
Persons (AARP) Cafeteria Benefit
American Federation of Labor and Carnegie, Dale/How to Win
Congress of Industrial Friends and Influence People
Organizations (AFL-CIO) Casual Friday
Americans with Disabilities Act Change Agent/Change
The Apprentice Management
The Art of War Code of Ethics
Balanced Scorecard Competitive Advantage
Benchmarking Competitive Intelligence
Best Practice Core Competencies
Blanchard, Ken Corner Office
Blue Collar Corporate Social Responsibility
Bonus Crisis/Risk Management
Bootstrapping Cubicle
Boundaryless Organization Dilbert
Brainstorming Diversity
Branding Dot.com/Dot.bomb
Bricks and Clicks Downsizing
Drucker, Peter Leveraged Buyout (LBO)

E-mail Lifetime Employment
Emotional Intelligence Made in Japan
Employee Assistance Programs Management by Objectives
Empowerment Managerial Grid
Enron Mass Customization
Equal Employment Opportunity Matrix Organizations
Commission (EEOC) Megatrends
Executive Coach Mid-Career
Executive Compensation Mission Statement
Exit Interview Moments of Truth
Feng Shui Myers-Briggs Type Indicator®
Flex-Time (MBTI)
The 4Ps Napster
Free Agent NASDAQ
General Electric (GE) Workout National Secretaries Day
Generation X, Y, and Z Networking
Glass Ceiling Offshoring
Golden Parachute Ombudsman
Hacker One-to-One Marketing
Harassment Open Book Management
Harvard Business Review Outsourcing
Headhunter Performance Management/
Herman Miller Furniture Performance Measurement
Horizontal Organizations The Peter Principle
Innovation Peters, Tom
Intangibles Portfolio Career
Intellectual Capital PowerPoint
Internet Real Time
Intranet/Extranet Reengineering
Job Sharing Relationship Marketing
Just-in-Time Sarbanes–Oxley Act of 2002
Kaizen Scenario Planning
Killer App Shareholder Value
Knowledge Management Six Sigma
Knowledge Worker Skunkworks
Lean Manufacturing Spin-off/Spinout
Learning Organization Stakeholder Theory/Management
viii
Strategic Alliances Total Quality Management (TQM)

Suggestion Box Training and Development
Supply Chain Turnaround
Sustainability 24/7
SWOT Analysis Value Proposition
Synergy Virtual Teams
Telework War for Talent
Temporary Workers Water Cooler
Theory X and Theory Y Whistleblower
360-Degree Feedback White Collar
Time Management
ix
Entries by Subject
Associations and Organizations Megatrends

American Association of Napster
Retired Persons (AARP) Peters, Tom
American Federation of
Labor and Congress of Daily Life
Industrial Organizations Casual Friday
(AFL-CIO) Dilbert
Equal Employment Exit Interview
Opportunity Commission Flex-Time
(EEOC) Job Sharing
Power Point
Cultural Influences, Milestones Real Time
or Markers Suggestion Box
The Apprentice Water Cooler
The Art of War
Dilbert Discrimination
Feng Shui Age Discrimination
Generation X, Y, and Z Americans with Disabilities
Harvard Business Review Act
Herman Miller Furniture Equal Employment Oppor-
Made in Japan tunity Commission (EEOC)
Entries by Subject
Diversity Scenario Planning

Glass Ceiling Shareholder Value
Employees Influential People

Blue Collar Blanchard, Ken
Cubicle Carnegie, Dale/How to Win
Employee Assistance Program Friends and Influence
Free Agent People
Generation X, Y, and Z Drucker, Peter
Hacker Peters, Tom
Intellectual Capital
Knowledge Worker Leadership
Lifetime Employment Change Agent/Change
Mid-Career Management
Myers-Briggs Type Corner Office
Indicator® (MBTI) Emotional Intelligence
National Secretaries’ Day Executive Coach
Networking Executive Compensation
Portfolio Career Golden Parachute
Telework Headhunter
Temporary Workers Mid-Career
Training and Development Moments of Truth
War for Talent The Peter Principle
Whistleblower Portfolio Career
White Collar 360-Degree Feedback
Theory X and Theory Y
Ethics Time Management
Corporate Social Responsibility
Enron Management Approaches
Sarbanes–Oxley Act of 2002 Action Learning
Balanced Scorecard
Finance Benchmarking
Budget Best Practice
Crisis/Risk Management Brainstorming
Enron Change Agent/Change
NASDAQ Management
Offshoring Empowerment
Outsourcing Flex-Time
xii
Entries by Subject
General Electric (GE) Strategy

Workout Bootstrapping
Horizontal Organizations Branding
Job Sharing Budget
Knowledge Management Bricks and clicks
Management by Objectives Business-to-Business/
Managerial Grid Business-to-Consumer
Matrix Organization (B2B/B2C)
Ombudsman Competitive Advantage
Open Book Management Competitive Intelligence
Performance Management/ Core Competencies
Performance Measurement Crisis/Risk Management
Six Sigma Downsizing
Suggestion Box The 4Ps
Synergy Innovation
Telework Intangibles
Theory X and Theory Y Intellectual Capital
Total Quality Management Just-in-Time
Virtual Teams Kaizen
Killer App
Manufacturing Lean Manufacturing
Just-in-Time Leveraged Buyout (LBO)
Offshoring Mass Customization
Lean Manufacturing Mission Statement
Outsourcing Offshoring
Skunkworks Outsourcing
Supply Chain One-to-One Marketing
Six Sigma Reengineering
Total Quality Management Relationship Marketing
Scenario Planning
Marketing Six Sigma
Branding Skunkworks
Bricks and Clicks Spin-off/Spinout
The 4Ps Stakeholder Theory/
One-to-One Marketing Management
Relationship Marketing Strategic Alliance
24/7 Supply Chain
Value Proposition Sustainability
xiii
Entries by Subject
SWOT Analysis Employee Assistance

Turnaround Programs
Value Proposition Executive Compensation
Flex-Time
New Economy Horizontal Organization
Bricks and Clicks Learning Organization
Dot.com/Dot.bomb Supply Chain
E-mail
Hacker Policies and Laws
Internet Americans with Disabilities
Intranet/Extranet Act
Knowledge Management Equal Employment
Knowledge Worker Opportunity Commission
Virtual Teams (EEOC)
War for Talent
Women
Organizational Design/ Corner Office
Description Diversity
Bonus Flex-Time
Boundaryless Organization Glass Ceiling
Cafeteria Benefits Job Sharing
Code of Ethics
xiv
Preface
“Business Culture” isn’t tangible. You can shape it; you can talk about its
characteristics; you can describe how people who work in a certain office
behave as a result of it; but business culture isn’t something that can be
physically grasped.
Accordingly, business culture is one of those “soft” yet incredibly pow-
erful elements of business as a whole. The importance of business culture
can perhaps be seen in the way it affects the individuals operating in that
culture. A strong and positive business culture can foster growth in an
organization and bring out the best in people. A weak culture, or a culture
of intimidation, can cause initially productive employees to become dis-
gruntled and unhappy to the point where they leave—it can also keep
those who remain from forming the kinds of teams that win in the market-
place.
Culture can be the difference between a company where employees
spend time together after work, and one where they all go their separate
ways at 5 P.M. It can be the difference between a company where employ-
ees spend a great deal of time meeting secretively behind closed doors,
and a company where they engage freely in a relatively tension-free atmo-
sphere. Culture can be the difference between a company where employees
compete against one another, and a company where employees share in-
Preface
formation and stand united, focused on external competition and on the

customer rather than internal issues.
Importantly, culture can change on a dime. The culture of work is dy-
namic. A new chief executive officer (CEO) can change a company’s cul-
ture pretty quickly. Similarly, a new manager can infuse a department with
a particular culture. Employees at all levels shape the culture of their com-
panies constantly by how they act, what they say to one another, and how
they represent the company to customers.
When you step back and consider business culture as it applies to all
companies—even if you set the boundaries loosely as “companies based in
the United States” and then limit the scope to “office” work—you see
that culture still evolves and changes, morphs and flows quickly at the big-
picture level.
Knowing this, our goal in compiling The Way We Work was to offer our
readers as many trends, definitions, and facts as possible within the covers
of these two volumes in order to capture a colorful and varied freeze-frame
look at office culture in the United States in the early years of the twenty-
first century. It is our hope that the contents will resonate with the people
who are hard at work in offices as of this writing, and help them better
understand the forces and factors that influence their organizations. The
set also offers a wealth of information that can serve as a useful resource
and starting point for high school and college students who are entering
the workforce and seek some guidance on what office work is like, and
how it is evolving.
What You Will Find
Over 100 entries, ranging from American Association of Retired Persons

(AARP) to white collar workers, and covering topics such as diversity,
learning organizations, mission statements, the glass ceiling, generation X
(Y, Z, etc.), and the war for talent, are included in this encyclopedia. The
topics and terms have been selected because each of them, in some way,
shapes the big picture of business culture as we know it.
It must be noted that one person’s opinion of the kinds of things that
shape business culture will naturally differ from someone else’s. And opin-
ions continue to change over time. In part, this transient nature of individ-
ual and general opinion is why a team of people including academic re-
searchers, journalists, corporate coaches, and executives and employees
xvi
Preface
from a wide range of companies came together to compile this book. In

deciding what to include—and what not to include—the team engaged in
often-vigorous debate over whether a certain term, or fact, or trend was
really a “culture-shaper” and so belonged in these pages. The items se-
lected for inclusion needed to have significant influence on business cul-
ture; they also had to have enduring impact. If you don’t expect to see
something, and it’s included, that is because the team determined that the
term or topic was in some way a significant influence on business culture.
If you do expect to see something, and it’s not here, that is most likely
because some other term or topic beat it out in the final analysis. As a
result, many formal and informal networks, associations, and the like are
not called out in the A–Z listings; where possible, these have been in-
cluded as reference sources.
In addition to the A–Z entries, you’ll also find a set of short features
titled “Why I Do This.” These are personal narratives that tap into the
motivations, pros, and cons of a host of individuals’ career choices and in
doing so move beyond office culture to include other kinds of work that
enable and assist office culture. If you think you want to be a Web-market-
ing expert, there is a “Why I Do This” that offers a glimpse into what day-
to-day life in this job is like. Are you more interested in working as a dental
office manager? What about a career as a finance executive? Librarian? Or
maybe a limo driver, enabling a host of executives, consultants, and the
like to work in multiple locations with relative ease? Driving limos is not
only about sitting in traffic; this job offers surprising upsides.
The “Why I Do This” essays do not represent every job available; what
they offer, however, is an insider’s perspective of the world of office work
and its supporting services from a diverse group of people located across
the United States. An outsider’s view of what work in a given office is like
can be vastly misleading; hearing directly from the employees is often an
eye-opener.
The encyclopedia also contains several feature articles that speak to par-
ticular aspects of the culture of work. Some of these—including Rob Gal-
ford’s essay on Leadership Mindsets, and Constantine von Hoffman’s inter-
view on Blogs and Work—were written for these volumes. Others, such as
the articles reprinted from Knowledge@Wharton, an online resource offer-
ing business insights, analysis,and information from a variety of sources,
have been included here because they offer particular insights into other
cultural elements of office life, and because they bring dedicated research
to bear on these issues.
xvii
Preface
The encyclopedia contains one key book chapter, reprinted from Align-
ing the Stars by Thomas Tierney and Jay Lorsch, and appearing here as an
appendix. This piece provides an in-depth look at what culture means in-
side professional service firms. And a series of short pieces, appearing under
the heading Signs of Changing Culture, reflect behaviors, happenings,
trends, and other influences of culture as reported in major newspapers
and magazines during the period when these volumes were being re-
searched.
Finally, the bibliography represents a host of resources available for
those who want to extend their research on business culture, or plumb the
depths of one or another topic in particular.
Themes
Interestingly—though perhaps not surprisingly—across all of the ele-

ments in this work, several common themes emerge. Among them:
• An awareness of the social and environmental issues facing the

world—poverty, inequality and global warming among them—and
an increasing resolve to contribute to solutions.
• A continuing struggle over where the lines are and should be drawn
with regard to the work/life balance. Can anyone who works in an
office really “unplug” anymore? Should they?
• An awareness of the phenomenon of the “rise of the customer,” or
the increasing influence that consumers have on what companies
make and market, and how responsive companies must be to con-
sumers in order to succeed . . .
• A continuing and intensifying struggle to get the most out of hu-
man capital—people—in a competitive landscape where businesses
increasingly compete in their ability to muster and channel talent.
• An ongoing effort to get Web-based business “right” including
marketing, reach, and coordination with physical stores, so that
companies don’t compete against themselves in their online and
physical worlds, and so that customers can expect to shop as easily
whether they’re on the computer or down town.
These themes and others are illuminated in related, cross-referenced en-

tries in this work. They surface in the short, “Signs of Changing Culture”
xviii
Preface
notes, and in the essays, interviews, and articles that flavor the encyclope-
dia throughout. They’re also reflected in the “Why I Do This” narratives,
to the extent that they have shaped people’s expectations of the work they
do, and the way in which they spend their days.
If You’re Looking for a Job
One of the most interesting insights that surfaced during the process of
putting together this encyclopedia is how different one job can be from
another, even given the same necessary skills, and in many cases, the same
job title. Culture is a prime differentiator. People with the “same” jobs at
one company have profoundly different work experiences at another com-
pany, and sometimes, even when working for the same employer in differ-
ent departments, or units, or functions.
This isn’t really a surprising insight. But when you’re faced with it, time
and again, across the amount of information that gets considered for an
encyclopedia, the range of different experiences, even given broad com-
monalities, is daunting.
The take-away from this insight is to search for the culture that fits an
individual, not just one that works as a skills-match. There are any number
of jobs out there that cause people to work in and around an office. But
someone with financial skills can work for a zoo, or a bank, or a fire de-
partment, or an opera company, and have a profoundly different daily ex-
perience at work than their peers-in-skill work in other environments.
Someone who works in human resources can be surrounded by lawyers,
architects, consultants, cleaners, security guards, computer programmers,
writers, designers, nurses, you name it. Again, while the job title may be
the same, each alternative offers a different daily existence.
Extremes
While collecting and coordinating materials for this encyclopedia, we

expected to find general themes. But many cultural “extremes” have also
come to light. Job-seekers again take note. For example, consider the com-
pany whose top executive demands complete obedience from his employ-
ees—and also takes it upon himself to manage and support employees’
xix
Preface
personal lives, even offering marital and general life advice on a regular
basis—the kind of company where employees call this senior leader in the
middle of the night to discuss their personal lives. Or think about the
insurance company that owns and stocks its own ponds, expects employees
to spend time fishing, and allows them to keep what they catch. (This
company also pays for a weight loss program; employees front some of the
cost, but get their money back if they lose the weight they set out to lose.
If not, the money goes to charity.)
These are merely samples of the individual cultures cultivated by certain
companies. Scratch the surface of any company and you’ll find unique cul-
tural attributes. But scratch the surface of some, and you’ll find “norms”
that truly stand out.
Culture-Shaped Challenges
Our research also highlighted, time and again, the challenges and con-
flicts that make and break individuals, teams, and entire businesses, on any
given workday. Battles rage over health care benefits, workplace standards,
and equal employment opportunity. Tensions spiral out of control when
directors and leadership teams clash over executive compensation, acquisi-
tions, and divestitures. Bosses, peers, and direct reports face off over a
market positions, pricing strategies, performance reviews, and the right
way to make decisions. And all of these conflicts are framed and fueled by
the culture at work in the organization at hand.
We hope that in these pages, you find resources that shed light on many
different perspectives of “the way we work” and that the material herein
informs your understanding of the forces shaping business culture, and
opens new avenues of thought.
Wherever possible, we’ve included suggestions or links to additional in-
formation on any given topic for further research. We urge you to utilize
these connections, and hope that you find them useful. Mostly, we hope
you find what’s in these pages interesting and provocative; we hope this
encyclopedia encourages students and professionals alike to examine or re-
examine their role or potential in the world of work as well as their contri-
butions to business culture.
xx
Acknowledgments
This work reflects the efforts of so many people—too many to name here.
You know who you are. Your essays, your thoughts about business culture,
your views about your own choice of jobs and careers, and your advice
about sources and content are reflected on every page that follows. You
have our profound and heartfelt gratitude.
We would like to recognize a few people explicitly, because of their
unique and substantive contributions to this work:
Our thanks go to Nick Phillipson, who had the idea to do an encyclope-
dia of business culture designed primarily for students considering “office”
work. His vision shaped the project from the early days; his thoughtful
editing provided the guidelines for the encyclopedia’s various elements.
Without Nick, the project would not have existed. Without Green-
wood’s Kristi Ward, it would not have been completed. Kristi stepped in
at a crucial time to edit, to encourage, and literally to pull together and
organize all of the many different editorial components that make up the
whole. Her unflagging enthusiasm, her patience, and her expertise drove
the project forward. She truly shouldered this encyclopedia and pushed it
to completion.
Christine Marra’s efforts were also utterly essential to the project’s com-
pletion. Christine stepped in to edit the many alphabetical entries and
other components of the encyclopedia. Her keen eye, efficient editing, and
Acknowledgments
level-headed approach kept the project on track, and allowed us to picture

what it would look like as a finished work, even when it was far from being
finished.
Credit for the content in the A–Z entries goes largely to a team of
skilled researchers, namely Marie M. Bell, Diane R. Walker, Catherine A.
Cotins, and Rochelle Stewart. An encyclopedia requires researchers who
are able to cast a wide net, assess a great deal of information, and select
and present that which they believe really “captures” a definition succinctly
and clearly. These folks were up to that task.
We would like to acknowledge, with deeply felt thanks, Sheryl Rowe’s
formidable editing and production skills, Bridget Austiguy-Preschel’s pro-
duction expertise, Megan Chalek’s diligence and attention to detail, and
the patience and skill of all of the other people who worked tirelessly be-
hind the scenes at Greenwood to see this through.
Finally, our thanks as ever go to our families, for their patience, toler-
ance, encouragement and love.
xxii
A
Action Learning
You remember the old phrase “learn on the job,” or “learn by doing.”
Well, action learning is a new, more advanced and aware way to learn by
doing.
Essentially, action learning refers to a problem-solving technique where
success means more than just solving the problem. Action learning calls
for groups of people to work together on a real challenge and to concen-
trate at the same time on capturing the kinds of lessons they learn during
the problem solving process. Put simply, it is an attempt to get groups of
people to solve problems, and also to learn about the best way to approach
problems and to work together. The idea is to learn more about the pro-
cess of learning each time a problem is solved. People engaged in “action
learning,” ask: What did we learn as individuals from this process? In addi-
tion to solving the problem at hand, what lessons can we carry forward?
Beyond the solution we found this time, what did we learn that can help
our company at large?
Noel Tichy is a professor of organization and management at the Uni-
versity of Michigan and the former head of Crotonville, General Electric
Co.’s leadership development organization. Tichy captured the impor-
tance of action learning with regard to leadership in an interview with
ComputerWorld, published October 2, 2006. In that interview, he said:
“It is up to the leaders of an organization to be the teachers. Only small
minorities of leaders do this, but the ones who do are role models. And
they don’t teach Harvard Business School cases; they get their leaders to
work on real projects as part of their development.”
The following explanation and opinion of action learning is reprinted
with permission from the February 18, 2004, edition of the George Wash-
ington University newspaper By George!
Action Learning
Action Learning: A Powerful New Training Tool

for Developing Individuals, Teams and Organizations
By Michael J. Marquardt, professor of human
resource development and international affairs
Action learning has suddenly emerged as a key training and problem-
solving tool for companies as diverse as Nokia, United Technologies,
Motorola, Marriott, General Motors, the US Department of Agricul-
ture, Deutsche Bank, and British Airways. These and hundreds of
companies around the world now employ action learning for strategic
planning, for developing managers, for identifying competitive advan-
tages, for reducing operating costs, for creating high-performing
teams, and for becoming learning organizations.
What exactly is action learning? Simply described, action learning is
a dynamic process that involves a small group of people solving real
problems, while at the same time focusing on what they are learning
and how their learning can benefit each group member, the group
itself and the organization as a whole.
Perhaps action learning’s most valuable capacity is its amazing,
multiplying impact to equip individuals, especially leaders, to more
effectively respond to change. Learning is what makes action learning
strategic rather than tactical. Fresh thinking and new learning are
needed if we are to avoid responding to today’s problems with yester-
day’s solutions while tomorrow’s challenges engulf us.
Components of an Action Learning Program
Developed by Professor Reg Revans in England in the middle of the

twentieth century, action learning was slow to be understood and ap-
plied until Jack Welch began using it at General Electric. Over the
past twenty years, various approaches to action learning have ap-
peared, but the model that has gained wide-spread acceptance is the
Marquardt Model, which incorporates the successful elements of both
European and American forms of action learning. This model con-
tains six interactive and interdependent components that build upon
and reinforce one another:
2
Action Learning
1. A problem (project, challenge, opportunity, issue, or task).

Action learning centers around a problem, project, challenge, is-
sue, or task, the resolution of which is of high importance to an
individual, team, and/or organization. The problem should be
significant, urgent and be the responsibility of the team to solve.
It should also provide an opportunity for the group to generate
learning opportunities, to build knowledge, and to develop indi-
vidual, team, and organizational skills. Groups may focus on a sin-
gle problem of the organization or multiple problems introduced
by individual group members.
2. An action learning group or team. The core entity in action
learning is the action learning group (also called a set or team).
Ideally, the group is composed of four-to-eight individuals who
examine an organizational problem that has no easily identifiable
solution. The group should have diversity of background and ex-
perience so as to acquire various perspectives and to encourage
fresh viewpoints. Depending upon the action learning problem,
groups may be volunteers or appointees, may be from various
functions or departments, may include individuals from other or-
ganizations or professions, and may involve suppliers as well as
customers.
3. A process that emphasizes insightful questioning and reflec-
tive listening. Action learning emphasizes questions and reflec-
tion above statements and opinions. By focusing on the right
questions rather than the right answers, action learning focuses on
what one does not know as well as on what one does know. Ac-
tion learning tackles problems through a process of first asking
questions to clarify the exact nature of the problem, reflecting and
identifying possible solutions, and only then taking action. The
focus is on questions since great solutions are contained within
the seeds of great questions. Questions build group dialogue and
cohesiveness, generate innovative and systems thinking, and en-
hance learning results.
4. Taking action on the problem. Action learning requires that the
group be able to take action on the problem it is working on.
Members of the action learning group must have the power to
take action themselves or be assured that their recommendations
3
Action Learning
will be implemented (barring any significant change in the envi-

ronment or the group’s obvious lack of essential information). If
the group only makes recommendations, it loses its energy, cre-
ativity, and commitment. There is no real meaningful or practical
learning until action is taken and reflected upon; for one is never
sure an idea or plan will be effective until it has been implemented.
Action enhances learning because it provides a basis and anchor
for the critical dimension of reflection. The action of action learn-
ing begins with taking steps to reframe the problem and determin-
ing the goal, and only then determining strategies and taking ac-
tion.
5. A commitment to learning. Solving an organizational problem
provides immediate, short-term benefits to the company. The
greater, longer-term, multiplier benefit, however, is the learning
gained by each group member as well as the group as a whole and
how those learnings are applied on a systems-wide basis through-
out the organization. Thus, the learning that occurs in action
learning has greater value strategically for the organization than
the immediate tactical advantage of early problem correction. Ac-
cordingly, action learning places equal emphasis on the learning
and development of individuals and the team as it does on the
solving of problems; for the smarter the group becomes, the
quicker and better will be the quality of its decision-making and
action-taking.
6. An action learning coach. Coaching is necessary for the group
to focus on the important (i.e., the learnings) as well as the urgent
(resolving the problem). The action learning coach helps the team
members reflect both on what they are learning and how they are
solving problems. Through a series of questions, the coach enables
group members to reflect on how they listen, how they may have
reframed the problem, how they give each other feedback, how
they are planning and working, and what assumptions may be
shaping their beliefs and actions. The learning coach also helps the
team focus on what they are achieving, what they are finding diffi-
cult, what processes they are employing and the implications of
these processes. The coaching role may be rotated among mem-
bers of the group or may be a person assigned to that role
throughout the duration of the group’s existence.
4
Age Discrimination
Action learning power is at its peak when all six of these components
are in operation. In addition to these six components, the Marquardt
Model of action learning has two ground rules: (1) statements can only be
made in response to questions, and (2) the action learning coach has the
power to intervene whenever he/she sees an opportunity for learning. Ac-
tion learning, when systematically implemented, can effectively and effi-
ciently solve problems with innovative and sustaining strategies, develop
teams that continuously improve their capability to perform, and apply
valuable knowledge at the individual, group, and community levels.
See also: Knowledge Management; Learning Organization; Training
and Development
Note: Action Learning is used courtesy of Mike Marquardt. Michael J. Marquardt, pro-
fessor of human resource development and international affairs, GSEHD, has written two
books on action learning—Action Learning in Action Transforming Problems and People
for World-Class Organizational Learning (Davies-Black Publishing, 1999) and Optimizing
the Power of Action Learning: Solving Problems and Building Leaders in Real Time (Davies-
Black Publishing, 2004).
Further Reading
Action Learning: How the World’s Top Companies are Re-Creating Their Leaders
and Themselves (Jossey Bass Business and Management Series) by David L.
Dotlich and James L. Noel (Jossey-Bass, 1998).
Learning in Action: A Guide to Putting the Learning Organization to Work, by
David A. Garvin, Harvard Business School Press, New edition (March 25,
2003).
Optimizing the Power of Action Learning: Solving Problems and Building Leaders
in Real Time, by Michael J. Marquardt, Davies-Black Publishing (March
25, 2004).
www.humtech.com
www.12manage.com
Age Discrimination
Age discrimination means that someone has been unfairly treated in an
employment situation because of his or her age. Usually, age discrimina-
tion implies that someone has been unfairly treated because they are older.
Such discrimination is prohibited by a law called The Age Discrimination
in Employment Act of 1967 (ADEA). Essentially, the law protects people
who are forty years old, or older, from unfair treatment based on age. The
5
Age Discrimination
law, ADEA, covers both people who are currently in jobs (employees) and
also those who are applying for jobs. If, for example, someone is passed
over for a job they apply for—even if they are clearly the most qualified
for that job—in favor of a younger applicant, that person may have a claim
according to the law.
According to the U.S. Equal Employment Opportunity Commission
website, in November 2006, the law actually covers “any term, condition,
or privilege of employment.” That is, the ADEA applies to hiring, firing,
pay, benefits, assignments, training, and layoffs. If a company must do a
round of layoffs, for example, and only people who are older lose their
jobs, those who are let go may have a claim. Or if only younger people
are selected for a particular training session, the older people who were
excluded may have a claim.
The law also protects people who come forward and let their employer
or others know when they feel age discrimination is an issue. According to
the website, it is unlawful “to retaliate against an individual for opposing
employment practices that discriminate based on age or for filing an age
discrimination charge, testifying, or participating in any way in an investi-
gation, proceeding, or litigation under the ADEA.”
The ADEA does not apply to all organizations, but it does apply to any
company with twenty or more employees. It applies in local, state, and
federal government employment situations, and also to labor organizations
and employment agencies.
Following are some more specifics about how the law applies in different
contexts, according to the website:
APPRENTICESHIP PROGRAMS
It is generally unlawful for apprenticeship programs, including joint
labor-management apprenticeship programs, to discriminate on the
basis of an individual’s age. Age limitations in apprenticeship pro-
grams are valid only if they fall within certain specific exceptions un-
der the ADEA or if the EEOC grants a specific exemption.
JOB NOTICES AND ADVERTISEMENTS
The ADEA makes it unlawful to include age preferences, limita-
tions, or specifications in job notices or advertisements. As a narrow
exception to that general rule, a job notice or advertisement may
specify an age limit in the rare circumstances where age is shown to
6
Age Discrimination
be a “bona fide occupational qualification” (BFOQ) reasonably nec-

essary to the essence of the business.
PRE-EMPLOYMENT INQUIRIES
The ADEA does not specifically prohibit an employer from asking
an applicant’s age or date of birth. However, because such inquiries
may deter older workers from applying for employment or may other-
wise indicate possible intent to discriminate based on age, requests for
age information will be closely scrutinized to make sure that the in-
quiry was made for a lawful purpose, rather than for a purpose prohib-
ited by the ADEA.
BENEFITS
The Older Workers Benefit Protection Act of 1990 (OWBPA)
amended the ADEA to specifically prohibit employers from denying
benefits to older employees. An employer may reduce benefits based
on age only if the cost of providing the reduced benefits to older
workers is the same as the cost of providing benefits to younger
workers.
WAIVERS OF ADEA RIGHTS
At an employer’s request, an individual may agree to waive his/her
rights or claims under the ADEA. However, the ADEA, as amended
by OWBPA, sets out specific minimum standards that must be met in
order for a waiver to be considered knowing and voluntary and, there-
fore, valid. Among other requirements, a valid ADEA waiver: (1)
must be in writing and be understandable; (2) must specifically refer
to ADEA rights or claims; (3) may not waive rights or claims that
may arise in the future; (4) must be in exchange for valuable consider-
ation; (5) must advise the individual in writing to consult an attorney
before signing the waiver; and (6) must provide the individual at least
twenty-one days to consider the agreement and at least seven days to
revoke the agreement after signing it. In addition, if an employer re-
quests an ADEA waiver in connection with an exit incentive program
or other employment termination program, the minimum require-
ments for a valid waiver are more extensive. www.eeoc.gov
The issue of age discrimination is receiving increasing scrutiny as the

“Baby Boomers” age. “Boomers” are people who were born between
1946 and 1964. According to AARP (www.aarp.org), “By 2014, nearly
7
Age Discrimination
one-third of the total U.S. workforce (32 percent) will be age fifty or
older, up from 27 percent in 2005.”
In the March 2003 issue of the AARP Bulletin Online, Trish Nicholson
wrote, “As more baby boomers move into their 50s, they are finding
something new to protest: age discrimination in the workplace. And they
aren’t wasting any time. Fueled by charges from workers in their 40s and
50s, the number of age bias complaints filed with the U.S. Equal Employ-
ment Opportunity Commission (EEOC) jumped from 14,141 in 1999 to
19,921 in 2002, up 41 percent.”
The article, entitled, “Boomers Discover Age Bias: Age Complaints
Surge as Midlife Workers Find the Going Harder,” quoted EEOC chair-
woman Cari M. Dominiquez as saying, “Baby boomers believe they
helped develop the core values of our society, which prohibit discrimina-
tion. “[They] see the [civil rights] laws that are on the books today as
part of their own efforts.” The article said that Dominiquez believes that
“boomers” are very comfortable standing up for their rights.
Every year, AARP compiles a list entitled “Best Employers for Workers
Over Fifty.” According to the AARP website, the list “is an annual recog-
nition program that acknowledges companies and organizations whose
best practices and policies for addressing aging workforce issues are road-
maps for the workplaces of tomorrow.”
The AARP list was first compiled in 2001, as the “Best Companies” for
older workers. The organization changed the name in order to encourage
nonprofit organizations to apply as well. The list is currently also open to
government employers.
According to the AARP list, the top fifteen employers for older workers
were: (1) Mercy Health System, www.mercyhealthsystem.org; (2) Lee
Memorial Health System, www.leememorial.org; (3) Bon Secours Rich-
mond Health System, www.bonsecours.com; (4) LRMC/TVRH, www
.leesburgregional.org; (5) Yale–New Haven Hospital, www.ynhh.org; (6)
Volkswagen of America, Inc., www.vw.com; (7) Massachusetts Institute
of Technology, www.mit.edu; (8) Oakwood Healthcare System, Inc.,
www.oakwood.org; (9) First Horizon National Corporation, www.first
horizon.com; (10) Hoffmann-LaRoche, Inc., www.rocheusa.com; (11)
Centegra Health System, www.centegra.com; (12) Stanley Consultants,
www.stanleyconsultants.com; (13) Scripps Health, www.scrippshealth.org;
(14) Brevard Public Schools, www.brevard.k12.fl.us; (15) Beaumont Hos-
pitals, www.Beaumonthospitals.com.
8
American Association of Retired Persons
Other sources of information about older workers, and their rights, in-
clude The Society for Human Resource Management, in Alexandria, VA;
The National Older Worker Career Center, in Arlington, VA (www
.nowcc.org); the Center for Corporate Citizenship at Boston College,
Chestnut Hill, MA; The American Society on Aging, San Francisco, CA;
The National Center for Productive Aging, Rockville, MD; and The Na-
tional Council on Aging (www.ncoa.org).
See also: American Association of Retired Persons (AARP); Diversity;
Equal Employment Opportunity Commission; Glass Ceiling; Job Sharing;
Lifetime Employment; Sexual Harassment; War for Talent
Further Reading
Age Discrimination in the American Workplace: Old at a Young Age, by Raymond
F. Gregory, Rutgers University Press (March 2001).
Age Discrimination in Employment: Cross Cultural Comparison and Management
Strategies, by Bahaudin Mujtaba and Frank Cavico, BookSurge Publishing
(January 12, 2006).

(AARP)
American Association of Retired Persons (AARP) is an advocacy and sup-
port organization for people age fifty and above. According to its website,
www.aarp.org, the organization is “the leading nonprofit, nonpartisan
membership organization for people age fifty and over in the United
States.”
AARP has more than thirty-five million members. Its services include
advocacy on legislative, consumer, and legal issues pertaining to people
over fifty, and also a host of discount programs, opportunities to network,
and connections to other groups offering support to those age fifty and
above, whether or not they have retired from the workforce.
Originally, AARP was called the American Association of Retired Per-
sons, but changed its name in 1999 to AARP, to reflect its growth and
expanded mission. U.S. citizenship is not a requirement. Nor do members
have to be retired; as of this writing, more than 44 percent of AARP mem-
bers work either part time or full time.
9
The organization was founded in 1958 by a retired high school principal

named Dr. Ethel Percy Andrus. Andrus had already founded the National
Retired Teachers Association in 1947, to help other retired teachers get
health insurance, and promote their well being. (As the AARP website
says, “At that time, private health insurance was virtually unavailable to
older Americans; in fact, it was not until 1965 that the government en-
acted Medicare, which provides health benefits to persons over age sixty-
five.” Andrus went on to add programs and services to the Teacher’s Asso-
ciation, and eventually founded AARP to offer benefits and programs to
all retired persons in the United States, not just teachers. The National
Retired Teachers Association is now a division of AARP.
For a few years in the 1960s, AARP had offices in Switzerland, and
offered services to retired people outside of the United States. Ultimately,
though, the organization closed its international office, and today pro-
motes connections to the worldwide community of retired people through
networks and coalitions that extend outside of the United States.
AARP’s founding principles, which it still adheres to, are:
• To promote independence, dignity, and purpose for older persons

• To enhance the quality of life for older persons
• To encourage older people “To serve, not to be served”
And as of this writing, the organization has two affiliated groups. These
are the AARP Foundation, and AARP Services, Inc. According to the web-
site, “The AARP Foundation is AARP’s affiliated charity. Its mission is
to build a society in which everyone ages with dignity and purpose. The
Foundation leads positive social change to help people fifty and older, es-
pecially the most vulnerable, by delivering information, education and di-
rect service to communities and families.”
Specific AARP Foundation programs include:
• A work training program for low-income persons age fifty-five and

over.
• Free tax preparation and counseling for older Americans.
• Improvement to legal hotlines through technical assistance and
training.
• Training and assistance for aging advocates in elder law and advo-
cacy.
10
American Federation of Labor and Congress of Industrial Organizations
• Support for housing counselors in their work with older homeown-

ers seeking reverse mortgages.
In addition, the Foundation supports AARP Foundation Litigation, a na-

tional group that focuses on major litigation benefiting older Americans.
The site says that AARP Services, Inc. (ASI), is “a wholly owned subsid-
iary of AARP. ASI manages a range of products and services made available
to AARP members, provides marketing services to AARP and its member
service providers, and manages the organization’s website. ASI is also re-
sponsible for developing new products and services that reflect the chang-
ing needs and interests of AARP members.”
ASI manages programs that address long-term health care issues and
offer or facilitate supplements to Medicare; automobile, home and life in-
surance; discounts on prescription drugs, eye-health services, and eyewear
products. The website says that “ASI also oversees discounts on hotels and
motels, auto rental, airlines, cruise lines, vacation packages, entertainment
products and consumer goods.” AARP members receive several publica-
tions, including the bimonthly AARP magazine, and the AARP Bulletin,
published eleven times a year. Additionally, AARP publishes a quarterly
Spanish-English newspaper called Segunda Juventud, targeting the over-
fifty Hispanic community.
AARP can be reached by phone at 1-888-687-2277, or by mail at 601
E Street NW, Washington, D.C., 20049.
See also: Age Discrimination; Lifetime Employment
Further Reading
The AARP: America’s Most Powerful Lobby and the Clash of Generations, by
Charles R. Morris, Crown; 1st edition (June 18, 1996).
Trust Betrayed: Inside the AARP, by Dale Van Atta, Regnery Pub (February
1998).
American Federation of Labor and Congress of

Industrial Organizations (AFL-CIO)
The American Federation of Labor and Congress of Industrial Organiza-
tions (AFL-CIO) is a voluntary federation of fifty-three national and inter-
national labor unions. According to its website, www.aflcio.org,
11
Today’s unions represent nearly nine million working women and

men of every race and ethnicity and from every walk of life. We are
teachers and truck drivers, musicians and miners, firefighters and farm
workers, bakers and bottlers, engineers and editors, pilots and public
employees, doctors and nurses, painters and laborers—and more. The
AFL-CIO was created in 1955 by the merger of the American Federa-
tion of Labor and the Congress of Industrial Organizations. In 1995,
the biennial convention elected President John J. Sweeney, Secretary-
Treasurer Richard Trumka, and Executive Vice President Linda Cha-
vez-Thompson. They have been re-elected three times since then,
most recently in 2005 for four-year terms.
The organization’s mission, according to the website, reads as follows:
The mission of the AFL-CIO is to improve the lives of working fami-

lies—to bring economic justice to the workplace and social justice to
our nation. To accomplish this mission we will build and change the
American labor movement.
We will build a broad movement of American workers by orga-
nizing workers into unions. We will recruit and train the next gen-
eration of organizers, mass the resources needed to organize and cre-
ate the strategies to win organizing campaigns and union contracts.
We will create a broad understanding of the need to organize among
our members, our leadership and among unorganized workers. We
will lead the labor movement in these efforts.
We will build a strong political voice for workers in our nation.
We will fight for an agenda for working families at all levels of govern-
ment. We will empower state federations. We will build a broad pro-
gressive coalition that speaks out for social and economic justice. We
will create a political force within the labor movement that will em-
power workers and speak forcefully on the public issues that affect our
lives.
We will change our unions to provide a new voice to workers
in a changing economy. We will speak for working people in the
global economy, in the industries in which we are employed, in the
firms where we work, and on the job every day. We will transform
the role of the union from an organization that focuses on a mem-
ber’s contract to one that gives workers a say in all the decisions that
12
affect our working lives—from capital investments, to the quality of

our products and services, to how we organize our work.
We will change our labor movement by creating a new voice
for workers in our communities. We will make the voices of work-
ing families heard across our nation and in our neighborhoods. We
will create vibrant community labor councils that reach out to workers
at the local level. We will strengthen the ties of labor to our allies. We
will speak out in effective and creative ways on behalf of all working
Americans.
The AFL-CIO is governed by a quadrennial convention at which all

federation members are represented by elected delegates of the participat-
ing unions. At these conventions, the organization’s broad goals and poli-
cies are determined. Elections are also held every four years for AFL-CIO
officers. In addition to being a union organizer/protector, the AFL-CIO
is also a resource for information and data on jobs, labor relations, union
membership, and union news.
The AFL-CIO has a history of great political clout, but according to a
Washington Post article (“AFL-CIO Looks for United Front on Election
Day” by Dan Baiz and Michael A. Fletcher, Sunday, September 3, 2006,
page AO4), “There have been concerns among Democrats that last year’s
split within the AFL-CIO could diminish the effectiveness of what long
has been considered an integral element of the party’s Election Day ef-
fort.” Elsewhere in that same article, however, Karen Ackerman, AFL-CIO
political director said, “If we meet our goals, we will contribute more than
1.2 million more votes for our endorsed candidates than we were able to
in 2002.”
See also: Equal Employment Opportunity Commission (EEOC)
Further Reading
The Black Worker: From the Founding of the CIO to the AFL-CIO Merger, 1936–
1955, by Ronald L. Lewis, Temple University Press (June 1983).
Not Your Father’s Union Movement: Inside the AFL-CIO, edited by Jo-Ann Mort,
Verso; Paperback edition (November 1998).
13
Americans with Disabilities Act

Reduced to its essentials, the Americans with Disabilities Act (ADA) is a
law that protects the rights of people with disabilities, and calls for them
to be treated fairly. Just as the law prohibits anyone from discriminating
against someone because of their age (see Age Discrimination), so to does
the law protect those with disabilities.
The ADA’s roots appear to be traceable to the 1960s, also known as the
Civil Rights Era, according to the website www.dbtac.vcu.edu. (This web-
site is a Disability and Technical Assistance Center, which offers a wealth
of information on the ADA and also provides links to local assistance cen-
ters.) In 1963, Martin Luther King, Jr. delivered his famous “I have a
Dream” speech, which laid out his vision of a “just and inclusive society.”
In 1964, the first major civil rights statute was enacted: the “Civil Rights
Act of 1964.” In 1965, the Voting Rights Act was enacted. And in 1968,
the Fair Housing Act was passed.
All of these events marked major steps in terms of fairness, but none
of them covered people with disabilities. However, they did trigger the
movement towards including people with disabilities under laws that called
for fairness.
From the 1970s through 1990, additional acts and amendments were
passed to gain more rights for disabled people in different venues. Accord-
ing to the website, however, “Disability would not be linked to the main-
stream of civil rights law which flowed from the Civil Rights Act of 1964
until Section 504 of the Rehabilitation Act of 1973 was enacted.”
In 1986, according to the website, the “National Council on Disability
issued, ‘Toward Independence,’ recommending that a comprehensive law
requiring equal opportunity for individuals with disabilities be enacted.”
And in 1990 that law—the Americans with Disabilities Act—was passed.
The U.S. Department of Labor provides a full-text copy of the act on
its website. Essentially, the first sections of the act set the context of the
law. For example, it says that some 43,000,000 Americans have disabilities
and that the number will increase as the population of the United States
ages. The act also says that historically, people with disabilities have often
been isolated from those without disabilities, and that such discrimination
is still a social problem despite progress on some fronts.
The ADA focuses in on discrimination against disabled people in “such
critical areas as employment, housing, public accommodations, education,
14
transportation, communication, recreation, institutionalization, health ser-

vices, voting, and access to public services.” It goes on to say that people
with disabilities “have often had no legal recourse to redress such discrimi-
nation.”
The ADA confirms that people with disabilities have suffered due to
such discrimination and lack of legal recourse, that such discrimination is
not fair, and that the purpose of the act is to ensure that such discrimina-
tion does not continue, and that people with disabilities should have “the
opportunity to compete on an equal basis and to pursue those opportuni-
ties for which our free society is justifiably famous.” It also notes that
discrimination against people with disabilities costs the United States “bil-
lions of dollars in unnecessary expenses resulting from dependency and
nonproductivity.”
Here is how the ADA lays out its purpose and goals:
(b) Purpose.—It is the purpose of this Act—

(1) to provide a clear and comprehensive national mandate for the
elimination of discrimination against individuals with disabilities;
(2) to provide clear, strong, consistent, enforceable standards ad-
dressing discrimination against individuals with disabilities;
(3) to ensure that the Federal Government plays a central role in
enforcing the standards established in this Act on behalf of individuals
with disabilities; and
(4) to invoke the sweep of congressional authority, including the
power to enforce the fourteenth amendment and to regulate com-
merce, in order to address the major areas of discrimination faced day-
to-day by people with disabilities.
Another good source of information about the Americans with Disabili-

ties Act (ADA) is the Job Accommodation Network (JAN; www.jan
.wvu.edu/links/adasummary.htm). The Job Accommodation Network is
a service of the Office of Disability Employment Policy (ODEP) of the
U.S. Department of Labor. According to the JAN website, the network’s
mission
is to facilitate the employment and retention of workers with disabili-

ties by providing employers, employment providers, people with disa-
15
bilities, their family members and other interested parties with infor-
mation on job accommodations, self-employment and small business
opportunities and related subjects. JAN’s efforts are in support of the
employment, including self-employment and small business owner-
ship, of people with disabilities. JAN represent the most comprehen-
sive resource for job accommodations available, JAN’s work has
greatly enhanced the job opportunities of people with disabilities by
providing information on job accommodations since 1984. In 1991,
JAN expanded to provide information on the Americans with Disabil-
ities Act. JAN consultants have obtained at least one Master’s degree
in their specialized fields, ranging from rehabilitation counseling to
education and engineering. The development of the JAN system has
been achieved through the collaborative efforts of the U.S. DOL Of-
fice of Disability Employment Policy, the International Center for
Disability Information at West Virginia University, and private indus-
try throughout North America.
The JAN website provides an overview of the ADA, again with a dis-
claimer stating that its information is “a brief overview which cannot possi-
bly set forth everything about the ADA and which, for purposes of brevity
or as part of an effort to state legal concepts simply and in plain English,
may describe the law in a manner which is not necessarily precise and/or
accurate in every respect.”
According to the JAN site, the ADA “is a wide-ranging legislation in-
tended to make American Society more accessible to people with disabili-
ties.” The JAN website goes on to say that the act, “is divided into five
titles”:
1. Employment (Title I) Business must provide reasonable accom-

modations to protect the rights of individuals with disabilities in all
aspects of employment. Possible changes may include restructuring
jobs, altering the layout of workstations, or modifying equipment.
Employment aspects may include the application process, hiring,
wages, benefits, and all other aspects of employment. Medical exami-
nations are highly regulated.
2. Public Services (Title II) Public services, which include state
and local government instrumentalities, the National Railroad Passen-
ger Corporation, and other commuter authorities, cannot deny ser-
16
vices to people with disabilities, participation in programs or activities

which are available to people without disabilities. In addition, public
transportation systems, such as public transit buses, must be accessible
to individuals with disabilities.
3. Public Accommodations (Title III) All new construction and
modifications must be accessible to individuals with disabilities. For
existing facilities, barriers to services must be removed if readily
achievable. Public accommodations include facilities such as restau-
rants, hotels, grocery stores, retail stores, etc., as well as privately
owned transportation systems.
4. Telecommunications (Title IV) Telecommunications compa-
nies offering telephone service to the general public must have tele-
phone relay service to individuals who use telecommunication devices
for the deaf (TTYs) or similar devices.
5. Miscellaneous (Title V) Includes a provision prohibiting either
(a) coercing or threatening or (b) retaliating against the disabled or
those attempting to aid people with disabilities in asserting their rights
under the ADA.
The ADA’s protection applies primarily, but not exclusively, to “dis-

abled” individuals. An individual is “disabled” if he or she meets at
least one of the following tests:
1. He or she has a physical or mental impairment that substan-

tially limits one or more of his/her major life activities;
2. He or she has a record of such an impairment; or
3. He or she is regarded as having such an impairment.
Other individuals who are protected in certain circumstances in-

clude 1) those, such as parents, who have an association with an indi-
vidual known to have a disability, and 2) those who are coerced or
subjected to retaliation for assisting people with disabilities in assert-
ing their rights under the ADA.
While the employment provisions of the ADA apply to employers
of fifteen employees or more, its public accommodations provisions
apply to all sizes of business, regardless of number of employees. State
and local governments are covered regardless of size.
17
The www.ada.gov website is a primary source of information for the

ADA. This website provides, among other things, current information
about the ADA, information on design standards, technical assistance, new
or proposed regulations, and links to other resources.
The ADA “home page” also provides a “Myths and Facts” page, at
www.ada.gov/pubs/mythfct.txt. The text on that page, as of November
2006, was as follows:
Myths and Facts about the Americans with Disabilities Act
MYTH: ADA suits are flooding the courts.

FACT: The ADA has resulted in a surprisingly small number of
lawsuits—only about 650 nationwide in five years. That’s tiny com-
pared to the six million businesses, 666,000 public and private em-
ployers, and 80,000 units of state and local government that must
comply.
MYTH: The ADA is rigid and requires businesses to spend lots of

money to make their existing facilities accessible.
FACT: The ADA is based on common sense. It recognizes that
altering existing structures is more costly than making new construc-
tion accessible. The law only requires that public accommodations
(e.g., stores, banks, hotels, and restaurants) remove architectural bar-
riers in existing facilities when it is “readily achievable,” i.e., it can be
done “without much difficulty or expense.” Inexpensive, easy steps to
take include ramping one step; installing a bathroom grab bar; lower-
ing a paper towel dispenser; rearranging furniture; installing offset
hinges to widen a doorway; or painting new lines to create an accessi-
ble parking space.
MYTH: The government thinks everything is readily achievable.

FACT: Not true. Often it may not be readily achievable to remove
a barrier—especially in older structures. Let’s say a small business is
located above ground. Installing an elevator would not, most likely,
be readily achievable—and there may not be enough room to build a
ramp—or the business may not be profitable enough to build a ramp.
In these circumstances, the ADA would allow a business to simply
provide curbside service to persons with disabilities.
18
MYTH: The ADA requires businesses to remove barriers overnight.

FACT: Businesses are only required to do what is readily achievable
at that time. A small business may find that installing a ramp is not
readily achievable this year, but if profits improve it will be readily
achievable next year. Businesses are encouraged to evaluate their facil-
ities and develop a long-term plan for barrier removal that is commen-
surate with their resources.
MYTH: Restaurants must provide menus in Braille.

FACT: Not true. Waiters can read the menu to blind customers.
MYTH: The ADA requires extensive renovation of all state and

local government buildings to make them accessible.
FACT: The ADA requires all government programs, not all govern-
ment buildings, to be accessible. “Program accessibility” is a very flex-
ible requirement and does not require a local government to do any-
thing that would result in an undue financial or administrative
burden. Local governments have been subject to this requirement for
many years under the Rehabilitation Act of 1973. Not every building,
nor each part of every building needs to be accessible. Structural mod-
ifications are required only when there is no alternative available for
providing program access. Let’s say a town library has an inaccessible
second floor. No elevator is needed if it provides “program accessibil-
ity” for persons using wheelchairs by having staff retrieve books.
MYTH: Sign language interpreters are required everywhere.

FACT: The ADA only requires that effective communication not
exclude people with disabilities—which in many situations means pro-
viding written materials or exchanging notes. The law does not re-
quire any measure that would cause an undue financial or administra-
tive burden.
MYTH: The ADA forces business and government to spend lots of

money hiring unqualified people.
FACT: No unqualified job applicant or employee with a disability
can claim employment discrimination under the ADA. Employees
must meet all the requirements of the job and perform the essential
functions of the job with or without reasonable accommodation. No
19
accommodation must be provided if it would result in an undue hard-

ship on the employer.
MYTH: Accommodating workers with disabilities costs too much.
FACT: Reasonable accommodation is usually far less expensive
than many people think. In most cases, an appropriate reasonable ac-
commodation can be made without difficulty and at little or no cost.
A recent study commissioned by Sears indicates that of the 436 rea-
sonable accommodations provided by the company between 1978
and 1992, 69 percent cost nothing, 28 percent cost less than $1,000,
and only 3 percent cost more than $1,000.
MYTH: The government is no help when it comes to paying for
accessibility.
FACT: Not so. Federal tax incentives are available to help meet the
cost of ADA compliance.
MYTH: Businesses must pay large fines when they violate the ADA.
FACT: Courts may levy civil penalties only in cases brought by the
Justice Department, not private litigants. The Department only seeks
such penalties when the violation is substantial and the business has
shown bad faith in failing to comply. Bad faith can take many forms,
including hostile acts against people with disabilities, a long-term fail-
ure even to inquire into what the ADA requires, or sustained resis-
tance to voluntary compliance. The Department also considers a busi-
ness’ size and resources in determining whether civil penalties are
appropriate. Civil penalties may not be assessed in cases against state
or local governments or employers.
MYTH: The Justice Department sues first and asks questions later.
FACT: The primary goal of the Department’s enforcement pro-
gram is to increase voluntary compliance through technical assistance
and negotiation. Under existing rules, the Department may not file a
lawsuit unless it has first tried to settle the dispute through negotia-
tions—which is why most every complaint settles.
MYTH: The Justice Department never files suits.
FACT: The Department has been party to twenty suits under the
ADA. Although it tries extensively to promote voluntary compliance,
the Department will take legal action when entities continue to resist
complying with the law.
20
MYTH: Many ADA cases involve frivolous issues.

FACT: The Justice Department’s enforcement of the ADA has
been fair and rooted in common sense. The overwhelming majority
of the complaints received by the Justice Department have merit. Our
focus is on fundamental issues related to access to goods and services
that are basic to people’s lives. We have avoided pursuing fringe and
frivolous issues and will continue to do so.
MYTH: Everyone claims to be covered under the ADA.

FACT: The definition of “individual with a disability” is fraught with
conditions and must be applied on a case-by-case basis.
MYTH: The ADA protects people who are overweight.

FACT: Just being overweight is not enough. Modifications in poli-
cies only must be made if they are reasonable and do not fundamen-
tally alter the nature of the program or service provided. The Depart-
ment has received only a handful of complaints about obesity.
MYTH: The ADA is being misused by people with “bad backs”

and “emotional problems.”
FACT: Trivial complaints do not make it through the system. And
many claims filed by individuals with such conditions are not trivial.
There are people with severe depression or people with a history of
alcoholism who are judged by their employers, not on the basis of
their abilities, but rather upon stereotypes and fears that employers
associate with their conditions.
Further Reading
Understanding the Americans with Disabilities Act, Second Edition (Paperback),
by William D. Goren, American Bar Association (May 25, 2007).
Voices from the Edge, Narratives about the Americans with Disabilities Act (Paper-
back), edited by Ruth O’Brien. Foreword by Rogers M. Smith. Oxford Uni-
versity Press (December 18, 2003).
21
The Apprentice
The Apprentice
Reality TV shows have been all the rage in recent years, and the subject
matter has ranged from finding a husband, to racing around the world, to
handling the politics and dangers of living with a group of strangers in a
remote locale, and even to the boardroom. No, not even the world of
management has escaped the attention of reality show TV and paying trib-
ute to the reality craze is The Apprentice.
Some may wonder what could be more frightening than being left on a
desert island with total strangers. The Apprentice seems to pose an even
more daunting option—a high-stakes interview for the job of a lifetime.
While TV viewers watch, the interviewees defend their actions and sweat
under the eye of billionaire real estate mogul Donald Trump who decides
whether to keep them in the interview process for another week (until the
next show) or whether to end their career hopes with his trademark
phrase: “You’re Fired!”
Put simply, The Apprentice is a hit TV reality show on NBC, starring
Donald Trump as the boss. According to the TV Guide website, the
show’s premise is: “A kind of ‘Survivor’ in pinstripes.” Apprentice “contes-
tants” compete in teams in a variety of business challenges, each vying for
the winning title of apprentice, and a guaranteed real job in the Trump
empire. At the end of each episode, “the Donald,” as Trump is known,
says “You’re fired,” to one of the contestants on the losing team; leaving
one less person in the game.
Essentially, this show brings the job interview process to a very public
and competitive forum, with a few “made for TV” twists, such as having
the contestants live together in New York City while the “game” is on.
Taglines for the show have included: “What if you could have it all?” “It’s
nothing personal . . . it’s just business,” and “The Ultimate Job Inter-
view.”
A summary of the 2004 season of the show, credited to NBC and
posted on the website www.imdb.com, called The Apprentice a fifteen-
episode, unscripted drama that included sixteen job candidates who would
“endure rigorous tasks each week while living together in a hip Manhattan
loft apartment.” In one subsequent season, the locale was shifted to Cali-
fornia, where the winners of each week’s “task” lived in luxury in a man-
sion, while the losers “camped out” in tents on the property.
The Apprentice premiered on January 8, 2004; its success has given rise
22
The Art of War
Why I Do This: Online Editor

Marie Gendron
I am an editor for Herald Interactive, a web-based media company owned
by the Boston Herald newspaper. My job is to generate strong editorial con-
tent to drive job seekers to Jobfind.com, which is a regional job search
site. Working with a dozen freelance writers, I assign and edit career-
related stories, columns and other features. I then format those stories—
and any associated artwork—for the web and FTP them to the site.
This job was a natural transition from my former position as a business
reporter for the Boston Herald. My typical day entails editing stories, post-
ing them to the web, checking in with freelancers by phone or e-mail, cre-
ating story budgets and deadline schedules for upcoming issues, and filing
the paperwork needed to get everyone paid. Since my job is web-based,
the hours are incredibly flexible. I work about half my hours at home.
I think the key skills to succeeding in my job are organization, creativity,
and flexibility.
to several knock-off shows, including an apprentice series starring Martha

Stewart, and a UK version of the contest.
There are many websites devoted to The Apprentice. Among them are
www.theapprenticerules.com and www.theapprenticeblog.com. The NBC
website has the show’s “home page.” And the website www.imdb.com,
source of the summary above, also posts reviews. The site, www.tv.com, is
also a good source of information and links pertaining to the show.
See also: War for Talent; Water Cooler; White Collar
Further Reading
Trump: The Art of the Deal, by Donald. J. Trump and Tony Schwartz, Ballantine
Books (December 28, 2004).
The Art of War

The Art of War, written by Sun Tzu, is a classic book of military strategy.
Written sometime between the fifth and eighth centuries B.C., and com-
monly known as “the oldest military treatise in the world,” The Art of War
remains a top seller to this day. It has been translated many times from
23
The Art of War
the original Chinese into many other languages and published in a variety
of forms.
Though intended as a guide for the military, Sun Tzu’s lessons in strat-
egy have been liberally referenced and applied in the world of manage-
ment. One book devoted to that task is The Art of War for Managers: 50
Strategic Rules, by Sun Tzu and Gerald A. Michaelson. Written by Mi-
chaelson, this book, published in 2001 by Adams Media, draws on the
words of Sun Tzu to create guidelines for success in the corporate world.
Other similar books stick to the military premise, albeit knowing that
readers will draw their own connections between Sun Tzu’s intent and
their own contexts.
Reviews of these texts vary as the treatments vary, but Lionel Giles’s
translation, published in 1910, seems to be the classic work, consistently
well regarded.
The website, http://www.chinapage.com/sunzi-e.html, contains the
basic text of The Art of War, as translated by Lionel Giles, M.A., in 1910.
Here’s a taste of the book, from that site:
All warfare is based on deception.

Hence, when able to attack, we must seem unable; when using our
forces, we must seem inactive; when we are near, we must make the
enemy believe we are far away; when far away, we must make him
believe we are near.
Hold out baits to entice the enemy. Feign disorder, and crush him.
If he is secure at all points, be prepared for him. If he is in superior
strength, evade him. If your opponent is of choleric temper, seek to
irritate him. Pretend to be weak, that he may grow arrogant.
If he is taking his ease, give him no rest. If his forces are united,
separate them.
Attack him where he is unprepared, appear where you are not ex-
pected.
Brian Bruya, reviewing a paperback edition of The Art of War (trans-

lated by Thomas Cleary, published in November 2002 by Dover Publica-
tions) on Amazon.com, called it “the Swiss army knife of military theory.”
The question does arise of how relevant this book really is in the context
of today’s business world. The answer depends on whom you ask. To
some, the principles laid out in the book are highly relevant. As the Ama-
24
The Art of War
zon book description for another Michaelson book (Sun Tzu Strategies for
Winning the Marketing War: 12 Essential Principles for Winning the War
for Customers (McGraw-Hill, October 2003) says, “Millions of business
warriors have been inspired by lessons from one of the world’s greatest
strategists, Sun Tzu.”
See also: Competitive Advantage
Further Reading
Understanding Sun Tzu on the Art of War, by Robert Cantrell, Center For Advan-
tage (July 15, 2004).
25
B
Balanced Scorecard
The balanced scorecard is a management system and tool that enables or-
ganizations to clarify their vision and strategy and translate them into ac-
tions. As its name suggests, the scorecard allows managers to measure and
assess performance on a variety of fronts that are important to the success
of a business. Developed in the early 1990s by Drs. Robert Kaplan (Har-
vard Business School) and David Norton (president of Renaissance Solu-
tions), the balanced scorecard allows managers to recognize some of their
organization’s weaknesses; it can also help managers identify areas where
a particular management approach has not been effective.
With the scorecard in place, managers have a common set of measures
to assess over time, and can work to strengthen corporate performance.
The idea is to ensure that both relevant financial and nonfinancial inputs
inform decision-making. As Publisher’s Weekly noted in its Amazon.com
description of Kaplan and Norton’s original book on the topic: “Purely
financial evaluations of performance . . . no longer suffice in a world where
intangible assets, relationships and capabilities increasingly determine the
prospects for success.”
According to SkyMark.com, an article by Kaplan and Norton entitled
“The Balanced Scorecard—Measures that Drive Performance” that was
published in the Harvard Business Review in 1992 sparked interest in the
method, and led to the authors’ business bestseller, The Balanced Score-
card: Translating Strategy into Action, published in 1996. Kaplan and
Norton describe the innovation of the balanced scorecard on the Balance
Scorecard Institute’s website (www.balancedscorecard.org):
The balanced scorecard retains financial measures. But financial mea-

sures tell the story of past events, an adequate story for industrial age
companies for which investments in long-term capabilities and cus-
tomer relationships were not critical for success. These financial mea-
sures are inadequate, however, for guiding and evaluating the journey
that information age companies must make to create future value
Balanced Scorecard
through investment in customers, suppliers, employees, processes,

technology, and innovation.
According to an article entitled “How to use the Balanced Scorecard,”

which was published in the May 15, 2002, issue of CIO Magazine, a fully
implemented Scorecard cascades from the top levels of a company all the
way down. In the same article, Norton tells CIO Magazine that it is ideal
to implement the Balanced Scorecard throughout the enterprise because
that framework helps foster alignment between business and IT.
Linda Bankston, CIO of DuPont Engineering Polymers, a $2.5 billion
division of DuPont Chemicals in Wilmington, Delaware, was quoted in
the same article, saying that when a company uses the scorecard, “the con-
versation is around strategy and impact, rather than just whether you can
or can’t do something” (http://www.cio.com/archive/051502/scorecard
.html).
Library Journal (located on Amazon.com) summed up the scorecard
approach this way:
Kaplan (accounting, Harvard) and Norton, president of Renaissance

Solutions Inc., created the “balanced scorecard” to assist businesses
in moving from ideas to action, achieving long-term goals, and ob-
taining feedback about strategy. The balanced scorecard consists of
four sections: clarifying and translating vision and strategy; communi-
cating and linking strategic objectives and measures; planning, setting
targets, and aligning strategic initiatives; and enhancing strategic feed-
back and learning.
See also: Six Sigma; Total Quality Management (TQM)
Further Reading
Balanced Scorecard Step-by-Step: Maximizing Performance and Maintaining Re-
sults, by Paul R. Niven, Wiley; Second edition (September 1, 2006).
The Balanced Scorecard: Translating Strategy into Action, by Robert S. Kaplan
and David P. Norton, Harvard Business School Press (September 1996).
28
Benchmarking
Benchmarking
When a company’s leaders and managers are trying to improve a practice,
a process, or performance overall, they require a way of measuring if they
are setting reasonable expectations. A company must have a way to deter-
mine whether it is truly doing the best that it can, on any given perfor-
mance front.
One way for a company to measuring improvement or evaluating expec-
tations is to “benchmark” their performance against another company that
is known as the leader in whatever area is chosen. Benchmarking, in short,
means comparing an aspect of your own personal or corporate perfor-
mance against the same aspect of another organization’s performance.
Generally, companies try to identify the “best in class” to benchmark
against, and then they strive to meet or exceed those top-level standards.
“Benchmarking is the process of determining who is the very best, who
sets the standard, and what that standard is. In baseball, you could argue
that seven consecutive World Series Championships made the New York
Yankees the benchmark,” says F. John Reh, a management professional
with broad experience and an Internet Management Consultant, in an arti-
cle posted on About.com (2007 About, Inc., A part of The New York
Times Company). Reh goes on to say that benchmarking is usually part of
a larger effort, usually a Process Re-engineering or Quality Improvement
initiative. Reh also says benchmarking is important so that a business can
compare itself against the standard.
All companies benchmark their work to some degree. Even a very small
business, seeking to build a customer base, will often compare—albeit in-
formally—its performance with similar competitor’s offerings. But larger
organizations often approach benchmarking in a very formal and analytical
way. The benefits of such analysis are great; when a company identifies a
suitable benchmark, managers can better assess their own performance in
the context of their own companies. They can also set more accurate and
reasonable goals for progress.
Benchmarking does not and should not necessarily be conducted within
the confines of a business type or even one particular geography. A great
deal can be learned, for example, from comparing front-line service to cus-
tomers across different types of businesses in the same general field (fast-
food coffee shops and high-end restaurants, for instance) and across differ-
ent industries (front-line service at a library, versus, say, a busy doctor’s
29
Benchmarking
Why I Do This: Editor-in-Chief, MarketWatch

David Callaway
Running an online news team is like sprinting up a hill all day long. Be-
cause we cover financial markets around the world, breaking news never
stops for us. From the moment I wake up at 4:30 A.M. in San Francisco
(West Coast hours are brutal when you follow the markets) to the time I
sign off around 10 P.M., there is always something breaking and some
work to be done.
I do it because I’m a news junkie and love the thrill of being on top of
all the major stories of the day. We have more than 100 reporters in bu-
reaus in the United States, London, and Hong Kong so somebody is al-
ways on deadline. The type of person I hire is also somebody that thrives
on action and likes to tell a story using the Internet, video, audio graphics,
or any other way.
While the job is busy, the rewards are amazing and almost instanta-
neous. The stories we do are read all over the world, and I never cease to
be amazed when somebody writes in from Thailand, South Africa, or Bra-
zil to comment on a news story we did out of Chicago or Los Angeles. In
my twenty years as a journalist, this is the most exciting job I’ve ever held.
practice). Much can also be learned by comparing or benchmarking

against levels and standards of service across geographies. Benchmarking,
at its best, provides inspiration for creativity, and motivation that is guided
by measurable progress.
Benchnet.com describes benchmarking as a tool to help you improve
your business process. But the site also cautions that too often, companies
seek to benchmark their work in too narrow a way. Benchnet.com notes,
One of the biggest mistakes people make when beginning their

benchmarking endeavor is that they only look to benchmark someone
within their own industry. Although this doesn’t hurt, you probably
already know enough about your industry to know what works and
what doesn’t. Worse yet, some people think they must benchmark
their competitor. What if the competition is worse than your com-
pany? Seems like a pretty big waste of time and energy. Instead how
about benchmarking a company that is well known for being a good
model? Sometimes referred to as Best Practices, Exemplary Practices,
Business Excellence. (2007 Benchmarking Exchange, http://www
.benchnet.com/wib.htm)
30
Benchmarking
Some companies choose to identify benchmarking targets by themselves,

and construct and conduct their own internal systems for benchmarking.
But there are many consulting firms ready and willing to engage in bench-
marking work as well.
Ann Evans, director of Benchmarking PLUS (Benchmarking PLUS
1999), an organization that provides benchmarking solutions, says there
are plenty of opportunities for benchmarking to go wrong. She advises
her readers to avoid the following ten benchmarking mistakes: confusing
benchmarking with participating in a survey, thinking there are pre-exist-
ing “benchmarks” to be found, forgetting about service delivery and cus-
tomer satisfaction, creating a benchmarking process that is too large to be
manageable, confusing benchmarking with research, misalignment, pick-
ing a topic that is too intangible and difficult to measure, not establishing
a baseline, not researching benchmarking partners thoroughly, and not
having a code of ethics and contract agreed with partners.
Benchmarking can be fraught with potential problems, ranging from
simple misunderstandings to serious legal problems, according to isixsigma
.com. The website’s recommendations—which are attributed to a code-
of-conduct produced by the Benchmarking Clearinghouse—include:
Don’t enter into discussions or act in any way that could be con-
strued as illegal, either for you or your partner. Potential illegal activi-
ties include, for example, such simple actions as discussing costs or
prices, if that discussion could lead to allegations of price fixing or
market rigging.
Don’t ask questions of your benchmarking partner that you are not
willing to answer yourself to the same level of detail.
Benchmarking’s golden rule: treat your partner and their informa-
tion the way you’d like them to treat you and yours.
See also: Best Practice; Performance Management/Performance Mea-

surement
Further Reading
Benchmarking for Nonprofits: How To Measure, Manage, and Improve Perfor-
mance, by Jason Saul, Amherst H. Wilder Foundation (October 30, 2004).
Benchmarking: The Search for Industry Best Practices That Lead to Superior Perfor-
mance, by Robert C. Camp, Productivity Press (August 30, 2006).
31
Best Practice
Best Practice
A best practice is a process or procedure that consistently produces supe-
rior results. Best practice is also a management idea which says that there
is a technique, method, process, activity, incentive, or reward that is more
effective at delivering a particular outcome than any other technique,
method, or process. When one firm in an industry establishes a best prac-
tice, its competitors seek to diffuse that advantage by adopting a similar or
better practice themselves.
When a company is known for a best practice process or system, other
companies often seek to “benchmark” against it (see Benchmarking).
When a company aspires to achieve a best practice process or system, it is
trying to be the standard by which other organizations measure their own
performance.
The Glossary of Project Management defines best practice as a superior
method or innovative practice that contributes to the improved perfor-
mance of an organization, usually recognized as “best” by other peer orga-
nizations. “It implies accumulating and applying knowledge about what is
working and not working in different situations and contexts, including
lessons learned and the continuing process of learning, feedback, reflection
and analysis (what works, how and why).”
The term, best practice, is in widespread use throughout the world of
business; it’s also part of the common language in education, government,
and a host of other fields.
For example, Teresa L. Kramer, Ph.D. and William N. Glazer, M.D.,
write on psychiatryonline.org that the best-practices movement in medi-
cine has much to offer practitioners who hope to demonstrate their value
in a commodity-driven market. In their article, they review and explore
the current status of the best-practices movement in general medicine and
psychiatry.
The ability to identify and implement best practices in industry has

differentiated the successful organization from the unsuccessful orga-
nization. Because longevity and financial viability are determined by
the quality of customer services and products, there has been a signifi-
cant increase in comparative techniques that recognize the best and
worst performers in the commercial world . . . In recent years, the
best-practices movement has filtered into general medicine and to
some extent mental health care, perhaps in the part because of pres-
32
Blanchard, Ken
sure from employers—payers—who have witnessed the value of this

process. (Kramer and Glazer; Psychiatric Services, www.psychiatryon-
line.org, 52:157–159, February 2001).
See also: Benchmarking; Performance Management/Performance Mea-

surement
Further Reading
www.bestpracticedatabase.com
www.bestpractice.org
Blanchard, Ken
Ken Blanchard is known in the business world for his influence on how
the role of the leader in an organization has evolved in the 1980s and
1990s. Blanchard is the owner and chief spiritual officer of the Ken
Blanchard Companies, a management training and consulting firm that he
and his wife, Dr. Majorie Blanchard, founded in 1979 in San Diego, Cali-
fornia. He is also a visiting lecturer at his alma mater, Cornell University,
where he is a trustee emeritus of the Board of Trustees.
According to Ninth House, a company that helps organizations develop
current and future leaders, Blanchard is a prominent, gregarious, sought-
after author, speaker, and business consultant known around the world
simply as Ken.
Blanchard is also cofounder of The Center for FaithWalk Leadership,
which is dedicated to helping leaders walk their talk in the marketplace,
while honoring their own integrity and spirituality. He is well known for
his contribution to the Blanchard and Hersey Model of situational leader-
ship theory (with Paul Hersey). The Situational Leadership Method holds
that managers must use different leadership styles depending on the situa-
tion. The model allows you to analyze the needs of the situation you’re
dealing with, and then adopt the most appropriate leadership style.
According to the Chimaera Consulting Limited website, this model is
popular because: “It’s simple to understand, and it works in most environ-
ments for most people. The model doesn’t just apply to people in leader-
ship or management positions: we all lead others at work and at home.”
The consulting firm’s site goes on to note that Blanchard and Hersey
characterize leadership style in terms of the amount of direction and of
33
Blue Collar
support that the leader gives to his or her followers. For example, leaders
can “direct” by defining employee’s roles and the type of work they need
to do. In a “directing” style, leaders make the decisions and generally com-
municate only from the top down. When a leader is a “coach,” on the
other hand, he or she will look for some feedback from employees to in-
form his or her decisions. When leaders take on a “supporting” role, they
may delegate many decisions, facilitating the decision-making process.
Blanchard is also well known for the concept he created with Spencer
Johnson: The One-Minute Manager. His book on the topic, and all of
the ancillary literature that has followed (creating a One Minute Manager
Library) has sold millions of copies and has also been widely translated.
The concept explains and explores three simple techniques: One-minute
goal setting, one-minute praising, and one-minute reprimands. Blanchard
and Johnson tout the concept as resulting in more effective leadership.
See also: Corner Office; Executive Coach; Management by Objectives;
Performance Management/Performance Measurement
Further Reading
Leading at a Higher Level: Blanchard on Leadership and Creating High Perform-
ing Organizations, by Ken Blanchard, FT Press (October 2006).
The One Minute Manager Meets the Monkey, by Ken Blanchard, William Morrow
(1989).
www.kenblanchard.com
Blue Collar
Blue Collar is an adjective that describes those who work for hourly wages,
especially manual or industrial laborers. A blue-collar worker is a working-
class employee who performs manual or technical labor, such as in a fac-
tory or in technical maintenance trades such as plumbing or electronics, in
contrast to a white-collar worker, who does non-manual work generally at
a desk.
The term is derived from the history of blue-collar worker’s uniform
dress code. Typically, industrial and manual workers wore clothing that
can be soiled or scrapped. The characteristic uniform has been and still is
a light or navy blue shirt. Blue is also a popular color for coveralls. Blue is
contrasted with the white dress shirt that has long been associated with
34
Blue Collar
Why I Do This: Contractor

Barry Keene
When I got out of the army, I was looking for work, and I started working
for a relative in the construction business. We started out doing excava-
tion, things like that. I found that I liked working outside, and I liked
seeing the “finished products” when a job was complete.
After a few years, though, I got out of contracting, and started working
for a delivery company because it seemed as if it would be less stressful get-
ting a steady paycheck. As it turned out, the paycheck end of things was
less stressful, but other parts of the job turned out to be more stressful. I
found that I had enjoyed being my own boss; I didn’t enjoy having my
schedule—and all aspects of my job, really—controlled by someone else.
Once you became a manager, at that job, you were often working 24/7.
So eventually I left that job (after fourteen years!) and opened my own
construction company. We do mostly houses, additions, renovations.
We’ve done a small spattering of commercial work. It’s a small company;
at our biggest, we’ve had three full-time employees.
I like it this way, though. I can subcontract larger jobs, and still have
control over my time and life.
You might like this kind of job if you enjoy being outside, if you like
working with your hands and seeing a finished product when you’re done,
and if you don’t need someone else pushing you to get going. (You have
to be a self-starter.)
You do have to deal with a lot of different types of people. You have a
new “boss” (that is, client) on every job. So there’s that; sometimes the cli-
ents aren’t always agreeable. But 95 percent of the people you work with
are easy to work with.
office workers. (The white dress shirt, for its part, is not nearly as univer-
sally equated with office work as it once was. Although some professions,
including financial services, still maintain a more formal “white collar”
style, many people who work in offices no longer adhere to that custom
and dress in far more casual clothing.)
For many who fall under the category, there is great pride associated
with being a blue collar worker—blue collar workers are seen as hard-
working people who helped make the United States the country it is today.
With very few exceptions, being a blue-collar worker is without stigma and
increasingly well paid.
Despite the need, however, there is an increasing shortage of blue-collar
workers. As more of the work done in the United States is office-based,
and companies increasingly offer services and compete on “knowledge”
35
Blue Collar
Why I Do This: Plumber

Cliff Irving
I am a master plumber, and I have my own business. If you’re going to be
a plumber, you can either be a journeyman, or a master. Journeymen can-
not hire help; you can be in business for yourself, but you can’t have any-
one working for you. When you’re a master plumber, you can hire employ-
ees, so the opportunity to create a bigger business (with more headaches
and stress!) is there if you want it.
You need certification to be a plumber. Currently, it takes three years of
apprenticeship and 300 hours of schooling to get certified as a journeyman
by the state. To be a master plumber, you need an additional one year of
apprenticeship, and 100 hours of school.
You can be an apprentice all your life, if that’s what you want to do. Be-
ing an apprentice simply means that you are a working for a plumber.
I didn’t set out to be a plumber; I wanted, originally, to be a carpenter.
But when I went to vocational school, my grades were not the best, and so
the teachers and guidance counselors put me in classes other than the ones
I had picked for myself. One of those classes was plumbing and heating,
and I loved it. My grades went up immediately; my father told me that
plumbing was a good trade; and so I stuck with it. I graduated in 1976,
and I’ve been a plumber ever since.
You might like this kind of work if you enjoy working with your hands
and you have patience. You also have to enjoy being able to think ahead,
and see in your mind what the finished product is going to look like. You
might also like this kind of work if you enjoy helping people—almost all of
the time, you’re doing something that helps someone directly, and they’re
appreciative.
If you’re going to make money at this kind of work, you have to be or-
ganized, and you have to have something of a head for business. It’s hard,
sometimes, when you’re doing a job for a friend, or an elderly person, to
charge them the fees that you should. And sometimes, you just don’t. But
if you need to make the business work, you have to have a certain disci-
pline.
I’m in business for myself. That means that sometimes I have more work
than I can handle. A lot of the work is emergency work; you have to be re-
sponsive, so you can’t plan your days out as you might hope to. On the
other hand, last year, I took six months off and walked the Appalachian
Trail with my son. One of the benefits of working for yourself is that you
can take that kind of time off without worrying about losing your job!
There is a lot of flexibility, when you work for yourself. I didn’t miss any
of my kids’ plays, or sports games; I was able to go to all of them. And
that’s huge.
36
Blue Collar
(and outsource manufacturing jobs), there has been less interest among
young people in pursuing blue-collar work.
According to a November 23, 2004, Boston Globe article titled “Look-
ing for Mr. Goodwrench: Blue-collar jobs abound, but skilled workers are
hard to find” by Kimberly Blanton, just 4 percent of high school graduates
pursue careers in technical fields, whether auto or boat mechanic,
plumber, heating and air-conditioning technician, or factory worker. In
the article, Blanton reported that: “Mechanically minded young people are
instead pushed by parents and guidance counselors to attend college or
are pulled by the high-technology industry into a cutting-edge field.”
Joe Lamacchia, a Newton, Massachusetts-based landscaping entrepre-
neur, was quoted in the article as saying, “If they don’t go to college
and don’t work in a cubicle,” they think “they’re not going to make it.”
Lamacchia’s website, www.bluecollarandproudofit.com promotes employ-
ment in the trades. Young adults ill-suited to working in an office environ-
ment at a desk, Lamacchia said, pass up opportunities to make good
money in challenging blue-collar jobs.
The Globe article goes on to cite the National Center on Education and
the Economy, a Washington, D.C.-based organization that studies worker
training, as reporting that at least one million U.S. jobs, most of which do
not require a four-year degree, went unfilled in 2004 because employers
could not find workers with the necessary skills.
See also: White Collar.
Further Reading
“Blue-Collar Work Helps City See Green,” an editorial published Wednesday,
August 29, 2007 in the Seattle Times, www.seattletimes.nwsource.com.
“Blue-Collar Work Buoyed by Boom in the Economy” by John Rather, published
March 29, 1998 in the New York Times, www.nytimes.com.
Limbo: Blue-Collar Roots, White-Collar Dreams, by Alfred Lubrano, Wiley (2003).
“Reactions to Blue-Collar Work: A Comparison of Women and Men” by Karyn
A. Loscocco, State University of New York, Albany, published 1990 in Work
and Occupations, Vol. 17, No. 2, by SAGE Publications: wox.sagepub.com/
cgi/content/abstract/17/2/152.
Work and Occupations, Vol. 17, No. 2, 152–177 (1990).
www.bluecollarandproudofit.com
37
Bonus
Bonus
Bonuses are something an employer gives to an employee, generally on an
annual basis, above and beyond the employee’s agreed-upon compensa-
tion. A bonus is usually cash, but can also take the form of stock, gifts
such as a turkey or a ham during the holidays, a gift certificate to a local
store or restaurant or, on a larger scale, a trip.
Bonuses have been the “norm” in the world of work for a long time.
Recall Charles Dickens’ famous Christmas Story, in which the ever-stingy
Ebenezer Scrooge (after much angst) finally finds his heart and bestows a
wonderful holiday bonus of food and goods on long-suffering employee
Bob Cratchitt and his family, including the small, frail son, Tiny Tim. As
it was at that time, bonuses were outright gifts, given annually by employ-
ers as a way of saying “thank you” for a year’s worth of effort. But increas-
ingly, it seems that companies are shying away from such annual gift-
giving, and instead, tying employee bonuses directly to performance.
According to an article entitled “The Vanishing Holiday Bonus,” by
Marilyn Gardner, published in the Christian Science Monitor on Novem-
ber 27, 2006, increasing numbers of companies are choosing not to be-
stow regular annual “holiday” bonuses.
Brian Drum, president of Drum Associates in New York, was quoted in
that article, saying, “Thirty-five years ago, when I first dealt with a lot of
companies that used to pay the so-called Christmas bonus, it was a gift.
Today, as companies are becoming larger and consolidated, they are giving
because it’s performance-related.”
Now, the article said, bonuses are increasingly linked to corporate per-
formance. The article said that bonuses rose an estimated 10–15 percent
in 2006 over 2005. “For top-tier bankers,” the article said, bonuses “can
swell to $20 million or more.”
An article published on November 16, 2005, found on the website
www.management-issues.com, concurs. This article, entitled “Perfor-
mance-related pay replacing the annual bonus” says that variable pay pro-
grams (performance-based bonuses) are now offered by almost eight out
of every ten employers. The article cited a global survey by the HR services
firm, Hewitt Associates, to report that holiday bonuses are not as “tradi-
tional” as they once were.
According to Fortune magazine’s list of the Best Companies to Work
For in 2007, salaried employees at the David Weekley Homes company
receive the biggest average annual cash bonuses. The average annual cash
38
Bootstrapping
bonus there is $59,104. Employees at Paychex received the second biggest

average annual cash bonuses, reporting in at $53,955.
See also: Executive Compensation; Performance Management/Perfor-
mance Measurement
Further Reading
“Employee Incentive Systems: Why, and When, They are So Hard to Change,”
published May 31, 2006 in Knowledge@Wharton, http://knowledge.wharton
.upenn.edu.
“Incentives Can Be Bad for Business,” by Alfie Kohn, Inc. magazine (January
1998).
Performance Management: Key Strategies and Practical Guidelines, by Michael
Armstrong, Kogan Page; 3rd Edition (March 2006).
“Why Incentive Plans Cannot Work,” by Alfie Kohn, Harvard Business Review
(September–October 1993).
Bootstrapping
There is an old phrase that says, “He raised himself up by his own boot-
straps.” Generally spoken with praise and respect, this phrase means that
an individual is self-made. That is, the individual had little means but,
based solely on his or her own will and determination, escaped poverty
and excelled despite adversity and achieved success.
The same definition remains true for the term as it is used in the busi-
ness world. According to BestforBusiness.com, bootstrapping means start-
ing a new business without start-up capital and/or running that business
on minimum expenditure. Another website, 1000Ventures.com, notes that
bootstrapping “is characterized by high reliance on any internally gener-
ated retained earnings, credit cards, second mortgages, and customer ad-
vances.”
That website, 1000Ventures.com, goes on to note that bootstrapping is
the most likely source of initial equity for more than 90 percent of technol-
ogy firms. It also noted that in the United States, venture capitalists often
will not fund small start-up organizations “(seeking less than $5 million),
regardless of the quality of the venture, because of their very specific in-
vestment criteria and high costs of due diligence, negotiating, and moni-
toring. Bootstrapping offers many advantages for entrepreneurs and is
probably the best method to get an entrepreneurial firm operating and
39
Bootstrapping
well positioned to seek equity capital from outside investors at a later time”
(1000Ventures.com).
Bootstrapping can allow a company to put a toe in the market and assess
demand without having an obligation to an outside funder. However,
boostrapping can also mean taking on a great deal of personal risk.
The National Federation of Independent Business provides tips for
bootstrapping your new business. The essentials include: having expertise
in your field; taking on debt with great care; working out of your home
to keep expenses down until cash flow warrants leasing an office; accepting
that your customers will determine your schedule; always striving to be
better than your competition in quality of service and customer care; and
allowing yourself time for rest and rejuvenation.
Networking can also be a help to would-be bootstrappers. The local
chamber of commerce, or local and national trade associations, can provide
connections with more experienced and/or retired business owners who
might be able to offer sound advice.
According to an article titled “Bootstrapping Your Startup” by David
Worrell published in the October 2002 issue on Entrepreneur.com, “99.9
percent of business owners will struggle alone, pulling themselves up by
their bootstraps.”
The article also noted, however, that it’s not necessary to “struggle
alone” when you’re bootstrapping. And it is possible to balance the risk
of starting a business in this manner by doing careful research, and also
possibly maintaining another job while the new business is in its infancy.
As Worrell wrote, “At the concept stage, a business is like an egg that
has not yet hatched—and the incubation process can be expensive. Doing
research, making phone calls and buying supplies can eat through thou-
sands of dollars before the business is really even born. Many entrepre-
neurs limit their risk and expense by keeping their day job and letting the
idea percolate during evenings and weekends.”
Worrell also wrote that some entrepreneurs take advantage of some of
the resources of an established business. Bootstrapping in this sense resem-
bles being “incubated” by a larger or more established business, while the
new venture finds its footing. Contacts at another job, or at a previous
job, can prove invaluable to the businessperson at the helm of a start-up.
Sometimes the established business will provide space. Sometimes, the
leader of the established business will provide use of equipment during
“down time.”
40
Boundaryless Organization
Would-be entrepreneurs beware, though: these activities should be

known and condoned by the leaders of the established organization. And,
as Worrell noted, “Not all employers will so generously support the moon-
lighting activities of employees. But keeping a steady income during the
planning phases of a business is the best start to bootstrapping any new
venture” (David Worrell, Entrepreneur.com).
See also: Entrepreneur; Networking; Skunkworks
Further Reading
“The Art of Bootstrapping” blog post by Guy Kawasaki, January 26, 2006,
http://blog.guykawasaki.com.
Bootstrap: Lessons Learned Building a Successful Company from Scratch, by Ken-
neth L. Hess, S-Curve Press (September 2001).
The Boostrapper’s Bible, by Seth Godin, Upstart Publishing Co. (1998).
“Bootstrapping Your Startup: No, You Don’t Need Investors to Start Your
Dream Business. Here’s How to Make It Happen with Your Own Money,”
by David Worrell, Entrepreneurs Start-Ups magazine, October 2002, www
.entrepreneur.com, or http://www.entrepreneur.com/money/financing/
selffinancing/article55776.html.
“The Economy’s Down and Investors are Wary: It’s a Good Time to Launch Your
Company,” published January 17, 2001 in Knowledge@Wharton, http://
knowledge.wharton.upenn.edu.
A “boundaryless organization” is one in which information and knowl-
edge flows easily from department to department, and across multiple lev-
els of management, resulting in a work environment where synergy is the
norm. The term “boundaryless” should not, then, be taken literally. It
does not imply an organization without form, or an organization that does
business internationally; rather, the term refers to the way in which infor-
mation flows through communication channels within a company.
The concept of Boundarylessness was developed at General Electric
(GE) in the late 1980s and early 1990s, and it is one of the cultural ele-
ments General Electric credits for its phenomenal success over the last fif-
teen years. Proponents of boundarylessness believe traditional boundaries
between layers of management (vertical boundaries) and divisions between
functional areas (horizontal boundaries) have stifled the flow of informa-
41
tion and ideas among employees. A boundaryless culture seeks to overcome

the limitations imposed by these and other internal corporate divisions”
(Sam Falk, Organizational Evolution in a “Boundaryless” Organization,
submitted to the Alfred P. Sloan School of Management at the Massachu-
setts Institute of Technology, May 11, 2001).
Falk notes that Ron Ashkenas, Dave Ulrich, Todd Jick, and Steve Kerr
are the primary authors writing about boundaryless organizations, in large
part because they worked closely with General Electric as GE aspired to
become a boundaryless organization. Their book on the topic, The Bound-
aryless Organization, was published by Jossey-Bass in October 1998.
Falk writes: “According to proponents of boundarylessness, for most of
the twentieth century, size, role clarity, specialization, and control were
among the crucial dimensions against which companies measured them-
selves to become successful . . . Boundaryless organization literature treats
as true the notion that in the late 1980s and 1990s, the world’s competi-
tive landscape changed, and new dimensions defined corporate success or
failure” (Sam Falk, Organizational Evolution in a ‘Boundaryless’ Organi-
zation, submitted to the Alfred P. Sloan School of Management at the
Massachusetts Institute of Technology).
Jack Welch, chairman and CEO of General Electric between 1981 and
2001, believed that GE would be much more effective if the cultural, geo-
graphical and organizational barriers that separated the employees become
more permeable, writes Allen Brown of The Open Group in his article
“The Boundaryless Organization,” which was published in December
2003 on financial-i.com. As Brown noted, Welch “put the emphasis on
the boundaries’ ability to enable business, rather than get in its way.”
Brown went on to say that “in the next era of the information age, we will
expect to have information at our fingertips, all integrated to suit our spe-
cific needs, instantly available, across geographies, time zones and organi-
zation structures.”
See also: Bricks and Clicks; Business-to-Business/Business-to-Con-
sumer (B2B/B2C); Competitive Advantage; Offshoring
Further Reading
The Boundaryless Organization: Breaking the Chains of Organization Structure,
revised and updated, by Ron Ashkenas, Dave Ulrich, Todd Jick, and Steve
Kerr, Jossey-Bass (January 2002).
The Effective Global Workforce, published by Mercer Management Consulting,
May 2007, www.mercer.com.
42
Brainstorming
Brainstorming
Brainstorming refers to an informal exchange of ideas, designed to sur-
face—among other things—innovative solutions to existing corporate
challenges, new product concepts, and better processes or systems.
Interestingly enough, this deliberately informal exchange can often fol-
low a very formal structure. Many companies schedule brainstorming ses-
sions, in which they explicitly gather employees from different levels and
different areas in an organization to share knowledge and feed off of each
others’ perspectives.
Often, brainstorming sessions take place in front of a white board, with
one or more participants jotting down notes or pictures in an attempt to
capture ideas and frame them accurately for further discussion. Sometimes,
brainstorming can take the form of an e-mail round-robin of sorts.
According to the jpb.com website, developed by the JPB group, brain-
storming can be an effective way to generate lots of ideas on specific issues
and then determine which idea—or ideas—is the best solution. The site
says: “Brainstorming is most effective with groups of 8–12 people and
should be performed in a relaxed environment. If participants feel free to
relax and joke around, they’ll stretch their minds further and therefore
produce creative ideas.”
It goes on to advise that: “Creativity exercises, relaxing exercises, or
other fun activities before the session can help participants relax their
minds so that they will be more creative during the brainstorming ses-
sion.”
According to MindTools, a career-skills publication, the exact beginnings
of brainstorming are not recorded. The publication states, “While the fun-
damentals of brainstorming have been put to use throughout history, a
name wasn’t exactly put to the process until Alex Osborn, a 1940s adver-
tising executive, decided that the conventional methods of overcoming
obstacles and creating new ideas were too inhibitive and weren’t conducive
to real creativity.”
Effectivemeetings.com says brainstorming should be used to generate
ideas during meetings: “When scheduling the meeting, be sure to include
a brief explanation of the problem and its history. This will help partici-
pants prepare mentally for the session and focus on the particular issue.
The more specific and focused a session, the better the results will be.”
This website goes on to note that brainstorming sessions are most effective
when they’re kept to a maximum time of forty minutes. It also notes that
43
Branding
brainstorming sessions can be even more effective when participants know

that there will be a follow-up meeting.
Erich Joachimsthaler, in his book, Hidden in Plain Sight (Harvard Busi-
ness School Press, 2007) notes that the kind of innovations that cause
competitors to say, “Why didn’t I think of that!?” often stem from immer-
sing oneself in the world of the consumer. The best brainstorming, then,
doesn’t necessarily even occur among corporate colleagues. In fact, it can
occur when a company’s employees talk with customers; the customer may
not even be aware that he or she is “brainstorming.”
Of course, brainstorming is only as valuable as a company’s ability to
follow through and implement promising new ideas, processes, and sys-
tems. As Rob Galford and Ann Drapeau noted in their book, The Trusted
Leader (Free Press, 2002), when a company’s leaders encourage brain-
storming and actively solicit new ideas, and then fail to follow through,
the result can be a drop in productivity and morale.
See also: Innovation
Further Reading
“Great Ideas: Brainstorming Sessions Your Staff Won’t Dread,” published in Ca-
nadian Business Online, April 26, 2007, www.canadianbusiness.com.
Instant Creativity: Simple Techniques to Ignite Innovation & Problem Solving, by
Brian Glegg and Paul Birch, Kogan Page, New Ed edition (February 2007).
The Leader’s Guide to Lateral Thinking Skills: Unlocking the Creativity and Inno-
vation in You and Your Team, by Paul Sloane, Kogan Page, Second Edition
(November 2006).
Branding
Strictly defined, a brand is a trademark or a name that explicitly identifies
a product or a manufacturer. Branding, then, means to mark to show own-
ership or to publicize using a brand name.
But the term “brand” has long since left that narrow definition behind,
and now encompasses a host of different meanings, chief among them
being the “promise” that a product or service makes to the customer.
Brands set expectations. When a customer selects one brand over an-
other, he or she is often basing their decision on an expectation that the
product or service they are purchasing will deliver on one or more charac-
44
Branding
teristics. Some brands are known for being less expensive than others.
Some are known for delivering premium quality, often at premium prices.
Some promise reliability; some promise fun, excitement, or a certain asso-
ciation of style.
Allen Adamson, managing director of preeminent strategic brand and
design consultancy Landon Associates, talked to Business Management
magazine (Issue 181) about his book BrandSimple:
Although the activities involved in getting an organization on board

with a brand idea may seem like an expensive proposition, consider
the idiom “penny-wise and pound-foolish.” The effort may cost you
money upfront, but you’ll make up for it ten times over as you build
and manage your brand. The true value of understanding the mean-
ing of your brand and getting your employees gainfully engaged will
become obvious when you compare that cost to the cost of making
up for employees who have no idea how to deliver the brand promise.
(http://www.busmanagement.com / pastissue / article.asp?art=268772
&issue=181)
A brand is a key differentiator. Even if a product or service is not necessar-

ily unique (think of coffee or water), branding seeks to ensure that poten-
tial customers pick up on a feature or point that sets it apart from competi-
tors’ offerings. Marketing consultant and author Sam Hill discussed this
idea in depth in his article “How to Brand Sand” (CITE). While a brand
may once have been simply a recognizable logo, the logo now cannot
stand alone; it must stand for some concept, theory, lifestyle, price, or
experience.
See also: Competitive Advantage; One-to-One Marketing; Relation-
ship Marketing
45
Branding
Signs of Changing Culture:

Nonprofit Brands: Don’t Waste Their Power
This article was reprinted with permission from Valuenewsnetwork.com.

It originally appeared in the February/March 2006 edition of Value: To-
morrow’s Markets, Enterprise & Investment magazine.
Is there a sea-change currently underway, in 2006, with regards to

the way in which nonprofit organizations operate? Is the nonprofit
world being shaken up? Re-invented? Re-invigorated? Could be all of
the above? Consider this one perspective, on the brand equity some
nonprofits hold, and what they could/should do with it.
Value recently had the opportunity to talk with John A. Quelch of the
Harvard Business School about the value of nonprofit brands. Quelch is
senior associate dean and Lincoln Filene Professor of Business Adminis-
tration at HBS. Broadly speaking, his research focuses on global market-
ing and branding in emerging as well as developed markets. Research
projects currently in the works focus on understanding the brand power
of global nongovernmental organizations and on formalizing marketing
and customer metrics that boards of directors can use to help them as-
sess their organizations.
Professor Quelch is the author, co-author, or editor of twenty books,
including The New Global Brands (2005), Global Marketing Manage-
ment (5th ed., 2005), The Global Market (2004), Cases in Advertising
and Promotion Management (4th ed., 1996), and The Marketing Chal-
lenge of Europe 1992 (2nd ed., 1991). He has published over fifty arti-
cles on marketing and public policy issues in leading managerial journals
such as Harvard Business Review, McKinsey Quarterly, and Sloan Man-
agement Review.
VALUE: What is it that managers of nonprofits are missing about the

value of their brands?
QUELCH: Several things—and they’re all interwoven in terms of their
implications for how nonprofits think about and use their brands go-
ing forward. First, it’s important to understand that nongovernmental
organizations, or NGOs, that operate on a global scale have some of
the most trusted brands in the world. (Let’s get the definition clear at
the outset. By NGOs, I mean both nonprofit associations trying to pro-
vide social services on a global scale, and nonprofit organizations that
46
Branding
attempt to achieve economic changes on a global scale by influencing

governments and corporations.)
When surveys are conducted that ask people to indicate their level
of trust in these NGO brands, versus, say, for-profit brands such as
major soft drinks or fast-food franchises, the nonprofits come out
way ahead. This makes them extremely valuable.
The problem is, many large nonprofits don’t realize the veritable
gold mine they have at their fingertips, in terms of brand equity. But
most for-profit companies have figured it out, and so they’re eager to
engage with the not-for-profits in alliances and in co-marketing ef-
forts and the like.
The for-profits are thirsting for connections with strong nonprofit
brands. The nonprofits are in large part ignorant of just how much
those connections are worth. If nonprofits don’t get up to speed on
the value of their brands, they’re going to shortchange themselves
(and that’s putting it mildly) in terms of the amount of money and
other concessions they can expect or demand from a for-profit in a
partnership arrangement.
VALUE: How is it that global nonprofits have created such strong
brands? You seem to be implying, at the same time, that they don’t
know a great deal about branding . . .
QUELCH: The people running not-for-profits often don’t know a lot
about the depths of marketing research and the nuances of segment-
ing customers. They don’t have the time or the resources to pursue
that knowledge. And so, in many cases, they’ve chosen one brand
name and stuck with it everywhere in the world. And guess what? In
the global economy, that is the optimal solution.
These organizations have very strong brand names that are readily
identifiable all over the world. Consider, by contrast, a company that
uses the same formula, or essentially the same product, all around the
world, yet markets that offering under a different name in every coun-
try, or region, thus diluting the equity.
What’s more, the global not-for-profit brand names are backed by,
or driven by, missions that people perceive as very important. Their
nonprofit status gives them a substantial “trust halo.” And all of
those factors sustain and build their brand power, even given that
their level of accountability and transparency is generally very weak
relative to what’s required in for-profit companies.
VALUE: There have been some very smart PR efforts . . .
47
Branding
QUELCH: Of course, in many cases nonprofits have done an excellent

job of public relations. Take Greenpeace, for example, which has
done some very thoughtful and well-received publicity. But that’s a
public-relations effort. It shouldn’t be confused with a full understand-
ing of brand valuation.
VALUE: The lack of marketing knowledge has been a double-edged
sword for nonprofits . . .
QUELCH: They don’t fully appreciate the magnitude of the advantage
that they have. And in not appreciating it, they don’t or won’t lever-
age it effectively.
VALUE: What would be an example of a nonprofit effectively lever-
aging the value of its brand?
QUELCH: The first example that comes to mind is the partnership be-
tween the World Wildlife Federation and Lafarge (WWF), the Paris-
based building-materials giant.
Now, Lafarge operates in some seventy-five countries, and it has a
workforce of about 77,000 people, with, I believe, some 245,000
shareholders. And Lafarge and WWF have created a productive part-
nership, where WWF gets funding to support its research and commu-
nications, and Lafarge gets the benefit of the WWF brand affiliation.
Now importantly, WWF also gets conservation, in the form of a per-
formance agreement with Lafarge. The agreement includes certain
milestones that Lafarge has committed to meeting and committed to
being monitored on by an independent auditor.
That’s a good example of a multipronged partnership, and I don’t
think it would be as equitable if WWF did not have a sense of the
worth of its brand.
VALUE: That seems ideal. But there’s a potential downside to nonprofit
for-profit partnerships, of course.
QUELCH: Of course. And there are some NGOs that religiously con-
tinue to refuse all collaboration with the for-profit sector. Some be-
lieve that their core values and the perception of their integrity would
be impugned if they were in collaboration with for-profits. Some fear
the spillover effects if the for-profit partner were party to a scandal of
any kind. Those are valid concerns.
VALUE: But then there are other NGOs, such as Habitat for Humanity
or WWF, that see partnering with for-profits as a way to achieve
scale in their work that they might not otherwise be able to do.
QUELCH: The NGOs that tend not to become involved with for-profit
48
Branding
collaborations tend to be more advocacy-oriented. These are the

NGOs that have strong positions in the marketplace of ideas. Am-
nesty International would be one, for example. But perhaps these
organizations are being slightly too myopic. They’re leaving on the ta-
ble too much of an opportunity—the potential to scale up their activi-
ties in a significant way.
VALUE: Why is it important to understand the value of nonprofit
brands now, as opposed to five years ago, or next year?
QUELCH: The root cause of the urgency to understand this issue now is
the sea change in the way people perceive social and humanitarian
challenges.
The size and scale of the challenges facing humanity are obviously
very substantial. They’re probably no more substantial than they have
been, but today, with an increasingly global media, they are being un-
derstood and measured differently than they had been in the past.
Twenty years ago, you would hear about these problems in a very
limited, contextual way. You’d hear “X number of people in a given
country are suffering from this or that.” You wouldn’t hear about,
say, the global HIV problem. You’d hear about it in slices.
Today, it’s “normal” to hear about the global total number of peo-
ple who suffer from a particular disease or are affected by a particular
environmental danger. The problems are being articulated as global
problems, and as a result, the magnitude of these problems is appar-
ent. And the call is for global solutions.
VALUE: But the NGO marketplace, at the moment, is far too frag-
mented. The barriers to entry are very low. And as a result, there are
a huge number of NGOs competing for resources and competing to
deliver relief.
QUELCH: If this were the for-profit sector, there would be massive con-
solidation in order to extract scale efficiencies. But because it is not
the for-profit sector, there are not obvious upsides to consolida-
tions—say, in the form of stocks or options. Merger and acquisition
activity in the nonprofit sector is motivated by the need for survival
on the part of the acquired entity and the people employed by it, not
a positive force for good.
Think about it, though. You can imagine that there are probably
many organizations doing, say, malaria relief around the world. Imag-
ine what you could do if you consolidated all of those efforts under
one or a few organizations. Imagine the scale efficiencies, the caliber
49
Branding
of management you could afford to hire, the management informa-

tion systems that you could put in place to track the money, the con-
trol systems. At every level, consider the difference between a $10 bil-
lion corporation and a $500 million or $50 million corporation.
VALUE: Most of the biggest NGOs don’t come close to that size.
QUELCH: Sure. Most of these big entities are still typically short of a bil-
lion dollars. And there on the for-profit side, you have Exxon Mobil
tracking something like $400 billion.
But what people running NGOs have got to come to grips with is
that for them to have an impact they do have to achieve scale. They
don’t need to hit $400 billion, clearly, but consider an order-of-magni-
tude difference of 200 to one.
And then consider that most dispassionate, objective observers
would say that there’s a better chance of me making a difference in
the world by influencing Exxon Mobil than by worrying about work-
ing through a smaller organization, even if that organization’s pur-
pose is singularly oriented around a given mission. There’s the penalty
that fragmentation and independence and zero barriers to entry
brings.
The NGO marketplace is extremely cluttered. And therefore—al-
though it may sound crassly commercial to a lifetime not-forprofit ex-
ecutive—turning your brand into a mega brand is the way to break
through the clutter.
VALUE: What would a practical action step be?
QUELCH: One step would be shifting the focus of the organization
from the recipients of the service to the donors who fund the service.
It’s a radical concept, but think what could happen if NGOs viewed
their donors as their customers and the recipients of their services as
secondary.
Let me back up a bit. When you go into business, you face the real-
ity of the marketplace. If customers do not value the additional brand
or product, it’s not going to be around that long. To use a very sim-
plistic analogy, consider the number of ice cream flavors available or
the number of shades of paint. Does the world need another varia-
tion on the theme? If not, it doesn’t fly.
That marketplace reality doesn’t come into play aggressively in the
NGO arena. One reason is that a lot of these organizations limp
along on relatively little money. They survive, but they don’t thrive,
50
Branding
and there are no shareholders to hold their feet to the fire. Another is
that the “customer” in the nonprofit sector has never really been de-
fined correctly.
VALUE: In the for-profit world, if I buy the ice cream or the paint, I’m
going to consume it or use it (or at least know if it was received satis-
factorily).
QUELCH: In the NGO world, it’s harder to define the term “customer.”
The donors are not the recipients—so you have two very distinct cus-
tomers. And of course most NGOs are set up to address the needs of
recipients. But if you haven’t got any money from donors, you aren’t
going to be able to deliver to recipients.
Consider another analogy: the television industry. Who is the cus-
tomer of CBS? The customer is actually the advertiser, not the “end
consumer.”
People go into NGO work because they’re motivated by the needs
of recipients. But if we had a few more donor-motivated NGOs or do-
nor-focused NGO leaders, think of the potential gains.
Of course the recipients would be there in the “customer mix,” but
if you were adding value to donors, you would automatically be tak-
ing into account the impact on recipients. The donor expects the orga-
nization to take care of the recipients. But the donor expects a host
of other things—depending on who that donor is. Social standing, rec-
ognitions—there are all sorts of reasons people and organizations
give beyond the obvious cause. If the organization marketed itself
more to the donors, the potential upside is enormous. Recipients
would, of course, benefit.
VALUE: You seem to want to make another point about NGOs surviv-
ing versus thriving.
QUELCH: Yes, and this is a digression because it’s a comment directed
at donors, but it’s an important point. NGOs that merely survive tend
to eat up a large proportion of the money that comes in to cover ad-
ministrative expenses. That measure—how much money is used in ad-
ministrative costs—is one of the standard benchmarks people use to
determine which charity to give to.
But making the choice to donate based on an administrative cost
rate can be a huge mistake. Better to consider—at least in equal pro-
portions—the organization’s approach to solving problems. A start-up
organization might have a brilliant new idea, or new approach, but ex-
51
Bricks and Clicks
tremely high administrative costs because of its start-up status. It

might be “surviving” because it needs the traction to take off, as op-
posed to “surviving” because it has little to offer.
Which, of course, opens up another avenue of inquiry for for-profit
organizations considering the brand valuation of NGOs. Put the
brand-valuation issue up against the value of the new idea or
approach of a struggling “new” NGO with a relatively unknown
brand . . .
Bricks and Clicks

Bricks and clicks is term used to describe a business strategy that integrates
offline and online resources. It is also known as click-and-mortar or clicks
and bricks. If your company has an online store, but your customers can
return or exchange products at a physical location, that’s one use of bricks
and clicks. If your financial institution offers online banking in addition to
live tellers at local branches, that’s bricks and clicks as well.
Businesses that operate in the virtual world and the physical world si-
multaneously are not necessarily full participants in a bricks and clicks cul-
ture. If the distribution channels are not synchronized (or at least, if they
do not appear seamless to customers), then bricks and clicks doesn’t really
apply. Many companies aspire to join the bricks and clicks culture. Increas-
ingly, companies are learning to coordinate their efforts in both realms.
But the process isn’t easy—though it may be easier for new companies
that open their businesses as bricks and clicks ventures from the get-go.
Anne Stuart, a former senior editor at CIO Magazine, writes in the
March 15, 2000, issue in an article titled “Clicks & Bricks” that David S.
Pottruck, president and co-CEO of San Francisco-based Charles Schwab
& Co. coined the phrase. As the article notes,
Pottruck used the catchy phrase in a speech at an Internet conference

in July 1999 as he described the discount brokerage’s successful ef-
forts to coordinate all its services so that customers can trade stock
online, in person at its walk-in retail branches or by telephone, either
using an automated touch-tone system or by talking to a call center
representative. In his speech, Pottruck predicted that future business
52
Bricks and Clicks
success will hinge not on pitting brick-and-mortar companies against

online-only efforts, but in successfully integrating the two.
In her article, Stuart goes on to say that the term signals an important
shift in the way in which business leaders approach strategy. The article
described Sears’ approach, where customers often use the company web-
site to learn about products before visiting the physical store.
In the October 18, 2004, issue of U.S. News & World Report, an article
titled “Bricks and clicks: New approaches blur the line between traditional
classrooms and online learning,” points out that many universities are inte-
grating the bricks and clicks business model through online courses. “A
further attraction of the bricks-and-clicks model is that it mitigates the
need for more bricks.”
As Joel Hartman, vice provost for information technologies and re-
sources at the University of Central Florida, said in that article: “We esti-
mate that we’ve avoided about $3.6 million in construction costs.” The
University of Central Florida integrates online instruction with classroom
work, the article said, to get more mileage out of its space.
See also: Business-to-Business/Business-to-Consumer (B2B/B2C)
Further Reading
“Adding Bricks to Clicks: The Effects of Store Openings on Sales through Direct
Channels,” by Jill Avery, Mary Caravella, John Deighton, and Thomas
Steenburgh, published February 2007 by Harvard Business School Working
Knowledge for Business Leaders, http://hbswk.hbs.edu.
Bricks To Clicks: The Details of Retail, by Sucharita Mulpuru, Tamara Mendel-
sohn, and Carrie Johnson, April 5, 2007, http://blogs.forrester.com.
www.valuebasedmanagement.net/methods_bricks_clicks.html
53
Budget
Signs of Changing Culture: Hobbies, Paid Work

Blend on Internet
“Virtual Piecework: Trolling the Web for Free Labor,
Software Upstarts Are New Force” by Robert A. Guth
Noted in the Wall Street Journal, Monday, November 13, 2006, Page
1, Column 5
As more people “grow up” with the Internet as second-nature, it’s

no surprise that web-based businesses are on the rise. Weaker ventures,
and fad businesses may flame out, but behind them will come another
wave, and some will have staying power. In this article, author Robert
A. Guth writes about Zimbra—an e-mail program that he notes may
threaten established giants in the industry. As Guth states, Zimbra’s core
is made up of “a virtual army of software hobbyists who collaborate on-
line to create free programs. Like bloggers and YouTube addicts, they
hang out on the Web at all hours, largely for no pay.”
Guth goes on to say that start-up companies “are helping themselves
to this software, piecing it together like Lego blocks into new commer-
cial products. Often, they post the products’ underlying code on the
Web and tap more volunteers to help improve it. Then they sell the soft-
ware online, saving the cost of a large sales force.”
Zimbra Inc., the article noted, employed just fifty-five people at the
time the article was written. And co-founder Staish Dharmaraj runs the
place “from a tiny cubicle with a laptop.”
Budget
A budget is a financial plan that seeks to establish the financial parameters
of a business. How much can the business invest in capital expenditures?
How much can it afford to pay in salaries? How much can investors expect
to receive in return? The answers to these questions all hinge on a com-
pany’s budget—and on leaders’ ability to create a viable budget for the
business.
According to the U.S. Small Business Administration’s (SBA) website,
the three main elements of a budget are sales revenue, total costs, and
54
Budget
profit. “Sales are the cornerstone of a budget. It is crucial to estimate

anticipated sales as accurately as possible. Base estimates on actual past
sales figures. Once you target sales, you can calculate the related expenses
necessary to achieve your goals.” The website goes on to report,
Total costs include fixed and variable costs. Estimating costs is com-
plicated because you must identify which costs will change and by
how much and which costs will remain unchanged. You also must
consider inflation and rising prices when applicable. Variable costs are
those that vary directly with sales. One example is the purchase cost
of inventory. The more inventory you sell, the higher your purchasing
costs; the less you sell, the lower your purchasing costs. . . . Fixed
costs are those that do not change, regardless of the sales volume.
Rent is considered a fixed cost. . . . Semi-variable such as salaries,
wages, and telephone expenses, have both variable and fixed compo-
nents. For budgeting purposes, you may need to break semi-variable
costs into these two components. The fixed element represents the
minimum cost of supplying a good or service. The variable element is
that portion of the cost influenced by changes in activity.
As the SBA notes, a budget is only as good as the accuracy and relevance
of the information used to create it.
Effective budgets are often not static. The ebbs and flows of demand in
the marketplace can demand that a budget be adjusted. The better able a
company is to adjust its budget to accommodate upswings or downswings
in demand for a product or service, the more likely the company will be
to excel in good times and survive in bad times.
An effective budget, then, is responsive. It also is set up to allow manag-
ers to identify, for example, the specific reason for a shortfall in profits. By
contrast, it allows managers to pinpoint potential growth areas.
In that spirit, Business Link (http://www.businesslink.gov.uk) advises
reviewing your budget regularly. According to the site, “This is particu-
larly true if your business is growing and you are planning to move into
new areas. Using up-to-date budgets enables you to be flexible, and lets
you manage your cash flow and identify what needs to be achieved in the
next budgeting period.”
See also: Competitive Advantage; Scenario Planning
55
Business-to-Business/Business-to-Consumer
Further Reading
“Adding Time to Activity-Based Costing,” a Q&A with Robert S. Kaplan by
Sarah Jane Gilbert, April 11, 2007 by Harvard Business School Working
Knowledge for Business Leaders, http://hbswk.hbs.edu.
“Breaking Free from Budgets: Exasperated by Budgets that Hamstring Creativity,
a Growing Number of Companies are Tossing Off Financial Constraints—
and Still Holding the Line on Spending,” by Suzanne McGee, Inc. maga-
zine, October 2003, www.inc.com.
“Gimme Some Money,” by Hannah Clark, published in Inc.Com (September 17,
2007).
(B2B/B2C)
As of this writing the year is 2007 and the Internet is far from new. Yet, as
time goes on, more businesses are “discovering” web-based or facilitated
distribution channels than ever before, and more individuals are finding
new levels of efficiency and ease in purchasing goods and services online,
from hotel reservations to airline tickets to clothes, electronics, sporting
goods, financial services—you name it.
E-commerce refers to all online transactions. But under that umbrella
are two sub-categories. The first, B2C, stands for “business-to-consumer”
and essentially means businesses selling to non-commercial end users, or
retailing, electronic-style. The second, B2B, stands for “business-to-busi-
ness” and essentially means online transactions between two or more com-
panies.
Business-to-business websites allow businesses to deal directly with their
suppliers and distributors online, according to A-K Strategic Business So-
lutions (www.akstrategic.com). Business-to-consumer websites link cus-
tomers to suppliers. Some of the major B2C websites include eBay, an
online auction site, and ZDNet, a technology marketplace.
Amazon.com, another major B2C site, had roots in online book sales,
but has expanded to offer a wide range of products and also facilitates
purchases with other retailers. These businesses exist primarily on the In-
ternet and offices and warehousing are born from the necessity of their
Internet success.
According to an article in CIO Magazine, compiled by Susannah Pat-
ton, and published March 6, 2007, “B2C e-commerce went through some
56
tough times, particularly after the technology-heavy NASDAQ crumbled

in 2000. In the ensuing dotcom carnage, hundreds of e-commerce sites
shut their virtual doors and some experts predicted years of struggle for
online retail ventures. Since then, however, shoppers have continued to
flock to the web in increasing numbers” (CIO Magazine, “The ABCs of
E-commerce” http://www.cio.com).
A B2B site primarily deals with other businesses, not the general public.
B2B sites are a portal to conduct business transactions that are usually
more complex and have higher security needs. Business-to-business cus-
tomers are other companies while B2C customers are individuals. The first
B2B applications were for buying finished goods or commodities that are
simple to describe and price, according to CIO Magazine.
As the CIO article put it, “B2B e-commerce can save or make your
company money. Some ways companies have benefited from B2B e-
commerce include: managing inventory more efficiently, adjusting more
quickly to customer demand, getting products to market faster, cutting
the cost of paperwork, reigning in rogue purchases and obtaining lower
prices on some supplies.”
In his blog, Internet Marketing B2B B2C (“Marketing Comparisons
for the Twenty-First Century” published September 29, 2004), James A.
Warholic writes that B2B requires a commitment of time and good cus-
tomer service prior to ever making the first sale.
Warholic notes, “Most B2C customers are looking for the best price
possible with a commitment of good customer service . . . When it comes
to purchasing a consumer product, I do extensive research online to check
the specifications on a product and price from online sources. If that prod-
uct is displayed on a website from a company with also a brick and mortar
outlet, I am most likely to buy it locally, even if the price is slightly higher.
If not found locally then I would look for the best price online checking
their return policy and customer service feedback information.”
Warholic’s comments raise another B2C issue, albeit indirectly. As of
this writing, although many major retailers have created successful online
sites, many others still struggle with website design, and the right align-
ment between their online and bricks-and-mortar venues. The distribution
channels for each stream of business can differ in significant ways, and it
can be difficult for a company to offer customers a seamless experience
across those channels.
57
See also: Branding, Bricks and Clicks; One-to-One Marketing; Rela-

tionship Marketing
Further Reading
“Top Tech Execs: Keith Krach,” by Lisa DiCarlo, Forbes.com (December 7,
2000), www.forbes.com.
www.ecommercetimes.com
www.managementhelp.org
58
C
Cafeteria Benefit
A cafeteria benefit is a particular employee benefit selected from a com-
pany plan offering a variety of choices to suit individual needs. Just as a
cafeteria offers a variety of foods, allowing patrons to assemble meals that
suit their own tastes, the term, “cafeteria benefits” or “cafeteria plans”—
also known as Section 125 plans—describes a system that allows employ-
ees to select from a range of offerings to assemble the benefits package
that they feel best suits their needs.
Put another way, according to Barron’s Education Series, Inc., a cafete-
ria benefit plan is an arrangement under which employees may choose
their own employee benefit structure. “For example, one employee may
wish to emphasize health care and thus would select a more comprehen-
sive health insurance plan for the allocation of premiums, while another
employee may wish to emphasize retirement and thus allocate more of the
premiums to the purchase of pension benefits.”
Proponents of cafeteria benefits believe that the approach allows compa-
nies to offer their employees benefits that are more tailored to their needs.
Another school of thought, however, holds that cafeteria benefits allow
employers to pass along more of the cost of providing benefits to their
workers.
In a 2001 article that ran in the Journal of Accountancy, John G. Sim-
mons, writes that “Cafeteria plans under IRC section 125 and non-125
flexible benefit plans can help small employers provide necessary benefits
in a way that helps mitigate rising costs.”
A 2002 article on GovExec.com, a daily news service of Government
Executive magazine discusses mixed feelings on cafeteria plans. In 2002, a
House subcommittee chairman pushed the idea of cafeteria-style benefits
for federal employees. But the proposal also drew concern from labor lead-
ers. Dan Weldon, R-Fla., chairman of the House Government Reform
Subcommittee on Civil Service, Census and Agency Organization, was
quoted in the article as saying that the U.S. government has to compete
for talented employees with companies that offer cafeteria plans. But the
Cafeteria Benefit
article also said that Derrick Thomas, national vice president of the Ameri-
can Federation of Government Employees’ 2nd District, told the subcom-
mittee that cafeteria plans “would make health care unaffordable for a
large number of federal employees because they put responsibility for pay-
ing benefits onto the employee instead of where they belong, on the em-
ployer.”
“Cafeteria plans are deceptive,” Thomas was quoted as saying. “The
plans force employees into ‘either-or’ decisions between benefits that
should be provided universally.”
According to Freedombenefits.org, though, cafeteria benefit plans are
an effective way for a small business “to customize its benefits for maxi-
mum tax savings and appeal to employees.”
Generally, very small businesses, or businesses without salaried employ-
ees, will not find cafeteria plans suitable. But for those that do, the range
of benefits includes health insurance, medical savings accounts, education
expenses, disability insurance, and life insurance. Employees who partici-
pate can often contribute toward aspects of the plan (such as child care)
on a pre-tax basis.
See also: American Federation of Labor and Congress of Industrial
Organizations (AFL-CIO)
Further Reading
www.entrepreneur.com/humanresources/compensationandbenefits
www.govexec.com

Pension Plan Safety Net Has Holes
In February 2007, Hewlett-Packard announced it would be phasing out
its pension plan for new employees and replacing it with a 401(k).
As the Wall Street Journal reported in an article by Lee Gomes pub-
lished Wednesday, March 14, 2007 (page B1), time was, large, estab-
lished technology companies offered generous pensions and a host of
other gifts to employees upon retirement. But, as the article says, even
“the old-guard tech companies, the last bastions of traditional pensions,
finally have joined their younger counterparts in the New Economy.”
As the article says, “Many of today’s retirees wonder whether their
children or grandchildren will do as well as they did after their careers
60
Carnegie, Dale/How to Win Friends and Influence People
end.” The article goes on to note, “while it’s possible to do perfectly

well with [a 401(k)], more often than not, that doesn’t happen.” The ar-
ticle says that according to Andrew Eschtruth, of the Center for Retire-
ment Research at Boston College, “Figures from the Federal Reserve . . .
show that the average 401(k) balance for heads of household between
ages 55 and 64 is just $60,000, not nearly enough to retire on.
Carnegie, Dale/How to Win Friends

and Influence People
Dale Carnegie’s philosophy of presentation and his belief in the ability of
individuals to improve their situations and positions in life and work influ-
enced millions of people in the world of work. His book, How to Win
Friends and Influence People, was first published in 1936, sold over thirty
million copies and remains popular today. (He also wrote a biography of
Abraham Lincoln, called Lincoln the Unknown.)
Carnegie developed a self-improvement program called The Dale Car-
negie Course. According to the DaleCarnegie.com website, which features
information on the training program, Dale Carnegie Training has “evolved
from one man’s belief in the power of self-improvement to a performance-
based training company with offices worldwide.”
In an obituary published in the New York Times on November 2, 1955,
Carnegie is described as “one of the world’s most phenomenal bestsellers.”
The obit said that Carnegie “was born in poverty on a Missouri farm, but
found that a silver tongue could be more useful than a silver spoon in
winning wealth and fame.”
Carnegie turned that insight into a business and a wildly successful ca-
reer teaching people the art of public speaking and the art of communicat-
ing effectively in the work environment.
According to the obit, a review of Carnegie’s book, published in the
New York Times on February 14, 1937, “said in effect that Mr. Carnegie’s
prescription for success was to smile and be friendly, not to argue or find
fault and never to tell another person he was wrong.”
See also: Training and Development
Further Reading
www.DaleCarnegie.com
61
Casual Friday
Casual Friday
Casual Friday is an American and Canadian business custom where some
offices celebrate a reprieve from the formal dress code. Instead of wearing
business shirts, suits, ties, and dress shoes, workers are allowed to dress
down and wear casual clothes such as jeans, T-shirts and sneakers. Casual
dressing at work was initially a Friday-only occasion, but more and more
companies have adopted ‘business casual’ attire standards for their offices.
Of course, business casual can also mean different things office to office,
and business to business.
As the Wall Street Journal notes, in the article “Business Attire: The
Office Coverup” (August 5, 2006), dressing casually at work, as a recog-
nized trend, began in the early 1990s. The article cites the Pittsburgh-
based aluminum company, Alcoa, as one of the early proponents. Alcoa,
it seems, let employees dress in casual clothes for two weeks in 1991 if the
employees donated to the United Way charity.
Many employees followed suit, and began explicitly allowing employees
to dress more casually than they typically would on Fridays. But the turn
of the century has seen a polarization of the trend, with some employers
encouraging employees to dress down all the time, and others explicitly
requiring employees to meet a certain standard of dress at work.
The Wall Street Journal article noted that Lehman Brothers and Bear
Stearns are among the companies to institute a business dress code. It also
cited a survey of 1,400 companies by Mercer Human Resources Consult-
ing, which found that in 2006, “some 84 percent of companies with 2,000
employees or more have a business-casual dress code, up from 79 percent
two years ago.” Joe Vocino, a senior consultant with Mercer, was quoted
in the article as saying that “the point of these policies is not so much to
encourage business casual but rather to define the limits of what can be
worn.”
Companies can often be grouped by industry when it comes to expecta-
tions of the kinds of clothes employees should wear. Some interpret “Ca-
sual Friday” as wearing jeans; others expect that employees who are dress-
ing down will still appear in suits, though possibly leaving the jackets at
home. Often, the way in which a company’s employees dress contributes
to the company’s brand (see Branding). If an employee is dressed more
formally, for example, the company may be trying to show customers that
it can be relied upon with sensitive client information. It’s no wonder,
62
Casual Friday
then, that law firms and financial service firms generally have a more formal
dress code than do many other types of businesses.
See also: Dilbert; Flex-Time; Generation X, Y, and Z
Further Reading
Survey by Emily Post.com Surveys, Monday September 17, 2007, “Many busi-
nesses today have a ‘Dress Down Friday’ policy. Do you think this is a good
idea?” www.emilypost.com/surveys.
Signs of Changing Culture: The Working Lifestyle

This makes “Casual Fridays” seem, well, obsolete:
I’m sitting on a heated toilet in my pajamas. I’m in engineering building

forty at Google on ‘pajama day,’ and directly in front of me, attached
to the inside door of the toilet stall, is a one-page flier, printed on
plain white paper, titled “Testing on the Toilet, Episode 21.” The
document . . . explores such subjects as ‘lode coverage’ and reminds
engineers that even biobreaks need not interrupt their work.
The quote is from an article entitled “Search and Enjoy,” by Adam Lashin-
sky, published in Fortune Magazine, January 22, 2007 (Volume 155, No.
1, page 70). The piece is all about working at Google, which is rated first
on the list of Fortune 100 Best Companies to Work for 2007.
The article talks about how the Google “campus” is like college—how
employees can do their laundry at work, or work out at a gym, or study
a foreign language (just to name a few of the benefits). It also talks about
how good the food is at the company’s eleven free gourmet cafeterias.
And, it talks about how hard employees work, though, and how deeply
engaged they are with that work—and with the company. Of course, the
article also goes on to ask: “Is Google a great place to work because its
stock is at $483, or is its stock at $483 because it’s a great place to work?”
Time will tell.
63
Change Agent/Change Management
Change Agent/Change Management

Getting an organization to “change” its practices, processes, or culture to
meet fluctuations in the market, or keep up with new technologies or cus-
tomer demands, is incredibly difficult. It can be especially challenging
when an organization is large and established. “But we’ve always done
things this way,” is a common response when confronted with change,
and one that’s hard to overcome.
Nonetheless, change is necessary for survival in today’s marketplace.
Companies that can’t adapt often don’t last. What’s needed are effective
change agents (people who spearhead and lead change efforts) and effec-
tive change management (the approach by which the organization’s lead-
ers build consensus among employees to change, guide employees through
the change, and ensure that the new processes and practices stick).
According to isixsigma.com on March 13, 2003, by Manoj Bhardwaj,
“A change agent is a person who leads a change project or business-wide
initiative by defining, researching, planning, building business support,
and carefully selecting volunteers to be a part of a change team. Change
agents must have the conviction to state the facts based on data, even if
the consequences are associated with unpleasantness.”
And according to a definition posted on October 13, 2006, on Whatis
.com’s Target Search (http://whatis.techtarget.com/definition/0,,sid9
_gci799426,00.html), change management is “a systematic approach to
dealing with change, both from the perspective of an organization and on
the individual level.” This definition goes on to say that “change manage-
ment has at least three different aspects, including: adapting to change,
controlling change, and effecting change. A proactive approach to dealing
with change is at the core of all three aspects. For an organization, change
management means defining and implementing procedures and/or tech-
nologies to deal with changes in the business environment and to profit
from changing opportunities.”
Change agents are often company leaders—top executives or senior
managers. But the definition of change agent is sometimes broadened to
include individuals or forces outside of an organization. For example, in
an article published in the Journal of American Medical Association on
February 13, 2002 (JAMA 2002; 287:776), journalists are noted as
change agents in medicine and health care. “In some cases, investigative
reporters have exposed aspects of medicine and medical science that
prompted legislative and policy changes in the health care system.”
64
Code of Ethics
The article went on to say that, “Investigative reporters often rely heav-
ily on anonymous sources who might jeopardize their careers for leaking
damning information These “whistleblowers” also risk being sued once
they trust a journalist with sensitive information about their organizations.
Journalists can risk exposing their confident sources when they attempt to
substantiate claims by speaking with people who oppose or disagree with
the whistleblower.”
See also: Benchmarking; Core Competencies
Further Reading
Change Masters, by Rosabeth Moss Kanter, Simon and Schuster (1983).
Leading Change, by John P. Kotter, Harvard Business School Press (1996).
“10 Principles of Change Management: Tools and Techniques to Help Compa-
nies Transform Quickly,” by John Jones, DeAnne Aguirre, and Matthew
Calderone, Strategy+Business, published by Booz, Allen and Hamilton (April
25, 2004), www.strategy-business.com.
Code of Ethics
A Code of Ethics is a set of rules governing the behavior of members of
an organization. Most companies are explicit about these codes; setting
standards for employee behavior and integrity makes it clear where the
company stands and what constitutes “crossing the line.”
Sometimes, a code is set not by an individual company, but by an indus-
try. For example, the Society of Professional Journalists has a code of ethics
that is voluntarily embraced by thousands of writers, editors, and other
news professionals. The preamble of the Society of Professional Journalists
Code of Ethics state that
members of the Society of Professional Journalists believe that public

enlightenment is the forerunner of justice and the foundation of de-
mocracy. The duty of the journalist is to further those ends by seeking
truth and providing a fair and comprehensive account of events and
issues. Conscientious journalists from all media and specialties strive
to serve the public with thoroughness and honesty. Professional in-
tegrity is the cornerstone of a journalist’s credibility. Members of the
65
Code of Ethics
Society share a dedication to ethical behavior and adopt this code to

declare the Society’s principles and standards of practice (www.spj.org).
But many corporations have their own Code of Ethics that is specific
not only to industry standards but to its particular context and culture.
For example, the New York Times states in its New York Times Company
Journalism Ethics Policy that the core purpose of the New York Times
Company is to “enhance society by creating, collecting and distributing
high-quality news, information and entertainment. The central place of
our news and editorial units in fulfilling that promise is underscored by
the No. 1 statement in our Core Values: Content of the highest quality
and integrity: This is the basis for our reputation and the means by which
we fulfill the public trust and our customers’ expectations.”
The Times’ code goes on to stipulate expectations that include how
journalists should cover the news with impartiality, and how all employees
should treat sources, customers, and advertisers.
Some codes of ethics are created in-house, written by top managers who
want employees to understand how they see the company fitting into the
world of work. Often, such codes reflect the wording in the corporate
mission statement; they can be very general. Other times, a code is very
formal, prescribing specific standards and expected behaviors for a range
of situations.
The National Association of Social Workers code of ethics, for example,
was approved by the 1996 NASW Delegate Assembly and revised by the
1999 NASW Delegate Assembly. According to the organization’s website,
the code has four sections, covering broad issues, such as the core values
of the profession, and specific standards to “guide social workers’ conduct
and to provide a basis for adjudication.”
While a company may have articulated a Code of Ethics, the ethics of
the organization are played out on a daily basis by the people who work
for the company. The Code of Ethics may be written in black and white,
but the reality is that many employees are faced with shades of gray in their
decision-making. One “back-of-the envelope” ethics test is euphemistically
called the “Wall Street Journal test,” i.e., if you wouldn’t feel comfortable
with your actions published on the cover of the Wall Street Journal, don’t
undertake them.
See also: Enron
66
Competitive Advantage
Further Reading
Harvard Business Review on Corporate Ethics, Joseph L. Badaracco, Harvard Busi-
ness School Press, Harvard Business Review Paperback Series (July 2003).
www.amanet.org (American Management Association)
www.ethicsweb.ca/codes
www.socialworkers.org/pubs/code
What companies sell the same types of products as your company? Which
firms offer the same types of services? How can you differentiate your com-
pany from the pack, and what will establish your company as the “one to
pick” in the eyes of the consumer?
Answer all of those questions and the perennial puzzle of competitive
advantage will have been cracked. Competitive advantage, reduced to its
essentials, means the “edge” that one company has in the marketplace that
enables it to outperform other companies.
Maybe a company’s edge is the quality of its customer service. Maybe it
is the ability to gather and garner talent to respond to clients faster and
more effectively than the next company. Maybe it’s the ability to get prod-
ucts to market faster. Maybe it’s being able to produce products at lower
cost. Maybe it’s the ability to position your brand as a premium offering
and command higher prices. Whatever it is, the ability to find it, develop
it, and use it to its potential is the key to excelling in business.
Competitive advantage is a holy grail of sorts in business today, and as
such, it is studied exhaustively by industry and academia alike. Michael
Porter is the leader of the Institute for Strategy and Competitiveness at
Harvard Business School. He is also considered a leading—if not the lead-
ing—authority on competitive advantage, competitive strategy and the
competitiveness and economic development of nations, states, and re-
gions. Key components of Porter’s work include undertaking an analysis of
the competitive structure of an industry and then employing a competitive
strategy leveraging a firm’s competitive advantage in the industry. He of-
fers three generic strategies: overall cost leadership, differentiation, and
focus.
Beyond Porter, as noted above, competitive advantage has the attention
of many other consultants and academics—and even this is a gross under-
67
Why I Do This: Independent Marketing Consultant

Andrea Harris
I’m the owner of a one-person marketing firm that helps professional ser-
vices businesses and authors promote their services and books. In a typical
week you might find me creating a plan for a business’s new e-mail newslet-
ter, making recommendations for an overhaul of their website, determin-
ing how to get them more targeted web traffic, rewriting their articles, and
getting those articles placed on websites that their potential customers
read. Because this is my own business, I don’t think of it as just a job. I
got started in the business after a dozen years in high-tech marketing com-
munications. I took a year off, then started taking on freelance writing and
web projects, and it grew from there. Now I’ve got enough work that I’m
outsourcing some of the web development and administrative work to
other freelancers. I generally work with the same clients from month to
month, but occasionally take on new ones.
I like the freedom of deciding what kind of work I want to do—which
usually means something new and interesting. When client work becomes
repetitive I can often delegate it to another freelancer. If a potential client
seems like they might be difficult to work with, I don’t have to accept the
work—I have no boss telling me what to do! Sometimes the work requires
learning something challenging and potentially scary—like the first time I
created a business blog for a client. I had no idea what I was doing, but I
figured it out and have gone on to create them for other clients. That will-
ingness to take a risk and do something outside your comfort zone is
tough at first, but worth it in the end because it makes you grow. It’s a
great business for someone who can think creatively, juggle many projects,
and is willing to stretch a bit and learn new things.
statement. Much of the literature on the subject shares common themes;

much of it is rooted in or at least influenced by Porter’s work.
Finding and developing a competitive advantage to its potential is devil-
ishly difficult. Layers of management can disguise or dilute a potential
competitive advantage in larger companies. In smaller companies, the abil-
ity to sustain an advantage can be a huge challenge. But consider what
Jack Welch had to say on the subject. In an article on postcresent.com
posted on December 10, 2006, for Fox Valley Inc., titled “Identifying,
trumpeting a competitive advantage,” Judy Waggoner writes: “Business
guru Jack Welch has offered this succinct advice: ‘If you don’t have a com-
petitive advantage, don’t compete.’”
See also: Competitive Intelligence; Performance Management/Perfor-
mance Meausurement
68
Competitive Intelligence
Further Reading
Competitive Strategy: Creating and Sustaining Superior Performance, by Michael
E. Porter, Free Press (1998/1985).
The Concept of Corporate Strategy, by Kenneth Andrews, 3rd ed., Dow Jones/
Richard D. Irwin (1987).
www.isc.hbs.edu (Institute for Strategy and Competitiveness at the Harvard Busi-
ness School)
Competitive Intelligence
No company operates in a vacuum. In order to compete successfully, a
company needs to understand not only its own product and existing cus-
tomers, but also the way in which the company fits into the larger business
landscape. Information concerning the company’s current competitors,
other companies that are rising stars, ways in which the industry is chang-
ing, how customer tastes gravitate toward a new technology and what new
modes of doing business are present, all relate to competitive intelligence.
All of this information, and more, according InvestorWords.com, is and
composes “competitive intelligence,” or data gathered and used by a com-
pany for the purpose of learning about its competition in a given market.
There are any numbers of ways to gather competitive intelligence,
among them: industry and analysts’ reports, customer focus groups, news
articles, academic research.
In an article for Fast Company magazine (Issue 14) published in March
1998 titled “Competitive Intelligence—Get Smart!,” a panel of experts
including consultant Leonard Fuld, researcher Marc Friedman, and con-
sultant Tracy Scott provided advice ranging from doing research on the
Internet to attending conferences and networking.
In the article, Friedman was quoted as saying “Sometimes I’m really
amazed at what searching the Net can turn up. One of our product lines
consists of antennae for air-traffic-control systems. I got a call from our
people in Canada, who needed a country-by-country breakdown of up-
grade plans for various airports. I knew nothing about air-traffic control at
the time. So I got on the Net. I found a site for the International Civil
Aviation Organization, which had lots of great data. I also found several
research companies that had done reports.”
However, Scott said that she makes it a point to separate secondary
information, such as what you can learn on the Internet, from “human-
69
Core Competencies
source information: stuff that real people tell you.” As Scott said, “I always
look for ‘star talent’ and think about what the comings and goings of
those people mean. I also love conference proceedings.”
Regardless of how a business gathers information, what’s equally impor-
tant is figuring out which information is actually relevant to the business
at hand, and how to use the information once it’s been gathered.
In a June 9, 2005, article entitled “Competitive Intelligence: What you
don’t know can hurt you” written for ClickZ Network (www.clickz.com),
Heidi Cohen, a principal in the consulting firm Riverside Marketing Strat-
egies, writes that “True competitive intelligence requires understanding
how diverse audiences perceive your company. These audiences include
customers, prospects, suppliers, distributors, competitors, and financial
markets. To keep abreast of market activity influencing your business, start
by understanding how your company is viewed as a whole, as well as how
your brands, products, pricing, and customer experience are seen.”
Cohen recommends: “Monitor competitors by channel, assess competi-
tors by brand or product line, understand how target consumers talk about
your company and products, and track sites containing negative informa-
tion about your company.”
See also: Competitive Advantage; Core Competencies
Further Reading
“Competitive Intelligence—Get Smart!” by Gina Imperato, Fast Company maga-
zine (March 1998).
Competitive Intelligence Programs: An Overview, by Yogesh Malhotra, PhD.
(BRINT Institute, 1996), www.brint.com.
www.loyola.edu/dept/politics/ecintel.html
Core Competencies
If companies are successful it seems clear that these companies are good at
something, that they are doing at least one thing right. It is less clear,
however, if successful companies necessarily have to be good at everything
they do. Can companies excel by focusing on the things they do well and
outsourcing the rest?
A “core competency” is something that the company does well, by itself,
using its own employees. Consider a bicycle company. Its core competency
70
Core Competencies
could be the design of the bicycles or it could be the way in which it sells
and services the bicycles. If the design is the core competency, maybe the
bicycle company should sell its product through another retailer and go
beyond operating stores itself. If the competency is the customer service,
and the design takes a back seat (so to speak), maybe the company should
consider operating stores that sell a range of bicycles designed by others.
On another level, if a company does a great job at design and at cus-
tomer service then it is possible that both are core competencies. But as
the company grows, its HR department may be stressed to the limit, and
unable to process payroll efficiently and accurately. At that point, payroll
fails to be a core competency. Here is where two possibilities are consid-
ered; whether that company should invest in developing expertise in the
area of payroll operations, or whether it should contract with a payroll
company—a company for which payroll is a core competency
It should be noted that although many people refer to a core compe-
tency when talking about a company as a whole, core competencies exist
within various departments in an organization as well. The aforementioned
HR department, for example, might excel at attracting key talent to the
organization. For that department, recruitment is a core competency, and
the company would do well to continue to invest in sustaining that skill,
but would do equally well not to personally invest as much in payroll.
An entry posted on September 19, 2003, on Whatis.com Target Search
says that,
a core competency is fundamental knowledge, ability, or expertise in

a specific subject area or skill set. For example, an individual who
becomes certified as Microsoft Certified Software Engineer is said to
have core competency in certain Microsoft systems and networks.
Companies with specific strengths in the marketplace, such as data
storage or the development of accounting applications, can be said to
have a core competency in that area. The core part of the term indi-
cates that the individual has a strong basis from which to gain the
additional competence to do a specific job or that a company has a
strong basis from which to develop additional products.
How can a company determine which competencies to focus on and

which competencies are really “core?” Often, the kinds of analysis that
lead to identifying a competitive advantage (see Competitive Advantage;
71
Core Competencies
Competitive Intelligence) will inform the answers. According to tutor2-

u.net, “The starting point for analyzing core competencies is recognizing
that a competition between businesses is as much a race for competence
mastery as it is for market position and market power. Senior management
cannot focus on all activities of a business and the competencies required
to undertake them. So the goal is for management to focus attention on
competencies that really affect competitive advantage.”
C. K. Prahalad, professor of corporate strategy at the University of
Michigan, and Gary Hamel, professor at the London Business School since
1983, and currently Visiting Professor of Strategic and International Man-
agement there, are generally credited with developing the concept of core
competency. Both Prahalad and Hamel are known throughout the world
of management for their work on strategy. They wrote a series of articles
on core competency, published in Harvard Business Review; they also pub-
lished a bestselling book entitled Competing for the Future, which explored
the concept of core competencies in the context of identifying and sustain-
ing competitive advantage.
Importantly, a core competency is about ability, and thus, not necessar-
ily tied to any particular product or type of service. Think back to the
hypothetical bicycle company. Maybe this company had great success with
their 2006 design. However, if the success of that design is an anomaly
(in the sense that the designs from 2005 and 2007 were not successful at
all) it’s possible that “design” is not a core competency. It’s also possible
that the company didn’t recognize design as a core competency and, in
failing to recognize this, made a huge mistake in terms of investing in and
supporting that key element.
See also: Competitive Advantage
Further Reading
Competing for the Future, by Gary Hamel and C. K. Prahalad, Harvard Business
School Press (1994).
Core Competency Based Strategy, by Andrew Campbell, and Kathleen Sommers-
Luch, International Thompson Business Press (1997).
“Stick to the Core—or Go for More?,” by Thomas J. Waite, Harvard Business
Review (February 2002), pp. 31–41.
Strategic Management and Core Competencies: Theory and Applications, by Anders
Drejer, Quorum Books (2002).
72
Corner Office
Corner Office
In the modern-day business environment where employees, from adminis-
trative support to management, are working in cubicles without doors or
windows, the corner office is often considered a status symbol. In terms
of the bricks-and-mortar work environment (see Bricks and Clicks), it
generally refers to the office occupied by the top executive.
As one retired sales executive, interviewed for this work, said: “The ‘cor-
ner office’ means ‘the boss.’” As another sales representative said, the term
conjures up “mahogany row.” Well appointed, the best seat in the house,
corner offices in many corporations are literally just that: in the corner.
They’re often large, featuring big windows on two sides. This is the literal
definition and the most commonly held perception. White-collar luxury,
earned by virtue of holding the position where (to use another well-known
phrase) “the buck stops.”
But, as culture differs company to company, in some situations, the term
“corner office” has come to mean arrogance and greed. As this thinking
goes, it is one thing to have an office that offers the privacy and space that
a top position in a company can demand. It’s another to flaunt privileges
when front-line employees, for example, clearly work under less-than-ideal
circumstances.
“Corner office” isn’t just a corporate phrase; it’s often used to describe
any leadership position and can also mean the governor’s office. For exam-
ple, according to an article in the Boston Herald, when Deval L. Patrick
was sworn in as Massachusetts’s 71st governor on Jan. 4, 2007, he asked
“citizens to join a ‘common cause’ of social reform that will reach from
the ‘Corner Office to the corner of your block.’” (“Welcome to the Cor-
ner Office, Gov: Patrick Invokes Humble Start, Rich Heritage for Inaugu-
ral,” by Casey Ross, in the Boston Herald on Jan. 5, 2007.)
If the corner office is so favorable then it would be beneficial to know
how to get to this elusive place. Interestingly, according to an article in
the Wall Street Journal published Sept. 9, 2006, for the Journal’s Ex-
ecutive Career Site (CareerJournal.com) titled “Path to the Corner Office
Often Starts at a State School” by Carol Hymowitz, “Getting to the cor-
ner office has more to do with leadership talent and a drive for success
than it does with having an undergraduate degree from a prestigious uni-
versity.”
The article went on to say that “most CEOs of the biggest corporations
73
Corner Office
Why I Do This: Director, Account Management,

Financial Services Firm
Kathleen Sullivan
It is my primary responsibility to act as an advocate for customers, to ensure
that the needs of their company and participants in Stock Compensation pro-
grams are being met. One of my goals is to increase the number of house-
holds participating, and have those individuals take action within their bro-
kerage account. To this end I need to leverage all of our resources to
educate my day-to day-contacts, as well as their participants, on the benefits
of having a brokerage account. I also need to make sure they are aware of
the guidance and financial planning that is available to them at no charge.
Another facet of my job is to see what other recordkeeping, administrative
opportunities exist within the company and try to win over that business.
A typical day for me would include preparing agendas and facilitating
weekly or bi-weekly calls. I also compile minutes and conduct the necessary
follow up on any action items due. A day would also include responding to
inquires and logging in all activity with any given client into our Customer
Relationship Model tool (that’s a corporate system we have in place to keep
track of what we do and whether we’re accomplishing what we think we
should).
I might also be traveling to a client’s location, running a quarterly or an-
nual Business Service Review or planning session, and then possibly enter-
taining the client at a dinner.
I didn’t seek this job per se, but I was working for this company in a dif-
ferent area, and then someone that I knew who worked in this division sug-
gested that this job would be a good match for me.
It’s a good job; I enjoy the feeling that I am running my own business.
This kind of work is good for someone who likes having tangible goals and
receiving a tremendous amount of support. The “everyday” also presents a
variety of challenges and learning opportunities; it’s never boring.
That might come as a surprise to some people. When you say “financial
services,” sometimes peoples’ eyes glaze over. But every day is unique, with
different problems, clients, contacts, and so forth to deal with. It’s really a
challenging yet rewarding role. The job provides many opportunities to im-
prove your skills with respect to negotiating, presenting, listening, facilitat-
ing, and coordinating, just to name a few. And at the end of the day, what
you’re trying to do is help people (the clients) make their lives a little more
secure.
You might like this job if you are organized and outgoing, if you’re a
good facilitator, and if you enjoy being out of your “comfort zone” at least
part of the time. You have to be a good team player, and you also have to
be able to say “No” to people (clients) sometimes, even when it is difficult
to do so. You also have to be willing to face the wrath of a client even when
the problem they face was completely out of your control. You are the face
of the company and thus you have to take the hit as graciously as you can.
74
Corner Office
didn’t attend Ivy League or other highly selective colleges. They went to
state universities, big and small, or to less-known private colleges.
“Wal-Mart Stores CEO H. Lee Scott, for example, went to Pittsburg
State University in Kansas, Intel CEO Paul Otellini to University of San
Francisco, and Costco Wholesale CEO James Sinegal to San Diego City
College.”
The article said that what matters most is whether or not a person can
spot opportunity and act upon it. The CEOs interviewed for the article
said that among other things, they pursued areas they were interested in
at college and built strong relationships with their professors.
It is possible that the path to the corner office is different for women
than it is for men (see Glass Ceiling). In an article for CNN’s career web-
site posted on May 3, 2001, titled “How do they get there? How do
they stay there? Women in the corner office,” author Loretta W. Prencipe
examined the issue, focusing at one point on the rise of Barbara Cooper
to the position of CIO at Toyota Motor Sales. Prencipe wrote: “The se-
nior-level IT professionals attending the IS Associates Spring 2001 meet-
ing at UCLA seemed to be in awe of Toyota’s Barbara Cooper. And it
was impossible not to wonder how Cooper made it to the top of the tech
hill at a Japanese auto manufacturer. What was it about Cooper that put
her—and more important kept her—on the path to an executive?”
Cooper’s response, quoted in the same article, was: “No matter what
anyone says . . . to get to the top position requires a combination of dedi-
cated mental bandwidth and plain, old fashioned time commitment to
compete with the guys who possibly have a spouse who does not work.”
See also: Executive Coach; Executive Compensation
Further Reading
The Ape in the Corner Office: Understanding the Workplace Beast in All of Us, by
Richard Conniff, Crown Business (2005).
The Trusted Leader, by Robert M. Galford and Anne Seibold Drapeau, Free Press
(2002).
75
Corner Office

Leadership Mindsets in the Twenty-First Century
Robert M. Galford is a managing partner of the Center for Executive De-
velopment in Boston. He divides his time between teaching executive
education programs and working closely with senior executives at the
world’s leading professional and financial organizations on the issues
that lie at the intersection of strategy and organization. He has taught
executive programs at the Columbia University Graduate School of Busi-
ness, the Kellogg Graduate School of Management, and most recently
at Harvard University. Earlier in his career, Rob was executive vice presi-
dent and chief people officer of Digitas, a marketing services firm based
in Boston. He was also vice president of the MAC Group and its succes-
sor firm, Gemini Consulting. He is co-author of The Trusted Advisor and
The Trusted Leader.
I have been struck, over the last twenty years or so, by how much
more aware many corporate leaders have become of the influence they
might wield in the world.
Years ago, many of the leaders I worked with, as a consultant, or
coach, or colleague, seemed much more focused on the year’s perfor-
mance, their company’s latest and next innovations, and their competitors.
They concentrated their efforts on improving, fostering, or controlling
those things. They measured their own performance against . . . well,
against what was easily and readily measurable.
They still do. But now add to their plates an increasingly urgent
awareness of issues that take less tangible forms: the daily lives of the
people they lead, and their company’s place in the world. These issues
take two forms. The first is economic; the second is behavioral demo-
graphic.
Economics
More and more, at least in the circles I move in, leaders have a
heightened awareness of the potential legacies they are going to leave.
They are connecting the dots between the decisions they make every
day, and the energy (or stress) in their employees’ eyes. They are con-
necting the dots between their decisions and the lives, communities,
and nations beyond the boundaries of their companies.
What’s causing this new level of awareness? Is it a “baby boomers
nearing retirement” thing? In part. But a piece of it is also that we’re
76
Corner Office
just plain more aware of the world’s issues now than ever before. Tech-
nology has made it possible for us to see more clearly how our ac-
tions—and the actions of corporations—potentially affect the world at
large.
Another piece of it is that the people in leadership positions today
just seem to be more aware of whose expectations are truly driving
their actions. If they are realizing that the answer is “shareholders,” or
“the board,” exclusively, and that they themselves have only a small
say, that’s raising a flag.
Frankly, another piece of it is that the media and the public at large
are scrutinizing leaders’ actions as never before. In the wake of the
white-collar scandals we’ve seen since 2000, John Q Public is holding
leaders accountable for their actions in a way we never have before.
Our level of skepticism is higher, and as a result, our expectations are
higher. We’re not giving anyone the benefit of the doubt, these days.
That said, though, increasingly, it does seem as if leaders want to get
more personal satisfaction out of leading their companies. And that’s
not a bad thing.
Let me be clear—it’s also not narcissistic. By personal satisfaction, I
don’t mean personal wealth. Or power and recognition. I mean that I
see increasing numbers of leaders who want to feel good about the
work they are doing, both in terms of their company’s vitality and
growth, and in terms of the positive effect the work of the company is
having on the individuals who are employed there, and beyond.
I’m speaking (writing) in broad terms, of course. I’m sure that a great
many leaders still “live by the numbers” and find their greatest satisfac-
tion in their ability to ply ever-greater monetary gains for shareholders,
and in their ability to “score another victory in the marketplace.”
We’ve only to look at the headlines in recent years to see, in very
poor lights, leaders whose primary drivers have been their own wealth,
at the expense of company, colleagues, and communities.
But I’ve met and worked with many leaders who while driven by per-
formance-on-paper do not find that that’s enough.
What does all this mean for the culture of companies in the United
States? Unfortunately, there seems to remain a fairly substantive gap be-
tween those in the corner offices and the lives of people many levels
down, in many companies. “Talking” green and social consciousness
and work/family balance, and leadership legacy isn’t “walking” those is-
sues. The economic disparity between upper and lower levels has be-
77
Corner Office
come such a substantial barrier that it is hard to envision how it will be

overcome unless we accelerate the potential wealth-building opportuni-
ties that come with ownership of shares of a company’s stock. While
the relative amounts of the interests may always be sizeable, share own-
ership offers faster alignment than anything else we have out there.
Behavioral Demographics
The second factor is the behavioral demographic one. By this, I mean
the job and career expectations of those in the younger-age part of the
workforce. For these individuals, there is little memory of a time before
some combination of laptops, cell phones, and the Internet. If one ap-
plies a definition of technology as everything that was invented after
you were born, then cell phones and e-mail are not even technology for
those individuals. They are merely a part of everyday life, in the same
way that older individuals would hardly consider television to be technol-
ogy. The behavioral demographic expectation of the younger-age work-
force is as follows: “Things happen fast, there is lots to look at and
choose from, there will always be more changes and choices, and it
doesn’t matter if one likes it or not, because it can and will change, and
so can I.”
Whether this is narcissistic is not the point. The point is that it is realis-
tic. One can simply observe the behavioral shift in less than two years,
where e-mail traffic diminishes and is substituted by instant messaging,
“Facebook” messaging, or text messaging. This also plays out in job ex-
pectations as well, where there is well-documented evidence of the time
that individuals expect or intend to remain in a particular job or with a
particular firm. This is not a function of affluence or a good economy. It
is a clear shift in what individuals expect or tolerate in their lives before
making a change.
The leadership implications of the foregoing are clear. First, it says
that how we attract new people to work for and follow us can rarely
be based on the long-term promise. Next is that it forces leaders
to be aware that the people working for them have a shorter “follower-
attention span” and higher standards for what they will stick around
for. The follower value proposition thus has shorter duration and
greater expectations of satisfaction than before. Finally, it says that as
leaders, there is no choice but to calibrate not just our expectations, but
our interactions. We have to work more quickly to build and develop
78
trust, and to talk about it as well. It requires being explicit about that as
a priority. It can’t just be done by behaving in a trustworthy fashion
and expecting the same. Time won’t allow it, and that part of the work-
force won’t engage as quickly if leaders don’t talk about it as well.

There is a growing perception, shared by corporate leaders and employees
at all levels of companies of all kinds, that in addition to pursuing their
own marketplace success, businesses must also consider the impact they
are having on the persons, community and environment in general in
which they operate. Corporate social responsibility is more, these days,
than “green” businesses, such as those that manufacture biodegrable
goods using environmentally sound methods. It is a business’s recognition
of the responsibility it has to the world at large.
According to Mallen Baker, development director for Business in the
Community, a movement in the UK of over 700 companies committed to
improving their positive impact on society, corporate social responsibility
is about how companies manage the business processes to produce an overall
positive impact on society, as he states on his website mallenbaker.net.
That same general definition is widely accepted in the corporate world,
with tweaks here and there, either broadening or tightening the realm of
responsibility. The World Business Council for Sustainable Development,
in its publication Making Good Business Sense used the following definition
by Lord Holme and Richard Watts: “Corporate Social Responsibility is
the continuing commitment by business to behave ethically and contribute
to economic development while improving the quality of life of the work-
force and their families as well as the local community at large.”
The idea (and the actions) surrounding the concept of corporate social
responsibility does not reside within the walls of individual organizations;
the issue in 2007 is on the global business and political radar as it never has
been before. As Baker wrote in an article titled “Standards of Corporate
Responsibility” from Business Respect (Issue 83, published on June 15,
2005), the International Standards Organization’s summit meeting in Ko-
rea focused in part on the future development of the Corporate Social
Responsibility standard ISO 26000. Baker wrote: “We should surely be
79
enthused and excited about the prospect of a standard to define best prac-
tice in corporate responsibility into a management system that can achieve
consistency.”
And during the 2002 Surrey Memorial Lecture at the National Policy
Association on June 18, 2002, Lorne W. Craner, assistant secretary of
State for Democracy, Human Rights and Labor, remarked on promoting
corporate social responsibility abroad. His speech, which can be found on
the U.S. Department of State website, included the following:
“Protecting and promoting democracy, human rights and labor right is
a tall order. To achieve sustainable results, we must work not only with
our traditional partners . . . but also increasingly work with new partners.
“An increasing number of corporations share some of our interests in
advancing human rights. They appreciate, as do we, that countries that
respect human rights have more open transparent laws and financial sys-
tems, less corruption, a better-educated workforce, more stability and
more security. As the leading employers and revenue source in many de-
veloping countries that are transitioning to democracy, companies are
uniquely placed to lead by example where they operate.”
Does wearing a mantle of corporate social responsibility make a com-
pany “good?” Well, it’s all relative. Ironically, as Mallen Baker pointed out
in his article, “It would be interesting to make some real progress on find-
ing ways to identify a good company. One of the most important would
surely be some reflection of the ‘corporate personality.’ When Enron was
busy running all the best community programs and environmental man-
agement systems, the only visible signs of a problem in advance of the
final collapse were the stories that appeared occasionally highlighting an
aggressive marketplace style.” (See Enron.)
See also: Sustainability; Value Proposition
Further Reading
Corporate Social Responsibility: Doing the Most Good for Your Company and Your
Cause, by Philip Kotler and Nancy Lee, Wiley (2004).
Harvard Business Review on Corporate Responsibility (Harvard Business Review
Paperback Series), Multiple Authors, Harvard Business School Press (2003).
What Matters Most: How a Small Group of Pioneers Is Teaching Social Responsibil-
ity to Big Business, and Why Big Business is Listening, by Jeffrey Hollender
and Stephen Fenichell, Basic Books New Ed edition (January 2006).
80

It’s Not Easy Going Green: Environmentalism May Help
Your Corporate Image, but Will It Keep You in the Black?
Published: February 07, 2007, in Knowledge@Wharton
Reproduced with permission from Knowledge@Wharton (http://
knowledge.wharton.upenn.edu), the online research and business analy-
sis journal of the Wharton School of the University of Pennsylvania.
On February 2, a long-awaited report from the Intergovernmental
Panel on Climate Change (IPCC) was released citing “unequivocal”
proof of global warming caused by man-made emissions of greenhouse
gases. Meanwhile, some of the biggest corporations in the world, includ-
ing Wal-Mart, Ford, General Electric, and BP, have adopted highly visi-
ble “green” strategies, embracing environmentalism in their marketing
and core business operations. But what does “going green” mean for
the bottom line? Whether motivated by desire to do what is right, or to
polish their public image and fend off government regulation, compa-
nies can profit from well-designed strategies that embrace environmen-
tal goals, according to Wharton faculty and analysts.
The IPCC report’s position that humans are spoiling the atmo-
sphere—a consensus of the world’s top climate scientists—is likely to
generate even more corporate interest in green business, says Wharton
Marketing professor Americus Reed. “It’s really getting some traction
now. There’s a big idea in the scientific community about global warm-
ing, and I think consumers are much more aware of these issues than
they were.”
At one level, green marketing is a way to differentiate a company
from its competitors in the consumer market, he says. “And when you
market yourself as environmentally friendly, it also implies that your
competitors are not.”
According to Wharton marketing professor Barbara Kahn, large com-
panies have steadily increased their efforts to integrate environmental
concerns into their marketing and core business strategies. For the most
part, she says, the campaigns seem to be a sincere effort, not just a pub-
lic relations ploy. “Corporations understand that part of their role is to
be socially responsible, and I think that’s genuinely the case. Good
breeds good.”
Research shows that in a competitive market, the perception that a
81
company is socially responsible can be a major differentiation point for

consumers, but it must be a sincere, deeply held element of the corpora-
tion’s culture, Kahn says. “You need to have a history of this kind of so-
cial responsibility. You can’t fake it. . . . It’s hard to do, but that’s what
makes it worthwhile. If it’s easy to copy, then it’s no longer a competi-
tive advantage.”
Wharton legal studies professor Eric Orts, director of Wharton’s envi-
ronmental management program, says some companies may be moti-
vated to promote green strategies out of fear they will be targeted by
environmental organizations that could tarnish their image with consum-
ers. Wal-Mart’s recent emphasis on good environmental practices, for
example, may be an attempt to generate social goodwill, particularly
with upper middle-class shoppers, after the company suffered harsh criti-
cism for its labor policies. “A lot of times a big company gets seriously
burned in its reputation, [which is] what happened to Wal-Mart. Al-
though that criticism was about employment issues, not the environ-
ment, sometimes these things all go together and you get a bad reputa-
tion that starts to hurt you,” he says.
At the same time, Orts notes, many companies are growing con-
vinced that addressing environmental problems will eventually enhance
their bottom-line performance. “I think there are companies out there
that believe this is a serious planetary issue, that business can’t just sit
on the sidelines, but must instead take a leadership role.” Shell and BP
are examples from the energy sector, says Orts, and GE and 3M are
also examples. “But I would add that it is often difficult to ascertain
how seriously particular companies take these issues. There is an impor-
tant difference between ‘greenwashing’ and true commitment to a
long-term sustainable strategy. It’s not always easy for an outsider to
perceive the difference, which is one argument for enhanced standards
for environmental disclosure.”
A Proactive Stance
Wal-Mart is not the only company hoping it can turn green into gold.
According to Kyle Cahill, manager of corporate partnerships at Environ-
mental Defense, the New York environmental advocacy group, Wall
Street is also beginning to look at corporations through an environmen-
tal lens. Citigroup Investment Research has issued a 120-page report
that identified seventy-four companies in twenty-one industries that
stand to benefit from strategies that revolve around climate change.
82
Meanwhile, Lehman Bros. has released its own report titled, “The Busi-
ness of Climate Change,” that calls global warming a “tectonic force,”
similar to globalization and aging populations, that will shape economic
change.
“There is a sense in the investment community that climate change
brings new opportunity,” says Cahill. Moreover, companies are seeing
that by addressing environmental challenges, they can run their busi-
nesses more efficiently. “All pollution is waste, and waste is costly.”
In addition, many companies are focusing on environmental solutions
in the face of tougher regulations. The newly elected Democratic Con-
gress and the prospect of a Democrat entering the White House after
2008 make the enactment of new environmental standards more likely,
says Wharton management professor Lawrence Hrebiniak. “I’d like to
think this is all springing from [executives’] hearts,” he adds, “but the
majority of it is probably springing from sound business sense.”
Companies can choose to react to regulation, he says, or proactively
shape the nature of future environmental policy. He points to efforts by
Alcoa, DuPont, and major utility and oil companies to establish a cap-
and-trade system for carbon emissions. Under this system, similar to
one already in effect for sulfur dioxide, companies would receive a cap
on the amount of harmful emissions they are allowed to make. Compa-
nies that want to exceed their cap can then trade credits for additional
emissions with companies that are under their limit.
“It’s inevitable. The government is going to do something. So compa-
nies can either react, or be proactive and control what’s going to happen.
The proactive stance is more strategic,” says Hrebiniak. Government may
also shape the development of companies in newly emerging industries—
such as biofuels and wind and solar power—focused on solving environ-
mental problems. The federal government is likely to provide funding and
other incentives to develop new technology in these areas, he notes.
Firms operating in Europe are already used to much tougher environ-
mental regulations, according to Orts. One example is “lifecycle” re-
quirements, which mandate that companies find ways to recycle their
products after customers are done with them.
A successful environmental strategy must be deeply integrated into a
corporation’s underlying culture and values, Orts notes. He points to
Ford, where former chief executive William Ford, Jr., launched a visible
campaign to introduce environmentalism to the company. Ford appears
on television ads and installed an environmentally friendly grass roof on
83
a showplace plant. Yet Ford’s product lineup continued to rely on heavy

trucks and sport utility vehicles that fell out of favor among consumers
when oil prices—and concern about a sustainable energy policy—began
to rise. At the same time, Toyota and Honda stood ready to profit from
years of investment in vehicles with high fuel economy.
“We’ve known for some time that there are difficulties in petroleum
supplies, but for a while the price was low and American companies
were pretending it would not be a problem,” says Orts. “Toyota and
Honda made strategic bets that this wasn’t going to go away. Now
they are looking pretty smart.”
Despite the commitment of Ford’s CEO, the entire organization
was not aligned around an environmental strategy. “It didn’t go
down deeply into the company. It shows it takes more than just the
CEO. There were a lot of good intentions, but this is not an easy thing
to do.”
Orts cautions that a potential danger in building a core strategy
around the environment is the possibility that one action will lead to un-
intended consequences that may harm the environment. Companies
that promote their environmental credentials open themselves up to a
public backlash if an element of their strategy is later discovered to be
less than pristine. He notes that Levi Strauss has been reluctant to pro-
mote its use of organic cottons in some of its apparel for fear that it
might draw attention to the way the rest of its cotton is produced.
Wal-Mart: “Not Two Worlds”

At Wal-Mart, the company’s high-profile environmental strategy be-
gan in 2004 with a series of meetings with dozens of associates, custom-
ers, community leaders, government and nonprofit organizations,
broadly aimed at helping Wal-Mart find its place in society.
Following Hurricane Katrina, Wal-Mart chief executive Lee Scott an-
nounced the company’s new emphasis on environmental awareness.
“As one of the largest companies in the world, with an expanding
global presence, environmental problems are our problems,” Scott told
associates in a leadership speech. “The supply of natural products—fish,
food, water—can only be sustained if the ecosystems that provide them
are sustained and protected. There are not two worlds out there, a
Wal-Mart world and some other world.”
Since then, the company has begun to develop a far-flung set of envi-
ronmental initiatives touching on packaging, logistics, and store opera-
84
tions. Most recently, Wal-Mart has begun to reach back into its supply
chain to eke out waste in its suppliers’ operations and products, accord-
ing to Andy Rubin, vice president of corporate strategy and sustain-
ability.
Rubin says the company did not hire outside consultants to devise a
strategy for the vast retailer. Instead, the company is taking a grassroots
approach. Rubin is part of a three-member team coordinating strategies
and holding managers accountable, but the ideas for potential environ-
mental strategies are rising up from operations.
For example, Wal-Mart’s seafood buyer is working with fisheries to
produce fish in a sustainable way. Overfishing, Rubin notes, had been
driving up the cost of seafood. Working with sustainable producers will
help the environment, but also keep the cost of Wal-Mart’s goods
down, he says, allowing the company to continue to pass along savings
to consumers and maintain its long-term commitment to low price.
Rubin acknowledges the company’s decentralized approach to its envi-
ronmental strategies opens it up to unintended consequences, but he
says that for a company that operates on the size and scope of Wal-
Mart, unintended consequences come with the territory. “Anytime we
make a move, there are dozens of consequences, intended and unin-
tended. That’s what makes the opportunities so great . . . Our challenge
is to listen to as many people as we can so we are as aware of the con-
sequences as we can possibly be.”
So far, Wal-Mart’s suppliers have been open to discussing ways to im-
prove their own environmental strategies and are providing the retailer
with feedback and insights that are helping it shape its environmental
policies, according to Rubin.
To doubters who view Wal-Mart’s environmental crusade as public re-
lations, Rubin insists that time will prove his company’s intentions are
pure. “We’ve said from the beginning, ‘Judge us by our actions, not by
our commitment.’ We’re doing this because it makes sense for the busi-
ness. There are a lot more people who believe us today than two years
ago, and there will be a lot more two years from now.”
Despite what may be a growing sense that pro-environmental strate-
gies can be good for business, Wharton’s Reed says it remains difficult
for many companies to take on socially responsible policies because it is
still often difficult to show a clear benefit to the bottom line.
The rewards for adopting environmentally sound policies within a cor-
poration take a long time, if ever, to become clear, he points out. While
85
Crisis/Risk Management
many top executives may be focused on the big picture of improving a

corporation’s environmental record, front-line managers need new incen-
tives to take actions because they are usually judged on their quarterly
results.
“The barrier to proliferation of socially responsible policies is that it’s
difficult to show social goodwill on the balance sheet,” Reed says.
“There is no column or item to say, ‘Here it is, here’s the savings in dol-
lars.’ That’s the conundrum.”
Every transaction or decision a business makes can be fraught with risk.
Much of a business’s success is due to its anticipation of the risks it takes;
its plan of how to reduce or manage that risk; its ability to balance a level
of risk with the potential of opportunity; and its ability to handle any nega-
tive impact, sometimes known as a crisis, that might occur. A part of man-
aging risk is handling crises.
The Institute for Crisis Management (ICM) website (www.crisisexperts
.com) defines a crisis as: “A significant business disruption that stimulates
extensive news media coverage. The resulting public scrutiny will affect
the organization’s normal operations and also could have a political, legal,
financial, and governmental impact on its business.”
According to the ICM, crises are caused by: “1) Acts of God (storms,
earthquakes, volcanic action, etc.); 2) Mechanical problems (ruptured
pipes, metal fatigue, etc.); 3) Human errors (the wrong valve was opened,
miscommunication about what to do, etc.); and 4) Management deci-
sions/indecision (the problem is not serious, nobody will find out).”
Crisis management, then, involves an immediate response to something
that has had a major negative impact on the organization in real time.
According to the Business Continuity Institute (Glossary of General Busi-
ness Continuity Management Terms Version BCI DJS 1.0 01/12/02), a
crisis management plan is a clearly defined and documented plan of action
for use at the time of a crisis. Typically a plan will cover all key personnel,
resources, services and actions required to implement and manage the cri-
sis management process.
86
As noted, crisis management is a component of the larger umbrella of

risk management. Risk management, according to that same source, is the
culture, processes and structures that are put in place to effectively manage
potential opportunities and adverse effects. As it is not possible or desirable
to eliminate all risk, the objective is to implement cost effective processes
that reduce risks to an acceptable level, reject unacceptable risk and treat
risk by financial interventions, for example, transfer other risks through
insurance or other means.
A risk management process is the systematic and documented process of
clarifying the risk context and identifying, analyzing, evaluating, treating,
monitoring, communicating, and consulting on risks. Risk control is the
part of risk management that involves the implementation of policies, stan-
dards, procedures, and physical changes to eliminate or minimize adverse
risks.
The Global Trade Review (GTR) November/December 2004 issue took
a look at crisis management vs. risk management. In the GTR, Cathy
Duffy, senior vice-president, strategic risk management at JPMorgan Trea-
sury Services, gave a risk manager’s view of how your company can best
protect itself.
A transaction’s risk management process should focus on five areas:

Knowledge of your client company and product, knowledge of your
customer/underwriting, structure and documentation, external risk
mitigation/portfolio management, and crisis management . . . There
is no single formula for determining an appropriate deal structure.
The goal is to achieve a reasonable balance between positive and neg-
ative factors. Some factors can be negotiated and/or influenced by
each party (amount, tenor, collateral, covenants, etc.), but others,
such as industry, geography, or purpose, represent the context for the
structure.
Despite the most careful preparation and strategic maneuvering, crises

happen. In November 1995, Norman R. Augustine (retired chairman and
CEO of Lockheed Martin) published an article in the Harvard Business
Review entitled “Managing the Crisis You Tried to Prevent.” A good
source of information if the “best made plans” don’t cut it.
See also: Scenario Planning
87
Cubicle
Further Reading
“Armchair Crisis Management: The 3 Big Questions,” in Business Spin, by Jack
Flack (September 12, 2007), CondeNast Portfolio.com, www.portfoli-
o.com.
www.12manage.com
Cubicle
In the world of office work, not everyone can have an office. So in many
companies, employees at one time sat at desks that were placed together
in a large, open space. While it is possible that this layout contributes to
an efficient use of space, it does not offer any privacy.
Enter the cubicle, “invented” in 1968 by Robert Propst, a professor of
fine arts at the University of Colorado. His term for the concept of an
office that utilized cubicles was “Action Office.” Cubicles, or “cubies” as
they are sometimes called, were designed to create a space-within-a-space
for office workers, giving each a “wall” of sorts, and more privacy, at least
in theory, than they would have had without the partitions. They were
also designed to allow people to spread their work out more than they
could if they had only a single desk; cubies allowed for some “counter
space” or a shelf.
At the same time, the theory was that cubicles would allow for more
collaboration than traditional offices with four walls and a door.
The Merriam-Webster Dictionary defines a cubicle as a “small parti-
tioned space; one with a desk used for work in a business office.” Other
sources employ more colorful names; the cubie, it seems, evokes strong
reactions.
Consider what Linda Tischler had to say on the subject in an article
called “Death to the Cubicle!” in Fast Company magazine (Issue 95, page
29, June 2005). Tischler wrote: “Collaboration is great, but sometimes
I’d kill for a door.”
In the same article, she wrote, “Propst’s vision was to give white-collar
workers, then toiling amid rows of desks in huge open spaces, both more
privacy and a way to individualize their space. By that measure, cubicles
were an improvement. But in the hands of space-mad facilities planners,
the idea was perverted to justify an officescape that resembled the Chicago
stockyards.”
88
Cubicle
As Tischler went on to note, in the wake of the creation of the action

office, came the wildly successful and cynical office-based cartoon, Dilbert,
by Scott Adams.
An article posted on CNN Money from Fortune magazine published on
March 9, 2006, calls cubicles “the great mistake.” That article also looked
back to Propst, noting that he “invented nothing so destructive. Yet be-
fore he died in 2000, he lamented his unwitting contribution to what he
called ‘monolithic insanity.’ ”
As that article noted, “The cubicle has been called many things in its
long and terrible reign. But what it has lacked in beauty and amenity,
it has made up for in crabgrass-like persistence . . . Reviled by workers,
demonized by designers, disowned by its very creator, it still claims the
largest share of office furniture sales—$3 billion or so a year—and has out
lived every ‘office of the future’ meant to replace it. It is the Fidel Castro
of office furniture” (“Cubicles: The Great Mistake” by Julie Schlosser
(03/09/2006) Fortune magazine).
Cubicles are often the butt of corporate jokes. As Lee Butler noted in
an article entitled “Living Out Loud: Cubicles and Co-Workers; Welcome
to My White Collar Zoo” (Citybeat.com, August 29, 2007): “This little
box is my prison cell away from home.”
Cubicles also provide “common ground” for all “cubie” workers, no
matter their company. Consider the following description, in an article
entitled “Shooting Messengers Makes Us Feel Better But Work Dumber,”
written by Jared Sandberg in the Wall Street Journal, September 11, 2007,
page B. Sandberg was quoting a Mr. Gordon, who was describing a sales-
man’s reaction to bad news delivered by a third party: “He then kicked his
own cubicle wall, ‘which in turn collapsed onto his neighbor’s cubicle wall
and thus started a domino effect of wrecking everyone’s office in the row,’
Mr. Gordon recalls.”
Anyone who has ever worked in a cubicle will likely not only be able to
picture this, but may also have a similar cubicle story of their own.
See also: Dilbert; Generation X, Y, and Z
Further Reading
“Cubicle Culture,” a regular column by Jared Sandberg that appears in the Wall
Street Journal, and can also be found on www.careerjounal.com, or the Wall
Street Journal Online.
www.lifeaftercoffee.com
89
D
Dilbert
Dilbert is a comic strip about work life in a corporate office, but it is more
than a merely entertaining read in the newspaper. The manner in which
the comic strip portrays conversations among management and workers
has made it so popular that, as of this writing, according to the Dilbert
website, Dilbert.com, Dilbert now appears in 2,000 newspapers in sixty-
five countries. The website, incidentally, was the first syndicated comic
strip to go online in 1995 and is the most widely read syndicated comic
on the Internet. And four original books by Dilbert’s creator, Scott Ad-
ams, have been bestsellers: The Dilbert Principle, Dogbert’s Top Secret Man-
agement Handbook, The Dilbert Future, and The Joy of Work. According to
Dilbert.com, there are twenty-two Dilbert books—including comic strip
reprint books—with more than ten million copies in print.
Created as a doodle by the artist, Scott Adams, Dilbert appeared in Ad-
ams’ business presentations before developing into a full strip syndicated
by United Media. Adams worked for many years at a bank, and then at a
phone company, where he came up with the idea for Dilbert. In fact, in
an interview with CNN.com available online at http://archives.cnn.com/
2001/COMMUNITY/08/30/adams/intex.html, Adams said, “Dilbert
might not have been created if I had a good cubicle during my corporate
jail term.”
The main characters in the comic are Dilbert, an engineer at a high-tech
firm, Dogbert, his pet (who can talk, and who is by far the more cynical
of the two), the Boss (according to the website, he’s “every employee’s
worst nightmare”), and a host of colleagues and other minor characters.
“Dilbert is a composite of my co-workers over the years,” Adams says
in his biography on Dilbert.com. “A co-worker suggested I name the
character Dilbert. Dogbert was created so Dilbert would have someone to
talk to.”
In a 2002 interview with Scott Adams (Funny Business, BizEd, The
Association to Advance Collegiate Schools of Business, November/De-
Dilbert
cember), Adams said, “Dilbert simply reflects the often laughable ex-
changes that occur between managers and their employees.”
In the same article, Adams said, “The strip definitely has an effect on
the small stuff that companies do every day. By that, I mean that I get a
lot of reports from people who say, ‘My manager was going to roll out
this stupid program. Then I showed him a Dilbert cartoon that showed
exactly how stupid that same program was and he canceled the whole
thing.’”
The popularity of Dilbert has sparked several streams of business. It has
also added to the jargon of the business world. Adams speaks at business
conferences; there are scads of Dilbert merchandise for sale; and according
to www.wordspy.com, the term “dilbert” is a verb meaning “to cause a
person to become bored or cynical about work.” That website lists several
spottings of the verb “dilbert” in use, among them:
“Can you imagine efficient private companies still working only with
paper? How many man-hours must be dilberted away? How many delays?
How many flat-out frauds?—Editorial ‘Man vs. Machine: The old world
meets the new,’ The Arkansas Democrat-Gazette, March 27, 2002.”
See also: Cubicle
Further Reading
“Kindness Pays . . . Or Does It?” by Jessica Marquez, Workforce Management
(June 15, 2007) www.workforce.com (subscription required).
www.dilbert.com
Signs of Changing Culture: Buzz Words Evolve

Always looking for new ways to connect with colleagues, reports, and
bosses, people are constantly bringing new words into the business ver-
nacular. It wasn’t so long ago that the word “impact” was not used as
a verb.
Now, according to an article by Christopher Rhoads, published in the
Wall Street Journal on Tuesday, March 27, 2007 (page 1, column 3),
the word “bucket” is hot. (“Business Types Get a New Kick Out of the
‘Bucket’: Executives Utter the Word To Describe Groups, Units; ‘Silo’
Pales in Comparison”)
“Suddenly the humble bucket has become a trendy fixture of corpo-
92
Diversity
rate boardrooms and PowerPoint presentations,” Rhoads wrote. “It is

pushing aside other business-speak for describing categories or organiza-
tional units, such as silo and basket.”
As the article says, “bucket has outgrown its barnyard roots and
moved into the business world.” It goes on to say, “Bucket trumps bas-
ket, which conjures up an image of someone picking flowers in a field”
and “Silo also has a negative buzz these days. It implies fiefdoms and
exclusive divisions, rather than inclusiveness and working together as a
team thrown together in, say, a bucket.”
Diversity
Diversity in the workplace essentially means having men and women from
many ethnic backgrounds and belief systems working together. Increas-
ingly, as more companies “go global,” diversity has become a desirable
corporate characteristic. Top managers and shareholders are seeing the
value of having an inclusive corporate culture, in which a diverse group of
people can work together, contributing their different perspectives to add
value to the company’s offerings and help it gain an advantage in the mar-
ketplace.
But the idea of diversity in the workplace stems mostly from the need
for fairness. According to the Workforce Diversity Office Ernest Orlando
Lawrence Berkeley National Laboratory, “The traditional polices, pro-
grams, and legal mandates of Equal Employment Opportunity (EEO) and
Affirmative Action (AA) are still the first and most important steps to
achieving diversity in the workplace. But diversity is a broader concept
than ethnicity, race, and gender” (www.lbl.gov/workplace/WFDO). The
website goes on to note that the concept of diversity at work is “inclusive
of all groups, maximizes the potential of all employees, and values the
variety of perspectives all employees bring to the workplace at the scien-
tific, technical, management, and administrative levels.”
According to the online version of the Bureau of Labor Statistics Occu-
pational Outlook Quarterly (Summer 2004, Vol. 48, No. 2), diversity in
the workforce is a continuing trend. That website says:
“Equal-opportunity laws were created to ensure that workers are hired,
retained, and promoted without regard to characteristics such as race and
93
Diversity
ethnic origin. Regulations aside, many employers value having a staff at-
tuned to population diversity. These employers may consider diversity in
their organizations to be sound business practice because it allows them
to better serve a wide range of customers.
“A number of programs encourage the development of a diverse work-
force. Some are general, such as scholarships and grants for minority stu-
dents in higher education. Other programs are more specific, aimed at
increasing the number of minorities in particular occupations. At Howard
University in 2002, for example, Secretary of State Colin Powell intro-
duced a $1 million grant designed to prepare minorities for diplomatic
careers.”
There are many resources for individuals seeking to learn more about
diversity in the workplace, and diversity issues. Among them: www.ethnic-
majority.com; www.affirmativeaction.org; www.aimd.org (the American
Institute for Managing Diversity); www.dlaa.org (the Diversity Leadership
Academy); www.diversityinc.com; www.now.org (the National Organiza-
tion for Women); and the U.S. Department of Labor (www.dol.gov).
Another source of further information: the 2005 Workplace Diversity
Practices Survey Report: A Study by the Society for Human Resource
Management (published by the Society for Human Resource Manage-
ment, January 2007).
Further Reading
www.diversityinc.com (DiversityInc Magazine)
Signs of Changing Culture: The Power in Diversity

Noted in an article entitled, “Mighty is the Mongrel” by G. Pascal Za-
chary, published in Fast Company, Issue 36, June 2000, Page 27
Diversity, Zachary writes, “is at a record level.”
“In a world of deepening connections, individuals, organizations, and
entire countries draw strength and personality from places as near as
their local neighborhood and as far away as a distant continent. Mixing
is the new norm.”
Why is this the case? According to Zachary, it’s because “the ability
94
Dot.com/Dot.bomb
to apply knowledge to new situations is the most valued currency in

today’s economy.”
“Divergent thinking,” he writes, “is an essential ingredient of creativ-
ity. Diverse groups produce diverse thinking. Ergo, diversity promotes
creativity. This logic applies to corporations, research teams, think tanks,
and other groups of creators.”
G. Pascal Zachary is also the author of The Diversity Advantage:
Multicultural Identity in the New World Economy, published by West-
view Press.
Dot.com/Dot.bomb
Reduced to its essentials, the term “dot.com” means a company that does
business on the Internet; that is, any entity on the web whose site ends
with “.com” as opposed to a nonprofit organization (.org), an educational
institution (.edu), and so forth.
When doing business on the Internet was new, scores of business enti-
ties rushed to the Internet, getting “.com” status. Venture capitalists were,
by and large, funding new web-based businesses right and left. The “dot.
com” bubble, as it was called, lasted from about 1995–2001.
But then many of the “dot.coms” became “dot.bombs.” That is, faced
with competition—and troubled by the structural and managerial chal-
lenges of running a “dot.com”—many online businesses failed. For many
such ventures, the cause of demise was a faulty revenue model, and/or an
inability to find a necessary base of customers online.
Thus, the “dot.com” bubble burst. The term, “dot.bomb” was coined
to describe all of those failed companies, or any “dot.com” that does not
survive.
Jad Duwaike, an Internet entrepreneur, was just one of the entrepre-
neurs who experienced the thrill of the dot.com launch and the agony of
realizing that a business was a dot.bomb. He wrote about his experiences
on the San Francisco Chronicle’s website. In his May 12, 2001, entry titled
“Dot-com diary: The trials and tribulations of a failed entrepreneur,” Du-
waike wrote, “My fourth company, Greenhouse for Startups, exploded
with potential. A networking group [of] entrepreneurs, Greenhouse grew
to 7,000 members with chapters in five cities and obtained a ton of press
95
Dot.com/Dot.bomb
coverage. Despite numerous attempts, however, I couldn’t find a revenue

model for the company and, by last December, it became clear that Green-
house was simply another dot-com dot-bomb.”
The dot.com bubble caused a great deal of financial angst—and that’s
a gross understatement. In the last few years, however, the number of
Internet businesses has increased, as has the amount of useful information
available to help people lead and manage online enterprises. And many
indicators point to a strong future.
For example, according to an article by Tom Abate, published in the
San Francisco Chronicle Tuesday April 14, 2007 (found online at www.sf-
gate.com), “For the first-time since the state lost tens of thousands of jobs
after the dot-com collapse, California companies have added tech workers
to their payrolls, according to a report that tracks nationwide employment
in the industry.”
According to the article, the American Electronics Association, which
released the report, said that the figures represent “the first net increase in
jobs (here) since the tech bubble began to burst in 2000.”
Another article, this one in the San Jose Mercury News, by Ryan Bilt-
stein, published May 19, 2007 (found online at origin.mercurynews
.com), said: “Since the dot-com bubble burst, online advertising spending
has jumped from $6 billion in 2002 to $16.4 billion last year, according
to eMarketer. And that number is poised to grow dramatically. The web
accounted for less than 6 percent of dollars spent on ads in 2006, but
it’s growing as much as five times the rate of offline ads, according to
Oppenheimer & Co.”
The entrance barriers to online businesses, some note, are also much
lower now than they were during the dot.com bubble. As online entrepre-
neur Guy Kawasaki, interviewed by Lee Gomes for a Portals article in the
Wall Street Journal, said: “During the dot-com bubble, you needed $5
million to do stupid ideas. Now you can do stupid ideas for 12 grand.”
(“In the New Net Economy, Everyone Gets to Be Stupid for 15 Minutes,”
by Lee Gomes, Portals, the Wall Street Journal Online, May 16, 2007.)
There are, however, concerns that we are entering another dot.com
bubble, and will someday (soon) experience another shake-out. As Joe Bel
Bruno of the Associated Press reported in an article posted May 4, 2007
at www.signonsandiego.com/news/business (the Union-Tribune), “It
was impossible to escape the comparisons with 2000 on Wall Street this
past week. Not only did the Standard & Poor’s 500 index pass 1,500, a
level the market has not seen since the dot-com boom, but the Dow Jones
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Downsizing
industrial average also ratcheted higher. Rising stock prices—which come

amid a slowing economy—have some on Wall Street wondering if inves-
tors are making the same mistakes they made during the high-tech
bubble.”
And, as Mark Walsh wrote in the May 2007 issue of OMMA magazine
(“Internet IPOs: Hot or Not?” OMMA the Magazine of Online Media,
Marketing and Advertising) “For anyone worried about Web2.0 morph-
ing into Bubble 2.0, few signs could be more ominous than the return of
the Internet IPO . . . Fears that we’re back in helium land seem to be con-
firmed . . . After all, the term Internet IPO, like reality TV, had become
an oxymoron in recent years, as public investors shunned the high tech
sector following the dot-com collapse. Buzz-generating startups with little
revenue and no profits were out, and sound business fundamentals were
in again on Wall Street . . . But now stirrings of a revived pubic market are
appearing.”
Of note: A movie entitled What Happened, about the implosion of the
dot.com bubble. A review of the movie by Bill Lessard in Wired magazine,
dated February 2, 2002 (found on www.wired.com) said: “The film does
a good job of chronicling the events of the past five years, from the Net-
scape IPO that started the whole mess until the NASDAQ crash in April
2000.” The review went on to say that viewers could find the film “enter-
taining and enlightening, particularly in some of the comparisons it draws
between the speculative frenzy of the 1920 and the late 1990s.”
See also: Bricks and Clicks; Entrepreneur
Further Reading
“Dot-Com Bubble, Part II? Why It’s So Hard to Value Social Networking Sites,”
published October 4, 2006 in Knowledge@Wharton (http://knowledge
.wharton.upenn.edu).
www.ecommercetimes.com
www.nethistory.info (“History of the Internet—the Dotcom bubble” by Ian
Peter)
Downsizing
When a business downsizes, it is reducing the number of people it em-
ploys. Companies downsize for a variety of reasons, not the least of which
is to look as lean and efficient as possible for prospective buyers. But most
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Downsizing
companies downsize to try to become more competitive. Sometimes

they’re facing stiff competition and they have to find a way to do more
with less, and sometimes a company’s financial management is not up to
par, resulting in an impending crisis—such as being unable to meet pay-
roll.
Downsizing can often be a signal to the outside world—and to Wall
Street in particular—that a company is serious about rethinking its strategy
and reinvigorating the business. Layoffs, then, while bad news for employ-
ees, can be seen as good news to investors.
In April 2007, for example, according to Computerworld Management
magazine (www.computerworld.com), Citigroup announced that it would
“lay off 17,000 workers as part of a massive restructuring expected to save
the company more than $10 billion over the next three years.” According
to the article, Citigroup Chairman and CEO, Charles Prince said in a state-
ment that “the goal was to identify and eliminate ‘organizational, technol-
ogy and administrative costs that do not contribute to our ability to effi-
ciently deliver products and services to our clients,’” Prince was also
quoted in the article as saying that “the planned restructuring will put the
company in a better position to grow.”
Sometimes, downsizing is a permanent move; sometimes, top managers
downsize a company temporarily to try to avoid a crisis. “Layoffs” are one
way in which downsizing is presented to employees. But managers who
find themselves having to downsize their companies also use other meth-
ods, including transfers—if the company has other divisions that are hir-
ing—or offering attractive “early retirement” packages.
Downsizing should never be undertaken lightly. In a crisis mode, com-
panies can inadvertently slash the jobs of the very people who might help
the organization recover. What’s more, when a company downsizes, the
way in which it treats employees—both those whose jobs are being cut
and those who are staying—can significantly influence productivity and
morale.
And, some say that downsizing should be the last alternative companies
consider when trying to turn things around. According to an article by F.
John Reh, found on http://management.about.com, “Layoffs are done
to save money. Unfortunately, they are usually a short term fix, detrimen-
tal to the company.” In the article, Reh says that sometimes layoffs are
made as a knee-jerk reaction to appease investors when a company misses
its numbers. Reh also refers to another article on management.about.com
by John Dorfman, which also discusses the downside of downsizing.
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Drucker, Peter
In his article “Job Cuts Often Fail to Bolster Stocks,” Dorfman, a Bos-
ton-based money manager who is a regular contributor to Bloomberg
News, wrote that he measured the stock performance of ten companies
(including Eastman Kodak, IBM, and Boeing) for eleven months to al-
most three years after the company in question announced job cuts in
1996 and 1997. What he found was that “contrary to popular myth, these
stocks didn’t outperform the market.” His conclusions were that “people
think that trimming the workforce is a shrewd cost-cutting measure, that
it shows toughness and resolve on the part of management and that it
indicates that executives are being ‘proactive’ in dealing with a company’s
problems. Malarkey.”
Dorfman noted that his sample size was too small to be scientifically
significant, but he called his results “powerfully suggestive” and noted that
“Companies used to at least pretend to be embarrassed and apologetic
when they let people go. Today, many CEOs all but pound their chests
with pride as they jettison employees. To my way of thinking, this is one
of the worst cultural changes of the last twenty years. There’s no need for
investors to blindly encourage it.”
See also: Change Agent/Change Management; Lifetime Employment
Further Reading
Downsizing in America: Reality, Causes, And Consequences, by William J. Baumol,
Alan S. Binder, and Edward N. Wolff, Russell Sage Foundation Publications
(March 2005).
http://humanresources.about.com/od/layoffsdownsizing/a/downsizing.htm
Drucker, Peter
Peter Drucker was one of the most important observers and influencers of
the business world and business culture and strategy in the past 100 years.
A management consultant, professor, and prolific author of books and arti-
cles on management, he revolutionized the concept of business manage-
ment worldwide.
Born in Vienna, Austria, in 1909, Drucker received his doctorate in
public and international law from Frankfurt University in Frankfurt, Ger-
many. He then worked in London as an economist and journalist, moving
to the United States in 1937.
He was on the faculty of New York University in the 1950s, and then
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Drucker, Peter
joined the faculty of the Claremont Graduate University in Claremont,

California, in 1971. The management school at the university was subse-
quently renamed the Peter F. Drucker and Masatoshi Ito Graduate School
of Management
According to the website, www.peter-drucker.com, Drucker wrote thirty-
five books in all, fifteen of which dealt with management, including The
Practice of Management, The Effective Executive, and Managing for Re-
sults. (Other sources say he wrote thirty-nine books.) He was also a colum-
nist for the Wall Street Journal, and a frequent contributor to the Harvard
Business Review.
In 1990, the Peter F. Drucker Foundation for Nonprofit Management
was established (it is now known as the Leader to Leader Institute). Ac-
cording to its website, www.leadertoleader.org, the institute’s mission is to
“strengthen the leadership of the social sector—by providing social sector
leaders with essential leadership wisdom, inspiration and resources to lead
for innovation and to build vibrant social sector organizations.”
Harvard Business School professor Rosabeth Moss Kantor, also a well-
known management thinker and prolific author, wrote this about Drucker
for the Leader to Leader Thought Leader’s Forum: “Peter Drucker’s eye-
glasses must contain crystal balls because he anticipated so many trends—
defining ‘knowledge workers’ decades before this trend was discernable,
identifying the centrality of the third sector of nonprofits to getting the
work of society done, putting mission first in the understanding of a busi-
ness, recognizing the power of pension funds and other institutional inves-
tors in the late twentieth century capitalism, defining entrepreneurship as
finding innovations to meet unmet needs.”
In that same Forum Stephen R. Covey (president of the Covey Leader-
ship Center) called Drucker “the Renaissance Man of the field of manage-
ment.”
Drucker was awarded the Presidential Medal of Freedom by President
George W. Bush on July 9, 2002. He died in 2005.
In an article about his death published in the Washington Post on page
B6 November 12, 2005, titled “Management Visionary Peter Drucker
Dies” author Patricia Sullivan wrote that
Drucker was often called “the world’s most influential business guru”
whose thinking transformed corporate management in the latter half
of the 20th century . . . Drucker pioneered the idea of privatization
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Drucker, Peter
and the corporation as a social institution. He coined the terms

“knowledge workers” and “management by objectives.” His seminal
study of General Motors in 1945 introduced the concept of decen-
tralization as a principal of organization, in contrast to the practice of
command and control in business. “There is only one valid definition
of business purpose: to create a customer,” he said forty-five years
ago. Central to his philosophy was the belief that highly skilled people
are an organization’s most valuable resource and that a manager’s job
is to prepare and free people to perform.
A book entitled The Daily Drucker (Collins, 2004) offers quotes from
Drucker’s work, followed by short commentaries on the implications of
his words. Just one Drucker quote from that book: “Effective executives
do not start with their tasks. They start with their time. And they do not
start out with planning. They start by finding out where their time actually
goes. Then they attempt to manage their time and to cut back unproduc-
tive demands on their time. Finally, they consolidate their ‘discretionary’
time into the largest possible continuing units.”
See also: Learning Organization; Performance Management/Perfor-
mance Measurement
Further Reading
www.leadertoleader.org
www.peter-drucker.com
101
E
E-mail
What is e-mail? Is it an indispensable tool for getting work done or a
ubiquitous distraction that prevents work from getting done? E-mail—the
technological tool that gives individuals the ability to send and receive
messages from person to person, and office to office, anytime, and almost
anywhere, has passionate supporters and equally passionate detractors.
The Merriam-Webster Dictionary defines e-mail as “[the] means or sys-
tem for transmitting messages electronically; messages sent and received
electronically through an e-mail system.”
According to www.answerbag.com, the first e-mail was sent in 1971
between two PDP-10 computers in Cambridge (USA) by engineer Ray
Tomlinson, a partner in the development of the first major computer net-
work, ARPANET, the precursor of today’s Internet. The first e-mail was
addressed by Tomlinson to himself and was supposed to have contained
the message “Testing 1, 2, 3.” Tomlinson was also the first person to use
the @ symbol in an e-mail address. His ideas were incorporated in the
electronic mail software on ARPANET by the end of 1972.
In a Legends article in Forbes magazine (published October 5, 1998,
and found on the Forbes website (http://members.forbes.com), author
Sasha Cavender wrote:
After graduating from MIT in 1965, the young computer engineer

spent two years working on a doctorate, then went to work nearby at
Bolt Beranek and Newman (BBN), a company that had a government
contract to work on the ARPANET, precursor of the Internet. “We
were building an operating system to run on bargain-basement hard-
ware,” recalls his longtime friend and BBN colleague Jerry Burchfiel,
“and Ray came up with a ‘Send Message’ program. It worked only
on a local system at first, but then he took it further and created cross-
ARPANET mail.”
Since those early days, e-mail has of course gone on to become standard
operating equipment in just about every office. But the ability to send and
E-mail
Why I Do This: English Instructor online (part time)

Jeanie Murphy
I teach a course I put on the books years ago for the community college
where I was tenured (before I resigned) called “Introduction to Mythol-
ogy.” I fought for and teach two sections every quarter mostly because we
get great health insurance, but it’s also more fun than lots of other jobs. A
day is checking in with the online platform and grading discussion, check-
ing e-mail and grading journals. Prep these days is minimal, but in the first
year or two it’s even more demanding than a f2f (face-to-face) class. And
it’s still ongoing—continual tweaks to syllabus or extra reading or lectures
(which are written).
It’s also a great excuse for me to pursue my interest.
How did I find my job? I was very purposeful about finding my job and
did so by figuring out quickly what course would always “go” (students love
myth) and then refusing to overload the section until they gave me two.
I had developed some of the first online classes for the college on a
grant, so I did have an in with all this.
What do I like about my job? Interesting material, I’m more or less my
own boss, some of the student interaction.
What is unexpected about my job? How surprisingly well this type of
class works online (not all do)—I get about twice as much work out of stu-
dents at a much higher level.
Why would I recommend it? It’s much lower stress than f2f teaching,
once you get used to it. You also have to be comfy with computers. You’re
on your own clock and, if like me you have a wi-fi laptop, you can do your
work anywhere, practically!
receive messages so easily to coworkers and one’s own extended commu-

nity of contacts has its pros and cons. For many people, in many compa-
nies, e-mail is an efficient way to send and receive documents, hold quick
“conversations” with others in the office, and also work from remote loca-
tions with ease. E-mail also makes it easier for employees to communicate
with other individuals who are working in different time zones.
But, in some companies, managers have found that employees abuse the
e-mail system, and waste company time chatting about personal issues. As
a result, in some companies, management has instituted rules regarding e-
mail usage; companies have also monitored employee e-mails. This prac-
tice has, in turn, raised employee privacy issues.
Privacy and employees’ reportedly wasted time are not the only down-
sides to e-mail. Some employees have complained that e-mail has caused
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E-mail
their bosses to multi-task—attending meetings with only half their atten-

tion and frequently losing the thread of conversation because of e-mail
distractions. (Cell phones and Blackberry devices have reportedly had this
same effect.)
An article in Fast Company magazine, published in the December
2006/January 2007 issue, discusses electronic communication etiquette in
today’s businesses with a parody on The Bill of Rights. Author Joe Robin-
son, after citing a Day-Timers survey that reported a sharp decline from
1994–2006 in the number of people who feel productive, offered seven
protocols, the first three of which are:
Article 1: There shall be no assumption of unlimited e-access simply

because the tools allow it. Excessive messaging shall be considered
electronic littering.
Article 2: The right of the people to be secure from unwarranted
electronic work intrusions at home shall not be violated. Nights and
weekends shall be considered unplugged zones.
Article 3: The people shall have the right to switch off e-mail notifi-
cation and other noisemakers and instead check messages at desig-
nated times to prevent attention deficit (Fast Company magazine, “An
E-Tool Bill of Rights.” Issue 111, December/January 2006/2007,
page 54, by Joe Robinson).
The final four “articles” in the Fast Company article call for people to feel
no pressure to respond immediately to e-mails; people to be sensitive
about how long their e-mails are and how much of a waste of time short
e-mails that simply acknowledge receipt of a message are; companies to
come up with formal and explicit policies to establish e-mail protocols;
and a plea to leave people alone (i.e., don’t expect them to be e-mail
accessible or responsive) when they’re on vacation.
That last comment resonates with company leaders who are becoming
increasingly aware of the importance of a work/life balance, which is, in
some circles, becoming an increasingly elusive phenomenon.
One top executive coach, chided by a colleague for staying at a posh
hotel in a foreign city and—working just about around the clock—not
even once taking time to relax and visit the spa on the hotel’s lower floor,
vowed: “I’ll go to the spa next time I’m there. I’ll send you an e-mail
from down there.”
105
E-mail
It should be noted that in some circles—and particularly among the

generation just entering the workforce—e-mail is already considered “old
school.” In an article found on ABC News Online, published July 28,
2005, a Reuters report said: “E-mail is for grown-ups and U.S. teenagers
now prefer instant messaging to communicate with each other online, a
survey has found. Internet users from twelve to seventeen years old say e-
mail is best for talking to parents or institutions but they are more likely
to fire up instant messaging (IM) when talking with each other, the non-
profit Pew Internet and American Life Project found. E-mail is still used
by 90 percent of online teens but the survey found greater enthusiasm for
instant messaging.” That survey was conducted in October and November
of 2004; the report noted a margin of error of 4 percent.
See also: Generation X, Y, and Z; Internet; Intranet
Further Reading
E-Mail: A Write It Well Guide—How to Write and Manage E-Mail in the Work-
place, by Janis Fisher Chan, Write It Well (2005).
www.livingInternet.com
www.nethistory.info
Signs of Changing Culture: Technology-Dependence

Service for the Blackberry wireless e-mail and web-access device went
down for ten hours starting at 8 P.M. (EST) on Tuesday, April 17, 2007.
The reported result was complete turmoil for many Blackberry users—a
sure sign that the device, sold by the Canadian company, Research in
Motion, has become a firm fixture in today’s culture of work.
According to a New York Times article by Brad Stone (“Bereft of
Blackberrys, the Untethered Make Do,” April 19, 2007, www.nytimes
.com), the downtime “revealed just how professionally and emotionally
dependent so many people had become on their pocket-size electronic
lifelines.”
One business executive quoted in the article said “I was running
around my hotel like a freak. It’s very sad. I love this thing.”
Another, Stone wrote, “reacted to the severed electronic leash with
several panicked calls to her office in the belief that the company e-mail
system was down.”
106
Emotional Intelligence
That Blackberry user was quoted as saying, “I quit smoking twenty-

eight years ago . . . and that was easier than being without my Black-
Berry.”
Emotional Intelligence
Many people have taken IQ tests, which are intelligence quotient tests that
aim to measure an individual’s intellectual capacity to solve problems and
perform tasks. Over time, though, the conventional thinking in the busi-
ness world has come to hold that pure intellectual capacity is not the only
criteria for being able to succeed and lead in organizations. That recogni-
tion has resulted in the emergence of a term called Emotional Intelligence
(EQ), which is the ability to perceive, consider, and manage the emotions
associated with any given situation, in addition to being able to process
the relevant facts.
An article in Fast Company magazine (“How do you feel?” Issue 35,
May 2000, page 296, by Tony Schwartz) takes a look at how “emotional
intelligence” is starting to find it’s way into companies, offering employees
a way to come to terms with their feelings. Time was, Schwartz wrote,
that emotions at work were frowned upon. But by 2000, he wrote, “com-
panies in a variety of industries are once again exploring the role of emo-
tions in business. This renewed interest in self-awareness is, in part, the
result of the rising corporate power of baby boomers. The increasing pres-
ence of women in the workplace and the higher comfort level they bring
to the territory of emotions have also nudged companies in this direction.
And the arrival of the new economy has made companies realize that what
they need from their workers goes beyond hands, bodies, and eight-hour
days.”
The theory of emotional intelligence was developed by Peter Salovey,
dean of Yale College, and John D. Mayer, professor at the University of
New Hampshire. Salovey, Mayer, and their collaborators developed tests
of emotional intelligence (“Mayer–Salovey–Caruso Emotional Intelli-
gence Tests”) that are now in use in businesses around the world.
Psychiatrist Daniel Goleman is also well known for his work in the area
of his emotional intelligence, some of which builds on the work of Mayer
and Salovey. Goleman wrote the bestselling book, Emotional Intelligence:
107
Employee Assistance Programs
Why It Can Matter More Than IQ. (The tenth anniversary edition of the
book was published by Bantam in September 2006.)
See also: Corner Office; Executive Coach
Further Reading
Emotional Intelligence: 10th Anniversay Edition; Why It Can Matter More Than
IQ, by Daniel Goleman, Bantam (September 2006).

As its name suggests, employee assistance programs (EAP), are employee
benefit programs designed to assist employees. Often offered by many
public and private employers in conjunction with health insurance plans,
EAPs range from helping employees deal with personal problems that may
affect their work performance to providing support for additional educa-
tion with tuition assistance.
The largest employee assistance program in the country is run by Fed-
eral Occupational Health (FOH), a component of the United States Pub-
lic Health Service. FOH, a service unit within the Department of Health
and Human Services’ Program Support Center, supports more than 1.3
million federal workers each year. (Information from the Federal Occupa-
tional Health website http://www.foh.dhhs.gov/default.asp)
EAPs have evolved over time in conjunction with the challenges facing
working people; moving from basic personal/emotional assistance to child
care to help with elderly relatives. The St. Petersburg Times, for example,
ran an article in January 2007 about a new EAP, designed by Neighborly
Care Network, the social service agency that invented Meals on Wheels,
that targets baby boomers who are trying to work and care for their aging
parents. According to the article, “With its new Employee Assistance Pro-
gram, Neighborly will help Pinellas employers assess the needs of their
workers. The companies pay $5 per month for every employee who partic-
ipates. In exchange, Neighborly provides counseling, referrals and dis-
counts on adult day care.” (“Working Caregivers Get Relief,” January 7,
2007, by Lorri Helfand, St. Petersburg Times.)
EAPs are designed, essentially, to help employees with the challenges
they face outside of work, so that when they are at work, they are bet-
ter equipped to focus on the challenges at hand. In this way, EAPs can
108
be thought of as a way to improve and sustain productivity in the work-

place.
See also: Cafeteria Benefit
Further Reading
Employee Assistance Programs: Wellness/Enhancement Programming, by William
G. Emener, William S. Hutchinson, and Michael A. Richard (eds.), C.C.
Thomas, 3rd edition (May 2003).

Efforts Are Growing to Trim the Fat from Employees—
and Employers’ Health Care Costs
Published: November 1, 2006 in Knowledge@Wharton
Perhaps it was the statement from the Centers for Disease Control
and Prevention in Atlanta that more than 30 percent of all adults in the
United States are obese, a number that has more than doubled since
1980. Perhaps it was the new report that obesity may cause as many as
365,000 deaths per year at a time when Americans reportedly spend
over $40 million annually on books, products and programs to help
them lose weight. Or maybe it was the CDC’s dire prediction that “cur-
rent data indicate that the situation is worsening rather than improv-
ing.” For whatever reason, the latest statistics have flagged obesity as a
serious health issue that corporations can no longer ignore.
Yet according to Wharton experts and others, the dramatic increase
in obesity is not what’s driving employers throughout the country to ad-
dress the problem. This past year, these experts say, companies seem to
have declared war on fat for one simple reason: Obesity is now recog-
nized as a real drain on companies’ health care costs. “I don’t think the
increase in obesity, the sheer numbers, are what’s driving companies to
take this seriously,” says Peter Cappelli, director of Wharton’s Center
for Human Resources. “The big driver is really the cost of health care,
which corporations have to bear.”
109
“We do know that obesity is a strong predictor of medical expenses,”

adds Mark V. Pauly, Wharton professor of health care systems, busi-
ness, and public policy. “The business case for doing something to re-
duce obesity is not that employees would be more productive, but that
business expenses would be less costly in terms of health insurance pro-
grams.” The general trend for most employers, he says, “is that sooner
or later, the deal you get on health insurance depends on how expen-
sive your workers are. And when it comes to obesity, what’s made it
more prominent is that it’s become more prevalent. Obesity in employ-
ees and dependents is starting to get employers’ attention.”
A $93 Billion Medical Bill

National business advocacy groups and associations now call obesity
a “preventable condition”—a word choice that both recognizes the
problem and acknowledges efforts to do something about it. According
to workplace surveys, the vast majority of organizations with 200 or
more employees say they offer programs designed to help improve the
health of employees, while about a third of smaller companies offer pro-
grams as well. The most prevalent fitness initiatives in companies today
include on-site fitness centers or sponsored fitness programs, along with
web-based tools for tracking wellness and information.
Yet health care experts also say that many of these programs fail to
deliver long-term, significant improvements. Today’s spotlight on obe-
sity in the workplace comes at a time when companies are beginning to
realize that they have to do more than offer employees access to
weight loss incentive programs, fitness centers, and educational semi-
nars. As a result, corporations like Home Depot and Dow Chemical are
joining forces with major universities and The National Institutes of
Health to develop environmental interventions to help people manage
their diet and weight—not just pump up the workplace with gleaming,
state-of-the-art fitness equipment.
Based on statistics, the task is daunting. Obesity and overweight con-
ditions contribute as much as $93 billion to the nation’s yearly medical
bill, according to studies reviewed by the National Business Group on
Health, a Washington, D.C.-based nonprofit organization that repre-
sents large companies. Of that amount, the total cost of obesity to U.S.
companies is estimated at more than $13 billion per year—a price tag
that includes $8 billion for added health insurance costs, $2.4 billion for
paid sick leave, $1.8 billion for life insurance and $1 billion for disability
110
insurance. According to recent studies on the economic cost of work-

place obesity, that translates into thirty-nine million lost work days, 239
million days where work activity is restricted, ninety million sick days or
days in bed and sixty-three million visits to physicians.
In October, Adam Gilden Tsai, instructor of medicine in psychiatry at
the University of Pennsylvania Medical School, further refined the finan-
cial costs associated with being overweight to include a per-person
charge. At a conference on obesity, Tsai noted that when compared to
a person of average weight, an obese person accounts for an additional
$1,034 every year in doctors’ visits, medications and medical proce-
dures. “I don’t think anyone would question that obesity is a significant
contributor to health care costs,” he says.
For adults, overweight and obesity ranges are determined by using
weight and height to calculate a number called the “body mass index”
(BMI), which correlates with their amount of body fat. For instance, ac-
cording to the CDC, a person who is 5’9? and weighs 125 pounds to
168 pounds is considered a healthy weight; the same person weighing
169 pounds to 202 pounds is overweight; and the same person weigh-
ing more than 203 pounds is considered obese. When statistics are tal-
lied to show how many Americans are obese or overweight, more than
half today fall into one category or the other.
First in Fat
Among developed countries, the United States has the most obese
and overweight people, according to Jean Lemaire, Wharton professor
of insurance and actuarial science. “Americans are much heavier than
they were ten years ago and much heavier than other people around
the world,” says Lemaire. “Life expectancy in the U.S., which is among
the richest countries, only ranks forty-eighth in the world. Being over-
weight is comparable to having diabetes or having high blood pressure.
It is a true diagnosable disease that affects life expectancy.”
According to statistics compiled by the National Business Group on
Health through its Institute on the Costs and Health Effects of Obesity,
obesity is now considered a greater trigger for health problems and in-
creased health spending than smoking or drinking. Based on statistics
from a 2002 report called, “The Effects of Obesity, Smoking and Drink-
ing on Medical Programs and Costs,” published in the Journal of Health
Affairs, individuals who are obese have 30 percent to 50 percent more
chronic medical problems than those who smoke or drink heavily.
111
Specifically, the CDC notes that being overweight or obese increases

the risk of many diseases and health conditions, including hypertension
(high blood pressure), dyslipidemia (high total cholesterol or high levels
of triglycerides), Type 2 diabetes, heart disease, stroke, gallbladder dis-
ease, osteoarthritis, sleep apnea and respiratory problems, and some can-
cers (endometrial, breast, and colon).
As obesity rises, the medical conditions associated with obesity have
helped trigger an increase in health care costs. The National Business
Group on Health notes that obesity accounts for approximately 9 per-
cent of total medical care expenditures each year, and that 8 percent of
private employer medical claims are due to overweight and obesity.
All of this begs the question: Just how big a slice of the rise in medi-
cal costs can be attributed to obesity? In 2004, the last year for which
data are available, the National Coalition on Health Care (NCHC) re-
ported that total health care expenditures rose 7.9 percent, for a total
of $1.9 trillion in health care spending. When analyzing increases in
medical spending from 1987 to 2001, a 2004 report called, “The Im-
pact of Obesity on Rising Medical Spending,” documented that obesity
drove 27 percent of these increased costs.
There’s no doubt that rising health care expenses increase the cost of
medical care and health insurance for employers and workers. The
NCHC notes that in 2005, “employer health insurance premiums in-
creased by 9.2 percent—nearly three times the rate of inflation.” In an
effort to counter these statistics and to help employees adopt healthier
life styles, employers are offering a variety of programs and benefits.
For example:
• With 1,400 people working at its headquarters in Newtown

Square, Pa., enterprise software company SAP “believes it is im-
portant to partner with our employees related to their health and
financial well being,” says Brian Shay, SAP manager of rewards
and recognition. Using a specially designed software program,
SAP analyzes its employee population to help determine the “big-
gest use of prescription drugs” and the most common medical
conditions. “Then we target our wellness programs to those ar-
eas. We found that obesity is one condition that we could work
on and improve.” To help with that effort, the company now of-
fers an on-site gym and outside gym discounts through its health
care provider, as well as additional health and wellness programs.
112
In 2007, SAP will roll out what Shay calls “health risk assess-
ments,” and then work to tailor health care programs to target
areas like obesity or high blood pressure. The company plans to
give cash incentives to employees who take the assessments, and
may offer further financial rewards in 2008 for those who suc-
cessfully improve their health risk assessment. Though SAP does
not have any specific statistics on how its programs may have
lowered health care costs, Shay says he relies on existing analyti-
cal studies that predict a market rate of return between 3 per-
cent and 5 percent from wellness programs. “We are hoping in
the long run, say a three- to five-year period, that we will see a
significant decrease in our medical costs,” he says.
• Over the last decade, the University of Pennsylvania’s Division of
Human Resources has provided a range of health and wellness
programs for faculty and staff, including discounts on month-to-
month fitness club memberships, health fairs on campus during
the spring to provide information and health screenings, and
health and wellness workshops throughout the year that address
nutrition, exercise, and ways to stop smoking. In the 2006 aca-
demic year, the division added several programs to address obe-
sity. Among them is a holiday weight and activity maintenance
program called “Maintain, Don’t Gain,” where participants agree
to weigh in before Thanksgiving and again after the New Year to
encourage themselves and each other to not gain weight during
the holiday season. Other initiatives include a Weight Watchers
program on campus, starting the second week of January, and a
spring walking program, beginning in March. Terri Ryan, HR com-
munications manager, also notes that the University’s “medical
plans are very involved with issues related to obesity.” Health
care plans offered through Independence Blue Cross include cov-
erage for gastric bypasses, and promise $200 back to members
who successfully participate in approved weight management pro-
grams. In addition, the University’s Aetna HMO plan is in the
process of adding a new Weight Management Discount Program
to their portfolio of health and wellness initiatives that will allow
members and eligible dependents to get discounts on Jenny
Craig weight loss programs and products.
• Lorrie Reynolds, director of population health and wellness for In-
dependence Blue Cross, notes that the region’s 9,500 employees
113
probably mirror national statistics, which means that over 50 per-

cent of the health insurance company’s workforce is overweight
or obese. Though Reynolds says that the company doesn’t offer
financial incentives for employees to lose weight, there are nu-
merous weight reduction challenge programs (similar to those of-
fered to subscribers); support groups; voluntary screenings for
weight, blood pressure and cholesterol; online and web-based re-
sources, and telephone counseling for people trying to lose
weight. “We really try to take a comprehensive approach and
not zero in on one particular way,” she says. Fighting obesity “is
very difficult. We offer discount programs for participation, but
they are not goal based. We realize it is a challenge, and not
something [that people] are going to be successful at over
night.”
Carrots and Sticks

Data to confirm if and how these programs work is hard to come by.
Wharton’s Pauly cautions that “with wellness and fitness programs I
have reviewed, the sweeping generalization is that their results are
mixed in terms of effectiveness.” In fact, in 2004, two-thirds of the com-
panies surveyed by the National Business Group on Health reported that
only 25 percent of their workers participated in existing fitness pro-
grams—and it wasn’t even clear if the participants were already fit or
chronically unfit. Pauley also cautions that programs that offer financial
incentives for employees to become fit are often a “delicate issue. Even
if you spin it as a carrot, it can become a stick.”
This may help explain why companies like Dow Chemical are taking a
different approach. As part of a four-year study being funded by the Na-
tional Institutes of Health, Dow is promoting weight management and
physical activity for roughly 10,000 employees at twelve work sites
around the country. The study, called “LightenUP,” uses environmental
approaches and interventions to supplement existing individual-based
program efforts.
In coordination with principal investigator Ron Z. Goetzel of Cornell
University and the study team, Dow plans to work with food service
and vending companies to reduce the amount of high-fat and high-
sugar items offered; put up signs to encourage people to take the stairs
instead of the elevator; offer weight management tracking programs,
and implement walking paths and routes around the buildings. “Provid-
114
ing opportunities for employees to develop a healthy lifestyle at the

workplace has become a more strategic focus of the company,” says
Goetzel, director of Cornell’s Institute for Health and Productivity
Studies.
Karen Tully, Dow’s global health promotion leader, notes that over
60 percent of Dow employees in the United States are either over-
weight or obese. Without giving a specific figure, Tully says that the 20
percent increase in health care costs for overweight Dow employees
tracks the national average. By participating in programs like LightenUP,
Tully argues, Dow is not only “addressing overweight and obesity is-
sues” but anticipating a substantial return on investment. According to
Goetzel, preliminary reports from the study indicate that if the program
succeeds in reducing individual employee risk factors, the subsequent re-
duction in corporate health care costs would be more than double the
company’s initial investment in the program, which Tully says “would
be a huge return.”
Although the potential benefits to individuals and companies are obvi-
ous, there’s something about fighting obesity in the workplace that
gives Cappelli and others pause. Why? “It’s another boundary that’s be-
ing crossed between the lives of the employees and the interest of the
employers,” says Cappelli. Putting the spotlight on obesity is particularly
unsettling because “unlike smoking—which is clearly bad, not only for
the individuals who do it, but for the ones around them—obesity has
no effects on the people around you. It’s just about you.”
From here on in, Cappelli notes, “The door is open for employers to
think about all kinds of other employee-related issues which effectively
cost them money. This has not been examined critically in any serious
way. People in health issues see [weight-related initiatives] as a good
thing. And the current interest in curbing obesity will probably stand be-
cause no one is pushing back on the employee rights’ side. But if you
start getting into other aspects of people’s lives, you may see groups
pushing back.”
For instance, Cappelli says, the “next step on this continuum [of cor-
porate influence] is for [activities] that might affect you and your perfor-
mance at work. Some professions already prohibit their executives from
participating in extreme sports. Cappelli also notes that companies may
already be exerting some unspoken influence on the size of families by
offering cafeteria benefits that index the costs according to the number
of children receiving benefits. “You have, effectively, created the incen-
115
Empowerment
tive for fewer kids,” he suggests. “No one has thrown up boundaries to
this, because it’s still primarily an abstract concern for people,” Cappelli
adds. “And as long as employers put their toe in the water and there’s
no objection, others will follow.”
Empowerment
Empowerment in an office setting, in a nutshell, is the confidence employ-
ees have that their voices are heard, and that their opinions count (and are
counted). An empowered employee is one who feels that the organization
respects them and their ability to make decisions.
Increasingly, forward-thinking companies are trying to empower their
employees. But “empowerment” as a term can cover a whole range of
issues, from letting employees make decisions regarding customer service
within a certain bandwidth of expense, to giving employees autonomy
over much larger issues regarding marketing, product development, and
so on.
For example, consider a customer who asks a front-line employee to
reimburse him or her for a $20 charge they felt was unfair, or for a $50
service they felt was not delivered properly. In many situations, depending
on the amount of the claim, the employee might be able to make the
decision to reimburse the customer without having to consult anyone
higher up in the organization. That employee is “empowered” to make
that kind of decision.
That’s one form of empowerment. Another might be giving a group of
employees the responsibility and the authority to select a consultant to run
a training course.
Empowerment can also be thought of more broadly—pertaining to an
organization’s culture rather than tying into specific decisions or events.
An organization where employees feel “empowered” might be one in
which employees feel that they trust their managers, and the organization’s
leaders, to listen to them and take them seriously all of the time at work.
A company with empowered employees often uses—and is serious
about—employee surveys. Such a company is often attentive to perfor-
mance reviews, and often conducts “consensus” reviews of managers and
leaders. (“Consensus” reviews meaning performance reviews that are based
116
Empowerment
Why I Do This: College Professor, Psychology

Karol Maybury, Ph.D.
As a college professor, I have taught psychology courses, including Intro-
ductory Psychology, Social Psychology, Personality Theories, and Research
Methods. But in addition to teaching, most professors conduct research. I
do that as well. My research examines how accurately people read others’
emotions in different situations. Other psychology professors may special-
ize in children’s development (developmental psychologists), memory (cog-
nitive psychologists), or animal behavior (comparative psychologists).
There are many other specialties in psychology. In addition to conducting
research and teaching college courses, psychology professors mentor stu-
dents, write articles, and advise students on course selections and career
paths.
I found my job after completing a four year undergraduate degree in psy-
chology, followed by a four year doctoral degree. I found my job through
an academic job advertisement (in the newspaper Chronicle of Higher Edu-
cation).
I love being a college professor. Most professors work long hours (fifty
hours per week), but are able to set our hours and select which classes
we’d like to teach. There is a lot of autonomy. Most college professors
teach 3–4 classes each semester. Psychology is an exciting field which is al-
ways changing. I like the fact that most students find psychology classes
much more interesting and challenging than they expect.
One of the unexpected aspects of the job is that you need to become
comfortable speaking to large groups. This comfort comes naturally to
some people. But most of us get better at it, and enjoy it more, after we
have been teaching for a while. I highly recommend this career field. Peo-
ple who enjoy solitary work (research, writing, and computer analysis) plus
collaborative work (with students, with colleagues, in classes) would find
this an enjoyable career field.
on input from peers, bosses, and direct reports, rather than just being
based on a boss or managers’ views.)
Companies that understand the importance of empowerment often also
attempt to measure their “performance” on the issue. As an article in Fast
Company noted:
Berth Jönsson at SIFO developed the Empowerment Index for ABB

Asea Brown Boveri in the United States. According to Jönsson, moti-
vation and trust are not adequate measures; employees also need ap-
propriate skills and tools to do the job. Thus SIFO’s survey adds
117
Enron
questions regarding employees’ willingness and ability to take action,

the support they receive to take action, and their access to systems
and information. Categories include Motivation, Support Within the
Organization, Awareness of Quality Demands, Responsibility Versus
Authority, and Competence” (Fast Company magazine, “Trust! (but
Verify).” Issue 2, April 1996, page 52, by Eric Matson).
The SIFO questionnaire, the article noted, is filled out by employees,

anonymously, and then returned to SIFO for analysis. The results are then
presented to the company’s leaders. This survey, the article said, has been
used by companies including AT&T, Skandia, Swedbank, and Microsoft.
While the concept of empowerment and its effective use can lead to
dramatic and meaningful change in organizations, the actual word “em-
powerment” is often times dismissed in business. Through the 1980s and
1990s, the term became trivialized with overuse.
See also: Generation X, Y, and Z; Glass Ceiling; War for Talent
Further Reading
Empowering Employees, by Kenneth L. Murell and Mimi Meredith, McGraw-Hill
(2000)
Enron
Enron Corp. was once a hugely successful energy company, but the giant
fell in 2001, when it was discovered that the company had engaged in a
massive deception centered around its accounting practices. Since the
company fell, the term “Enron” has been increasingly used as a generic
synonym for “corporate scandal” or “accounting scandal.” The fall—and
the fallout—have been huge.
In a report entitled “The Corporate Scandal Sheet” published in Forbes
magazine August 26, 2002, Penelope Patsuris summed up the Enron
scandal as follows: “Boosted profits and hid debts totaling over $1 billion
by improperly using off-the-books partnerships; manipulated the Texas
power market; bribed foreign governments to win contracts abroad; ma-
nipulated California energy market.”
In a January 28, 2002, essay in BusinessWeek, author Bruce Nussbaum
wrote:
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Enron
There are business scandals that are so vast and so penetrating that
they profoundly shock our most deeply held beliefs about the honesty
and integrity of our corporate culture. Enron Corp. (ENE) is one of
them. This financial disaster goes far beyond the failure of one big
company. This is corruption on a massive scale. Tremendous harm has
befallen innocent employees who have seen their retirement savings
disappear as a few at the top cashed out. Terrible things have hap-
pened to the way business is conducted under the cloak of deregula-
tion. Serious damage has been done to ethical codes of conduct held
by once-trusted business professionals.
In the December 24, 2001, issue of The Nation (www.thenation.com),

national affairs correspondent William Greider (a former Rolling Stone and
Washington Post Editor) wrote: “An energy-trading company that Wall
Street had valued at $80 billion ten months ago is now a penny stock.
Meanwhile, California consumers and businesses are stuck with the ruin-
ously inflated electricity prices that Enron rode to brief financial glory.
The firm’s gullible creditors include some of the best gilt-edged names in
American banking—J.P. Morgan Chase, Citigroup—whose ancestral
houses were big players during the first Gilded Age too. Unfortunately,
then and now, these venerable financial institutions lured millions of inno-
cents to the slaughter, unwitting shareholders who bought the exuberant
promises.”
And, in an article entitled “Called to Account,” published in Time mag-
azine June 18, 2002 (online at www.time.com), Cathy Booth Thomas
wrote: “Accounting firm Arthur Andersen had already been found guilty
in the court of public opinion, and paid a heavy penalty. Clients deserted;
employees fled. In fact the Chicago firm was barely alive, but one question
remained: What would its epitaph be, the lesson for others?” An answer
came last Saturday, when a Houston jury found Andersen guilty of ob-
structing justice. It provided a moment of vindication for investors who
lost more than $60 billion in the spectacular collapse of Enron, whose
books had been audited by Andersen.
John Ellis, a New York based writer and consultant, writing for Fast
Company in its February 2002 issue (Issue 56, page 118), summed up the
scandal in the context of the new economy:
Enron’s deranged notion that it could lie itself out of its pickle is
emblematic of how little the company really understood the underly-
119
Enron
ing principles of the new economy. Principle one is transparency.

Principle two is opportunity. Principle three is speed. Enron grew at
an astonishing speed. It seized a tremendous opportunity (creating a
futures market for any number of basic services). But it never under-
stood the most important principle: A business of information re-
quires transparency. And so, Enron failed. Good riddance.
Note: Ex-Enron CEO Kenneth Lay, awaiting sentencing for fraud and
conspiracy in the Enron trial, died in 2006. According to a report in
CNNMoney (www.money.cnn.com) by Shaheen Pasha, published July 5,
2006, Lay “was found guilty of ten counts of fraud and conspiracy related
to the collapse of Enron, the energy company he founded that eventually
grew into the nation’s seventh largest company before it imploded after
an accounting scandal.”
Pasha wrote: “It was an astounding fall from grace for the Houston
businessman who was affectionately called ‘Kenny Boy’ by President Bush.
Lay had raised funds for Bush earlier in his political career. In the Enron
trial, Lay was accused of lying to investors and Wall Street about the health
of Enron in late 2001 even as he enriched himself by selling millions of
dollars in stock.”
Ultimately, the word Enron has become synonymous with corporate
greed and leaders who can’t be trusted.
See also: Code of Ethics
Further Reading
“Life After Enron’s Death: Preventing Another Enron Means Understanding
What Really Went Wrong. That Means Understanding Transparency, Op-
portunity, and Speed,” by John Ellis, Fast Company magazine (February
2002), p. 118.
www.enron.com
120
Equal Employment Opportunity Commission
Equal Employment Opportunity Commission

(EEOC)
The U.S. Equal Employment Opportunity Commission (EEOC) is the
federal agency responsible for enforcing employment discrimination laws.
Its Training Institute provides a wide variety of training programs to help
employers understand, prevent and correct discrimination in the work-
place.
The EEOC has five commissioners and a General Counsel appointed by
the President and confirmed by the Senate. Commissioners are appointed
for five-year, staggered terms. The term of the General Counsel is four
years. The President designates a Chair and a Vice Chair, The Chair is the
chief executive officer of the Commission. The five-member Commission
makes equal employment opportunity policy and approves most litigation.
According to the EEOC website, the federal laws prohibiting job dis-
crimination are:
• Title VII of the Civil Rights Act of 1964 (Title VII), which prohib-
its employment discrimination based on race, color, religion, sex,
or national origin;
• the Equal Pay Act of 1963 (EPA), which protects men and women
who perform substantially equal work in the same establishment
from sex-based wage discrimination;
• the Age Discrimination in Employment Act of 1967 (ADEA),
which protects individuals who are 40 years of age or older;
• Title I and Title V of the Americans with Disabilities Act of 1990
(ADA), which prohibit employment discrimination against quali-
fied individuals with disabilities in the private sector, and in state
and local governments;
• Sections 501 and 505 of the Rehabilitation Act of 1973, which
prohibit discrimination against qualified individuals with disabilities
who work in the federal government; and
• the Civil Rights Act of 1991, which, among other things, provides
monetary damages in cases of intentional employment discrimina-
tion (Information obtained from www.eeoc.gov).
The EEOC’s Training Institute is part of the Commission (www

.eeotraining.eeoc.gov). According to its website, it provides training that
can help prevent discrimination in the workplace, and also correct discrim-
121
Executive Coach
inating behaviors. The Training Institute also provides assistance for peo-
ple who want to learn more about EEO law. The Training Institute has
an annual conference it calls EXCEL. According to the website, this con-
ference is for “EEO managers, supervisors and specialists, attorneys, union
representatives, mediators, Alternative Dispute Resolution coordinators
and human resources professionals.” The Training Institute also runs reg-
ular seminars—held in major cities throughout the United States—that
explore various EEO topics and clarify EEOC policies and procedures.
See also: Age Discrimination; American Association of Retired Persons
(AARP); Americans with Disabilities Act; Harassment
Further Reading
www.eeoc.goc
Executive Coach
An executive coach is an individual who works with business executives to
advise them on how to become better leaders and managers. Executive
coaches sometimes take on the role of trusted advisor, the role of therapist,
and the role of career coach simultaneously.
An article published in the Harvard Management Update quoted Bab-
son professor James Hunt on coaching. “Coaching is effective for execu-
tives who can say, ‘I want to get over there, but I’m not sure how to do
it,’” says James Hunt, an associate professor of management at Babson
College and coauthor of The Coaching Manager (Sage Publications,
2002). “Coaching works best when you know what you want to get
done.” (“Methodology: Do You Need an Executive Coach?” Harvard
Management Update, Vol. 9, No. 12, December 2004)
Coaching, in other words, can be very effective when a manager has
clear aspirations. But it can also help managers in general be more effective
leaders, by helping them identify and address their weaknesses and build
on their strengths. Sometimes, an executive will call on a coach when the
organization is going through a crisis, or a period of undue stress. In “nor-
mal” times, possibly the executive would not need such coaching. But in
the midst of turmoil, a coach can be an objective third-party, helping the
executive gain and regain perspective so that they can make decisions with
as clear a head as possible.
122
Executive Compensation
And, sometimes, a coach can be helpful when a manager is in over their

head in terms of leadership issues. Sometimes, if a strong employee—say,
a “rainmaker” sales person—is promoted to a leadership position, that per-
son can flounder due to lack of experience, or confidence as a manager. A
coach can often help the person develop necessary leadership and manage-
ment skills faster than they would do on their own.
See also: Blanchard, Ken; Corner Office
Further Reading
“What an Executive Coach Can Do for You,” by Paul Michelman, Harvard Man-
agement Update (published June 13, 2005), located at http://hbswk
.hbs.edu.
“The Wild West of Executive Coaching,” by Stratford Sherman and Alyssa Freas,
Harvard Business Review (November 1, 2004).
Executive compensation, put simply, is what executives receive from a
company in exchange for the work they do. Time was, such compensation
could consist simply of a salary and a bonus. More often than not, how-
ever, the term today means more than that. According to a special report
on Forbes.com in an article titled “CEO Compensation” published on
April 21, 2005 and edited by Scott DeCarlo, executive compensation to-
day means a “salary and bonus plus ‘other’ compensation, which includes
vested restricted stock grants and ‘stock gains,’ the value realized from
exercising stock options during the just-concluded fiscal year.”
In many cases, executive compensation, beyond an agreed-upon salary,
is determined in large part by how the company performs under the execu-
tive’s leadership. (If the person is not a top manager, compensation might
be tied to the division or function that they run.) This is common practice,
although it does have critics. Another article on Forbes.com published on
May 9, 2005 titled “Paychecks on Steroids” by Michael K. Ozanian and
Elizabeth MacDonald, takes a closer look at executive pay. This article
first says that paying executives based on company performance is a long-
established practice, and notes that in 1929, Eugene Grace, president of
Bethlehem Steel earned a $1.6 million cash bonus on a salary of $12,000.
It then goes on to say that such pay-for-performance practices “became all
123
the rage in the 1990s. The stock market was taking off, and stock options
were the currency of choice because companies did not have to expense
them. Incentive plans would typically cover two or three years and incor-
porate such metrics as profitability and the company’s stock price.”
That article notes that it is difficult to ensure that a pay-for-performance
system links shareholder interests with the interests of the senior executive
in question: “The proxy statement is often so vague it’s impossible to fig-
ure out what targets were supposedly met by an executive to qualify for a
bonus. Plus, it’s easy to play with how you meet targets, especially earn-
ings.”
The article quoted Baruch Lev, an accounting and finance professor at
New York University’s Stern School of Business. Lev told Forbes.com:
“Generally accepted accounting principles are an art, not a science. Give a
smart boss the incentive to do it, and he can push the earnings envelope
to the limit—or beyond.”
The issue has sparked much debate—and not just in the United States.
For just one more example, the Ottawa Citizen editorialized on executive
pay in an article titled “There’s no profit in arguing” by Mark Sutcliffe
that appeared on the Ottawa Citizen website on January 6, 2007.
The article said: “It’s easy to criticize rising executive pay. It’s much
harder to come up with a method of controlling it . . . And while it’s
worth exploring how, through better governance practices, the growing
compensation gap between CEOs and their employees can be closed, it’s
fair to ask whether the exorbitant pay earned by the highest-paid execu-
tives in Canada is really a big problem for society or just a convenient
target.”
The article noted that according to the Canadian Centre for Policy Al-
ternatives, the average of Canada’s 100 highest-paid chief executives made
more money in the first two full days of 2007 than the average Canadian
will earn the entire year.
This article also went on to note that according to a report around that
time in the New York Times, executives at major U.S. corporations “make
170 times the typical worker.”
Many opinions offered in the press and by academics acknowledge that
the salaries paid to the top executives of companies are far too high, espe-
cially when compared with the wages earned by employees much lower on
the organization chart. Some contend that the issue continues to spiral
out of control, despite the fact that most people—even most top execu-
tives—would acknowledge that something should be done to bring top
124
Exit Interview
manager’s wages more in line with those earned by the rest of the com-
pany’s employees. There has yet to be a large movement, however, to-
wards resolution of this issue.
See also: Corner Office; Sarbanes–Oxley Act of 2002
Further Reading
“Fixing Executive Pay” by Orit Gadiesh, Marcia Blenko, and Robin Buchanan, a
Bain Results Brief (February 26, 2003), www.bain.com/bainweb/publications.
Exit Interview
An exit interview is the meeting held between an employee who is leaving
a company, and a representative of that company—most often someone
from the Human Resources department. Exit interviews can be valuable
on several levels. For example, allowing an employee to vent freely about
the workplace, and about his or her reasons for leaving, can shed light on
chronic management problems, or other issues at the company that should
be addressed. If a company compares notes from exit interviews, managers
may recognize common themes, and take steps to remedy employee rela-
tions on a larger scale—in an effort to improve retention.
Exit interviews can also be good for the employee who is leaving. If the
company is truly interested in its employees as people, an exit interview
can serve as a launching pad from which the employee becomes a valued
“alumni” of the organization. Some businesses—notably those in the pro-
fessional services field—take alumni-employee relations very seriously. A
firm’s alumni can be a great source of references for new business, and
also word-of-mouth recommendations for future employees.
According to an article on the National Federation of Independent
Business website posted on January 27, 2004, by Charles R. McConnell
titled “Simple Exit Interviews Help Reduce Turnover,” “Valued employ-
ees often consider changing jobs because of unhappiness with some aspect
of the work situation, and often their reasons relate to how they believe
they are treated.”
The article goes on to say that “departing employees are most likely to
speak honestly if exit interviews are conducted by someone other than
the immediate supervisor, say perhaps another supervisor, the immediate
supervisor’s manager, or, preferably, whoever usually attends to human
resource matters. Even when undertaken by a neutral party, some depart-
125
Exit Interview
ing employees—usually those leaving for ‘personal reasons’—may say

nothing negative for fear of affecting future employment references.”
The article notes that it is important for companies not to jump to con-
clusions based on one exit interview, but to gather information from as
many interviews as it can before making any judgment calls about what’s
going on inside the company—or department within the company that
has high turnover (http://www.nfib.com/object/4152571.html).
An article on Entrepreneur.com provides some tips on conducting a
successful exit interview. The key idea, according to this article, is to offer
the exiting employee a “safe” place in which they feel they can speak hon-
estly and freely about issues at the company, or the behaviors of a certain
manager. It’s a good idea, the article says, to guide the conversation a bit,
to touch on points including relationships with colleagues, the behavior
and style of the boss, the way in which the company’s different depart-
ments and functions interact, and employee satisfaction. The article also
said that it can be helpful to let the exiting employee know beforehand
what topics might be covered, so that they have time to think about the
issues and don’t feel on the spot or under pressure during the interview.
(“Conducting an Exit Interview: Just why would you want to interview
an employee who’s decided to quit? We’ll give you a few good reasons.”
By David Javitch. October 17, 2006. Entrepreneur.com. http://www
.entrepreneur.com/humanresources/employeemanagementcolumnistdavid
javitch/article169102.html)
Much like an annual employee survey, exit interviews are an excellent
way to get an in-depth view of what is really happening in a business’s
office culture. But it is important to follow through with the person con-
ducting these interviews. Otherwise, the interview process can become an
exercise in futility, and a waste of time.
See also: War for Talent
Further Reading
“Exit Interviews: Gone with the Wind,” by Mansi Dutta & Mansi Tiwari, The
Economic Times (powered by Indiatimes) (September 11, 2007).
“Why Good Employees Leave—and How to Retain More of Them,” by Gregg
Gregory, Reliable Plant magazine (September 2007), www.reliableplant
.com.
126
F
Feng Shui
The concept of Feng Shui, or “wind and water,” has its roots in ancient
Chinese philosophy. Essentially, Feng Shui calls for people to live in har-
mony with their environment; when harmony is achieved, there is a natural
flow of energy, which can improve one’s sense of well-being.
Many home decorators embrace the concept of Feng Shui as they set
out to create calming and inviting interiors. But Feng Shui is also popular
in office settings. When Feng Shui is applied at work, the goal is to reduce
stress and thus encourage increased employee productivity. According to
an article by Miriam Marcus on Forbes.com (“A Healthy Office, A
Healthy Mind?” May 29, 2007), the use of Feng Shui is on the rise among
corporate leaders.
The Forbes article quotes Dirk Moler, CEO of Get Logistics, a Billings,
Montana transportation broker. “The crazy thing about Feng Shui is that
I don’t know if it was the right business timing for increased profits, the
right time of the year, or the result of good Feng Shui, but it all happened
at the same time, and I attribute at least some of that success to Feng
Shui,” Moler said.
The article went on to say that, according to Feng Shui consultant
Kartar Diamond of Los Angeles, “By manipulating a physical workspace
in subtle ways, such as color choice, furniture arrangement, and the use of
natural building materials, Feng Shui can increase employee productivity,
amplify profits by attracting more customers, cut down on office politick-
ing and build a better corporate reputation.”
Importantly, the article notes, the practice of Feng Shui is not about
placing items around an office to cue people to reduce stress. More likely,
applying Feng Shui in an office setting will involve rearranging the furni-
ture to align people within the office and people moving through an office
to minimize disruption and maximize individuals’ abilities to concentrate
and interact productively.
An article by Claire Bush written for the Arizona Republic, published
May 30, 2007 on www.azcentral.com, concurs, noting also that a good
Flex-Time
first step is getting rid of clutter. As Feng Shui consultant Carol Johnsen
says in that article: “Getting rid of clutter gets rid of the overwhelming
feeling that zaps your energy. If you don’t have time to take care of things
in your immediate environment, don’t have them in there.”
Feng Shui can even apply if your office is in your home According to a
Q&A by Rose B. Gilbert, posted on ParamusPost.com on Friday, June 8,
2007, the most important step a person can take to promote the concept
of Feng Shui in a home office is to “get your office out of your bedroom.”
A Google search for Feng Shui consultants, conducted on June 11,
2007, results in about 992,000 cites. Among the top three: The Feng Shui
Directory (www.fengshuidirectory.com).
See also: Dilbert
Further Reading
“The Feng Shui Kingdom,” by Laura M. Holson, New York Times, Late Edi-
tion—Final, Section C, Page 1, Column 2 (April 25, 2005).
“SQUARE FEET: BLUEPRINTS; Where Comfort Is Obvious, and Wiring Less
So,” by Claire Wilson, New York Times, Money and Business/Financial
Desk Late Edition—Final, Section 3, Page 24, Column 1 (December 17,
2006, Sunday).
www.amfengshui.com (American Feng Shui Institute)
Flex-Time
Flex-time is a work schedule that allows employees to work hours that are
not within the standard 8 A.M. to 5 P.M. range. Employees working a “flex-
time schedule” for example, might put in a few hours early in the morning,
then take time to take their children to school, and then return to work at
10 A.M. Alternatively, other employees might start their workday later in
the morning, and stay later into the evening, or work a “short day” and
then put in extra hours at night or over the weekend to make up the time.
Far from being an altruistic move, most employers who offer flex-time
arrangements do so to get the most out of valued employees who are
trying to balance the demands of work and family, and contribute the
most they can in each venue. These employees have found that the stress
of trying to balance work and family are significant, and that it erodes their
ability to do their best work.
128
Flex-Time
A report on FoxNews.com posted on Dec. 20, 2006, titled “Stressed-

Out Parents Cost Companies $300 Billion in Lost Productivity,” points
to a survey completed by researchers at Brandeis University and Catalyst,
a New York-based nonprofit, which found that of 1,755 working parents
nationwide, one in twenty said they were severely impacted by concerns
about after-school childcare.
“Stress over after-school care is an ‘equal-opportunity issue,’” Ilene
Lang, the president of Catalyst, said in a statement in that report.
The study noted that companies are increasingly able to create work
environments that are amenable to flex-time arrangements. E-mail, video
and phone meetings, and networks on which employees can share docu-
ments all facilitate people who are working flexible hours, but expect—and
are expected to—meet a high standard of full-time performance expecta-
tions. Technological aids can also allow employees to toggle back and
forth between home and work life with minimal disruption.
In the workplace, shared offices, cubicles, or other work-spaces are an-
other way to facilitate flexible schedules. Such arrangements may also re-
sult in savings associated with renting or maintaining office space. If em-
ployees are using laptops, and can easily access a robust intranet, it is easier
to work effectively in multiple locations without a lot of ramp-up time.
The study recommends that companies be proactive about facilitating
flexible schedules by creating environments that are conducive to telecom-
muting, flex-time and “flex-space.” It recommends that companies also
educate managers about the needs of flex-time workers, and take steps to
ensure that employees are aware of the ways in which the company can
support a flexible schedule.
According to the study, the results are worth the effort. “More than 75
percent of respondents said greater flexibility to arrive at work later or
leave earlier, or take half-days when necessary, significantly cuts down on
stress.”
If company leaders are leery of embracing flex-time arrangements, they
might take note of an article in the New York Times, which cited a survey
by the Association of Executive Search Consultants, a professional group
based in New York. This survey found that more than half of senior execu-
tives responding would turn down a promotion if it meant losing more
control over their schedule (New York Times; “Flex Time for the Rest of
Us,” by Lisa Belkin, Dec. 17, 2006).
Companies hesitant to offer flexible schedules might also consider the
129
Flex-Time
cost of losing employees they have invested in—particularly to a more flex-

ible competitor. Time was, flexible hours were considered a perk. But in a
marketplace where so many companies compete on the knowledge and
talent of their employees, flexibility is necessarily and strategically moving
more towards standard operating procedure.
Unfortunately, as the New York Times article noted, although more
companies are professing to offer flexible schedules, work-life balance has
worsened for employees. The article said that the survey authors noted
that “flexibility in more than name only is still a long way off.”
See also: Job Sharing; War for Talent
Further Reading
“Employers Find Balance with Flex Time for All,” by Joyce M. Rosenberg, Associ-
ated Press article as published September 2, 2007 in www.thenewstribune
.com.

Men, Women, and Household Activities
“American Time Use Survey Summary” by the Bureau of Labor Statis-
tics (BLS) of the U.S. Department of Labor, July 27, 2006. http://www
.bls.gov/news.release/atus.nr0.htm
On an average day in 2005, 84 percent of women and 65 percent of
men spent some time doing household activities, such as housework,
cooking, lawn care, or financial and other household management.
Women who reported doing household activities on the diary day
spent 2.7 hours on such activities while men spent 2.1 hours.
On an average day, 19 percent of men reported doing housework—
such as cleaning or doing laundry—compared with 53 percent of
women. Thirty-seven percent of men did food preparation or cleanup
versus 66 percent of women.
130
The 4Ps
The 4Ps
The “4Ps” are the four “essentials” that a marketer has to think about
when planning a strategy for any product or service. Though different aca-
demics and practitioners have changed the terms associated with the “Ps”
to suit their work over the years, the generally agreed upon “4Ps” are:
Product, Price, Promotion, and Place.
Product is the “what”—what is being sold and can be a thing or a ser-
vice. Price is, as the word implies, the amount that the customer must pay
to get the product. What will the company charge for its product or ser-
vice? Will the offering be part of a bundle? Will it be a monthly fee? Pro-
motion has to do with how the product is marketed. In what context is
the product sold? To what target customers? How is it marketed?
Finally, place has to do with distribution. Place deals with how a cus-
tomer gets a product—whether the purchase takes place in a store or on-
line or both. This aspect also deals with whether a store in which an item
is purchased is owned by the company and even covers details of distribu-
tion, manufacture (or creation of service), and delivery to the customer.
According to the American Marketing Association website (www
.marketingpower.com), the “most common classification of these factors
is the four-factor classification called the “Four Ps”—price, product, pro-
motion, and place (or distribution). Optimization of the marketing mix is
achieved by assigning the amount of the marketing budget to be spent on
each element of the marketing mix so as to maximize the total contribu-
tion to the firm. Contribution may be measured in terms of sales or profits
or in terms of any other organizational goals.”
Here’s another definition of the 4Ps, or the Marketing Mix, this one
according to www.marketingteacher.com:
The marketing mix is probably the most famous phrase in marketing.

The elements are the marketing “tactics.” Also known as the “four
Ps,” the marketing mix elements are price, place, product, and pro-
motion. The concept is simple. Think about another common mix—a
cake mix. All cakes contain eggs, milk, flour, and sugar. However,
you can alter the final cake by altering the amounts of mix elements
contained in it. So for a sweet cake add more sugar! It is the same
with the marketing mix. The offer you make to you customer can be
altered by varying the mix elements.
131
The 4Ps
Marketingteacher.com goes on to note that some people choose to use

five “Ps,” adding “people” to the mix, and asking marketers to think more
closely about who is going to be buying or using the product. And some
marketers use even more “Ps,” trying to emphasize, for example, “pro-
cess,” or the whole “experience” of buying and using a product.
The “experience” of buying and/or using a product or service has lately
factored largely in the traditional “mix.” B. Joseph Pine II and James H.
Gilmore’s book The Experience Economy: Work is Theatre and Every Busi-
ness a Stage, explores the concept in great detail. Consider this short anec-
dote from their book:
Immediately on arriving in Venice, Italy, a friend asked a hotel con-
cierge where he and his wife could go to enjoy the city’s best. With-
out hesitation, they were directed to the Café Florian in St. Mark’s
Square. The two of them were soon at the café in the crisp morning
air, sipping cups of steaming coffee, fully immersed in the sights and
sounds of the most remarkable of Old World cities. More than an
hour later, our friend received the bill and discovered the experience
had cost more than $5 a cup. Was the coffee worth it, we asked?
“Assolutamente!” he replied.
Considering “experience” can allow a company to alter the “mix” signifi-
cantly, and please the customer while reaping increased profit.
The term “4Ps,” was reportedly coined by Neil H. Borden in his article
“The Concept of the Marketing Mix” in 1965. That’s more than forty
years ago, as of this writing, of course. So fast-forward to a slightly more
recent year, 1985, when Benson P. Shapiro, another venerable Harvard
Business School professor, wrote another key article on the topic, pub-
lished by the Harvard Business Review. This article, called “Rejuvenating
the Marketing Mix,” reviewed the essential elements, but honed the sub-
ject, talking about how to tailor the “mix” depending on company
strength, the competition and the greater context of the market. The mar-
keting mix as a concept has stood the test of time, and is still relevant in
the “new economy,” and the age of the “knowledge worker.” Companies
that get it right, do well.
See also: One-to-One Marketing; Relationship Marketing
Further Reading
“The Keys to Growing Brands,” by John Blasberg and Vijay Vishwanath, Market-
ing Magazine (October 6, 2003), located at http://www.bain.com/bain-
web/publications.
132
The 4Ps
The Toyota Way Fieldbook: A Practical Guide for Implementing Toyota’s 4Ps, by
Jeffrey Liker and David Meier, McGraw-Hill (2005).
http://marketing.about.com/od/marketingplanandstrategy
www.marketingpower.com (American Marketing Association)

The New Age of Marketing
Glenn Rifkin
Glenn Rifkin is a business journalist and author based near Boston. He is

a regular contributor to the New York Times and is the co-author of
Radical Marketing: From Harvard to Harley; Lessons from Ten That
Broke the Rules and Made It Big. This article is used courtesy of Glenn
Rifkin.
On October 23, 2006, a string of seemingly unrelated stories made the

business news pages of various publications. Among the most compelling:
• Shares of Google stock topped $480 a share, an incredible price

for a company that had been in existence for less than eight
years. Much of the recent surge in the stock price stemmed from
Google’s decision to buy YouTube.com for $1.6 billion, which
had been announced the week before.
• Apple celebrated the fifth anniversary of the launch of the iPod.
Despite early sluggish sales of the innovative product, the iPod
quickly became an icon product in the new millennium. By this
date, Apple had sold 68 million iPods for $14 billion and experts
predicted that the 100 millionth iPod would be sold before the
end of the year.
• CBS announced that it was canceling a promising new drama
named Smith after just three weeks on the air. This came less
than a week after NBC announced it would no longer produce
“scripted” shows (i.e., sitcoms, dramas, and anything that isn’t re-
ality TV) for its once coveted 8 P.M. timeslot.
• Ford Motor Company announced a third-quarter loss of $5.8 bil-
lion, the largest in fourteen years.
• Jeffrey Skilling, the former CEO of Enron, was sentenced to
133
The 4Ps
twenty-five years in prison for his role in defrauding investors

and bringing the giant corporation to bankruptcy.
In fact, these stories, chosen on a random day in a chaotic business

year, demonstrated the dramatic changes taking place in the world of
business and media. Fundamental shifts in thinking about once inviolate
markets have been underway for several years and it has become in-
creasingly obvious that there is a new order in the world in terms of
news, entertainment, advertising, marketing, and the movement of infor-
mation in all our lives.
A company like Google, founded in a Silicon Valley garage in 1998,
has quickly become the major technology player in the minds of market-
ers trying to reach a broader audience. In what seems like an instant,
Google changed the landscape of the Internet, not just for search en-
gines but for the wide dissemination of information around the globe.
In fact, the name Google quickly became a verb in the technology-
driven lexicon of a new generation.
Its latest acquisition, YouTube.com, a popular website for video post-
ings, was even more of a lightning rod for the new media. Less than
two years old, this site had quickly become a destination location for
Generation Y’ers and a harbinger for the future of Internet marketing.
With no profits and few revenues, the $1.6 billion price tag that Google
paid for YouTube was reminiscent of the mindless spending for overin-
flated ventures during the dot.com era of the late 1990s. Yet YouTube
has obviously struck a chord with a growing audience and marketers
could no longer afford to ignore its influence. No one could point out
the exact tipping point for YouTube, when it crossed the line from up-
start to cool, but once that occurred, the rush to corral that audience
was on.
Symbolizing the massive shift in media, Apple’s iPod quickly became
more than a well-designed MP3 player. It has become a platform for
layers of media including television programming and movies and it has
been the catalyst for a new, potent form of communication dubbed Pod-
casting. Apple’s iTunes website simply changed the music business, cre-
ating a new model for pricing and distribution of music.
These and other powerful new media have begun to change the land-
scape for traditional media outlets. The major television networks, such
as CBS and NBC, have been forced to reconsider their content offerings
as well as how they will attract audiences among new generations of
134
The 4Ps
viewers. New TV shows have just a few weeks to attract an audience or

they will be canceled. Expensive dramas and sitcoms are being replaced
by cheap to produce reality shows, and the audience for television in
general seems to be dwindling as the demographics get younger.
Tectonic shifts in economic trends and markets have created tremen-
dous pressures on traditional corporate powerhouses such as the Detroit
automakers. Finding appealing new products is now only the first step
in the quest for greater profits. Reaching an audience that is not re-
sponding as past audiences have is creating challenges that corporate
marketers struggle to overcome. Giant companies like Ford find them-
selves in a quandary over how to incorporate the new media in order to
sell products. The old ways clearly are not working. Several large compa-
nies experimented with using the Internet to encourage customers to
create their own advertising. Chevy discovered the concept was a mixed
blessing as its Chevy Tahoe SUV was lambasted by creative neo-adver-
tisers with a barrage of ads portraying the Tahoe as a gas-guzzling, envi-
ronment killing vehicle that buyers should avoid.
And the Skilling verdict was a reminder that the stakes in this eco-
nomic drama remain high enough for players to be tempted to scam
the system, seeking fraudulent ways to market their message, bolster
the numbers, and garner personal riches. The new economy, fueled by
the digital revolution, is likely to be fertile ground for nefarious means
to dubious ends.
The foundation for all these changes actually began in the 1980s with
the advent of the personal computer, followed by advances in telecom-
munications technology and the birth of the Internet in the 1990s. With
the confluence of several remarkable technologies in the early part of
this decade, there was a perfect storm of world-changing events. The
great leap forward in computing power and speed coupled with the ex-
plosion of the Internet around the planet collided head-on with the
widespread adoption of broadband connections to the online world.
Suddenly, almost without warning, the Internet began to attract hun-
dreds of millions of users around the planet and the technology opened
the door for new applications of video, audio, and online commerce. A
new virtual world, which had been much discussed and anticipated for
two decades, suddenly came real.
In the midst of this great transition, the old and the new have
bumped up against each other, leaving corporate marketing executives,
advertising professionals, and consultants in a quandary as to how to
135
The 4Ps
proceed. Traditional marketing methods such as print and broadcast ad-

vertising are under tremendous pressure to demonstrate the kind of re-
turn on investment that justifies the billions of dollars of spending that
continues today. For example, an estimated 12 million American homes
now have digital video recording (DVR) devices installed, including the
pioneering technology TIVO. Although that remains a relatively low
number, the implications of the technology are great. Viewers armed
with DVRs can record their favorite programs and simply eliminate the
commercials. Even those homes without such devices have changed
their viewing habits dramatically, zapping to other channels when com-
mercials appear. So what must corporate clients do to reach their target
audiences with their marketing messages in a world where that message
can be easily ignored?
In ten years, for example, radio, a medium long favored by advertis-
ers, has seen a dramatic drop in teenage listeners. According to Edison
Media Research, the average weekly time spent listening to the radio
among 12–17 year olds has dropped from 15.75 hours to 12.75 hours.
Listening hours have also dropped 21 percent for 18–24 year olds dur-
ing this same period.
Indeed, television viewing in these demographics has dropped nine
percent in recent years as a wide array of new media is drawing this
young audience away. Teenagers spend far more time on cell phones,
online blogging at such social networking sites as Facebook and
MySpace.com, or instant messaging with friends. Video games continue
to be a major attraction and an emerging world of virtual communities
such as Second Life, where members take on digital alter egos called av-
atars, is growing rapidly in popularity. Marketers such as Toyota, Star-
wood Resorts, and Nissan are already placing ads in these three-dimen-
sional digital worlds with the hope of attracting a new audience.
Never before has the world faced such rapid and dramatic change.
When Marshall McLuhan uttered his famous edict in the 1960s that
“the medium is the message,” he was presaging the world of today,
where media advancements and market shifts occur at breakneck speed
and new trends unseat current trends before most companies can react.
The Internet is indeed a medium that is also the message and those
who can decipher the message most effectively will be the winners.
The solution appears to be a new corporate archetype built upon flexi-
ble, diverse marketing efforts led by (usually) young, creative forward-
thinkers who stay in close touch with shifting trends and technologies.
136
Free Agent
At the same time, companies cannot get ahead of themselves and pre-
sume the early and untimely death of traditional marketing techniques.
Television and print, for example, remain potent conveyers of messages
to a wide audience, including the economically powerful baby boom
generation that is just now turning sixty. This target audience has mas-
sive buying power, long memories, and media habits that date back sev-
eral decades. Although they are generally open to embracing new tech-
nologies, they have not abandoned long favored connections such as
newspapers, radio, and television viewing.
Like so many corporate challenges, this is all about the journey, not
the destination. The winners will be companies like Nike, Apple, Toyota,
Yahoo, and others that recognize and embrace new technologies while
sustaining long-held ties to traditional media.
Free Agent
Free agents are people who work independently, and are often hired by
larger companies for their expertise. As individuals, their input keeps a
great many companies running more smoothly than they otherwise would.
As a group, they are growing in number and impact on the world of work.
They often work from home, or from very small offices—sometimes
quite untraditional in nature and location. And they are known by a variety
of monikers, among them: “free agents, freelancers, elancers, solo prac-
titioners, independent consultants, and home-based business operators.”
In December 1997, Daniel H. Pink wrote a Fast Company article enti-
tled: “Free Agent Nation.” In it, Pink wrote:
It’s out there, from coast to coast, and it’s growing every day. The
residents of Free Agent, USA are legion: Start with the fourteen mil-
lion self-employed Americans. Consider the 8.3 million Americans
who are independent contractors. Factor in the 2.3 million people
who find work each day through temporary agencies. Note that in
January the IRS expects to mail out more than seventy-four million
copies of Form1099-MISC—the pay stub of free agents.
Pink subsequently went on to write a book entitled Free Agent Nation:

How America’s New Independent Workers are Transforming the Way We
137
Free Agent
Live (Warner Books, 2001). A quote from that book: “The Free Agent
Org Chart is fluid. And because it’s fluid, it’s less hierarchical. Your peer
on one project could be your boss on another. Today’s subcontractor
could be tomorrow’s customer. In this sense, the Free Agent Org Chart
resembles a traditional organization chart less than it resembles the human
brain . . . This is one reason that free agency might—just might—be more
attuned to human nature than the typical twentieth-century employment
structure.”
There are growing numbers of formal networks and associations de-
voted to facilitating the world of the free agent. Many of these are specific
to a given profession, but some are more broad in nature, Free Agent
Boston (www.freeagentboston.com), for example. According to its web-
site, “Free Agent Boston is an informal network of people working solo in
the greater Boston area organized by Susan Kaup. The project got its start
in December 1999 when Susan invited a couple of free agent friends to
get together for lunch. Since then Free Agent Boston has hosted dozens
of networking, educational, and social events for people working outside
the corporate 9–5 world who want to exchange ideas, collaborate on proj-
ects and see someone during the day other than the mailman.”
Elance.com is another. Elance links website designers, writers, program-
mers and other professionals with people and companies searching for in-
dependent contractor expertise. According to the website (albeit advertis-
ing copy), “Elance’s self-service staffing model allows businesses to remain
nimble while getting work done quickly and cost effectively, simultane-
ously bringing great work opportunities to a global network of talented
service providers.”
It is important for tax purposes—for both the employer and the person
being hired to work—to determine, at the outset of any job, whether the
relationship is employer/employee or employer/independent contractor/
free agent. On this topic, the website of the Internal Revenue Service
(www.irs.gov/businesses/small) says:
Before you can determine how to treat payments you make for ser-
vices, you must first know the business relationship that exists be-
tween you and the person performing the services. The person per-
forming the services may be—
An independent contractor
A common-law employee
138
Free Agent
A statutory employee
A statutory non-employee
In determining whether the person providing service is an employee or an

independent contractor, all information that provides evidence of the de-
gree of control and independence must be considered.
It is critical that you, the employer, correctly determine whether the
individuals providing services are employees or independent contractors.
Generally, you must withhold income taxes, withhold and pay Social Secu-
rity and Medicare taxes, and pay unemployment tax on wages paid to an
employee. You do not generally have to withhold or pay any taxes on
payments to independent contractors.
Caution: If you incorrectly classify an employee as an independent con-
tractor, you can be held liable for employment taxes for that worker, plus
a penalty.”
The website goes on to say that: “A general rule is that you, the payer,
have the right to control or direct only the result of the work done by an
independent contractor, and not the means and methods of accomplishing
the result.
Example: Vera Elm, an electrician, submitted a job estimate to a hous-
ing complex for electrical work at $16 per hour for 400 hours. She is to
receive $1,280 every two weeks for the next ten weeks. This is not consid-
ered payment by the hour. Even if she works more or less than 400 hours
to complete the work, Vera Elm will receive $6,400. She also performs
additional electrical installations under contracts with other companies,
that she obtained through advertisements. Vera is an independent con-
tractor.
The IRS website offers a great deal of other information for indepen-
dent workers/free agents. Other good resources include the United States
Small Business Administration (www.sba.gov), the National Small Busi-
ness Association, and the American Small Businesses Association.
See also: Flex Time; Job Sharing
Further Reading
“Free Agent Nation,” by Daniel H. Pink, Fast Company magazine (December
1997), p. 131.
Free Agent Nation: How America’s New Independent Workers Are Transforming
the Way We Live, by Daniel H. Pink, Warner Books (2001).
139
G
General Electric (GE) Workout
General Electric is often used as an example of a well-run, highly successful
company. As a result, the tools and techniques that General Electric has
used are widely studied, and have been tailored for use in many other
organizations. One of these techniques is the “GE Workout,” which was
developed under the leadership of Jack Welch. Essentially, the GE Work-
out is an approach to decision-making and problem solving in which larger
groups of employees, along with their managers, identify problems or de-
cisions that need to be made, and then smaller groups of employees—sans
the higher-level managers—gather to figure out solutions. (This phase is
often accomplished with the help of an outside facilitator. The goal is to
push beyond “the way things have always been done,” and find new and
innovative ways to address the issues at hand.) These smaller groups,
armed with an idea, then meet again with the higher-level managers in a
town meeting-like setting to vet their ideas.
According to “Adapting General Electric’s Workout for Use in Other
Organizations: A Template,” published in the Management Development
Forum (Willam S. Schaniger, Jr., Stanley G. Harrish and Robert E. Nie-
buhr, Volume 2—No. 1[99]), the GE Workout “was as much a philoso-
phy and approach to problem solving as it was a technique.” The article
goes on to say that the Workout approach—together with benchmarking
best practices and mapping processes, have been the fundamental keys to
GE’s success.
The article, and other sources, note that the GE workout is a process,
not a one-off event. It must be embraced at all levels of the organization,
or it will not work.
An article on www.isixsigma.com published on Feb. 11, 2004, called
“Six Sigma and Workout: Building a Better Tool Set for Accelerating
Change,” by Rick Tucci also discusses the evolution of the GE Workout.
As Tucci noted, the GE Workout marked a striking departure from other
organizational tools and approaches designed to help companies improve
performance. For example, he noted, the GE Workout differed from the
Generation X, Y, and Z
Total Quality Management (TQM) approach to continuous improvement

by calling for action as soon as the “town meeting” agrees upon a solution
(TQM, by contrast, incorporated more time for analysis). What’s more,
Tucci wrote, the Workout could be used by anyone—or any group—with
knowledge of the problem at hand. Other methodologies, including
TQM, require statistical and analytical expertise.
As Jack Welch noted, in an interview in the Harvard Business Review in
October 1989, “Work-out is absolutely fundamental to our becoming the
kind of company we must become . . . The ultimate objective of Work-out
is clear. We want 300,000 people with different career objectives, different
family aspirations, different financial goals, to share directly in this com-
pany’s vision, the information, the decision-making process, and the re-
wards” (“Speed, Simplicity, Self-Confidence: An Interview with Jack
Welch,” by Noel Tichy and Ram Caran, Harvard Business Review, Sep-
tember–October, 1989).
See also: Action Learning; Learning Organization; Six Sigma
Further Reading
The GE Work-Out: How to Implement GE’s Revolutionary Method for Busting Bur-
eacracy & Attacking Organizational Problems, by Dave Ulrich, Steve Kerr,
and Ron Ashkenas, McGraw-Hill (2002).
Jack: Straight from the Gut, by Jack Welch with John A. Byrne, Warner Books
(2005).
Winning, by Jack Welch with Suzy Welch, Collins (2005).
Why does U.S. society in general—aided and abetted by marketers—label
generations of people? There’s the “Greatest Generation” of people who
were young during World War II. Then there are the Baby Boomers—
born in the period after World War II, and up until about 1964. Then
there are Generations X, Y, and Z.
One reason for the tendency to label generations is that such labels im-
ply a certain set of common characteristics. As different as the individual
people are who were born throughout the baby-boom years, for example,
they can still be identified—in broad strokes—among larger groups of
people because they lived through the same national and global historical
events that shaped the years during which they grew up.
142
For companies considering their market, this is a boon because it helps

them tailor offerings to certain age groups. For companies considering
their employees, it can also be a boon; it can help them better understand
where their staff members are “coming from” and what might constitute
their “comfort zones” with regard to office culture norms. Again, though,
this is a very broad-stroke assumption; it establishes commonalities that
might not prove true if researched thoroughly.
When employees of different generations find themselves at odds with
one another, they often blame the “generation gap,” which is thought to
be the differences in values, styles and approach between one generation
and another. In her book, Retiring the Generation Gap: How Employees
Young and Old Can Find Common Ground (Jossey-Bass, 2006) author
Jennifer Deal, however, pushes back at that conventional wisdom. Deal’s
research suggests that when employees find themselves in conflict with one
another, and blame the “generation gap” for that conflict, what’s really
happening is simple miscommunication. She writes, in her introduction:
“Fundamentally, people want the same things, no matter what generation
they are from,” and “You can work with (or manage) people from all
generations effectively without becoming a contortionist, selling your soul
on eBay, or pulling your hair out on a daily basis.”
Deal begins her book, in fact, with an eye-opener of a quotation: “Chil-
dren today are tyrants. They contradict their parents, gobble their food,
and tyrannize their teachers.” This quote is attributed to Socrates, who
lived from 470–399 B.C. She also writes: “The so-called generation gap,
is, in large part, the result of miscommunication and misunderstanding,
fueled by common insecurities and desire for clout—which includes con-
trol, power, authority, and position.”
All that said, the labels exist. To go back, those born between 1925 and
1945 are considered the “silent generation” if for no other reason than
the publicity that the Baby Boomers, who followed, have garnered
Baby Boomers were born between 1946 and 1963 or 1964, depending
on whom you ask—and can be classified as either early- or late-boomers.
Generation Xers birthdates begin in 1964 (or 1965) and range through
the mid-1980s. Interestingly, in the post–baby-boom years, the start and
end-dates of generational labels are fuzzier, with more sources in disagree-
ment.
Focusing on Generation X and beyond, according to an article entitled
“Generation X Defies Definition,” by Jennifer Jochim, published in the
Nevada Outpost (copyright 6/1/97 Nevada Outpost http://www.jour
143
.unr.edu/outpost), “Generation Xers were brought up on television, Atari

2600s, and personal computers. They are the generation that was raised
in the 1970s and 1980s, and saw this country undergo a selfish phase that
they do not want to repeat.”
In that article, Jochim quotes Jackie Shelton, a thirty-one-year-old ad-
vertising executive, as saying: “Generation X grew up in the ‘me genera-
tion’ of the 1980s, and now they are able to see that it is not all it is
cracked up to be.”
Jochim explains in her article that “Generation X” was coined as a label
in 1991 by author Douglas Coupland, in a novel about three people he
describes as “underemployed, overeducated, intensely private, and unpre-
dictable.” Jochim writes: “Coupland took his book’s title from another
book Class, by Paul Fussell. Fussell used X to describe a group of people
who want to pull away from class, status, and money in society. Because
the characters in Coupland’s book fit that description, he decided on the
title ‘Generation X.’”
People in Generation Y were born, predictably, after those born in Gen-
eration X. Some are children of the oldest baby boomers; others are chil-
dren of Generation Xers.
According to a USA Today article posted on www.usatoday.com on No-
vember 6, 2005 (“Generation Y: They’ve arrived at work with a new atti-
tude,” by Stephanie Amour), Generation Yers comprise as many as seventy
million people. “This age group,” Amour writes, “is moving into the labor
force during a time of major demographic change, as companies around
the USA face an aging workforce.” The article goes on to say that the
“new job entrants are changing careers faster than college students change
their majors, creating frustration for employers struggling to retain and
recruit talented high-performers.”
Amour’s article refers to research by Bruce Tulgan, a founder of a com-
pany called RainmakerThinking, which studies the lives of young people.
The article says, “Unlike the generations that have gone before them, Gen
Y has been pampered, nurtured, and programmed with a slew of activities
since they were toddlers, meaning that they are both high-performance
and high-maintenance, Tulgan says. They also believe in their own worth.”
Generation Z, as of this writing, may still be in elementary school.
Sources on the web differ as to what constitutes the first year of Genera-
tion Z individuals. Some sources identify Generation Z as those born after
2000. Others cite dates as early as 1993, or before. Some indicate the early
144
1990s. For example, an article by Thomas Hoffman entitled “Job Skills:

Peparing Generation Z” published August 25, 2003 in Computerworld
(www.computerworld.com) says that corporate CIOs responding to a sur-
vey indicated that they were concerned that colleges and universities are
by and large doing a poor job of preparing current college students for
company life. That article’s title indicates that the piece is written about
Generation Z.
According to that article, “The survey, plus interviews with CIOs, indi-
cated that the shortcomings are in the areas of business skills, trouble-
shooting skills, interpersonal communication, project management and
systems integration.”
All of this information may be daunting, but consider Deal’s theory,
which came out of an extensive research project done by the Center for
Creative Leadership, and which surveyed people born between 1925 and
1986. And recall another quote she cited in her book, this one by Alex-
andar Dumas, 1824–1895: “All generalizations are dangerous, even this
one.”
Further Reading
Beyond Generation X, by Claire Raines, Crisp Learning; 1st ed. (1997).
Generation X: Tales for an Accelerated Culture, by Douglas Coupland, St. Mar-
tin’s Griffin; 1st ed. (1991).
Managing Generation Y, by Carolyn A. Martin, HRD Press (2001).
Retiring the Generation Gap: How Employees Young and Old Can Find Common
Ground, by Jennifer J. Deal, Jossey-Bass (2006).
www.ccl.org (Center for Creative Leadership)
Signs of Changing Culture: Good Job, You!

How do you know when you’re doing a good job at work?
According to an article by Jeffrey Zaslow, published in the Wall Street
Journal April 20, 2007 (page W1), young people joining the workforce
today expect a lot of praise. And, it seems, companies are wiling to go
to great lengths to deliver.
Specifically, Zaslow writes, companies are “hiring consultants to teach
managers how to compliment employees using e-mail, prize packages
145
Glass Ceiling
and public displays of appreciation.” One company, Zaslow noted, calls

one staffer its “celebrations assistant.” This person’s job includes throw-
ing confetti and passing out balloons.
“There are benefits to building confidence and showing attention,”
Zaslow writes. “But some researchers suggest that inappropriate kudos
are turning too many adults into narcissistic praise-junkies.”
Times have changed, noted one law firm partner quoted in the arti-
cle. Early on in his career, he said, “If you weren’t getting yelled at, you
felt like that was praise.”
Glass Ceiling
The term “glass ceiling” was coined by Wall Street Journal writers to de-
scribe the barriers that prevent women from reaching leadership positions
in companies. As of this writing, it has come to mean women and also
any other group of people prevented from reaching corporate leadership
positions due to discrimination of any kind. But it is most commonly asso-
ciated with women in business.
The glass ceiling has been studied and written about a great deal. A
federal commission was established in 1991 to study and report on the
topic. The glass ceiling has also been considered extensively in individual
fields—the glass ceiling in medicine, the glass ceiling in high tech indus-
tries, and so forth. Much of the writing focuses on pay gaps, and on ways
in which women can “break” the ceiling to attain leadership positions. But
there are also some controversial views. According to a 2006 Forbes.com
article by Hannah Clark, titled “Are Women Happy Under the Glass Ceil-
ing” (Forbes.com, March 8, 2006) women may not be as unhappy with
the consequences of the glass ceiling as they once were. The article cites a
study of 1,200 executives in eight countries, done by consulting firm Ac-
centure. The study reports that about “70% of women and 57% of men”
believe that the glass ceiling exists. But, as Clark’s article goes on to say:
“If women are unhappy about making 77 cents for every dollar earned by
a man, it’s not reflected in Accenture’s statistics. Globally, the same per-
centage of men and women—58%—felt they were fairly compensated. In
the U.S., 67% of men were happy with their salaries, compared with 60%
of women. But American women were almost as satisfied as men with the
professional levels they had achieved.”
146
Glass Ceiling
Why I Do This: Director, Career Development and Placement

Graduate School
Carol R. Anderson
My job is to prepare students pursuing masters degrees at a professional
graduate school to find internships and jobs in their fields of study. I help
them identify their professional assets (skills, education, experience that dif-
ferentiate them from competitors) and learn how to find opportunities,
present themselves effectively to prospective employers, how to interview,
negotiate salary, choose between multiple offers. My work is varied: I coun-
sel students individually, run resume and strategic workshops, organize job
fairs and recruit companies, nonprofits, and government agencies to partici-
pate, bring in alumni to talk to students, coach working students on career
issues, survey alumni on their career progression.
I did not find this job; I was invited to apply for it by a colleague at my
previous job in outplacement (counseling professionals who lost their jobs
on finding new ones) who was on the school’s search committee and rec-
ommended me. Most jobs (70–80%) are found through such introduc-
tions, not through ads or online or through employment agencies. I se-
gued into this field as a second career, when I was over fifty, but you can
start as soon as you complete graduate school. Good preparation while
you’re in high school and college: camp counselor, being a Big Brother or
Big Sister, tutor, sports coach, acting (trying on different lives, role play),
Toastmasters, a summer job in an employment agency, any job that in-
volves customer service, advocacy, being an exchange student overseas or
hosting one, shadowing people who do jobs you find interesting, any expe-
rience that allows you to broaden your horizons by trying something (le-
gal, ethical, and safe) about which you know nothing, psychology courses.
I have a passion for this work, and I am good at it, two criteria for any
successful career. My success is vicarious: the satisfaction comes when grad-
uates get the job they’ve dreamed of, or are chosen by prestigious organiza-
tions for competitive programs, such as the United Nations Young Profes-
sionals Program or the Presidential Management Fellows program in the
federal government. As director I have a great deal of autonomy in plan-
ning my work, choosing what my office provides to students and alumni
and when, another factor that contributes to my career satisfaction. Three
“unexpected” elements of my work are the amount of writing and editing
I do in it (workshop handouts, resumes, cover letters, a newsletter), the
depth of my relationships with students and alumni, and the path that led
to it. While many career services jobs in academe require an MA in counsel-
ing, I have an MBA in finance and a BA in English, and prior careers in
book publishing and financial management on Wall Street. To enjoy this
kind of job, you need what we call the “service gene,” a strong desire to
help others, as well as patience, cross-cultural sensitivity, and the ability to
inspire others.
147
Golden Parachute
Resources for more information include: www.ethnicmajority.com,

www.breaktheglassceiling.com, www.feminist.org, www.womensleadership
.com, the Center for Women’s Leadership at Babson College, and the
Institute for Women’s Leadership at Rutgers University.
See also: Corner Office
Further Reading
A Glass Ceiling Survey: Benchmarking Barriers and Practices, by Ann M. Mor-
rison, Carl T. Schreiber, and Karl F. Price, CCL Press, (1995), www.ccl.org
Golden Parachute
A golden parachute, according to investorwords.com, is a clause in an ex-
ecutive’s employment contract specifying that he/she will receive large
benefits in the event that the company is acquired and the executive’s em-
ployment is terminated. “These benefits can take the form of severance
pay, a bonus, stock options, or a combination thereof.”
Golden parachutes are “golden” because they’re very large. Consider a
BusinessWeek.com article published Dec. 22, 2006 titled “The Golden
Parachute Club of 2006: Top executives who left their companies this year
were rewarded with rich pay packages. But is this the last hoorah?” This
article, by Moira Herbst, describes some of the rewards received by CEOs,
and discusses how the size of the “parachutes” are being received by share-
holders:
On Dec. 21, Pfizer revealed that (then CEO Hank) McKinnell, who
did give up the CEO post in 2006, is getting even more money than
originally thought. He’ll receive a total of $122 million in retirement,
as well as deferred compensation worth an additional $78 million.
The sum total of $200 million isn’t going over too well among
investors. “It’s not reasonable to pay someone who failed as CEO this
much; he’s the poster child for pay-for-failure,” says Daniel F. Pe-
drotty, director of the investment office of the AFL-CIO, whose
member unions’ funds hold about $568 million in Pfizer shares. “Un-
fortunately, once you’ve negotiated this and gotten it wrong, it’s hard
to fix.”
In Corporate America, the article goes on to say, “the road for even
148
Golden Parachute
the bitterest of goodbyes has long been paved with sweet financial
rewards. Continuing a long-term trend, 2006 saw many companies
parachuting executives into soft post-employment landings, whether
leaving with head held high, like ExxonMobil chief Lee Raymond, or
in a cloud of controversy like McKinnell (www.businessweek.com).
Indeed. MarketWatch.com published a report on its website on January

3, 2007 about the $210 million golden parachute departing Chief Execu-
tive Robert Nardelli received from Home Depot. According to that article,
“Some corporate governance experts said that Nardelli’s pay package was
not entirely out of line with other companies of that size that cut ties
with top managers, and there could be others like it down the road unless
shareholders enact reforms.”
The article went on to quote Sydney Finkelstein, professor of manage-
ment at Dartmouth University’s Tuck School of Business, as saying “It’s
clearly an outrageous number but one that was preordained from [Nardel-
li’s] employment contract,” said. “I think it’s a sign of the new rule for
CEOs” (MarketWatch.com. “Don’t Expect Reforms in Wake of Nardelli
Parachute: Experts Say Large Home Depot Packages Could Continue;
Others Could Follow,” by Russ Britt, January 3, 2007.)
See also: Executive Compensation; Sarbanes–Oxley Act of 2002
Further Reading
“Executive Pay: A Special Report; More Pieces. Still a Puzzle,” by Erich Dash,
New York Times, Late Edition-Final, Section 3, Page 1, Column 2 (April 8
2007).
149
H
Hacker
A hacker is a computer expert who can access and manipulate computer
programs, applications, systems, and more in “unorthodox” ways to
achieve his or her goal. Initially, the term hacker was a derogatory term,
meaning someone who was unlawfully breaking into a computer system
they were not supposed to have access to. It is still used that way. But the
meaning of the term has evolved and expanded.
Consider the following, quoted from a “Portals” column by Lee Gomes
in the Wall Street Journal (“How a Young Turk Spared Hackerdom from
Respectability,” Wednesday, October 4, 2006, Marketplace Section, page
B1): “Hacker, of course, used to mean ‘computer-connected bad guy.’
That’s still how the word is used on TV. In tech circles, however, it has
shed its nefarious undertones and now stands for ‘computer enthusiast.’
(Although, in more rarified programming circles, it has come full circle
and is pejorative once more; here a hacker has only a superficial knowledge
of programming and gravitates toward quick but impermanent solutions.
Think duct tape.)”
Gomes writes, “The pro-hacker aesthetic is now so ascendant that the
mere whim of [a] hacker is valued more than even the most studied plan
of someone else, such as a marketing dweeb.”
The term, then, changed mostly for those people who do not under-
stand the inner workings of computers, the Internet, and cyberspace. Con-
sider this as well, from the website www.catb.org, in an article by Eric
Steven Raymond entitled, “How to Become a Hacker”:
There is a community, a shared culture, of expert programmers and

networking wizards that traces its history back through decades to the
first time-sharing minicomputers and the earliest ARPANET experi-
ments. The members of this culture originated the term ‘hacker.’
Hackers built the Internet. Hackers made the Unix operating system
what it is today. Hackers run Usenet. Hackers make the World Wide
Web work. If you are part of this culture, if you have contributed to
Hacker
it and other people in it know who you are and call you a hacker,
you’re a hacker.
That article goes on to say that there is “another group of people who
loudly call themselves hackers, but aren’t. These are people (mainly adoles-
cent males) who get a kick out of breaking into computers and breaking
the phone system.” The article says that “real” hackers call those people
“crackers,” and goes on to say that according to a real hacker, “being able
to break security doesn’t make you a hacker any more than being able to
hotwire cars makes you an automotive engineer.” The article laments the
fact that the media generally uses the work “hacker” when “cracker” would
be more appropriate. “Hackers build things,” the article says, and “crack-
ers break them.”
Raymond is the editor of The New Hacker’s Dictionary. The book’s
third edition, in paperback, was published by the MIT Press in October
1996. Even though more than a decade has passed since the book’s publi-
cation, its information still engages readers because hackers do have their
own language, as noted by Hugh Kenner in his review of the dictionary in
Byte magazine. Kenner, as quoted from the Amazon.com website, wrote:
My current favorite is “wave a dead chicken.” New to you? You’ve

waved a dead chicken when you’ve gone through motions to satisfy
onlookers (suits?), even when you’re sure it’s all futile. Raymond’s
book exhilarates. . . . The New Hacker’s Dictionary, though, is not for
skimming. Allot, each day, a half hour, severely timed if you hope to
get any work done.
Good guys or bad, hackers, whether we adhere to the Gomes definition

or the Raymond, are the people who understand computers, applications,
systems, and more much better than most.
See also: Killer App
Further Reading
Gray Hat Hacking: The Ethical Hacker’s Handbook, by Shon Harris, Allen Harper,
Chris Eagle, Jonathan Ness, and Michael Lester, McGraw-Hill Osborne Me-
dia, 1st ed. (November 9, 2004).
Hacking Exposed, by Stuart McClure, Joel Scambray, and George Kurtz, McGraw-
Hill Osborne Media, 5th ed. (2005).
www.hacker.org
152
Harassment
Signs of Changing Culture: Privacy Increasingly Formal

Noted in The Financial Times, November 14, 2006, page 8
“Business Slow to Act on Data Protection and Privacy,” by Philip Staff-
ord in London
Stafford, in this article, has tacked the tough topic of privacy. Citing
an Ernst & Young study, Stafford notes that more companies are realiz-
ing that they need to pay more attention to protecting their data.
Stafford cited an Ernst & Young Global Information Security Survey of
1,200 public and private sector organizations in 48 countries. He wrote,
“For the first time in the study’s nine-year history, organizations have
cited privacy and data protection as a significant issue.”
The article quoted Richard Brown, head of technology and security
risk services at Ernst & Young, as saying, “Businesses are only just wak-
ing up to the dangers of having little or no privacy policy in place for
managing sensitive data.”
Stepping back and considering the big picture, it’s interesting to note
that companies are becoming more vigilant about protecting their data
even as many probe more deeply into employees’ information. The is-
sue of where employee privacy boundaries reside continues to spark
heated debate.
Harassment
The Federal Communications Commission describes harassment as any
form of discrimination that violates the Civil Rights Act of 1964. It is
classified as unwelcome verbal or physical conduct based on race, color,
religion, sex, national origin, age, disability, sexual orientation, or retalia-
tion.
The U.S. Equal Employment Opportunity Commission describes sexual
harassment as
Unwelcome sexual advances, requests for sexual favors, and other ver-
bal or physical conduct of a sexual nature [that] constitute[s] sexual
harassment when submission to or rejection of this conduct explicitly
or implicitly affects an individual’s employment, unreasonably inter-
153
Harassment
feres with an individual’s work performance or creates an intimidat-

ing, hostile or offensive work environment.
Sexual harassment can occur in a variety of circumstances, including
but not limited to the following:
• The victim as well as the harasser may be a woman or a man.

The victim does not have to be of the opposite sex.
• The harasser can be the victim’s supervisor, an agent of the em-
ployer, a supervisor in another area, a co-worker, or a non-
employee.
• The victim does not have to be the person harassed but could be
anyone affected by the offensive conduct.
• Unlawful sexual harassment may occur without economic injury
to or discharge of the victim.
• The harasser’s conduct must be unwelcome.
The commission’s website notes that victim’s should inform the harasser
that the conduct is not appropriate and not welcome, using whatever sys-
tem the employer has available for such complaints. The website goes on
to explain that the EEOC, when investigating allegations of sexual harass-
ment, considers the context of the alleged offense and the nature of the
alleged offense, and makes its judgment based on facts, on a case-by-case
basis.
When investigating allegations of sexual harassment, the EEOC looks at
the whole record: the circumstances, such as the nature of the sexual ad-
vances, and the context in which the alleged incidents occurred. A deter-
mination on the allegations is made from the facts on a case-by-case basis.
Retaliation and Backlash
Under the law, retaliation against a victim or complainant is illegal. Un-

fortunately, retaliation is still pervasive.
Victims who speak out against sexual harassment are often labeled
“troublemakers” or “attention seekers.” As is too often the case in rape or
sexual assault, the victims often become the accused, and their lives and
motives come under sharp scrutiny. They risk hostility and isolation from
colleagues, supervisors, teachers, fellow students, and even friends. They
may be passed over for promotions that they deserve.
154
Harassment
Training in the Workplace
The position of the EEOC according to its website, www.eeoc.gov, is

that “prevention is the best tool to eliminate sexual harassment in the
workplace. Employers are encouraged to take steps necessary to prevent
sexual harassment from occurring. They should clearly communicate to
employees that sexual harassment will not be tolerated. They can do so by
providing sexual harassment training to their employees and by establish-
ing an effective complaint or grievance process and taking immediate and
appropriate action when an employee complains.”
A column in the Baltimore Sun discusses sexism and harassment in the
country in 2007 and notes,
It’s also true that the United States may have gone further than any
other country to protect women’s right to equal treatment in the
workplace. Laws against sexual harassment and discrimination are
broad and reasonably effective. Further, this country has advanced the
cause of justice for rape victims (“Lingering Sexism Impedes Wom-
en’s Path to Highest Level of Power,” by Cynthia Tucker. The Balti-
more Sun, January 8, 2007).
Many published sources discuss the difficulty that an accuser/victim of
harassment has in making the issue public. According to these sources,
many victims feel as if they must prove their innocence, and are thus reluc-
tant to come forward. Other sources also note how difficult it is from a
manager’s point of view, to handle claims of harassment fairly and fully,
highlighting again the need for formal employee policies, and procedures.
A Harvard Businses Review (HBR) case, “The Case of the Hidden Harass-
ment,” by Daniel Niven, published March 1, 1992, discusses the issue of
harassment from a third-party managerial point of view in a fictional set-
ting. Another fictional HBR case study, “Will She Fit In?” by Joan Ma-
gretta discusses the issues of gender, harassment, and leadership. HBR
cases, fictitious scenarios designed to highlight managerial issues, include
commentaries from experts on the topic at hand. For more information,
go to www.hbsp.harvard.edu.
See also: Age Discrimination; Code of Ethics; Diversity; Glass Ceiling
Further Reading
http://library.uncg.edu/depts/docs/us/harassment.asp (University of North
Carolina, Greensboro, Libraries)
155
Harvard Business Review
http://www.fcc.gov/owd/understanding-harassment.html (Federal Communica-

tions Commission)
www.catalystwomen.org
www.eeoc.gov

The Harvard Business Review (HBR) is a venerable business magazine
published by Harvard Business School Publishing. It is owned by the Har-
vard Business School. Since its founding in 1922, HBR’s contributors
have comprised a veritable “Who’s Who” of business thought. Many of
the groundbreaking articles in business theory and research have been
published in HBR including work by Clayton M. Christensen, Peter F.
Drucker, Theodore (Ted) Levitt (both a marketing scholar and HBR edi-
tor), Michael E. Porter, Rosabeth Moss Kanter, and Robert S Kaplan. Its
worldwide English-language circulation is about 240,000 and there are
eleven licensed editions of the magazine.
For some, HBR fills a unique niche by bringing the work of academic
theory into the real world application of business and creating a resource
for practitioners at the cutting edge. While the format has changed over
the years, the magazine usually offers a combination of articles, an HBR
interview with a thought leader, and HBR Case Study, a “Different Voice”
article—that offers the viewpoint of a leader outside the business main
stream—and a Best Practice piece. At times, too, issues will feature a
“Classic” article—an article whose contents have stood the test of time,
and whose insights are considered as valid upon reprinting as they were
when first voiced.
In 2006, Harvard Business Review was included in the list of publica-
tions licensed for digital uses inside organizations, according to a press
release on BusinessWire.com titled “Harvard Business Review Joins Copy-
right Clearance Center’s Digital Licensing Program” on December 11,
2006.
With Harvard Business Review content now available through CCC’s

Annual Copyright License, employees of licensed companies are al-
lowed to internally share HBR content in electronic formats.
The announcement follows major additions to CCC’s digital reper-
tory earlier this year of Science, the British Medical Journal, the Jour-
156
nal of the American Medical Association and the New England Jour-
nal of Medicine.
Harvard Business Review is the leading monthly magazine of man-
agement thought and practice, with a circulation of 242,000. HBR
publishes for the global business leader, with articles written by man-
agement experts on new thinking in strategy, negotiation, innovation,
leadership and other topics. It is published by Harvard Business
School Publishing (HBSP).
With demand for electronic content growing daily, we are pleased
to work with CCC to make HBR articles digitally available to its cor-
porate license customers,” said Allan Ryan, Director of Intellectual
Property at HBSP. “Joining the digital repertory will encourage law-
ful digital use of our valuable content within corporations.”
“We are proud to broaden our ties with Harvard by adding more
of their titles to our digital repertory,” said Bob Weiner, CCC Senior
Vice President, Licensing. “And we know our corporate customers
will be pleased to license Harvard Business Review content in digital
formats.”
According to the Harvard Business Review website, “you can rely on

Harvard Business Review for ideas that truly make a difference to your
organization—ideas on leadership, motivation, managing change, innova-
tion, and more. Every monthly issue of HBR will help you run your busi-
ness more successfully.” The site goes on to say that “you’ll be impressed
by the influence HBR’s insights with have on you, your team, and your
entire organization.”
Harvard Business Review is published monthly except for a July/August
issue which counts as two issues.
See also: Blanchard, Ken; Drucker, Peter
Further Reading
www.hbsp.harvard.edu
157
Headhunter
Headhunter
Barron’s, a weekly publication for investors, from the publisher of the Wall
Street Journal, describes a headhunter as an independent employment ser-
vice—or individual—that seeks out personnel for high-level executive po-
sitions; formally known as an executive search company. Headhunters are
generally used by companies that are looking outside their present staff to
fill executive positions. (Dictionary of Marketing Terms, Copyright 2000
by Barron’s Educational Series, Inc.)
Fast Company magazine interviewed a headhunter to give job seekers
tips on how to succeed during the job interview process. Headhunter Nick
A. Corcodilos covered the basics of a successful hunt and showed readers
how to “deliver the one, surefire thing that every employer is looking
for—proof that you can do the job, and do it profitably.”
“Headhunters know that a résumé rarely gets you inside a company,”
Corcodilos said in the interview. “A résumé can’t defend you or answer
questions about you. All that a résumé can do is outline your past, and
your past is largely irrelevant, because it doesn’t demonstrate that you can
do the work that the hiring manager needs to get done.
“A résumé leaves it up to employers to figure out how you can add value
to their organization,” says Corcodilos. “That’s no way to sell yourself.
Headhunters deal with a company’s human-resources department only
when they’re filling a highly visible position, such as president or CEO.
Otherwise, they avoid HR whenever possible. So should you” (Fast Com-
pany magazine, “Interview with a Headhunter,” by Bill Breen. Issue 21,
December 1998, page 154).
An article on the Wall Street Journal Executive Career Site titled “Find
Good Career Advice From Headhunter” by Frederick C. Hornberger
posted on February 10, 1999, says that when looking for career advice,
ask an executive recruiter.
Executive recruiters are specialists who find, evaluate and select talent
for employers. Throughout the selection process, they evaluate a
broad variety of candidates and career-success stories. They also coun-
sel employers on the structure, benefits and presentation of their job
opportunities so they’ll attract quality candidates. This knowledge of
the employer’s perspective makes executive recruiters an invaluable
source of career advice.
158
Headhunter
Why I Do This: Senior Managing Director,

Management Consulting Firm
Sam Hill
I am a management consultant, and I work on strategic projects at what is

called the C-Level, working for CEO, COO, CMO, CFO, CIO. (That’s
Chief Executive Officer, Chief Operating Officer, Chief Marketing Officer,
Chief Financial Officer, and Chief Information Officer—the top levels of a
company.)
What that means is that a CEO or COO calls me when they have a really
complicated problem, usually involving marketing strategy, since that is my
specialty. These problems arise either because something has changed or is
about to change with markets or competitors, or because their organizations
have attempted something and struggled. I sit down with them and their
staff, listen, and then develop a work plan to answer the question. If they
agree that the work plan makes sense, they hire me and my team.
A consulting team is usually three to five people, some of whom are full
time on an assignment and some of whom are part time. Typically, there are
two or three junior people whose job is to gather data, do analysis, etc. A
mid-career manager who guides the work, checks the quality of the analysis,
and tries to understand what it all means, and me. My job is to make sure the
team stays on track and answers the question we were hired to answer (it’s
easier than you think to go off course) and leads the communication with the
CEO and COO. We have to be very careful in what we say and how we say
it, since our advice will change people’s lives and involve hundreds of millions
of dollars.
Yesterday was a typical day for me. At 7 A.M. I met with a CEO in Detroit
for an hour and a half, briefing him for a board meeting. From 9 to 11 or so,
I read client documents. Over lunch I worked on the outline for our next re-
port. Early in the afternoon, I had a conference call with my team to review a
very complicated analysis that will tell us how effectively the client is spending
its huge marketing budget. At 3, I scheduled five interviews with the R&D
group to discuss their thoughts on marketing and worked with the CEO’s as-
sistant to schedule our next major report. At 4 I reviewed a workplan for a dif-
ferent client we will be meeting with on Monday in New York. From 5 to 6,
I made a half dozen phone calls, some related to internal administration, and
some trying to help another part of my consulting firm prepare for a meeting
they have with a BOD (board of directors in consulting slang.) Today I will
spend in the office writing reports between conference calls, and tomorrow I
will be back in Detroit doing the interviews I scheduled yesterday.
You’ll really like this job if you are very smart, easily bored, quantitative,
able to think in a structured way, flexible, aren’t afraid of flying, and like to
work hard. If you love working with people, like a well-defined schedule with
a well structured day and lots of time for your friends, and if you find algebra
a chore, this might not be the right choice.
Herman Miller Furniture
This article says that employers help executive recruiters by being forth-
coming with them about internal corporate issues, personalities, and pref-
erences when it comes to types of employees. This information, in turn,
can be very helpful when a job seeker is looking for a company where
they’ll “fit.”
The only caveat about searching for a job (or an employee) via a head-
hunter, or a career counselor, is that it is important for the employer (or
the job-seeker) to be comfortable with the expert, and trust in their judg-
ment. If a manager does not establish a connection with the headhunter
(and in fact, doesn’t get along with them, or doesn’t understand them),
how can that manager, by extension, expect the headhunter to turn up a
good fit for the organization?
Put another way, if you can’t stand the real estate agent, is it going to
be easier or more difficult to find a house that you like? If you keep saying
you love staircases, and the agent keeps showing you ranch houses, that
should tell you something—the same goes for a headhunter.
Further Reading
“The Role of the Board in CEO Succession,” by Ken Taylor and Keith Meyer in
Director’s Monthly, September 2006 (Volume 30, Number 9).

Herman Miller, Inc. produces office and healthcare furniture and accessor-
ies for businesses and home offices. It also offers services for furniture man-
agement, strategic facilities consulting and leasing, according to its web-
site. Net sales of $262,000 in 1923 grew to $25 million in 1970, the year
the company went public. Net sales in fiscal year 2006 were $1.74 billion.
Business Ethics ranked Herman Miller, Inc. among the “100 Best Cor-
porate Citizens” in America in 2006. Herman Miller has also been ranked
as the “most admired” company in its industry in Fortune magazine’s an-
nual survey.
Our founder, D.J. De Pree, committed Herman Miller to “modern”

furniture in 1936 partly because he saw a moral dimension to Gilbert
160
Rohde’s clean designs, honest materials, and lack of ornamentation.

In 1984, a major impetus behind Bill Stumpf and Don Chadwick’s
Equa chair was a desire to give a reasonably priced, comfortable,
good-looking chair to everybody in offices—not just the higher-ups.
These are but two examples of some of the best work done at Herman
Miller. Our people and the designers we work with are concerned
with larger issues of humanity and equality and bettering the world
we work in. What arrives on the truck is furniture. What went into
the truck was an amalgam of what we believe in: innovation, design,
operational excellence, smart application of technology, and social re-
sponsibility (Information from www.hermanmiller.com).
According to a second-quarter report (discussing the company’s second-

quarter ending December 2, 2006), Herman Miller’s “strong sales
growth, coupled with improved financial leverage, drove the highest quar-
terly earnings per share ever recorded by the company. Sales for the quar-
ter increased 13.9 percent and orders increased 22.1 percent from the
year-ago period. Operating earnings expanded to 11.8 percent of sales
based on improvements both in gross margin and operating expenses as a
percentage of sales. Net earnings were $36.6 million, or $0.56 per share,
an increase of 31.2 percent over net earnings of $27.9 million for the same
period in the prior year.” As of this writing, they’re doing something right
(Furniture World Online Magazine [www.furninfo.com]. “Herman Miller,
Inc., Reports 22.1 percent Order Growth and Record Earnings Per Share,”
December 21, 2006.)
See also: Feng Shui
Further Reading
“Forum Focuses on Sustainability, ” by Shandra Martinez, The Grand Rapids
Press (located at www.mlive.com, Thursday, September 13, 2007).
“Furniture Desk Set,” by Rebecca Ascher-Walsh, Wall Street Journal (September
15, 2007), Page W8.
“So You Want Ivy Around Your Desk?,” by Elizabeth Olson, New York Times
(Sunday, November 19, 2006), Style Desk Late Edition—Final, Section 9,
Page 12, Column 3.
www.hermanmiller.com
161
Horizontal Organizations
The term “Horizontal Organizations,” also known as flat organizations,
refers to an organization with few or no intervening levels of management
between the top executive and the workers, according to the American
Marketing Association Dictionary of Marketing Terms. “It presents a stark
contrast to the classic hierarchical organization and bureaucratic organiza-
tion with their layers of managers each of whom supervises a lower layer,
leading finally to the supervision of workers. The underlying concept of
the flat organization is that trained workers with assigned goals, and with
the authority to achieve the goals in their own way, will—working individ-
ually or in groups—be more productive than workers who are closely su-
pervised by managers.”
The idea of a horizontal, or “flat” organization, lends itself to a world
of work in which employee empowerment and creativity are valued. But
horizontal organizations are not easily created, or sustained.
An article entitled “Working in FLAT Organizations: An Idiot’s
Guide,” by Vijay Bhat, published on Ezinarticles.com, offers a sometimes
cynical view of the horizontal organization, including:
If you are a Mid-Level manager—Flat means there is no more room

for you to go up. They have replaced the corporate ladder which you
were climbing with a stool and you are already standing on top of it.
The people above you are actually above the ceiling.
If you are a Senior Manager—Flat means your responsibilities will
be now given to smarter and younger staffers probably even trainees
who do the same work at much lower pay, so that you become redun-
dant before you retire.
Another article, this one entitled “The Corporate Ladder is Here to

Stay,” by Ethan A. Winning (1999, www.ewin.com/articles) offers this
insight:
Okay, so we’ll get rid of the hierarchy. There’ll just be two levels in
the company: the President and everyone else, ’cept we know that
there are sub-layers which remain because we can’t all be chiefs. But,
we take away the titles. Still, there are those with offices with windows
and carpeting, and there are those with cubbyholes and lineloleum,
and there are those with a wood desk, and those with no desk at all.
162
Of course, we have those making $200,000 a year and those making

$20,000 a year. Do we have a hierarchy? You bet we do.
So, ultimately, then, are horizontal organizations really “flat?” No. A

better term, according to the American Marketing Association (http://
www.marketingpower.com/mg-dictionary-view4001.php), would be “flat-
ter.” According to that website, a “flatter organization” would be one in
which there are as few layers of management as possible, and employees
have more autonomy—and more responsibility—than they would in a
corporate culture with many layers of management. Importantly, the web-
site notes that in the case of a business—particularly where stock is issued
to the public—the hierarchy cannot be dispensed with entirely. The cor-
poration is charged with many fiduciary and legal requirements. Conse-
quently, top management must provide policies, direction, and controls to
ensure that managers and workers at all levels understand and comply with
these requirements.”
Another way to think about it would be to consider the prominent fea-
tures of a horizontal organization. A paper by Dr. Joe H. Mine (The Hori-
zontal Organization: MIT Course 16.852J/ESD.61.J—Fall 2002), sum-
marizes the principles of organizing horizontally as follows:
• Organize around cross-functional core processes, not tasks or

functions
• Map processes, eliminate waste
• Re-deploy personnel and resources
• Install “process owners” who have responsibility for an entire
core process
• Make teams, not individuals, the basis of organizational design
and performance
• Empower individuals and teams to make decisions directly re-
lated to their activities in the work flow; provide essential training
and education
• Ensure cross-trained work teams
• Retain down-sized functional units as “centers of excellence” for
expertise and career-path “homes” for professionals
• Measure for end-of-process performance objectives (which are
driven by the value proposition)
163
That paper goes on to say that horizontal organizations are commonly

characterized by their team structures, by their propensity to have groups
of people organized by “core process,” and by their focus on the com-
pany’s “value proposition” to customers.
Are “flat” organizations “better” than hierarchical organizations? They
can be. But a company can also lose much in the attempt to become flat.
A BusinessWeek Playbook audio, dated October 26, 2006, which sites
BMW as an exemplar of the horizontal approach, sums up the dilemma in
this way: “BMW is an idea machine, driven by a culture that listens to
entry-level workers and rewards the risks they take. As others try to repeat
that feat—ideas flow better in more cooperative, flat organizations—chaos
has the potential to reign.” The Playbook seems to suggest that there is a
fine line between collaboration and chaos, and that if the flat organization
is to succeed, managers have to find “a way to cut through the clutter
and new ways to stay better aware of their organization’s collaborative
cultures.”
An article entitled “Micromanagers Take Root in ‘Flat’ Organization,”
published on May 2, 2003, by Debbie Heuer, in the Cincinnati Business
Courier, put it this way:
It seems that many companies adopted only a part of the innovation

but lost sight of its full intent. Flatter organizations were rapidly
adopted largely because they appealed to the cost-cutting instincts of
organizational leaders; the lure of the dollar, like a siren’s call, dis-
tracted leaders from the goal of dispersing decision-making to the
most appropriate organizational level.
In theory, flat organizations were intended to eliminate unneces-
sary decision-making tollgates and the faithful trolls who guarded
them. Unfortunately it appears that, too often, the trolls were elimi-
nated, but the tollgates remained viable and accessible to other aspir-
ing trolls.
See also: Empowerment
Further Reading
Built to Change: How to Achieve Sustained Organizational Effectiveness, by Ed-
ward E. Lawler, III, and Christopher G. Worley, Jossey-Bass (2006).
“Going Horizontal,” Title Annotation: Process Management: A New Leaf; case
164
studies on process-based organizations; Date: May 1, 1996; Publication:

Chief Executive (U.S.); (found at www.thefreelibrary.com).
The Horizontal Organization, by Frank Ostroff, Oxford University Press (1998).
“Managing for Results: Using Strategic Human Capital Management to Drive
Transformational Change” (A Statement of David M. Walker, Comptroller
General, United States General Accounting Office, Testimony before the
National Commission on the Public Service, July 2002) (located through
www.brookings.edu).
165
I
Innovation
Innovation. New ideas. The next big thing. The “different” product or
service that will be all the rage, and hopefully, become an integral part of
the way people live or work. This is all part of the battle to attract, and
retain, customers and marketshare. It’s all part of the battle to make a
profit, please shareholders, and go home confident that the company will
live to see another day and that your job is secure.
When companies “innovate,” they’re coming up with new ideas. The
question is whether that innovation will have the desired result—success
in the marketplace. Can it help a company gain and keep a competitive
advantage?
According to an article entitled “Don’t Look to New Ideas for
Growth,” in BusinessWeek.com posted January 17, 2007, by Jeneanne
Rae, “innovation isn’t necessarily the panacea that many companies hope
it will be.” Rae writes: “In the annals of corporate innovation history,
2006 should go down as the year of ‘idea management.’ As innovation is
more widely recognized as a new business discipline, executives are lining
up to implement idea-management systems and software intended to har-
ness the considerable insight and talent within their corporations.”
But then she writes: “Too many times, however, idea management is
the end of the discussion on innovation.” She notes that managers are too
often content to create some “buzz” around innovation and new ideas,
but that the follow through is sorely lacking. “Considering the energy that
goes into creating and vetting these insider contributions, relying on new
ideas as your primary source of innovation is, in itself, a very bad idea.”
Rae goes on to note that the challenges associated with generating new
ideas are many. Among them: there are too many ideas being generated
internally, and companies aren’t able to sort or prioritize or thoroughly
vet any one of them; the ideas are not generated with any sort of strategy
in mind; and growth platforms—innovations that can lead to multiple
streams of products and marketplace successes—are very difficult to iden-
tify.
Innovation
Erich Joachimsthaler would likely agree. The Preface of Joachimsthaler’s

book, Hidden in Plain Sight: How to Find and Execute Your Company’s
Next Big Growth Strategy (Harvard Business School Press, 2007) begins:
“We live in a world of innovation overdrive, overloaded by consumer
choice and excruciatingly tough commercial realities, realties that include
the rapid commoditization of markets, technology shifts, margin pressures,
and relentless fragmentation of consumer and business markets.”
He then goes on to note that companies “with any talent” continually
try to grow by generating new ideas. The problem, he writes, is that when
a company grows, its organization necessarily becomes more complex.
Success breeds “hierarchy, structure, processes, systems, and policies that
. . . can inch the company further away from the very people [it] has been
serving.” Joachimsthaler calls this complexity “a kind of smokescreen” that
makes it “very difficult to see the biggest opportunities for innovation and
growth, even though they are right there, hidden in plain sight.”
Joachimsthaler’s take on the challenge to innovate is that companies
need to get out into the “daily routines” of the people they want to serve.
They have to (at least figuratively) “forget” what business they’re in, and
what their strategy has been and instead consider the “dynamic and com-
plex ecosystems” of customers’ lives. Only by doing so can they truly inno-
vate successfully.
According to an article by Joyce Wycoff, entitled “The Big Ten Innova-
tion Killers and How to Keep Your Innovation System Alive and Well,”
published on www.thinksmart.com, there are ten reasons why most inno-
vation initiatives fail:
Not creating a culture that supports innovation

Not getting buy-in and ownership from business unit managers
Not having a widely understood, system-wide process
Not allocating resources to the process
Not tying projects to company strategy
Not spending enough time and energy on the fuzzy front-end
Not building sufficient diversity into the process
Not developing criteria and metrics in advance
Not training and coaching innovation teams
Not having an idea management system
To home in on one, “Idea Management Systems” (also mentioned above

by Rae), Wycoff writes:
168
Innovation
Idea Management System—Many innovation projects have died on

a sticky-note covered wall as participants lost energy trying to figure
out what to do with those yellow pieces of paper fluttering to the
floor. Having an effective system that captures ideas and engages peo-
ple in developing, modifying, enlarging, and evaluating those ideas is
just as critical to innovation as accounting systems are to the financial
health of an organization.
It’s hard to get innovation right. That much everyone agrees on. And
that’s why, as Joachimsthaler says, so many companies find themselves say-
ing, “Why didn’t I think of that!” It is of great benefit to the companies
that do this.
See also: Competitive Advantage; Entrepreneur; Killer App
Further Reading
Catalyst Code: The Strategies Behind the World’s Most Dynamic Companies, by
David Evans and Richard Schmalensee, Harvard Business School Press
(2007).
“Communities of Creation: Managing Distributed Innovation in Turbulent Mar-
kets,” by Mohanbir Sawhney, and Emanuela Prandelli, California Manage-
ment Review, Summer 2000, 24–54.
Hidden in Plain Sight: How to Find and Execute Your Company’s Next Big Growth
Strategy, by Erich Joachimsthaler, Harvard Business School Press (2007).
60 Trends in 60 Minutes, by Sam Hill, Wiley (2002).
“The 12 Different Ways for Companies to Innovate,” by Mohanbir Sawhney,
Robert Wolcott, and Inigo Arroniz, MIT Sloan Management Review, Spring
2006.
Signs of Changing Culture: Adapting to New Technology—

As Always, Easier for Some . . .
Noted in the Wall Street Journal, Tuesday, November 14, 2006, Page
1, Column 4
“To Uneasy Riders, Buttonless Elevators Have Ups and Downs: Schind-
ler’s Lifts and Otis’s Promise a Swifter Trip; Miscues at the Marriott,” by
Julia Angwin
One way to think about culture is to consider what a company’s
norms are. What is considered typical behavior? What technologies are
169
Innovation
second nature? Some practices or habits that might be “business as

usual” at your company could cause friends at other organizations to
raise their eyebrows, couldn’t they?
Time was, many people viewed ATMs with suspicion. Today, they’re
ubiquitous. Time was, “push button” elevators were new. People who
had the luxury of riding in an elevator were accustomed to asking an
“elevator operator” to take them to their desired floor.
And so it goes. Consider what Julia Angwin writes about the new
“buttonless” elevators, which, apparently, are taking some riders some
time to get used to: “Elevator riders enter their floor number on a key-
pad and are directed by the display to a particular car that will stop at
their floor. You can’t change your mind about where you’re going after
the doors shut.”
Angwin noted in her article that elevators “joined the computer revo-
lution” in the 1970s. Before that, she wrote, they had been operated
manually from the lobby. But this new evolution came about in 1990,
the brainchild of Joris Schroder, an engineer at Schindler. Schroder
thought of using microprocessors to make banks of elevators more effi-
cient.
The first “destination elevator” was installed in Germany in 1990, An-
gwin wrote. The first such elevator in the United States was launched in
Indianapolis, in the Ameritech building. “When the new elevators ar-
rived,” Angwin wrote, “the building hired mimes to show tenants how
to use them.”
Signs of Changing Culture: Successful Innovation?

You Might Not Know Until You Try It
Noted in a feature entitled “How to Succeed in 2007,” published in

Business 2.0, located online on November 30, 2006.
What is the best advice that notable business leaders can offer in to-
day’s world? Well, it depends. In this article, Business 2.0 offered advice
from fifty highly successful people, among them Chad Hurley, co-
founder of YouTube.
Hurley said that in order to succeed with a start-up business, entrepre-
170
Intangibles
neurs would do well to: “1) Test first, 2) Seek outside feedback, and 3)
Give partners what they want.”
Specifically, Hurley noted, “Launch your product or service before
you have funding. See how people respond to it before you have a
PowerPoint and business plan—have something people can use, and go
from there . . . Don’t assume that you know all the answers. . . . We
saw YouTube as a powerful way to add video to auctions, but we
didn’t see anyone using our product that way, so we didn’t add fea-
tures to support it . . . Approach your business partners with concepts
that they can get their heads around.”
For more information and to see the entire Business 2.0 feature, go
to http://money.cnn.com/popups/2006/buz2/howtosucceed.
Intangibles
When people talk about sports teams and their performance they often
refer to the intangibles—the leadership, the interaction between players,
the will to win among certain athletes—the list of things that are hard to
quantify, but when put together, create a winning formula. In business,
there are intangibles too.
Intangible Property is property that has value but cannot be seen or
touched, according to the Internal Revenue Service United States Depart-
ment of the Treasury. The Internal Revenue Service (IRS) says it includes
things such as: goodwill, business records, a patent, a license, and a cove-
nant not to compete.
Investopedia calls an intangible asset one that is not physical in nature.
The website Investopedia.com says, “An intangible asset can be classified
as either indefinite or definite depending on the specifics of that asset. A
company brand name is considered to be an indefinite asset, as it stays
with the company as long as the company continues operations. However,
if a company enters a legal agreement to operate under another company’s
patent, with no plans of extending the agreement, it would have a limited
life and would be classified as a definite asset.”
This source goes on to note that intangibles “can prove very valuable for
a firm and can be critical to its long-term success or failure. For example, a
company such as Coca-Cola wouldn’t be nearly as successful were it not
171
Intangibles
for the high value obtained through its brand-name recognition” (Copy-
right © 2007 Investopedia, Inc.). Brand strength, or brand equity, is in
fact a powerful intangible asset.
Jack Keen, president of The Deciding Factor and coauthor of Making
Technology Investments Profitable: ROI Road Map to Better Business Cases,
writes in an article published in the Sept. 1, 2003 issue of CIO Magazine
titled “Don’t Ignore the Intangibles,” that an astute handling of intangi-
bles, “those goals that can’t be easily measured in dollar terms,” can pro-
vide a big boost for your business.
Keen goes on to say that “more than 25 percent of the value of enter-
prises is now based on intangible assets, such as brand image and market
share, according to economists.” He notes, however, that many managers
do not yet understand (or accept) the implications of “this financial real-
ity.” He writes:
Burned by failed project implementations, and noting that such proj-

ects had a heavy dependence on intangible benefits, they jump to the
erroneous conclusion that all intangibles are bad. Unfortunately,
when business cases are devoid of intangible analysis, projects vital to
the enterprise go unfunded because intangibles can’t add to the hard
number ROI. Strategically marginal projects showing a high ROI (of-
ten because the investment is small) get the money. Such misguided
project investments can undermine critical strategic goals, such as im-
provement of market share and sharpening of competitive advantage.
Intangibles must be taken seriously; they can and do affect the bottom
line. As such, their importance must be realized, not only by managers
and employees, but also by directors and shareholders. Jane Davidson,
writing in Accountancy Age (June 21, 2007, www.accountancyage.com),
notes the need to convey the importance of intangibles in a company’s
annual report (“Why Every Picture Tells A Story in an Annual Report”):
The need to effectively communicate “intangible assets” means the

presentational aspects of company reports have never been more im-
portant. Intangible assets could include elements such as a company’s
products, management, or brand. It is believed by some financial
commentators that when Procter & Gamble acquired Gillette in 2005
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Intangibles
for $56bn (£28.4bn), up to 97 percent of the price was for Gillette’s

intangible assets.
In that same article, Davidson notes that traditional accounting methods

don’t “adequately deal with the recognition, measurement, and disclosure
of intangible assets.” She suggests that although pictures and text have
long been thought of as “lightweight elements of the annual reporting
package,” they are in fact “heavyweight ingredients, both in the richness
and variety of their messages, and in their potency.”
As an aside: the idea of “intangible” value has also made its way into
business-school curriculum. In that venue, it may not mean quite the same
thing as an “intangible asset” of a business, but the concept is similar.
Consider what Peter Walker wrote in an article for CNN entitled “Learn-
ing to be Creative,” posted on www.cnn.com February 9, 2007:
Professor David Sims, who teaches organizational behavior at Lon-

don’s Cass Business School, aims to teach students the seemingly in-
tangible virtues of imagination, inspiration, intuition, and improvisa-
tion. He does this by taking students choosing his elective on themed
exercises, for example going to London’s National Portrait Gallery to
look at pictures of leaders with the help of an art historian.
In an age where the knowledge worker is rising in importance, where

“flat” organizations call for innovative thinking from all employees, and
where the purchase “experience” can make the difference between win-
ning and losing customers, it’s no wonder “intangible assets” are critical,
even if they’re not visible.
To sum up that point, consider an article in Fast Company magazine
titled “Intangible Assets Plus Hard Numbers Equals Soft Finance” by Bill
Birchard (Issue 28, September 1999, page 316). This article takes a look
at how hard assets and intangibles add up.
“Hard questions about soft assets are driving finance professionals to

develop new measurements, new reporting forms, new tools and tech-
niques for an economy based on intangibles,” Birchard writes. “At
Macromedia Inc., for example, a San Francisco-based Web-software
company, CFO Betsey Nelson finds herself calculating value based on
how close the company can get to its customers. “We’re looking at
the value over time of a relationship,” she says.
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Birchard also looks at Silicon Valley Bank in Santa Clara, California. He

quotes Ken Wilcox, the bank’s president, chief operating officer, and chief
banking officer, who “leads his loan officers in equating company value
with the value of people networks inside and outside the company: ‘A
management team that can change fast is of the greatest importance,’ says
Wilcox.”
See also: Knowledge Management; Knowledge Worker
Further Reading
Brand From the Inside: Eight Essentials to Emotionally Connect Your Employees to
Your Business, by Libby Sartain, and Mark Schumann, Jossey-Bass (2006).
Intangibles: Management, Measurement, and Reporting, by Baruch Lev, Brook-
ings Institution Press (2001).
Closely linked to an “intangible asset” is a company’s “intellectual capital.”
Intellectual capital is knowledge that can be exploited for some money-
making or other useful purpose. According to SearchCRM.com (2000–
2007, TechTarget):
The term combines the idea of the intellect or brain-power with the
economic concept of capital, the saving of entitled benefits so that
they can be invested in producing more goods and services. Intellec-
tual capital can include the skills and knowledge that a company has
developed about how to make its goods or services; individual em-
ployees or groups of employees whose knowledge is deemed critical
to a company’s continued success; and its aggregation of documents
about processes, customers, research results, and other information
that might have value for a competitor that is not common knowl-
edge.
Certified Professional Accountant Barry Brinker writes in his executive

summary titled “Intellectual Capital: Tomorrow’s Asset, Today’s Chal-
lenge” (1998, 1999, 2000 AICPA [American Institute of Certified Public
Accountants]) that “we are still working toward a universal definition of
intellectual capital.” In his article he describes intellectual capital as assets
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currently valued at zero “on the balance sheet” including items such as
“human brainpower, brand names, trademarks, assets booked at historical
costs that have appreciated over time into something of much greater
value.”
Other experts define intellectual capital, he says as the “combined intan-
gible assets which enable the company to function” or “the sum of human
capital and structural capital.” Brinker adds that, however it is valued, the
gap between a company’s market value and the value of all its tangible
assets has widened significantly over the last two decades. Market-to-book
ratios are rising demonstrably, and so are price/earnings ratios. Simulta-
neously, corporate investments in tangible capital stock have been de-
clining.”
Brinker writes that traditional accounting measures, then, cannot really
calculate the true value of a company. The strength of a company’s intel-
lectual capital can have a great bearing on a company’s ability to develop
and implement viable strategies and deliver on its goals.
One comprehensive source of information about intellectual capital?
Thomas A. Stewart’s book Intellectual Capital: The New Wealth of Orga-
nizations (Currency/Doubleday, 1997) discusses the impact of intellectual
capital on business, and the importance of the concept to managers.
See also: Knowledge Management; Knowledge Worker
Further Reading
The Leadership Pipeline: How to Build the Leadership-Powered Company, by Ram
Charan, Stephen Drotter, and James Noel, Jossey-Bass (2000).
“Who Owns the Concept if No One Signs the Papers?,” by Jason Pontin, New
York Times (located on www.nytimes.com, August 12, 2007).
Internet
The Internet has become an almost indispensable tool in the business
world (from the company point of view and from the consumer point of
view) in just a few short years. It has had an enormous influence on how
business transactions are completed, how customers purchase goods and
services, how banking gets done, bills get paid, used cars get sold, jobs get
found, job candidates are evaluated, students select possible careers, and
research gets conducted.
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While its influence is felt, it is still difficult to define the Internet. Ac-
cording to (SearchVb.techtarget.com, 2000–2007 TechTarget), the In-
ternet (also referred to as the “Net”) is “a worldwide system of computer
networks—a network of networks in which users at any one computer can,
if they have permission, get information from any other computer—and
sometimes talk directly to users at other computers.” It was conceived by
the Advanced Research Projects Agency (ARPA) of the U.S. government
in 1969 and was first known as the ARPANET. The original aim was to
create a network that would allow users of a research computer at one
university to be able to “talk to” research computers at other universities.
A side benefit of ARPANET’s design was that, because messages could be
routed or rerouted in more than one direction, the network could con-
tinue to function even if parts of it were destroyed.
An article in Fast Company magazine (“Power Partners,” by George
Anders. Issue 38. August 2000. Page 145), explores the early Internet
economy and other “ambitious” online players. The article said that the
future belongs to partnerships. It used Wells Fargo as one example.
What is especially striking about Wells Fargo’s push to embrace the

Web is how much work is being done in close partnership with In-
ternet startups. These young allies bring ingenuity and urgency be-
yond what the big bank could create on its own. Yet Wells Fargo,
with its 148-year heritage and $222 billion in assets, provides vital
strengths that a dotcom couldn’t conjure up. Not only is Wells Fargo
chock-full of banking expertise and a history of relationships with fi-
nancial regulators, but it also enjoys a time-tested brand name.
That article went on to describe how many Internet start-up companies

“vowed to remake entire industries and send corporate ‘dinosaurs’ to the
graveyard.” Written in the wake of the collapse of the NASDAQ index,
however, the article also discussed how the “dinosaurs” (big companies)
were finally gearing up to innovate and succeed with web-based business
initiatives. “These pragmatic companies,” the article said, “are taking
pointers from the new mind-sets, the new practices, and the new energy
levels of the startup world. Step inside such diverse companies as Ford
Motor Co., Hewlett-Packard, and UPS, and you’ll find veteran managers
teaming up with Internet startups.”
According to the Computer Industry Almanac’s press release (January
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4, 2006) the number of people that used the Internet was one billion in
2005, with the largest numbers of users in the United States, China, Japan
and India. Overall penetration in the leading countries was 65–75 percent.
Another good source of information about Internet use is the U.S. Cen-
sus (www.census.gov). The report entitled “Computer and Internet Use
in the United States: 2003” notes that “In 2003, 70 million American
households, or 62 percent, had one or more computers, up from 56 per-
cent in 2001. In 1984, the proportion of households with a computer was
8 percent.”
That report goes on to say that “Sixty-two million households, or 55
percent, had Internet access, up from 50 percent in 2001, and more than
triple the proportion of households with Internet access in 1997 (18 per-
cent). Most households with a computer also had Internet access (88 per-
cent). In 1997, less than half of households with computers had someone
using the Internet.”
Whether it is attracting customers or making their businesses more effi-
cient, companies are discovering almost daily new ways to leverage their
performance via the Internet, and the Internet continues to have an in-
creasingly strong influence on corporate culture.
See also: Hacker; Killer App
Further Reading
“DIGITAL DOMAIN; All the Internet’s a Stage. Why Don’t C.E.O.’s Use It?,”
by Randall Stross, New York Times (Sunday, July 30, 2006), Money and
Business/Financial Desk Late Edition—Final, Section 3, Page 3, Col-
umn 1.

Behind the Scenes in the Blogosphere:
Advice from Established Bloggers
The following excerpts of this study are reprinted courtesy of Nora

Ganim Barnes, Ph.D., Chancellor Professor of Marketing and Director,
Center for Marketing Research at University of MA Dartmouth.
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Internet
Blogs will make or break your business. They have the power to dis-
seminate information and host global conversations on any topic. Every
publication from BusinessWeek, Forbes, and the Wall Street Journal to
online white papers from Marqui (www.marqui.com/blog) warns busi-
nesses that blogging is not an optional endeavor. Those that don’t will
not survive. With over 40 million conversations going on twenty-four
hours a day, the question becomes, how does a business enter and
thrive in the blogosphere?
The answer to this question is that smart businesses will seek guid-
ance from the experts. The talented and generous bloggers in this study
candidly offer thoughts and ideas on how to succeed in the blogo-
sphere, how to promote your blog and even what characteristics they
feel will make you a great blogger. These innovators share their view on
how to get noticed in the online world.
The seventy-four bloggers included in this study represent some of
the biggest and best in the business (or the most successful indepen-
dent blogs). The blogs in this study have been operating an average of
2–3 years. Seventy-three percent of these bloggers have been running
their weblogs for over a year, including 20 percent who have blogged
for more than three years. Fifty (68 percent) of the bloggers in this
study have direct or indirect ties with a corporation or business. The in-
dependent blogs are some of the most established in the blog commu-
nity. These are amazing statistics given that blogging began in 1998
and corporate blogging is only a few years old.
Each of our seventy-four respondents listed key words that describe
their blog. We searched using their keywords on Google to see which
blogs appeared in the results. Twenty-six of the blogs in this study (36
percent) come up in the Google top ten using their key words search
and sixteen ranked first or second.
This report is based on the most experienced, business savvy and re-
spected bloggers who are at the forefront of innovation in the blogo-
sphere. In this report, they talk about everyday challenges of running a
blog and how they deal with them. Behind the Scenes in the Blogo-
sphere (www.umassd.edu/cmr) looks at the time it takes to run a blog,
feelings about a public policy for comments and how blogs tie into exist-
ing business websites, products and promotions. Take their advice on
the best way to promote a blog and hear about the next set of changes
these blog leaders plan to make to stay competitive in the blogosphere.
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This report, like the blogospere itself, is based on conversation.

Through extensive written comments, phone interviews, and numerous
online exchanges, rich data was collected that provide statistics as well
as a plethora of anecdotal information. Those researchers who are veter-
ans of blogger studies know what I have now learned; bloggers are gen-
erous, helpful, unselfish, and friendly. Discover what these experts have
to say, and move your business into the blogosphere.
Two hundred and ninety-eight bloggers were contacted for this study
using published lists to locate business or corporate blogs. Through the
assistance of many of the early participants who posted or linked to the
survey, seventy-four bloggers provided information for this report.
Many offered to be interviewed, and were. Most provided links to other
articles or studies they felt would enhance this project.
In many ways the data in this study was blogger driven. Respondents
offered comments on the wording of questions, suggestions for new
questions, and help in disseminating the survey to be filled out. The fi-
nal version of the survey presented here is more personal and revealing
thanks to the bloggers who wanted the findings to be meaningful, use-
ful, and unique in perspective.
Blogosphere Truths
1. Blogs Take Time and Commitment
Initially many of the bloggers in this study did not anticipate the time
their blog would take. A good blog is one where posts are fresh and
new posts are frequent. Researching interesting new things to share
with your audience takes time. One blogger noted, “The worst blogs
are those that are updated infrequently.” He cautions others with, “Be
prepared to spend more time than you think.”
If your posts have to be vetted by legal or discussed with others in
your organization, there will be additional time demands on the blog-
ger, and delays on posting. A business blogger in the study advised,
“The corporate communications team needs to commit to rapid turn-
around of items submitted for pre-posting.”
In this study, 49 percent of bloggers reported the time a blog takes
as the major drawback to running one. Two-thirds of the bloggers re-
port spending less than one hour a day on their blog, while 31 percent
spend 1–3 hours a day. One blogger writes, “Look on it as a learning
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experience (you will get back as much as you give). Once you start,
don’t stop.” Another warns, “Make sure you have time and resources
dedicated to supporting it.”
Some of the time commitment is due to bloggers spending more time
posting. Thirty-eight percent have increased the number of posts to
their blog since they began. Overall, bloggers feel that the time invest-
ment is worth it with 95 percent reporting their blogs are successful.
Some measure success in links, some in income, some in self-satisfac-
tion, and some in the quality of human connections they have made.
2. Blogs Must Be Part of A Plan
It is unlikely a successful business or a new venture would be lacking

a business plan. As part of that plan, or in addition to it, most busi-
nesses and organizations developed mission statements long ago. Many
have added customer service mission statements to guide their customer
service component. These plans and mission statements are created to
focus peoples’ efforts and capture the purpose of the organization and
its relationship to its customers.
One blog author was adamant about the need for a business plan for
creating and running a business blog. “Like anything else in business, a
blog requires a plan. Without a plan, the blog is going to fail within
three months. Period.”
Another adds, “Create a business plan. Since this is intended to make
money, a full business plan was created for it and we are still tweaking
it a bit (you might say it is in Beta right now).”
Bloggers decide on a focus for their site. Surveyed bloggers say, “Have
a purpose in mind and method for measuring success. Don’t do it just
because everyone else is.”
“Define your audience and that will help in defining the voice and di-
rection of your blog.”
As a new communications tool, blogs are essential for communicating
with your target audience. Blogging can help to mitigate problems as
well. One business blogger offered: “In a company environment blogs
can be used as a tactic to solve a number of communications issues so
don’t blog just for the sake of having a blog.”
Blogs can be internal, external, or both. They can be used in conjunc-
tion with websites, or in some cases instead of them. Blogs can be used
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to gather data, disseminate information or both. They can be official

business blogs or can be affiliated or sponsored by a business. The pur-
pose of the blog will determine who should post, how often, and how
the blog should be directed.
To maximize the potential of a blog, it must be viewed as part of the

overall package and voice of the organization. If it is not part of an inte-
grated strategy, it will lack focus and a following. The plan should also
address policies on reader comments, directing traffic to the blog from
company websites, products and advertising.
In this study, 18 percent of blogs reported having a public policy regu-
lating conversation on their blog. These policies range from the formal
disclaimer and creative commons license to the very informal directive
on comment forms. Policies are found on front pages, FAQ section, or
in comment fields on blogs.
Fifty-eight percent of bloggers reported their company website directs
visitors to their blogs. In all cases the link was on the company site
home page. Additionally, 39 percent reported their company packaging,
labeling, or promotion directs people to the blog.
3. A Blog is a Conversation
Author Robert Scoble (http://scobleizer.wordpress.com) calls it “na-

ked conversations.” Early blogger Dave Winer (http://www.scripting
.com) calls it “come-as-you-are conversations.” Some marketers call
blogs “2-way marketing.” The point is the same in all cases—participa-
tion is essential in the blogosphere. One respondent says, “Don’t start a
blog unless you have people in your organization ready to post to it
daily in an open, friendly, and excited tone. A blog is a conversation.
Don’t open the line unless you’re ready to really talk.”
A blog is an invitation to debate, discuss, and exchange. It is what

makes blogging different than websites. The responsive nature and hu-
man connection pull people in. Consumers want to talk about products
and services. If they can’t talk to the vendor or the manufacturer, they
will talk to others online.
The plethora of articles being published on Web 2.0, speak to this
new paradigm. In the first generation of online experiences, the web
provided a vehicle for mostly one-way communications. Websites were
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static. Many are not updated. E-mail allows us to speak to a certain des-
ignated person or group. We now have the ability to go beyond this
and disseminate information in a more personal and timely way.
A survey respondent cautioned against blogging with a traditional
mind-set: “Don’t think of a blog in terms of publishing metaphors—it’s
not a newsletter replacement. Blogs are a great communication tool.
But when you set one up to serve as a “corporate voice” it’s as effec-
tive as spam. Find human beings to blog—don’t set up a blog and try
to find someone to manage it. It will fail if you do.”
It is important not to be afraid of giving up the mono-directed control

that usually characterizes an organization. One respondent offers,
“Blogs are conversation rather than one-way speech. Allowing that con-
versation actually strengthens your base.
Blogs, facilitated by increased access to the Internet, high-speed connec-

tions, RSS feeds, a selection of easy to use blog software, and new blog
search capabilities, now allow businesses to speak to current and poten-
tial customers in real time. Equally important, consumers can talk back
in real time. Bloggers say, “It’s a great way to get closer to your users,
customers, and other critical stakeholders.” “There is no downside to
getting to know your customers on a more personal basis.”
“The opportunities for businesses to test new ideas, discuss product
lines, introduce brands, or conduct online research are infinite. The pre-
requisite for success however, is that the business blog accepts the prem-
ise that the blog is a conversation, not a monologue or an infomercial.”
This is what our seasoned business bloggers had to say about the es-
sence of a blog conversation: “The ‘popularity’ of your blog is directly
related to frequent posting, open and honest dialogues.”
4. Transparency, Authenticity, and Focus are Good. Bland is Bad
Consumers know when they are being talked at, played, or deceived.
Respondents say, “Be authentic. If you can’t, don’t blog.” “Don’t focus
on execs, the public wants to hear from people they can relate to—the
average worker. Pick a “short fuse” topic to get started, with a definite
start and end date, before you start an indefinite blog.”
Consumers want corporate/business blogs to talk honestly and can-
didly about their products, services, ideas, and plans. Consumers want
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more than to be on the receiving end of commercials. Bloggers warn,

“Write it yourself, no PR guys on it. Comment broadly on your indus-
try. Don’t just summarize your press announcements.”
People are looking to talk to someone in authority about their experi-

ences, ideas, and suggestions. If they have something negative to say,
they expect (on a blog) that their comments will be heard. A recurrent
theme with the bloggers studied was honesty and openness. They ad-
vised, “Be transparent and authentic.” “Make it genuine, make it inter-
esting, have guest authors talking about all aspects of your business.”
“Make it real. Have the right people talking about product innovation,
not the PR people.”
Keep in mind that conversations will happen outside your blog that re-
late to your products or industry. You need to be aware, current, and
honest in dealing with those conversations too. One business blogger
wrote, “Monitor the blogosphere closely, both for discussions about
your brand, and for comments about your blog. Respond with com-
ments to those outside blog posts. The blogosphere respects participa-
tion, so respond.”
Consumers who feel like a business blog is authentic, honest and inter-
esting will contribute to it and support its products. These contributions,
and the resultant conversations, provide a rich new data source for com-
panies as well as great new relationships. One experienced blogger
summed it all up for a company thinking about starting a blog: “Be hon-
est and don’t pander. Readers can tell.”
Blog Growth and Development

A blog is constantly evolving, growing, and developing. Bloggers are
looking for new and better software, exciting and innovative informa-
tion to post and for new links to increase their presence on search en-
gines. The bloggers in this study are doing all this and more. Fifty-four
percent of those surveyed are planning to make changes to how their
blogs function.
Corporations encourage blogging. Some corporations are encouraging

employees to start blogs. Of those some are choosing to focus on prod-
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ucts or product applications. These product-oriented blogs are particu-

larly successful in targeting niche markets that may not warrant major
corporate expenditure. Other employees blog about R&D as well as up-
coming product releases. Employees using a blog to discuss general hap-
penings in the industry are also contributing to the corporate presence.
The blogs give the corporation a human face and allow multiple ways
to communicate with the company.
As additional bloggers are added, the blog may need to adapt. One
blogger plans to do that and says, “As we add bloggers, we will need
to change the layout to accommodate so it doesn’t become cluttered.”
Blogs serve as barrier breakers. Some companies are running (or consid-
ering) blogs in other languages to reach markets where traditional mar-
keting may be costly and difficult. These are particularly good to “intro-
duce” products without the expense or risk of a full campaign.
Blogs evolve. Bloggers surveyed also plan to add more video, introduce
new media/mobile technology, add podcasting, and expand the number
of visitors to their sites. Here are some of the responses that address
these kinds of changes:
“I am thinking of doing a podcast that I would append to the blog,
probably covering and expanding the same topics, but maybe doing
some interviews.”
“Getting us listed on more blog engines, having our associates post
comments to other blogs and linking those posts to ours, incorporate im-
ages in our posts.”
“I may add more advertising and affiliate stuff—I am interested in
how it works and this is a good place to explore these areas. I may repli-
cate more of my posts to the corporate site. I may look for more discus-
sion and responses.”
Most of the bloggers in this study spoke of redesigning their blog and
changing their software. One offered, “I’d like a better index—TypePad
says they are planning to introduce this soon.” Another said, “I will be
moving the blog from Blogger to its own domain name in WordPress
soon. The charge will allow significantly increased functionality over the
free blogspot.com set up currently used.”
For the bloggers in this study redesign includes the appearance as
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well as content changes. Bloggers indicated they were planning to “of-

fer a dynamic style sheet for users to pick their favorite style layout” or
“become more topical with events in our industry as other process man-
ufacturers, trade press, automation suppliers, join in the blog conversa-
tion.”
Adding additional authors. Many of the bloggers spoke about adding

authors, more information on authors, more channels, and more fre-
quent posts. In this study, 38 percent have increased posts on their
blogs since they began them.
Blogging begets blogging. When asked how to grow readership and pro-
mote a blog, our respondents were very clear. One blogger wrote, “The
best way to promote a blog is by commenting on other people’s blogs
in the same niche and industry.” Another offered, “Grow your blog by
being cited by other more popular blogs.” The theme continued with,
“Get linked to by talking about issues of importance to bloggers with
high PageRank.”
Publicize yourself. Many of the bloggers in this study suggested using a

link in your e-mail to direct others to your blog. They suggest talking
about your blog in your e-mails and encouraging people to visit. Be-
yond that, send e-mail blog posts to people who might find them inter-
esting. One business blog author said they “constantly reinforce the
blog within the membership, mentioning it every chance we get, in
every e-mail we send out and at every meeting we have.”
You need to connect. Ultimately the growth of a blog will depend on

the quality and quantity of posts on it and on what one blogger calls
“blogger relations.” One blog author attributes growth to, “Consistent
quality postings coupled with relevant comments adding to the conver-
sation on other blogs over the long haul.” Another says, “Provide use-
ful information, post regularly, be honest, and be user-oriented.” In clas-
sic blogger form, we get advice that is both humorous and probably
true: “Be brilliant, pick a fight.”
The Human Factor

People are important. The ultimate success of any blog depends on
the person that manages and posts. Blogs are a human endeavor, a per-
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sonal conversation, a sharing of thoughts and ideas. Readers form rela-

tionships with bloggers that are very real. Communities are formed and
friendships are made. One of the blog authors tells us, “I bump into
strangers who know my dog’s name.” There is a real person that enter-
tains, provokes, and responds. In many ways, blogs are a place to go
for all that is missing in today’s off line world.
Blogs have not stolen the hearts and minds of consumers. Consumers
have gone willingly in search of a more meaningful relationship. Most
business communication is impersonal and one way. Customers do not
feel they are valued by organizations that have built multiple walls be-
tween them and those they supposedly serve. They cannot get a hu-
man voice on the phone, an option that fits their problem, or a call
back. Now, with the Internet, customers can know more about any busi-
ness than the business itself is willing to tell. Employees, ex-employees,
past customers, and industry experts are no more than a click away,
and your customers are indeed clicking.
Businesses are no longer the soul source of product information or
new product development underway. People are getting the informa-
tion they need to make purchase decisions from other people. Remem-
ber, there are over forty million blogs with a new one springing up ev-
ery second. If only one-tenth of one percent of those can impact your
market, you have 40,000 new voices talking to your customers as we
speak.
It is the humanity of the blogoshpere that makes it an enormous threat

to business as usual. The only way for businesses to survive this new
consumer movement is to understand what makes blogs successful. We
asked our prestigious group of bloggers to tell us what characteristics
make a good blogger. Many offered lists of personal traits including:
“Dedicated, opinionated, inquisitive”

“Disciplined”
“Intelligent, diligent, and patient”
“Personality, commitment, networking ability”
“Responsible, honest”
“Being true and real at all times”
“Passion, engagement, sincerity, authenticity, to be coherent, to an-
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Intranet/Extranet
swer comments (even the negative ones), to post regularly (even

if only once per week)”
Others offered more extensive comments on what makes a blogger or

blog successful:
“Above average conversational or writing skills, creativity, persistence,
complete honesty and integrity (if you aren’t honest you’ll be found out
quickly); the ability to separate yourself from your blog. The worst blog-
gers are those that identify so thoroughly with their blog that conversa-
tion and debate can’t occur—they are just seen as personal attacks.”
“Short and concise postings, blogging is not about really long articles,
powerful useful tips of information, a good search feature, a tad bit of
humor but also knowledgeable on the subject matter. Sharing of cutting
edge info rather than old news.”
One well know business blogger wrote, “The blogosphere has
changed forever how people share information and what their takes are
on just about any topic under the sun. The net result being the world
which was getting flat is now even flatter and you are a couple of clicks
away from smart people with first hand knowledge and insight into all
kinds of ideas that you care about.”
In typical blogger form, some sent links to other blogs that have com-
piled lists of highly effective bloggers, others sent things they have writ-
ten or have seen on the subject. This is typical blog behavior . . . people
helping people.
Intranet/Extranet
The intranet is a private network that is contained within an enterprise,
according to SearchWebService.TechTarget.com (2001–2007TechTar-
get). The intranet may consist of interlinked local area networks and use
leaded lines in the wide area network, the site states. “Typically, an intranet
includes connections through one or more gateway computers to the out-
side Internet. The main purpose of an intranet is to share company infor-
mation and computing resources among employees. An intranet can also
be used to facilitate working in groups and for teleconferences.”
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Intranet/Extranet
An extranet, on the other hand, is designed for companies to engage

with clients. Also a private network, and also reliant upon the Internet,
an extranet allows companies to share information with individuals and
businesses “approved” by the company—clients, suppliers, and so forth.
According to SearchNetworking.TechTarget.com, “An extranet can be
viewed as part of a company’s intranet that is extended to users outside
the company.”
A February 26, 1996, issue of BusinessWeek has an article titled “Here
Comes the Intranet: And It Could be the Simple Solution to Company-
wide Information-on-Demand,” by Amy Cortese, which explores how in-
tranets have revolutionized the workplace. In that article Cortese writes
that “the Web, it turns out, is an inexpensive yet powerful alternative to
other forms of internal communications, including conventional computer
setups.”
What are the advantages? According to Cortese, an intranet can cut
down on paper use by allowing a company’s internal documents—manu-
als, training materials, and so forth—to be electronically stored, updated,
and accessed.
That isn’t all the good news, though, writes Cortese: “Intranets can do
something far more important. By presenting information in the same way
to every computer, they can do what computer and software makers have
frequently promised but never actually delivered: pull all the computers,
software, and databases that dot the corporate landscape into a single sys-
tem that enables employees [to] find information wherever it resides.”
The article quotes Tom Richardson, marketing manager of Digital
Equipment Corp.’s Internet Business Group, as saying: “When the In-
ternet caught on, people weren’t looking at it as a way to run their busi-
nesses. But that is in fact what’s happening.”
A Fast Company article also looks at how intranets are boosting effi-
ciency and creativity in the workplace (“Inside Job,” by George Anders,
Issue 50, August 2001, page 176). Anders writes that Intranets are helping
employees communicate and collaborate with one another in more pro-
ductive and efficient ways than they previously could.
In May [2001], for example, IBM convened 52,600 of its employees

online for what it called WorldJam. Using the company’s intranet,
IBMers everywhere swapped ideas on everything from how to retain
employees to how to work faster without undermining quality.
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Intranet/Extranet
It’s not just IBM-like giants that are taking advantage of this tech-
nology; smaller enterprises are doing so as well. At organizations of
almost every size, well-run intranets are transforming clerical chores
and making it possible to accomplish routine tasks faster, better, and
cheaper. Internal websites are also making it easier than ever to trans-
mit up-to-the-minute company and industry news to employees. And
they are opening up new ways for business associates in far-flung loca-
tions to brainstorm together.
The very success of the intranet has made it vulnerable. Because infor-
mation is so readily shared, companies have been under attack from hack-
ers anxious to gain access to intranets and the wealth of information con-
tained in them. As a result, increasing levels of security have been put in
place to try and prevent access from outsiders.
See also: Generation X, Y, and Z; Internet
Further Reading
“UNDER NEW MANAGEMENT; The Silent May Have Something to Say,” by
Kelley Holland, New York Times (Sunday, November 5, 2006), Money and
Business/Financial Desk Late Edition—Final, Section 3, Page 5, Column 1.
189
J
Job Sharing
The U.S. Department of Labor (DOL), defines job sharing as when two
or more workers share the duties of one full-time job, each working part
time, or two or more workers who have unrelated part-time assignments
share the same budget line. Job sharing is a matter of agreement between
an employer and an employee. Job sharing is an attractive way to recruit
new employees and retain current ones. “In order for a job sharing ar-
rangement to be successful, however, both individuals must be able to
handle the position as efficiently as one person.”
The pros of job sharing are clear. But the practice offers unique chal-
lenges. Consider this short article excerpt from the January 1996 issue of
HR Magazine:
According to an April 1994 Conference Board survey of 131 compa-

nies offering flexible options . . . the greatest challenges to instituting
job sharing include management resistance and skepticism, corporate
culture, and the specific nature of the job. Those who lack experience
with job sharing often worry about compensation and benefit costs,
management of an extra employee, and consequences if the arrange-
ment fails. The study did not find significant problems based on re-
sentment from co-workers, scheduling difficulties, duplication of
work, or union negotiations. Difficulties did arise, however, from job
sharers’ differences in work styles, communication styles, and quality
standards (HR Magazine, “Job sharing offers unique challenges—
Tools from the HR Desk,” by Elizabeth Sheley, January 1996).
Monster.com also looked at the pros and cons of job sharing in an arti-
cle by Monster contributing writer Alyson Preston titled “A New Trend
in Alternative Work Arrangement” (Monster, 2006) This article said:
“One type of flexible schedule particularly geared toward parents is the
job share—two employees essentially split one job’s functions, each work-
ing part-time. According to a 1999 survey of 1,020 U.S. employers con-
Job Sharing
ducted by Hewitt Associates, a leading global management consulting

firm, 28 percent of employers offer job sharing.
The Monster article also noted that job-sharing can be difficult, but
rewarding when it works. It also noted that employees should take respon-
sibility for figuring out how their own arrangements might work before
suggesting a job-share arrangement. The article counseled employees who
want to share jobs to try to anticipate all of the questions managers would
have about the arrangement.
See also: Flex-Time; War for Talent
Further Reading
“The Pros and Cons of Job Sharing. Thinking About Implementing a Job-Sharing
Program? Here’s What You Need to Consider Before You Do,” by David
Javitch, www.entrepreneur.com (November 10, 2006).

Plateauing: Redefining Success at Work
Published: October 4, 2006 in Knowledge@Wharton
As an executive coach who works with corporations, Monica Mc-
Grath has her ear to the ground. And what she is hearing is this: A num-
ber of men and women in middle management are increasingly reluc-
tant to take the next step in their careers because the corporate ladder
is not as appealing as it used to be, and the price to climb it is too high.
“These people are still ambitious, and they are still driving. They just
aren’t driving for the same things they were driving for fifteen years
ago,” she says.
What may be happening, suggest McGrath and others, is that people
are setting career paths based on their own values and definitions of
success. They are not burned out or dropping out; they are not going
back to school and changing careers; they are not having a mid-life cri-
sis. Instead, they are redefining how they can keep contributing to their
organizations, but on their own terms. Rather than subscribe to the “on-
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ward and upward” motto, they are more interested in “plateauing,” un-
hooking from the pressure to follow an upward path that someone else
has set.
A number of oft-cited trends in the workplace contribute to this phe-
nomenon: Technological advancements are breaking down the barriers
between work and non-work hours, adding to the pressure to con-
stantly be on the job or on call. Strategic decisions like restructuring,
downsizing, and outsourcing are adding to job uncertainty at all levels
and reducing the number of promotions available to mid- and upper-
level managers. The continuing influx of women into the workforce
keeps raising the level of stress when it comes to work/life balance is-
sues.
Lois Backon, a vice president at Families and Work Institute (FWI), a
New York-based nonprofit research organization, points to a report FWI
does every five years entitled, “National Study of the Changing Work
Force.” The latest one was released in 2003. One of their areas of re-
search relates to what the organization calls “reduced aspirations”
among various sectors of the workforce. “This is an incredibly important
issue, and it offers some of the most troubling data out there for corpo-
rate America,” she notes.
For example, in one of its latest reports, “Generation & Gender”
(2004), which uses data from the national study to determine differ-
ences among generations, FWI found that fewer employees aspired to
positions of greater responsibility than in the past. Among college-
educated men of Gen-Y, Gen-X, and boomer ages, 68 percent wanted
to move into jobs with more responsibility in 1992, versus only 52 per-
cent in 2002. Among college-educated women of Gen-Y, Gen-X, and
boomer ages, the decrease was even higher: 57 percent wanted to
move into jobs with more responsibility in 1992 versus 36 percent in
2002. (Generation Y is typically defined as those born between 1980
and 1995, Generation X as those born between 1965 and 1980.)
“We then did a more focused look at leaders in the global econ-
omy,” Backon says. “We took the top ten multinational companies—
such as Citicorp and IBM—and conducted in-depth interviews with the
top 100 men and top 100 women. Of those leaders, 34 percent of the
women and 21 percent of the men said they have reduced their career
aspirations.”
This plateauing is part of a bigger phenomenon in the workforce—
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Job Sharing
one that also includes people putting higher priorities on activities out-
side their jobs, from family to volunteer work to hobbies. For example,
in the FWI study, the reason that the majority (67 percent) of these
leaders gave for their response was “not that they couldn’t do the
work, but that the sacrifices they would have to make in their personal
lives were too great,” says Backon.
“We call it ’negative spillover from their jobs to their homes,’”
Backon adds. “The whole issue of overwork, of needing to multitask, of
having to deal with numerous interruptions during their work day” af-
fects employee attitude, not just toward their jobs but also their free
time. “Based on our research, we know that 54 percent of employees
are less than fully satisfied with their jobs, 38 percent are likely to ac-
tively look for new employment in the next year, and 39 percent of em-
ployees feel they are not engaged in the work they are doing.” Most
employees “do want to feel engaged by their jobs. The term ’reduced
aspirations’ does not mean they are not talented or not good at what
they do. They are. But in focus groups, they also say things like, ’I need
to make these choices because my family is a priority,’ or ’I need to
make these choices to make my life work.’”
One way to look at this phenomenon, adds Wharton management
professor Nancy Rothbard, is that some employees “still derive some
sense of identity from their jobs but they have, or are seeking, other
ways to get that fulfillment.” They are no longer pushing for the bigger
raise, the larger staff, the more prestigious title; “they are taking energy
that had been focused primarily on goals defined by the corporation
and focusing it elsewhere.”
Fewer Promotions, Fewer Pensions

Peter Cappelli, director of Wharton’s Center for Human Resources,
has done extensive research into the changing nature of the workplace.
As he and others have noted, companies no longer promise job security,
generous benefits packages or even pensions, and employees no longer
feel loyal to their employers or obligated to stay for long periods of
time. Employees are responsible for managing their own career track
and seeking out the mentors and training they need to move on in their
current company or, just as likely, in a new company.
Cappelli agrees that organizations “don’t have quite as much influ-
ence over people as they used to in terms of shaping their goals and as-
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Job Sharing
pirations, in part because people come to these jobs at an older age and
change jobs more frequently than in the past. Does that necessarily
mean people are on their own career path? It depends what you mean
by that. I’m not sure it means they are eschewing corporate success.
But they are looking outside their current employer’s definition of suc-
cess, more so than in the past.”
Cappelli cautions, however, that it’s unlikely employees can go on
cruise control and still hope to be retained and valued by their employ-
ers. “It used to be you could just lie low and wait for the pension. That
doesn’t happen much any more.” And while some employees may not
pay as much attention to the goals that their companies want them to
pursue, they “continue to work hard because they are afraid of being
laid off. . . . Companies systematically go through and fire people who
are not pulling their weight. The ability to punish people into appro-
priate behavior is one of the great and unpleasant lessons of the 1980s.
Employee morale sank and productivity stayed up because people were
afraid of being fired,” Cappelli notes, adding, however, that this dy-
namic changes in a tight labor market.
Wharton management professor Sara Kaplan “could imagine a sce-
nario where people have discovered that there is not too much point be-
ing loyal to their employers, and then go on to say, ’Okay, I have got-
ten where I am going to get, and I am going to focus on the other part
of my life. I will keep working but won’t invest all my energy in my
job.’”
But Kaplan also thinks “everyone needs something to be passionate
about, so it would be hard for me to imagine that people would simply
ramp down on their job without having a crisis or without having found
something else” to interest them. Indeed, in today’s economy, she
adds, “you can’t keep your job unless you are engaged, to a certain ex-
tent. Corporations don’t want people who don’t want to go higher.
They don’t want people who won’t strive. You can’t plateau; there are
always people biting at your heels.”
Directly related to the issue of job satisfaction is the question of job
design. “Management scholars have been studying this for a long
time,” says Wharton management professor Sigal Barsade. “Whenever
a company designs a job, it must take into account how employees
view that job, whether their goal is to get ahead, whether work is cen-
tral to their lives, and so forth. A company can make a real error trying
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Job Sharing
to redesign a job to be more enriched if the employee doesn’t want

that,” especially if the new job definition requires them to work harder.
What is crucial, Barsade says, “is good job fit. Is the person doing
what the company needs done? If the answer is ’yes’ and the person
also is good at what they do but simply doesn’t want to do more, then
that could actually be a good situation, especially for jobs that don’t in-
clude room for promotion.” This is applicable in particular to customer
service positions where people need to be engaged while they are pro-
viding the service, but are not expected to be thinking of ways to rede-
sign the whole customer service system. “So the fit needs to be be-
tween what the organization needs and what the employee wants and
values. If that fit isn’t there, that’s when you are going to have a
problem.”
When should employees who have no interest in advancing or taking
on higher challenges worry about losing their job? “I think as long as
these employees are working diligently and competently and are willing
to change—whether that means learning a new technology or adapting
to a new work process—they should be safe,” says Barsade.
Making Tradeoffs
Kathleen Christensen, who directs The Program on The Workplace,
Work Force and Working Families at the Alfred P. Sloan Foundation,
suggests that plateauing in one’s job “is a completely natural part of a
career, but we ignore it because we have this notion of a steep trajec-
tory.” Psychologists, she says, “talk about different stages of human de-
velopment. One stage may be that as people reach middle age, there is
the idea of generativity—a willingness at this point to start giving back,
perhaps start cultivating others rather than just” focusing on your own
achievements. Plateauing can be desirable, she says, in that employees
“are likely to have a great deal of institutional knowledge. They can be
the ones who know the processes, can share them and guide others. If
everyone is always out for themselves, it goes counter to developing
the team culture that every company wants.”
No matter how people define their jobs, Christensen adds, “they still
must have performance goals, and be evaluated in terms of how well
they meet those goals. But we should also recognize that at different
points in people’s lives, they may define their performance goals in
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Job Sharing
slightly different ways—they may move at different tempos—and still

be well within what the company needs in order to achieve its business
goals.”
Plateauing cuts across all boundaries, Christensen suggests, and it
could be the result of certain events in people’s lives—like the birth of a
child or the need to care for a sick parent—which lead an employee to
decide, “I’m going to hold my own but not try to climb.” But it would
be “a mistake to assume that all the factors that lead to different tem-
pos are due only to outside forces. It could just be an employees’ own
decision not to try to climb” in the organization. It doesn’t mean they
are slacking off. “Someone can be working hard and still be plateauing
in a career,” Christensen says.
She emphasizes the need for employer and employee to communi-
cate expectations and goals. Any decision to plateau, for whatever
length of time, should be a “deal that is structured to meet both sides’
needs. It’s a danger if employees think they can make these decisions
based only on what they want to do. It’s also a danger for the com-
pany if it doesn’t take into account what the employee needs in order
to do his or her best. It comes down to principles of good manage-
ment.”
At Deloitte & Touche USA LLP, senior advisor Anne Weisberg is in-
volved with a pilot program called mass career customization, which
allows employer and employee together to customize an individual’s ca-
reer “along a defined set of options.” It’s a realization, she says, that
“the ’one size fits all’ approach no longer works.” In the pilot program,
which started in June with a practice group of 400 people and will run
for a year, “we have unbundled the career into four dimensions: role,
pace, location and schedule, and work load.” Under the role dimension,
employees can specify, for example, whether they want an external role
involving significant client interaction, an internal role without that client
service aspect, or a role somewhere between the two. Under pace, the
issue is how quickly an employee wants to move up. Under location
and schedule, issues such as part-time hours, working at home and
willingness to travel are included, while work load looks at variables like
the number of projects an employee is willing to undertake at any one
time.
“There are tradeoffs to these choices,” Weisberg emphasizes. “A to-
tally internal role has a different compensation structure and advance-
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ment route. But the tradeoffs are articulated and an employee can
move from one set of options to another. It’s a recognition that people
need to fit their work into their life and their life into their work over
the course of their career, which is forty years. No one solution will
work” for all that time. (Interestingly, she notes, the pilot program so
far has found that “rather than dialing down on their careers, most of
the practice group is choosing to dial up,” reflecting, in part, the fact
that 65 percent of Deloitte’s employees are under the age of thirty-
five.)
Companies can’t redefine the corporate ladder “with a different
model that is just as rigid,” Weisberg adds. “We need to replace the
corporate ladder with a corporate lattice”—a term implying a more
adaptive kind of framework which allows an individual to move in many
different directions, not just upward or downward. “I know in many
companies, employees are evaluated on the basis of how much time
they spend on the job or how many sacrifices they make. That para-
digm has to shift so that you look at performance and contribution sepa-
rate from sacrifice.”
Weisberg, senior advisor to Deloitte’s Women’s Initiative, says that
when the initiative was started in 1993, it was concerned primarily with
women’s career paths, which are very different from men’s. (For exam-
ple, the vast majority of women, about 80 percent, do not work full-
time continuously throughout their career, whereas the vast majority of
men do, she notes.) “But we quickly realized these issues affect many
groups other than women, including men, members of Gen X and Gen
Y who perhaps want to accelerate early and then decelerate later, and
the baby boomers” who are trying to adjust their workloads to accom-
modate interests or responsibilities outside of work. What’s been miss-
ing, she says, “is a way to approach all these different people with a
consistent set of options.” On the micro level, she adds, “it is funda-
mentally a negotiation between the employer and employee,” which is
why it is so important to develop “the right kind of negotiation frame-
work.”
In scanning the 2006 employment landscape, Weisberg says she sees
a “heating up of the war for talent. If you look at the demographics,
there is a huge shortage in many of the knowledge-based industries.
That is going to be with us for a long time.” She cites a recent statistic
that women now make up 58 percent of college graduates, a trend that
should affect even more how jobs and careers are structured. “Smart
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Job Sharing
employers don’t want to drive their employees so hard that they burn
out. That is very expensive. The estimates of the cost of turnover keep
going up, in large part because of this issue of the shrinking skilled la-
bor force.”
In the past, she says, “we used 150 percent of salary as the cost of
turnover. We are now using 200 percent of salary.” Some experts say
that for knowledge-based companies, that figure is 500 percent. “Turn-
over is a huge cost. One of the major reasons for doing mass career cus-
tomization is to improve retention.”
Weisberg, too, suggests the need for transparency in any decisions re-
lated to the work environment. When both employer and employee are
clear about the choices being made, “then both sides are more satisfied
with the arrangement. If choices are never discussed, you can end up
with mismatched expectations, which can lead to stress on both sides.”
Wharton management professor Stewart Friedman, who teaches
Wharton Executive MBA students, among others, agrees that “people
are struggling with this issue of, ’What do I really care about and how
do I measure success?’ My sense is that more people, not just middle-
aged employees but younger people as well, are raising this question in
ways they didn’t twenty years ago. If so, is it because more people are
hitting the pyramid and accepting the reality of lowered expectations
caused by less upward mobility, or is it that they are part of a larger
swing in our culture that is more focused on other definitions of success
besides economics? I think it is probably both.”
What makes leaders in an organization effective, says Friedman, is
that they realize employees can have different values than your typical
workaholics—those who enjoy working eighty hours a week—and still
contribute to the organization. “But it’s hard to change norms and cul-
tural values that are deeply embedded.” What Friedman describes as
“the excesses of the overworked generation” have reached a point
“where more and more people are starting to question their total dedica-
tion to work. We are seeing more people pursuing creative alternatives.
The big question twenty years ago was, ’How early did your power
breakfast start?’ Now the big question is, ’Where and how far did you
go on your vacation?’”
Disappearing Flex-Time
It’s not clear how managers in organizations might react to employ-
ees who redefine their positions as jobs rather than as vocations or call-
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Job Sharing
ings. “They could worry that people simply decide to ’work to rule’—
i.e., do exactly what is specified and nothing more,” says Rothbard.
“Companies are terrified of that happening: They know things will
break down at that point because you can’t specify everything that has
to be done in a particular job. But I think if employees’ identities are still
tied up in their jobs, this won’t happen.”
Another consideration is how to continue to motivate people if none
of the traditional rewards are available—such as a promotion or a big-
ger office. “A company may, in fact, want employees to have other
sources of fulfillment, and so will try to build in things that matter to
them,” says Rothbard. That could include flex-time, job sharing, job sab-
baticals, or the sponsorship of charity events that are meaningful to em-
ployees.
Some people question the sincerity of programs like flex-time or sab-
baticals that let people pursue interests outside of work. “I don’t think
companies are paying a lot of attention to people’s passions. There are
programs to address this but, frankly, it doesn’t happen that much,”
says Kaplan, who notes that companies will try to institute flex-time ben-
efits during times of economic growth, but “the minute the crunch hap-
pens, then all those programs go away.” And even when companies im-
plement such procedures as flex-time or job sharing, adds Barsade, “it
doesn’t really address the bigger issues of the tremendous amount of
work people these days are expected to do on the job.”
One of those bigger issues relates to work/life balance and job com-
mitment. McGrath recently taught an executive education course for
women in the middle management ranks of a pharmaceutical company
to explore “ways to build relationships with, and support each other, as
they attempted to take on the next level of responsibility. It’s because
the companies were finding that women were not willing to step into
the high-potential pool of employees” for a number of different rea-
sons, including in some cases, wanting to make sure they had time for
their families. “These women were at the vice president level. They
weren’t lacking in ambition and they wanted to make a difference in
their jobs. It was just a question of, ’How much more responsibility can
I take on?’”
Rothbard continues to find it ironic that employees who want to “opt
out” of their jobs for a short time get less pushback than women who
want flex-time “so that they can pick up their children from school at
4:30 instead of 5:30 every day.” Rothbard cites Arlie Hochschild’s book
200
Just-in-Time
The Time Bind, which notes the exceptions available to high-potential

men who want to take a sabbatical and travel around the world. In one
chapter, Hochschild relates how two men had asked their supervisor for
time off to do underwater photography of coral reefs. The supervisor
granted them an educational leave to pursue their project. Why, the au-
thor asks, can’t the company offer flexible schedules to parents who
want to pick up their children early from daycare?
Rothbard also points to research on the phenomenon of “multiple
roles, and the fact that there are physical as well as psychological bene-
fits to people” who have more than one area in their lives that engages
them and requires their attention. An example would be a woman who
has responsibilities both at her job and with her family at home. The re-
search discusses “the buffer hypothesis, which says that if something
goes wrong in one area, you then have another area that buffers you,”
says Rothbard. “In other words, work/family roles enrich, rather than
deplete, each other.”
Stress in the workplace, many experts have noted, can be intensified
by technological advancements that make it harder for people to ever
totally disconnect from their jobs at appropriate moments, like vaca-
tions. As McGrath notes, “there are no boundaries around employees’
time. They are always available.” McGrath has worked as a coach in
five large corporations over the past year and at all of them, she ob-
served workloads that were, in her opinion, unmanageable. Some em-
ployees, she says, react by trying to set strict limits on their accessibil-
ity—for example, not answering their Blackberry from 6 P.M. to 6 A.M.
“They have come to some sort of peace with the fact that they will
never get everything done and keep everyone happy.”
Just-in-Time
Just-in-Time (JIT) is a manufacturing organization philosophy that at-
tempts to eliminate storage costs and overstocking of parts by meeting
demand for parts, components, and the like as closely as possible with
supply. When the factory needs a certain component, if it is adhering to
JIT practices, that is when the component will be delivered, in the amount
needed at the time. By eliminating overstocking and overproduction, the
philosophy aims to reduce storage costs, and cut down on wasted action.
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Just-in-Time
Why I Do This: CMIR Fellow,

Surplus Asset Investment Recovery Manager
Paul F. Wengert
Inevitably, businesses and corporations generate equipment that they no
longer need. “Surplus, excess, or obsolete” equipment and material is gen-
erated because businesses change. Businesses replace older equipment, de-
velop new ways of doing whatever they do, grow or get smaller, build or
teardown. The purpose of this job is to recover what remains of the origi-
nal value (or cost) of the no longer needed equipment. It is, in a sense, re-
cycling the asset.
This job involves identifying where the equipment is, conducting inven-
tories to catalog and list the equipment in electronic databases (so that the
equipment can be reused somewhere else in the company), marketing, sell-
ing, donating, or scrapping.
I was offered this job by a major corporation to manage their surplus
equipment. After fourteen years I started a company that provides these ser-
vices to companies that did not have people to do that work. We em-
ployed 26 people doing that for companies.
Do I like this job? I like it very much!
What is unexpected in this job: The most unexpected part of this job is
finding out that corporations waste so much money by not reusing surplus
assets or selling the assets that they no longer need.
This is a challenging and rewarding job that is new and changing every
day. It involves working with lots of different people in different places.
There is a great deal of satisfaction in this job.
What kind of person would enjoy this job? This is a job for someone
who likes to be creative, wants to show initiative, wants responsibility, and
is a “self starter.”
If you want to know more about this career go to the Investment Recov-
ery Association website (www.invrecovery.org).
To sum up using an old adage, JIT could be thought of essentially as

the manufacturing interpretation and implementation of “waste not, want
not.”
According to ValueBasedManagement.net, “just-in-time” was pioneered
by Taiichi Ohno in Japan at the Toyota car assembly plants in the early
1970s. “JIT cuts waste supply by supplying parts only when the assembly
process requires them. At the heart of JIT lies the kanaban, the Japanese
word for card. This kanaban card is sent to the warehouse to reorder a
standard quantity of parts as and when they have been used up in the
assembly/manufacturing processes . . . The target of JIT is to speed up
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Just-in-Time
customer response while minimizing inventories at the same time. Inven-

tories help to respond quickly to changing customer demands, but inevita-
bly cost money and increase the needed work capital” (2006 Value Based
Management.net, last updated September 27, 2006) (http://www
.valuebasedmanagement.net/methods_jit.html).
According to the Department of Labor’s 1999 “Report on the Ameri-
can Workforce,” prepared by the Bureau of Labor Statistics, U.S. Depart-
ment of Labor:
Both the automobile industry and the help supply industry have each,
in their own way, adopted “just-in-time” strategies in an increasingly
competitive economy. The motor vehicles and equipment industry
throttled down labor costs during the current economic expansion.
In three major segments of the industry—motor vehicle assembly,
parts manufacturing, and automotive stampings—unit labor costs
were lower in 1998 than in 1991. From 1991 to 1998, unit labor
costs of motor vehicle assemblers declined 0.9 percent per year. Dur-
ing the same period, parts manufacturers cut unit labor costs by 2.0
percent annually, on average. The automotive stampings industry had
even greater success in cost-cutting, reducing unit labor costs by 4.4
percent per year.
The auto industry has leveraged the impact of these changes with
strategies of lean manufacturing and just-in-time production through-
out the supply chain. As a result, there has been a change in the struc-
ture of the industry: The number of people working up-stream in the
automotive parts industry first surpassed the number in final assembly
in 1981. Their lead has widened since 1987, as the industry shifted
many design, development, and supply management functions to sup-
pliers” (Monthly Labor Review Online, October 1999, Vol. 122, No.
10. “Research Summaries: The 1999 Report of the American Work-
force”).
JIT has helped manufacturers across many industries improve their bot-
tom line. One source for more information on JIT is www.strategosinc
.com, which offers a history of “lean manufacturing.” Another is www
.inventorymanagementreview.org. An article published November 8, 2005
on that website discusses JIT in the context of fast food (preparing the
food long before customers order it and keeping it warm under food
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Just-in-Time
lamps, versus using a JIT approach and identifying an efficient way to pre-
pare the food as needed) and also in the context of computer production.
The article cites Dell Computers as an exemplar of low inventory levels
and the JIT approach.
See also: Made in Japan; Six Sigma
Further Reading
“A Revolution That Came In a Box,” by Joe Nocera, New York Times (Saturday,
May 13, 2006), Business/Financial Desk Late Edition—Final, Section C,
Page 1, Column 1.
Improving Production with Lean Thinking, by Javier Santos, Richard A. Wysk,
and Jose M. Torres, Jossey-Bass (2006).
“Thanks to Detroit, China Is Poised to Lead,” by Keith Bradsher, and Jeremy W.
Peters, New York Times (Sunday, March 12, 2006), Money and Business/
Financial Desk Late Edition—Final, Section 3, Page 1, Column 3.
Transforming Your Go-To-Market Strategy: The Three Disciplines of Channel Man-
agement, by V. Katuri Rangan, Harvard Business School Press (2006).
204
K
Kaizen
Kaizen is a Japanese term that means continuous improvement. It is taken
from the words “kai,” or continuous, and “zen,” or improvement. Ac-
cording to www.valuebasedmanagement.com, “kai” literally means
change, and “zen” means to become good.
According to that website, the Kaizen method is a Japanese manage-
ment concept that consists of “five founding elements: teamwork, personal
discipline, improved morale, quality circles, and suggestions for improve-
ment. Valuebasedmanagement.com also notes that the Kaizen philosophy,
or approach to management, provides the foundation for many other Japa-
nese management concepts, including Total Quality Control.
In practice, the Kaizen approach calls for never-ending efforts for im-
provement involving everyone in the organization—managers and workers
alike, according to 100ventures.com. Kaizen management, that site says,
has two major components: maintenance and improvement.
Under the maintenance function, the management must first establish

policies, rules, directives, and standard operating procedures (SOPs)
and then work towards ensuring that everybody follows SOP. The
latter is achieved through a combination of discipline and human re-
source development measures. Under the improvement function,
management works continuously towards revising the current stan-
dards, once they have been mastered, and establishing higher ones.
Improvement can be broken down between innovation and Kaizen.
Innovation involves a drastic improvement in the existing process and
requires large investments. Kaizen signifies small improvements as a
result of coordinated continuous efforts by all employees.
The site points out that encouraging employees to suggest ways to im-
prove processes and procedures is an important part of the Kaizen ap-
proach. It also says that one of the ways that top managers evaluate a
company that is embracing a Kaizen philosophy is by keeping tabs on how
Kaizen
Why I Do This: Minister

Rev. Catherine Torpey
I am responsible for the day-to-day running of the church. I write newslet-
ter columns, meet with parishioners who want to try something new in
their lives, or who need someone to talk to. I meet with other members of
the community and learn about local, national, and international social in-
justice issues so that I and my congregation can make the world a better
place.
I have the best job in the world. I tell people what’s on my mind and
heart each week, in the hope that perhaps it will help them in figuring out
how to make their life as meaningful and fulfilling as possible. I help peo-
ple both in times of crisis and joy (funerals and weddings, for instance),
and I get to help them find ways to make the world more compassionate
and just. I get to sing in the choir, and go to New Orleans to help rebuild
houses. I get to hang out with children and teenagers at church camps and
overnights. I get to hone business skills as a leader of a nonprofit institu-
tion. In other words, I get to do everything I love in life, in such a way
that it brings meaning to others. I get to use my gifts and encourage oth-
ers to use theirs.
Running a church is truly a team effort. I’m the paid member of the
team, a kind of coach, really. Most of the real work is done by the mem-
bers of the congregation, with me helping to guide and cheer. I don’t
have to be the expert at everything; I just have to figure out what I’m
good at, and find others who have a passion for other aspects of church
life, so that we can co-create one small beloved community in this crazy
world.
I’d recommend becoming a minister if you love helping others to find
meaning in life. You don’t have to be better, kinder, or smarter than any-
one else; you just have to envision a world where we can all become a little
better, kinder, and smarter.
many employee suggestions are made and followed up on, resulting in

higher standards and improved performance. The more suggestions made
by employees, the more involved they are in the work of the company, the
better practices become, and the more closely the company is aligned with
the Kaizen method (http://www.1000ventures.com/business_guide/mgmt
_kaizen_main.html).
Silvia Hartman writes about Kaizen in her essay “Kaizen, The Exclusive
Or & How To Escape From The Black and White Universe” (Silvia Hart-
man, 2001) on her website, silviahartman.com.
I think the most soothing aspect of the Kaizen philosophy is the up

front presupposition that whatever you do, and no matter how well
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Kaizen
you do it, it can never be perfect . . . Yet even from this state of im-
perfection, there is no need to be dismayed, or afraid, if you follow
the Kaizen principle. Here, we strive TOWARDS perfection—we do
the best we can to make things better, every way, and every day, to
move towards perfection in an evolution of simple endeavours, all the
time.
Many companies have adapted a Kaizen approach to evaluating their

processes, with a goal towards improving performance. Consider the Ar-
iens Company, based in Brillion, Wisconson. Ariens manufactures outdoor
power equipment for commercial and home use. An article published on
www.landscapemanagement.net on June 21, 2007, notes that the Ariens
company “recently conducted [its] 1,000th Kaizen event aimed at reduc-
ing waste within the operation.” That article goes on to quote company
president Dan Ariens as saying “Employees have not only created a culture
of continuous improvement, they have sustained it.”
Toyota Motor Sales USA is one of the higher-profile companies that
embraces the Kaizen approach. And not only does the company pursue
the Kaizen method internally, it also annually recognizes a large carrier
company for its ability to embrace Kaizen concepts. According to a press
release dated June 5, 2007, on businesswire.com, the 2006 Large Carrier
of the Year award went to J.B. Hunt Transport Services, Inc.
The release said, “J.B. Hunt embraces the Toyota Way, and the DNA
of their culture is much like ours,” said Jane Beseda, Group Vice President,
general manager for the Toyota Customer Services Division. “For both
companies, ‘there is no best . . . only better.’”
Each year, Toyota asks employees from its Corporate Logistics de-
partment, plants, and distribution centers to vote on the winners
based on each carrier’s performance in various categories of cost con-
trol and quality. Criteria for selection include on-time delivery and
pickup, problem solving capabilities, damage prevention, profession-
alism, equipment availability, and enroute delays.
In addition, Toyota scores each carrier on its ability to embrace and
culturally implement Kaizen, Toyota’s methodology for continuous
improvement. J.B. Hunt has taken significant steps to eliminate waste
from its own operations and further improve Toyota’s supply chain
processes by ensuring the production facilities receive the right
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Killer App
amount of product at the right time. This is accomplished by utilizing

a unique blend of intermodal and traditional truckload movements
that provide Toyota with an on-time percentage greater than 99 per-
cent.
An article by Jewel Gopwani, published on www.freep.com (The De-

troit Free Press) June 4, 2007, discusses the result of a survey of companies
that supply automakers with parts, and notes that Toyota has been a pe-
rennial favorite of the parts suppliers. The article says: “At Toyota, the
results reflect what the industry has come to know as the Toyota Way,
a business philosophy based on mutual respect and Kaizen, or continual
improvement.”
“We will never believe that there is not room for improvement,” said
Gene Tabor, general manager of purchasing at Toyota’s North American
manufacturing headquarters in suburban Cincinnati. “That’s Kaizen in its
purest form.”
See also: Lean Manufacturing; Six Sigma; Total Quality Management
(TQM)
Further Reading
Kaizen: The Key to Japan’s Competitive Success, by Masaaki Imai, McGraw-Hill/
Irwin, 1st ed. (November 1, 1986).
One Small Step Can Change Your Life: The Kaizen Way, by Robert Maurer,
Workman Publishing Company (June 1, 2004).
Killer App
First, know that “killer app” is a nickname, short for “killer application.”
A killer app is a computer program that becomes so successful, that it has
its own “brand equity.” That is, it is known and explicitly recognized for
the value it creates by using, or building on, existing technology. E-mail is
one of the “killer apps” on the Internet. According to the 1998 bestseller,
Unleashing the Killer App, by Larry Downes and Chunka Mui (Harvard
Business School Press; the book text also appears on www.killer-apps
.com): “Over the last two years, electronic commerce . . . has been touted
as the killer app that will redefine the entire manufacturing-distribution-
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Killer App
Why I Do This: Editorial Director,

Global Management Consulting Firm
Barry Adler
I manage a group of writers and editors who produce a variety of publica-
tions about matters of interest to senior executives throughout the business
world. The consultants at my firm work on a wide range of projects, and
my job is to help them—via our writers and editors—capture what they’ve
learned, and differentiate us from other firms.
Some of the materials we produce are short articles, some are longer re-
ports, and a few projects even turn into books. All are used to market the
firm to clients and prospective clients, and to give us a presence in the
mainstream and industry press. The idea is that we help build and sharpen
our brand in the marketplace by publishing pieces that convey the firm’s
thinking and that showcase our areas of special expertise and focus. At the
same time, we have to be very careful not to breach our pledges of confi-
dentiality to our clients.
In a typical day, I’ll get 100 e-mails or so, and a bunch of phone calls. I
might also have several conference calls. In many ways, this is a virtual orga-
nization, so I find that I’m dealing with writers, editors, and consultants
from offices all over the world each day. They’re all involved in various
stages of developing, writing, or editing pieces. It’s my job to orchestrate
the process and make sure that we have the resources we need to produce
the materials on schedule.
Put another way, I take an oversight role in most of the editing. I also
broker many of the arrangements between the consultants and the editorial
group. When consultants have ideas they want to get “out there,” they’re
naturally looking to get something written as quickly as possible. I’m the
keeper of the schedule, in the sense that I have to set realistic expectations
all around to ensure that the trains run on time and arrive at the right sta-
tions in good shape.
I have to work closely with our production manager and his crew to
make that schedule succeed. They do the design work and produce the gal-
leys that eventually lead to a finished publication. I also work closely with
marketing and media specialists to help coordinate and plan press cam-
paigns when the publications are ready for distribution.
I’m a manager at this point in my career. I have extensive editorial expe-
rience, but what I’m really doing is bringing that experience to bear to
make this complicated process run smoothly. I have less and less time to
edit things myself. But because of my background, if need be, I can jump
in and do any of the jobs that are done by the people I manage. (Although
they might argue that I don’t do their work quite as well as they do.)
I like managing this process—but I certainly couldn’t have predicted
that this would be the kind of work I would be doing. With writing and
editing, it seems that you start out in a certain way, and then as you de-
velop, people either like your work or they don’t, and certain doors open
as you go, based on your style and the people you work with . . .
Killer App
I was at the New York Times for fifteen years, as an editor in the busi-
ness section. And of course, that’s a great name-brand place to be, so a lot
of doors opened for me. One person I knew, for example, went off to the
Harvard Business Review, and from there, he moved into the consulting
world. He called me when he started a magazine at one consulting firm,
and I made that move. I made another move with him when he started a
small publishing unit within a big educational company. And then I was
called a few years later by someone else I knew to come over to this firm,
and I did. I was ready for all of these changes, and here I am.
You might like this kind of work if you like keeping an awful lot of de-
tails in your head at the same time—who’s doing what, when, why, with
whom, what do they need, when will they be finished, what will be next
. . . You have to like, or at least tolerate, working with things that aren’t
necessarily very neat. Schedules change, messages aren’t clear. You have to
be comfortable dealing with all that and then figuring out what went
wrong and how to fix it.
You also have to be able to think thematically. This is important, be-
cause the job is really not just about making the trains run on time. To do
the deeper part of this job, a person needs to be able to evaluate the vari-
ous pieces individually, but also put them into a greater context of what
the firm as a whole is doing. What are the messages we’re sending? Are
they consistent? Do they build upon one another? Do they move us for-
ward? This is where the brand-building comes in; it’s also a good internal
measure of the work of the firm.
A lot of what I do depends on how much I can get from the people I
work with. So in order to do this job, you have to genuinely like interact-
ing with people. That may sound strange, but a lot of people really do not
like working with others. I have to understand what various individuals are
good at, what motivates them, how fast they work, whether they can take
stress, whether they enjoy stress . . . In that sense, I’m part rabbi and part
therapist and part diplomat as well as manager and editorial advisor.
There’s never a dull moment—and hardly ever a free one.
retail-finance business cycle, creating gigantic new markets while it under-

mines existing ones.”
But keep in mind, killer apps can be created on any sort of technology.
As Dr. William Burke, a New York pediatrician, was credited with saying,
“You never know where a blister will rise.” As Downes’ and Mui’s book
goes on to say: “It is easy . . . to find examples of killer apps from history
that demonstrate just how unpredictable and indirect their impact can be.”
In Medieval Technology and Social Change, for example, historian Lynn
White, Jr., studied several inventions from the Middle Ages that revolu-
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Killer App
tionized not only the activities they were intended to affect but society as
a whole.
Perhaps the most important of these medieval killer apps was the stir-
rup, which the Franks—Germanic tribes who ruled central Europe
after the fall of Rome—adopted from an Asian design. The stirrup
made it possible for a mounted fighter to strike with his lance without
falling off his horse, greatly increasing the force that could be put
behind such a blow. It proved decisive in the Franks’ efforts to turn
back the marauding Saracens who invaded western Europe in the
eighth century, despite the superior numbers of the invaders.
Charles Martel, leader of the Franks, understood from his victory
that the stirrup hadn’t simply improved the effectiveness of his forces,
as a new weapon or fighting formation might have done. Rather, it
changed his entire military strategy. Stirrups made possible a mounted
cavalry, a new element in the battle equation, and Charles Martel im-
mediately made them a permanent feature.
Who would have thought that stirrup and E-commerce had anything in
common?
Another good definition of “killer app” comes from www.searchweb
services.techtarget.com, which is “powered by” whatis.com. This website,
in a section that credits contributor Reg Harbeck, says that a killer app is
“jargon in the computer industry for an application program that inten-
tionally or unintentionally gets you to make the decision to buy the system
the application runs on. A classic example of a killer app was the spread-
sheet program, the first of which was called VisiCalc, followed later by
Lotus 1–2-3. The spreadsheet application helped introduce the personal
computer into the department level of large and small businesses. A killer
app can refer to a generic type of application that hasn’t existed before, to
a particular product that first introduces a new application type, or to any
application with wide appeal.”
That website goes on to say that when any sort of new computer hard-
ware is released, the manufacturers want other companies to develop a
killer app for the product, as the app will fuel sales.
Most businesses would probably relish the chance to be credited with
introducing a killer app. (Particularly if they marketed it profitably.) But
from the user point of view comes at least one cautionary note. Consider
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Killer App
these thoughts, published in an article by Thomas Claburn online in Infor-

mationWeek, November 13, 2006 (www.informationweek.com). (The ar-
ticle is entitled “Blogs and Wikis Move In as E-Mail Overload Becomes
Unbearable).
E-mail, the Internet’s killer app, is killing productivity. Even for work-
ers who insulate themselves from pitches for porn and pills—up 59
percent in October from the previous month, according to e-mail
management company Postini—occupational spam takes a toll: Mail-
ing list messages, workgroup updates, e-mail alerts, and corporate
communiqués demand attention, if not a reply. Dealing with e-mail
easily can become a full-time job. Heavy users receive 1,000 messages
and 1,500 spam messages a week, estimates Richi Jennings, lead ana-
lyst with the e-mail security practice at Ferris Research.
What are the next killer apps? Are they already in use, but not yet reach-
ing their full potential? Consider an article that appeared on www.pda
.mobileeurope.co.uk/magazine/features (Nexus Media Communications).
Entitled “Out of the Maelstrom,” and online on November 14, 2006,
the piece was credited to Mike Dallimore, Radio Frequency Systems Vice
President Broadcast, Towers and Defence Systems. It said: “There is pres-
ently a great deal of industry hype surrounding ‘mobile television.’ Said
by some to be the next ‘killer app’ of the mobile sector, and dismissed by
others as having no sustainable business model, mobile TV is a conjure of
possibilities. It lies at the eye of a maelstrom of technologies, network
models and frequency bands, waiting for many trials to end and the mani-
festation of a clue as to the most practical and commercially viable direc-
tion.”
That’s one possibility.
Further Reading
Unleashing the Killer App: Digital Strategies for Market Dominance, by Larry
Downes and Chunka Mui, Harvard Business School Press, rev sub ed.
(March 2000).
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Knowledge Management
Knowledge management is the art (and science) of managing the “knowl-
edge” that a company possesses. To manage knowledge explicitly is to
treat knowledge as a part of the business that needs to be recognized in a
company’s strategy—and in its practices. If a company engages in knowl-
edge management, for example, some employees’ performances may be
measured, in part, on their contributions to the acquisition of knowledge,
and their skill at disseminating it to their colleagues. Knowledge is seen as
an explicit contributor to the company’s results. Some companies have
dedicated knowledge functions—that is, departments or groups of people
dedicated to gathering and managing the company’s knowledge. In some
firms, the people from this department might work with managers from
other areas in the company to “capture” what they’ve been learning and
write it up for all to read. In other companies, knowledge work might be
spread through different divisions.
The idea of managing knowledge explicitly has taken hold as the term
“knowledge worker” has gained in use and popularity. Both terms were
for a time associated primarily with “information-based businesses,” such
as service businesses. But now, all sorts of companies are recognizing that
knowledge can be a useful way to think about what it is that employees
know that translates into a competitive advantage for the business.
Any size company can engage in knowledge management—and many
do so without even calling it knowledge management. Say for example,
the company in question is a marketing firm. The knowledge that the
marketing consultants acquire as a result of working with one client may
prove valuable to other consultants in future engagements. Not the knowl-
edge of the clients (nor any proprietary information) but rather, the
knowledge of what it is like to work on a particular sort of campaign, with
certain logistical challenges, or characteristics. This firm may call what they
do “knowledge management,” but they may also not have a name for it,
and simply do it as part of how they operate.
Managing knowledge explicitly—that is, recognizing it as an asset, and
something that can be counted as part of what gives a company its com-
petitive edge—is difficult, in part because knowledge is an “intangible
asset.” As an article in Fast Company magazine, noted:
The trick is to balance the “hard” with the “soft”—tapping the

knowledge locked in people’s experience. This “tacit knowledge” is
213
frequently overlooked or diminished by companies. In contrast, most

companies have elaborate systems to capture and share their “explicit
knowledge”—the stuff that shows up in manuals, databases, and em-
ployee handbooks. This kind of knowledge never translates into a
winning strategy. What good is a database if it doesn’t include what
the employees really know? (“Strategy as if Knowledge Mattered,” by
Brook Manville and Nathaniel Foot, Issue 2, April 1996, page 66).
In order for a company to be able to tap into employees’ knowledge

successfully, the company’s other policies and practices must also be sup-
portive of knowledge development. If a company wants to “capture” what
its employees know, those employees must feel that they are encouraged
to speak up and share their thoughts about the company and how it oper-
ates. A company in which employees are not encouraged to speak freely is
going to have a more difficult time gathering their knowledge.
It is also difficult for many companies to assess what their knowledge is
worth. An essay published in the Journal of Knowledge Management Prac-
tice, August 1999, titled “A Viable System Model: Consideration of
Knowledge Management,” by Allenna Leonard, PhD, contends that indi-
vidual and organizational knowledge is difficult to value and therefore dif-
ficult to manage.
You must learn to manage yourself and your formal and informal ex-
changes and interactions with others. This must be done in the con-
text of your understanding of who you are: your goals, your capabili-
ties, your knowledge of your own strengths and weaknesses; and your
appreciation of your social, technical, and business environments.
A report titled, “What is the Knowledge Economy?” published by Ernst

and Young, August 31, 1999, discusses the increasing importance of
knowledge as an asset in business. In an age where more businesses gain
competitive advantage on the information they control and provide, it is
also increasingly important to manage knowledge internally.
The report states, “There is now considerable evidence that the intangi-
ble component of the value of high technology and service firms far out-
weighs the tangible values of its physical assets, such as buildings or equip-
ment. The physical assets of a firm such as Microsoft, for example, are a
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Knowledge Worker
tiny proportion of its market capitalization. The difference is its intellectual

capital.”
The quotation that begins the report, attributed to the World Develop-
ment Report, 1999, sums it up as follows:
For countries in the vanguard of the world economy, the balance be-
tween knowledge and resources has shifted so far towards the former
that knowledge has become perhaps the most important factor deter-
mining the standard of living—more than land, than tools, than la-
bour. Today’s most technologically advanced economies are truly
knowledge-based.
See also: Competitive Advantage; Drucker, Peter; Intellectual Capital;

Knowledge Worker
Further Reading
“People, Knowledge And Technology: What Have We Learnt So Far,?” Proceed-
ings of the First Ikms International Conference on Knowledge Management,
Singapore 13—15 December 2004, World Scientific Publishing Company
(December 31, 2004).
www.advancingknowledge.com
www.cfses.com/documents/knowledgeeconprimer.pdf
www.futureofinnovation.com
www.theworkfoundation.com
Knowledge Worker
Knowledge workers are people who are employed to use information or
data in a way that enhances the performance of their company. In an age
where education is becoming increasingly important in the workforce, and
more companies are trying to compete in the way in which they use or
disseminate information, knowledge workers are increasingly in demand.
Peter Drucker coined the term “knowledge worker,” in his book, Land-
marks of Tomorrow, first published in 1959 by Heineman. As he said
(www.brainyquote.com), “Today, knowledge has power. It controls access
to opportunity and advancement.”
Knowledge workers are people whose jobs have to do with gathering
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Knowledge Worker
and sharing or passing along information. When you buy a toaster, you’re
purchasing a product. But when you buy advice (as in consulting, for ex-
ample, or legal advice) you’re buying knowledge. So consultants and attor-
neys are “knowledge workers.” But knowledge workers can also work in
any other type of business (including toaster manufacturers!) If you are an
employee, and your knowledge (of the market, of the organization’s de-
sign, of the way in which the organization makes deals with other compa-
nies) helps your company improve its performance, then you are a knowl-
edge worker. Today, although the term “knowledge worker” is often
associated with service or “information” types of businesses, “knowledge
workers” really work in all kinds of companies.
In an article titled “Managing ‘Knowledge Workers’ ” in the October
13, 2005, issue of the Economist magazine, professor and author Thomas
Davenport said that finding ways to improve the productivity of knowl-
edge workers is “one of the most important economic issues of our time.”
In an interview with Alan Alter, “Knowledge Workers Need Better Man-
agement,” published August 5, 2005, by www.cioinsight.com, Davenport
said that knowledge workers are going to be the “key source of growth”
in most companies going forward. “New products and services, new ap-
proaches to marketing, new business models—all these come from knowl-
edge workers.”
Davenport went on to say that most knowledge workers are not man-
aged as well as they should be, and, as a result, most are not achieving their
full potential for their companies. Most companies still treat knowledge as
a separate entity from employees, but it would be better to find a way to
integrate the knowledge that a company is amassing into the daily lives of
employees. As Davenport explained, it’s one thing to accumulate knowl-
edge and store it somewhere. It is another thing (and far more preferable
and useful) to be able to have knowledge-acquisition and sharing be a part
of people’s day-to-day life at work. Not only should it be accessible, but it
should be routinely and regularly tapped into. As he said, “The best way
to use technology is to bake the knowledge into the job.”
In large part because of the increasing numbers of information-based
businesses, and businesses that operate in and around the Internet, knowl-
edge workers are often seen as those with advanced education, employed
in professional service fields, technology industries, or other “new econ-
omy” arenas. Knowledge workers are not all located in these areas,
though. And the term “knowledge worker” to some, in fact, encourages
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Knowledge Worker
Why I Do This: Reference Librarian

Beth Slater
I am a reference librarian for a public library. There are many different jobs
in a library, and mine is to help people find answers to questions they
have, and to show them how to get those answers. I help people face-to-
face, on the telephone, and via e-mail. How you do your job depends on
the size of the library where you work. In a small library, you may have to
help put the books away (called shelving) and check books out to people
as well as help them find information. In a large library your job may be
limited to assisting people at the reference desk, and your other duties
would be to recommend items for specific areas of the collection and to
weed. Weeding involves removing items that are too old to keep or items
that have become damaged or too worn out for people to take home. An-
other part of my job is to teach basic computer classes for the public to
take for free, so computer experience is recommended.
How did I discover this job? I wanted to get a Master’s degree where I
could do research. My older sister asked about librarianship since I have al-
ways enjoyed books and learning, and I found out that librarians need (in
most cases) a Master’s degree. It seemed like the perfect idea—this way I
would not be limited to research in one area, I could research anything for
anybody. I’ve worked in a medical library, a research library, and two pub-
lic libraries. I found out that I enjoy working with the public the best. I
like to help people find answers and I also like to find new authors for peo-
ple to enjoy reading, which is called Reader’s Advisory. I am an avid
reader, mainly in the fiction areas of mystery and fantasy, and there are peo-
ple of all ages who enjoy the same kind of books.
There is an unexpected area to my job. The people you help everyday
help you to understand how different everyone is, and how people commu-
nicate ideas and questions differently. You have to become adept at fishing
for information, because most of the time what a person asks for is not ex-
actly what they want, and a few careful questions can make a big difference
in where to find answers. People who become librarians are usually people
who could not decide on one area of interest—they like to learn a lot
about everything, and they never want to stop learning.
an inaccurate or limiting perception of the knowledge that employees in

other industries must bring to bear at their jobs.
Meredith Levinson wrote in “ABC: An Introduction to Knowledge
Management” (www.cio.com), that
a golf caddie is a knowledge worker who provides advice to the golfer

based on his or her knowledge of the course, the clubs, and the con-
217
Knowledge Worker
dition, or immediate context (weather, for example). A caddie also

provides a good example of how knowledge management can be used
to get the most out of a knowledge worker. Say, for example, the
caddie provides good advice and the golfer in turn offers a bigger tip.
This simple exchange could be parlayed into a knowledge benefit for
the golf course, as follows: “The caddie master may decide to reward
caddies for sharing their tips by offering them credits for pro shop
merchandise. Once the best advice is collected, the course manager
would publish the information in notebooks (or make it available on
PDAs), and distribute them to all the caddies. The end result of a
well-designed KM program is that everyone wins. In this case, caddies
get bigger tips and deals on merchandise, golfers play better because
they benefit from the collective experience of caddies, and the course
owners win because better scores lead to more repeat business.
Mike Rose, a professor at the UCLA graduate school of Education and

Information Studies, wrote that the term “knowledge worker” is too often
associated with the “new economy,” and that that context is limiting. As
Rose wrote in an opinion piece entitled “Workers Must Use Their Brains
as Well as Their Hands,” published in the Buffalo News on September 11,
2007:
Take, for example, the waitress. In the busy restaurant, the waitress
has to remember orders and monitor them, attend to a dynamic envi-
ronment, prioritize tasks and manage the flow of work, make deci-
sions on the fly. If we want to create an economy that optimizes the
conditions for workers to use their minds, then let us do that in a
broad and expansive way.
See also: Drucker, Peter; Knowledge Management; Learning Organiza-

tion
Further Reading
Knowedge Management: Concepts and Best Practices, by Kai Mertins, Peter Heisig,
and Jens Vorbek (eds.), Springer; 2nd ed. (August 5, 2003)
www.babsonknowledge.org
www.cio.com
218
L
Lean Manufacturing
Lean manufacturing is also known as the Toyota Production System,

which is a philosophy organizing manufacturing logistics at Toyota. The
concept was created by the founder of Toyota, Sakichi Toyoda, his son,
Kiichiro Toyoda, and the engineer, Taiichi Ohno, who drew heavily on
the work of W. Edwards Deming and the writings of Henry Ford.
The idea calls for factories to reduce cycle times—the time it takes to
make a given product or component—by eliminating waste. This can be
wasted time, due to unnecessary steps or motions. It can also be wasted
“output” due to overproduction.
According to the Rockford Consulting Group, Ltd. (1999), the con-
cept’s “key thrust is to increase the value-added work by eliminating waste
and reducing incidental work. The technique often decreases the time be-
tween a customer order and shipment, and it is designed to radically im-
prove profitability, customer satisfaction, throughput time, and employee
morale.”
The benefits generally are lower costs, higher quality, and shorter lead
times. The term “lean manufacturing” is coined to represent half the
human effort in the company, half the manufacturing space, half the
investment in tools, and half the engineering hours to develop a new
product in half the time.
Fast Company magazine took a look at what has made Toyota so successful
in its December 2006/January 2007 issue. The article says that “Lean
manufacturing and continuous improvement have been around for more
than a quarter-century. But the incessant, almost mindless repetition of
those phrases camouflages the real power behind the ideas. Continuous
improvement is tectonic. By constantly questioning how you do things,
by constantly tweaking, you don’t outflank your competition next quarter.
Learning Organization
You outflank them next decade”(Fast Company magazine, “No Satisfac-

tion at Toyota,” by Charles Fishman, Issue 111, page 82).
See also: Made in Japan; Six Sigma; Total Quality Management
Further Reading
Lean Manufacturing that Works: Powerful Tools for Dramatically Reducing Waste
and Maximizing Profits, by Bill Carreira, AMACOM/American Manage-
ment Association, 1st ed. (October 30, 2004),
A “learning organization” is one that isn’t ever satisfied with the status
quo. Learning organizations are made up of people who are fully engaged
in their work, who want to see the organization continually improve its
performance, and who are open to new ideas, and are flexible enough to
adapt them.
The term “learning organization” is credited to Peter Senge, a senior
lecturer at the Massachusetts Institute of Technology. Senge coined the
term in his book The Fifth Discipline: The Art and Practice of the Learning
Organization. Senge is the founding chair of the Society for Organiza-
tional Learning.
He talked about learning organizations in an interview with Fast Com-
pany magazine in April 1999:
I have never seen a successful organizational-learning program rolled

out from the top. Not a single one. Conversely, every change process
that I’ve seen that was sustained and that spread has started small.
Usually these programs start with just one team. That team can be
any team, including an executive team. . . . Just as nothing in nature
starts big, so the way to start creating change is with a pilot group—a
growth seed. As you think about a pilot group, there are certain
choices that you have to make in order to make the group work. The
first choice goes back to the issue of compliance versus commitment:
Will the change effort be driven by authority or by learning? (“Learn-
ing for a Change,” by Alan M. Webber. Issue 24. Page 178. April
1999).
220
Why I Do This: Educational Support Personnel “ESP”

Nanette P. Jacob
My job is working in an elementary school K through 8th grade with the
children. A few years ago I would have been called a Teacher’s assistant. I
find my job very interesting and never boring. Each year I have new kids
to work with. My day is spent helping special education kids with every-
thing from English, math, social studies, science to art, gym, and music—
whatever the need is for the child or group of children. I may take a group
out of a classroom to read. Or I may take one child to study on a particu-
lar test or problem in class. This year I am taking kids out of 1st grade to
do reading groups. When I am not doing that, I am a 1-to-1 aide with an
autistic child. I help that child with math.
This can be a very challenging job on certain days but it is always reward-
ing. I found my job ten years ago when my kids were in the school and I
heard that they needed a part time assistant. I am now full time. The older
kids will ask me “don’t you hate being in school all day working?” They
don’t know it’s not a bad job to get up every morning knowing I’m going
to hang out with kids. It’s a lot of fun.
What’s unexpected about my job? I have found that working with kin-
dergarteners and 8th graders is about the same. They need the same
amount of attention and they will give you all of theirs.
This job doesn’t have the best pay, but the benefits make up for it.
Christmas vacation, February vacation, spring vacation and all summer off.
That is not too tough to handle.
Harvard Business School professor David Garvin is also well known for
his research and thinking on learning organizations. His book, Learning in
Action: A Guide to Putting the Learning Organization to Work (Harvard
Business School Press, paperback edition, May 2003), explores the con-
texts in which employees can create learning organizations, and also the
challenges that many companies face when trying to build a learning orga-
nization.
In a discussion of that book published November 13, 2000, in the Har-
vard Business School Working Knowledge newsletter (“Managing to
Learn: How Companies can Turn Knowledge into Action”) author Laurie
Joan Aron wrote that “Garvin’s concept of a learning organization is one
that is ‘skilled at creating, acquiring, interpreting, transferring, and retain-
ing knowledge, and at purposefully modifying its behavior to reflect new
knowledge and insights.’” Although new ideas are essential, he advises,
lots of lightbulb epiphanies alone do not a learning organization make.
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Leveraged Buyout
The necessary complement is a mind-set of inquiry and experimentation,

plus a knowledge-sharing process that enables everyone in a company to
act in an informed way upon what’s been learned before.
See also: Action Learning
Further Reading
The Fifth Discipline: The Art & Practice of the Learning Organization, by Peter
M. Senge, Currency (2006).
Learning in Action: A Guide to Putting the Learning Organization to Work, by
David L. Garvin, Harvard Business School Press (2003).
Leveraged Buyout (LBO)

A leveraged buyout (LBO) is the acquisition by one company of another
using a significant amount of borrowed money to meet the cost of the
acquisition, according to Investopedia (Investopedia, Inc., 2007) “Often,
the assets of the company being acquired are used as collateral for the
loans in addition to the assets of the acquiring company. The purpose of
leveraged buyouts is to allow companies to make large acquisitions with-
out having to commit a lot of capital.”
In an LBO, in other words, the acquired company is the one responsible
for the interest payments that the purchasing company created in the
transaction. According to Investopedia, “In an LBO, there is usually a
ratio of 90 percent debt to 10 percent equity. Because of this high debt/
equity ratio, the bonds usually are not investment grade and are referred
to as junk bonds.”
Investopedia notes that leveraged buyouts “have had a notorious his-
tory, especially in the 1980s when several prominent buyouts led to the
eventual bankruptcy of the acquired companies.” What happened in those
cases was that the acquired companies were simply unable to make the
interest payments and continue to operate; they didn’t have the cash.
Investopedia also notes that “It can be considered ironic that a com-
pany’s success (in the form of assets on the balance sheet) can be used
against it as collateral by a hostile company that acquires it.” For this rea-
son, some regard LBOs as an especially ruthless, predatory tactic. Accord-
ing to Investopedia, the largest LBO (as of 2006) was “the acquisition of
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Leveraged Buyout
HCA Inc. in 2006 by Kohlberg Kravis Roberts & Co. (KKR), Bain &
Co., and Merrill Lynch.”
An article by Bloomberg News titled “KKR to Pay $837 Million in Fees
for 2006 Buyouts,” published Jan. 5, 2007 that appeared in the Inter-
national Herald Tribune (http://www.iht.com/articles/2007/01/04/
bloomberg/bxkkr.php) discusses leveraged buyouts in detail, particularly
the acquisition of HCA Inc.
The article says leveraged buyout firms use a combination of debt se-
cured on the companies they buy and money from their own funds to pay
for the takeovers. They seek profit by increasing sales, selling assets, and
cutting costs and then usually sell the business in five years.
Private equity firms have about $409 billion in cash to invest and can
raise another $1.2 trillion in non-investment grade bonds and loans,
according to Morgan Stanley. KKR alone is gathering more than $15
billion for its biggest-ever buyout fund . . .
New York-based Blackstone Group’s takeover of Equity Office
Properties Trust capped a record $326 billion of takeovers announced
by private equity firms in the United States in 2006, according to
data compiled by Bloomberg. The firms announced $216 billion of
European purchases, including the 7.6 billion takeover of the Dutch
publisher VNU by a group including Blackstone and Kohlberg Kravis
Roberts in July. Financial advisors also reap handsome benefits.
According to the article: “Wall Street firms typically charge clients about
0.6 percent of the value of a deal for their takeover advice. They earn an
average fee of about 6 percent of the value of an IPO in the United States
and about 2.3 percent in Europe,” according to Bloomberg data.
The company that acquires another company may do so in order to
make a profit, but it seems that in the world of leveraged buyouts, those
firms that guide the deal may have the surest returns.
For further information on leveraged buyouts: http://privateequity
.dowjones.com is the source of LBO Wire, which provides daily news and
analysis of the buyouts market.
See also: Sarbanes–Oxley Act of 2002
Further Reading
The Art of M&A: A Merger Acquisition Buyout Guide, by Stanley Foster Reed
and Alexandra Reed Lajoux, McGraw-Hill, 3rd ed. (December 1998).
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Lifetime Employment
Lifetime Employment
Lifetime employment means that when a person is hired by a company,
they are assured of being employed with that company until they retire.
It was the traditional approach to employment in Japan—and is still a
widespread practice—and was once also the “norm” in big companies in
the United States, such as IBM.
As Mike Moran wrote on webpronews.com/blogtalk on June 25, 2007,
“The IBM I joined years ago was a very paternalistic (maternalistic?) cul-
ture, where excellence occurred but was not really rewarded. IBM fa-
mously promised lifetime employment—no layoffs—rarely firing anyone
even for incompetence. When it came time to give out annual raises, I
used to joke that they’d rather give ten people a dime than one person a
dollar.”
IBM’s near-death experience in the early ’90s caused it to modernize its
approach to emphasize value to the customer rather than value to its own
employees, a wrenching but needed culture change.” (Moran, who is an
IBM Distinguished Engineer, and the author of Search Engine Marketing,
Inc. [IBM Press, 2006], as well as a regular blog, writes in this piece that
IBM is a “better fit” for him now because the company tolerates his “idio-
syncrasies in return for the value” that he brings to the organization.)
IBM, like most other big U.S. companies, has moved away from the
practice of lifetime employment. And Japan is doing the same, albeit
slowly. An article by Sheryl WuDunn, published in the New York Times
on June 12, 1996, entitled “Lifetime Employment Is No Longer a Given
at Japanese Companies (sourced on www.hartfordhwp.com/archives, and
in the New York Times archives, listed as “Downsizing Comes to Japan,
Fraying Old Workplace Ties”), discussed how when one fifty-three-year
old executive at a Japanese firm was asked to resign, he refused, and so the
company simply had him sit at a desk and continually churn out reports
on the same topic: his “Second Life.” The article went on to say that to
unemployed workers, this man had it pretty good. But that in Japan, it is
becoming more important to perform at work than to have seniority. And
that increasingly, employees are leaving companies to start their own, or,
simply, to spend time with family. The “backdrop” the article says, “is the
harsh new reality that the guarantee of a lifelong job, declared on the way
out before but still a staple of many of the country’s biggest companies, is
finally beginning to break down.”
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Lifetime Employment
The article goes on to say that the lifetime employment model helped
spur commitment to a company, and also helped build Japan into an eco-
nomic powerhouse. But over time, that approach created a “bloated work-
force, particularly in the white-collar sector, which proved to be a painful
drag that prolonged [Japan’s eventual] economic troubles.”
That was 1996. A news analysis found on www.cnn.com called “The
Changing Face of Japanese Employment” written by Marina Kamimura,
CNN Tokyo Bureau Chief and posted on the web July 29, 1999, dis-
cussed how employees at Japanese companies no longer expect to be
treated like family, and no longer expect the same types of benefits, or
commitment from the company. Employees, the article said, are also no
longer as committed to the companies as they were traditionally.
The article quoted a twenty-three-year-old named Miki Harada on the
new realities of Japanese employment. Harada said, “Our parents were so-
called ‘company people,’ who only thought of what they could do for the
company, rather than what they could do for themselves,” Harada said.
“For me, my career is important, but so is my private life.”
Subsequent news reports echo those views; employment norms in Japan
continue to change. As they do all over the globe.
Thomas L. Friedman’s book The World is Flat: A Brief History of the
Twenty-First Century (Farrar, Straus and Giroux, 2005), excerpted in Blue-
print magazine, May 31, 2005, in an article entitled “Globalization3.0”
(www.dlc.org), contains the following nugget about lifetime employment,
and what might take its place:
Since lifetime employment is a form of fat that a flat world simply

cannot sustain any longer, compassionate flatism seeks to focus its
energy on how government and business can enhance every worker’s
lifetime employability. Lifetime employment depends on preserving a
lot of fat. Lifetime employability requires replacing that fat with mus-
cle. The social contract that progressives should try to enforce be-
tween government and workers, and companies and workers, is one
in which government and companies say, “We cannot guarantee you
any lifetime employment. But we can guarantee you that government
and companies will focus on giving you the tools to make you more
lifetime employable.”
Friedman, a Pulitzer Prize-winning New York Times columnist, writes

that the Earth is now amidst “Globalization 3.0” and that today’s political
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Lifetime Employment
and technological landscapes have fueled necessary changes in the way we

think about business and traditional structures in economics.
Further Reading
“Japanese Lifetime Employment: A Century’s Perspective,” by Chiaki Moriguchi
and Hiroshi Ono, in Institutional Change in Japan, by Magnus Blomstrom,
and Sumner La Croix (eds.), pp. 152–176, Routledge (2006).
http://ideas.repec.org/p/hhs/eijswp/0205.html. See also: http://ideas.repec
.org/p/hhs/hastef/0624.html
Signs of Changing Culture: Workplace Loyalties Change,

but the Value of Mentoring Doesn’t
Published: May 16, 2007 in Knowledge@Wharton
In Homer’s great poem The Odyssey, Odysseus had a tough time
finding his way home to his palace in Ithaca after the Trojan War, what
with all those monsters, dangerous whirlpools, Sirens, and Lotus Eaters
threatening to derail his journey. But Odysseus at least had the comfort
of knowing that he had left a wise and trusted fellow named Mentor to
be the guardian and teacher of his son, Telemachus, during his absence.
Modern employees need mentors as much as Telemachus, especially
in these times of corporate upheaval. One of the most notable shifts in
the workplace in recent years has been the rapid disappearance of the
prototypical loyal employee who would work 30 or 40 years for the
same corporation and then retire with a gold watch and a pension.
Many workers today hold positions at multiple companies during their
careers, and may feel no particular loyalty to remain at any organization
for any great length of time. By the same token, many companies feel
no special loyalty to their workers.
Despite this sea change in corporate culture—and in some instances
because of it—mentoring is just as important as it ever has been for
younger workers looking to learn the ropes from more experienced em-
ployees, according to experts at Wharton and other business schools. In-
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Lifetime Employment
deed, mentoring may also be more important than ever for organiza-
tions themselves, since linking up a mature mentor with a promising
protégé is an excellent way to keep valued up-and-comers from jump-
ing ship and taking jobs elsewhere.
Increasingly, management experts view mentoring not just as a one-
on-one relationship but as a component of social networking, where
protégés, also known as mentees, gain valuable knowledge by interact-
ing with many experienced people. Mentees, for example, often look to
more experienced co-workers for career guidance and professional ad-
vice and use them as sounding boards for ideas and problem-solving.
Mentors also help employees learn about, and become acclimated to,
an organization’s culture and politics.
Yet these days, frequent job changes by younger workers could actu-
ally dissuade senior managers from volunteering to be mentors, since
they may not wish to spend valuable time with someone who might
leave the company before long. Therefore, young workers who want
guidance should be more aggressive in seeking to build relationships
with mentors than they were in the past, according to these experts.
Peter Cappelli, a Wharton management professor and director of the
school’s Center for Human Resources, says mentoring has assumed a dif-
ferent guise in recent years in response to the disintegration of the tradi-
tional employer-employee contract as a result of downsizing and out-
sourcing.
“If you go back a generation ago, your immediate supervisor had the
responsibility to develop you; the mentor was your boss,” says Cappelli.
“Bosses knew how to be mentors. They knew what employees needed
to do and they knew how to give employees a chance to accomplish
things. Mentors were assessed based on the number of subordinates
who got promoted and how the subordinates moved along in their ca-
reers.”
But the boss-subordinate model of mentoring shifted in the 1980s.
“Companies had a surplus of white-collar managers, and reengineering
waves in corporations were about getting rid of people,” Cappelli notes.
“Companies told mentors, ’We’re trying to get rid of people, so we
can’t promote your mentee.’”
Although bosses continued to play an important role as mentors
when they could, the supervisor-subordinate model waned and compa-
nies sought other ways to help workers navigate their way in the work-
place. According to Cappelli: “Companies said, ’What do we do for
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Lifetime Employment
these folks? Bosses aren’t helping them anymore.’ The idea became to
find mentors who weren’t necessarily someone you worked closely with
or for. Instead of your supervisor, your mentor became somebody you
could bounce ideas off of and get career advice from. It became more
low-impact.”
Safe to Let Your Guard Down

Terri A. Scandura, a management professor and dean of the graduate
school at the University of Miami, says most Fortune 500 companies
see mentoring as an important employee development tool, with 71 per-
cent of them having mentoring programs.
Various academic studies since the 1980s have demonstrated the
many benefits of mentoring. “Clearly, employees who have mentors
earn more money, are better socialized into the organization and are
more productive,” Scandura says. “They experience less stress and get
promoted more rapidly. Because of the positive benefits shown to men-
tors, companies are still very interested in this process.”
Wharton management professor Katherine Klein says what mentees
look for in a relationship with a mentor is “having a sounding board
and a place where it’s safe to be vulnerable and get career advice. It’s a
relationship where one can let one’s guard down, a place where one
can get honest feedback, and a place, ideally, where one can get psy-
chological and social support in handling stressful situations.”
For their part, effective mentors are experienced people who should
possess knowledge of career paths inside, and even outside, the organi-
zation, Klein says. “Mentors also should have an understanding of the
organization’s values, culture, and norms so they can pass these along
to mentees. The mentor should be sensitive to the mentee’s needs and
wishes, and enhance the mentee’s career potential, while simultaneously
looking for ways the mentee’s potential can benefit the organization.”
And what do mentors derive from the relationship? “You get the sat-
isfaction of seeing somebody develop. And don’t forget that mentees
may be in a position to help the mentor at some point. Mentees may
also make the mentor look good. There’s no question that Tiger Woods
made his father look good,” says Klein, referring to Earl Woods, who
taught the golf champion how to play the game at an early age and
served as his coach into adulthood.
Scandura adds that mentors can obtain more than just a glow of satis-
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Lifetime Employment
faction at having helped someone: They can actually learn a lot about
their companies and discover new ideas by engaging with mentees.
“Dealing with a person who is your junior improves your network,” she
says. “Mentors know more about what goes on in lower levels when
they deal with mentees. Junior people can provide information to men-
tors. . . . [They] are up on the latest technology and knowledge. So it’s
an interactive process: Mentors and protégés become co-learners.”
Mentoring also offers benefits to organizations. For one thing, firms
enjoy increased employee engagement and productivity. A positive men-
toring relationship can go a long way to helping a firm retain its best
employees, thus improving an organization’s “bench strength,” accord-
ing to Scandura.
If a company wants to implement a successful formal mentoring pro-
gram, both the mentor and mentee must be genuinely excited about
the initiative, adds Jennifer S. Mueller, a Wharton management profes-
sor. “It has to be a long-term program with frequent meetings, and the
meetings have to be meaningful, not arbitrary. You can’t just meet to
talk about ’stuff’ three times a year.”
Scandura agrees. Companies can set up mentoring any number of
ways, but the most effective approach “is where the human resources
department—or even top management—identifies the people who
have the experience and knowledge and says, ’We want them to be the
most involved in the mentoring program.’”
Sun Microsystems Study: Higher Retention Rates

In October 2006, Sun Microsystems, a technology company based in
Santa Clara, Calif., released the results of a study that explored the
value of mentoring. The study, conducted by Gartner, a research and
advisory firm, and Capital Analytics, a software and services company,
used statistical analysis to examine the financial impact of mentoring
and how Sun could target its spending in this area. The study concluded
that “mentoring has a positive impact on mentors and mentees, produc-
ing employees that are more highly valued by the business.”
The researchers looked at data from more than 1,000 Sun employees
over a five-year period, broken down by job classifications, such as ad-
ministrators and engineers. The study examined sixty-eight variables—
including product area, base pay, previous job code, and reason for
termination—to find correlations with a half-dozen metrics: employee
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Lifetime Employment
salary grade, salary grade change, job performance rating, promotion,

merit increase in salary, and salary increase due to promotion.
The study found that 25 percent of employees in a test group who
took part in the company’s mentoring program had a salary grade
change, compared with 5 percent of employees in a control group who
did not participate in the program. The research also showed that the
program had positive financial benefits for mentors: 28 percent of men-
tors in the test group had a salary grade change as opposed to just 5
percent in the control group. In addition, the study determined that ad-
ministrators benefited more from the mentoring program than engi-
neers. “This result was somewhat counterintuitive, since Sun had ex-
pected that higher skill positions would benefit most from the
program,” the study reported.
The researchers also learned that Sun’s mentoring program was least
effective for the highest performers. This was an especially startling re-
sult since most mentoring programs focus on developing high perform-
ers with high potential, and led the researchers to conclude that “the
better investment for Sun would be to spend the money on lower per-
formers to help them raise their level of performance.”
Other findings from the study include: Mentors were promoted six
times more often than those not in the program; mentees were pro-
moted five times more often than those not in the program; and reten-
tion rates were much higher for mentees (72 percent) and mentors (69
percent) than for employees who did not participate in the mentoring
program (49 percent).
Men Mentoring Men

Formal mentoring programs are only one way for young workers to
increase their knowledge. Informal mentoring relationships are often
more typical and more beneficial to both mentor and protégé, accord-
ing to Klein. “Mentoring often happens informally,” she says. “It hap-
pens most commonly when somebody senior starts giving advice and
starts playing the role of a sounding board. When I go to somebody
and say, ’I’m considering taking that job, what do you think?’—that
can be the beginning of a mentoring relationship.”
Formal corporate mentoring programs are worthwhile, but they can
founder if the mentor and protégé do not hit it off. “A formal mentor-
ing program is like a blind date set up by somebody who ostensibly
knows both people, but it might not be a good match,” Klein notes.
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Lifetime Employment
“And if a formal mentoring program simply tells the mentor to initiate

an hour-long conversation with the protégé about his or her career ev-
ery quarter, it’s not going to be terribly meaningful. But it can be mean-
ingful if it sets a relationship in motion. I don’t think there’s anything
necessarily wrong with formal programs. But in some cases, it might be
more productive for a company to simply say to managers that it’s im-
portant for them to play a development role for junior people and ask
the managers to reach out to them.”
It is particularly important for senior management to encourage men-
tors to offer help to women and minorities, according to Klein. “Compa-
nies should be mindful of the fact that it may be difficult for women
and minorities to find mentors. Senior management should tell all man-
agers to ’step out of your comfort zones and provide support and ad-
vice for a broad section of employees.’ Statements like that, backed up
by the most senior people, can make a big difference.”
Klein says it is particularly important for protégés to be proactive in
trying to establish a relationship with a senior person and be energetic
in keeping the relationship going. She uses the phrase “irresistible pro-
tégé” to describe these employees.
“Research shows that protégés influence the amount of mentoring
they receive,” according to Klein. “You’re more likely to get mentored
if you’re talented, have an outgoing personality and are career- and
goal-oriented. Once a mentor sees that you’re eager, the more likely it
is the mentor will want to spend the time and social capital on you, in-
troduce you to the right people, and so on. One unfortunate conse-
quence of this is that sometimes people who are most in need of guid-
ance don’t have mentors, which means companies must make a special
effort to reach out to the people who really need mentors.”
Klein points to one study, for instance, that showed it is easier for
young men to get mentored by senior men than it is for young women
to get mentored by senior men. Since men continue to hold most of the
senior positions in organizations, it can be difficult for young women to
get mentored. There is nothing necessarily nefarious about this ten-
dency, says Klein, adding, “Each of us tends to attract people like us.”
But organizations do need to tackle this issue.
Young people may also wish to be assertive in trying to establish a
mentoring relationship because they may not stay with the same organi-
zation for more than a few years. Failing to find a mentor might result
in the younger person missing out on career-advancement opportunities
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Lifetime Employment
at their current firm or making bad choices by moving to another firm

or changing careers, says Klein. But management scholars do not yet
know a lot about how this change in the workplace is affecting the men-
tor-mentee relationship.
“If the employment contract is shorter and looser than before, if peo-
ple do not stay in organizations for decades like they once did, what
does that mean for people who need mentors?” Klein asks. “If you find
a mentor in Company A and you move to Company B and the mentor
moves to Company C, can you still get mentored by this person? Or
are people having to rebuild mentoring relationships with greater fre-
quency because everybody is moving around more than before? We
don’t know the answers to those questions yet.”
But Wharton’s Mueller suggests that even if a mentee leaves a corpo-
ration after four or five years, the corporation may still reap long-term
benefits from having mentored that young person. “The organization
can benefit when an employee leaves if the person rises in promi-
nence,” Mueller says. “That person can generate alliances. If the person
moves to a company that is not in direct competition with you, he or
she may stay in touch with people at your company and exchange valu-
able information.”
In the end, some employees may find that the best mentors are their
managers—whether they call them mentors or not.
“In my years of observation of people in organizations and their de-
velopment, I find no method more powerful for the development of
management skills than, simply, working for top-notch managers,” says
David Sirota, co-author of The Enthusiastic Employee: How Companies
Profit by Giving Workers What They Want. “By ‘top-notch’ I mean
both that they know how to manage—and are therefore good role
models—and that they have a strong interest in their subordinates’ de-
velopment so that they take the time and provide the challenging job as-
signments that facilitate this development.
“This is not to say that mentoring programs, formal management de-
velopment and job rotation are not important. They help. But a caring
managerial role model has, in my observation, by far the biggest im-
pact. Companies, then, in planning for the development of employees
who they feel have high potential should be certain to provide them
with that kind of experience.”
232
The Way We Work
The Way
We Work
An Encyclopedia of
Business Culture
Volume 2
M–Z
Edited by Regina Fazio Maruca
GREENWOOD PRESS
Westport, Connecticut • London
Library of Congress Cataloging-in-Publication Data
The way we work : an encyclopedia of business culture / edited by Regina Fazio Maruca.
p. cm.
Includes bibliographical references and index.
ISBN-13: 978-0-313-33886-1 ((set) : alk. paper)
1. Corporate culture—United States. 2. Work environment—United States.
I. Maruca, Regina Fazio.
HD58.7.W3328 2008
658—dc22 2007040510
British Library Cataloguing in Publication Data is available.
Copyright © 2008 by Regina Fazio Maruca
All rights reserved. No portion of this book may be
reproduced, by any process or technique, without the
express written consent of the publisher.
Library of Congress Catalog Card Number: 2007040510
ISBN: 978-0-313-33886-1 (set)
978-0-313-33887-8 (vol. 1)
978-0-313-33888-5 (vol. 2)
First published in 2008
Greenwood Press, 88 Post Road West, Westport, CT 06881
An imprint of Greenwood Publishing Group, Inc.
www.greenwood.com
Printed in the United States of America
The paper used in this book complies with the

Permanent Paper Standard issued by the National
Information Standards Organization (Z39.48–1984).
10 9 8 7 6 5 4 3 2 1
Every reasonable effort has been made to trace the owners of copyright materials in this
book, but in some instances this has proven impossible. The editor and publisher will be
glad to receive information leading to more complete acknowledgments in subsequent
printings of the book and in the meantime extend their apologies for any omissions.
Contents
Alphabetical List of Entries vii
Entries by Subject xi
Preface xv
Acknowledgments xxi
The Encyclopedia 1
Appendix 395
Bibliography 423
Index 431
Action Learning Budget

Age Discrimination Business-to-Business/Business-to-
American Association of Retired Consumer (B2B/B2C)
Persons (AARP) Cafeteria Benefit
American Federation of Labor and Carnegie, Dale/How to Win
Congress of Industrial Friends and Influence People
Organizations (AFL-CIO) Casual Friday
Americans with Disabilities Act Change Agent/Change
The Apprentice Management
The Art of War Code of Ethics
Balanced Scorecard Competitive Advantage
Benchmarking Competitive Intelligence
Best Practice Core Competencies
Blanchard, Ken Corner Office
Blue Collar Corporate Social Responsibility
Bonus Crisis/Risk Management
Bootstrapping Cubicle
Boundaryless Organization Dilbert
Brainstorming Diversity
Branding Dot.com/Dot.bomb
Bricks and Clicks Downsizing
Drucker, Peter Leveraged Buyout (LBO)

E-mail Lifetime Employment
Emotional Intelligence Made in Japan
Employee Assistance Programs Management by Objectives
Empowerment Managerial Grid
Enron Mass Customization
Equal Employment Opportunity Matrix Organizations
Commission (EEOC) Megatrends
Executive Coach Mid-Career
Executive Compensation Mission Statement
Exit Interview Moments of Truth
Feng Shui Myers-Briggs Type Indicator®
Flex-Time (MBTI)
The 4Ps Napster
Free Agent NASDAQ
General Electric (GE) Workout National Secretaries Day
Generation X, Y, and Z Networking
Glass Ceiling Offshoring
Golden Parachute Ombudsman
Hacker One-to-One Marketing
Harassment Open Book Management
Harvard Business Review Outsourcing
Headhunter Performance Management/
Herman Miller Furniture Performance Measurement
Horizontal Organizations The Peter Principle
Innovation Peters, Tom
Intangibles Portfolio Career
Intellectual Capital PowerPoint
Internet Real Time
Intranet/Extranet Reengineering
Job Sharing Relationship Marketing
Just-in-Time Sarbanes–Oxley Act of 2002
Kaizen Scenario Planning
Killer App Shareholder Value
Knowledge Management Six Sigma
Knowledge Worker Skunkworks
Lean Manufacturing Spin-off/Spinout
Learning Organization Stakeholder Theory/Management
viii
Strategic Alliances Total Quality Management (TQM)

Suggestion Box Training and Development
Supply Chain Turnaround
Sustainability 24/7
SWOT Analysis Value Proposition
Synergy Virtual Teams
Telework War for Talent
Temporary Workers Water Cooler
Theory X and Theory Y Whistleblower
360-Degree Feedback White Collar
Time Management
ix
Entries by Subject
Associations and Organizations Megatrends

American Association of Napster
Retired Persons (AARP) Peters, Tom
American Federation of
Labor and Congress of Daily Life
Industrial Organizations Casual Friday
(AFL-CIO) Dilbert
Equal Employment Exit Interview
Opportunity Commission Flex-Time
(EEOC) Job Sharing
Power Point
Cultural Influences, Milestones Real Time
or Markers Suggestion Box
The Apprentice Water Cooler
The Art of War
Dilbert Discrimination
Feng Shui Age Discrimination
Generation X, Y, and Z Americans with Disabilities
Harvard Business Review Act
Herman Miller Furniture Equal Employment Oppor-
Made in Japan tunity Commission (EEOC)
Entries by Subject
Diversity Scenario Planning

Glass Ceiling Shareholder Value
Employees Influential People

Blue Collar Blanchard, Ken
Cubicle Carnegie, Dale/How to Win
Employee Assistance Program Friends and Influence
Free Agent People
Generation X, Y, and Z Drucker, Peter
Hacker Peters, Tom
Knowledge Worker Leadership
Lifetime Employment Change Agent/Change
Mid-Career Management
Myers-Briggs Type Corner Office
Indicator® (MBTI) Emotional Intelligence
National Secretaries’ Day Executive Coach
Networking Executive Compensation
Portfolio Career Golden Parachute
Telework Headhunter
Temporary Workers Mid-Career
Training and Development Moments of Truth
War for Talent The Peter Principle
Whistleblower Portfolio Career
White Collar 360-Degree Feedback
Ethics Time Management
Enron Management Approaches
Sarbanes–Oxley Act of 2002 Action Learning
Balanced Scorecard
Finance Benchmarking
Budget Best Practice
Crisis/Risk Management Brainstorming
Enron Change Agent/Change
NASDAQ Management
Offshoring Empowerment
Outsourcing Flex-Time
xii
Entries by Subject
General Electric (GE) Strategy

Workout Bootstrapping
Horizontal Organizations Branding
Job Sharing Budget
Knowledge Management Bricks and clicks
Management by Objectives Business-to-Business/
Managerial Grid Business-to-Consumer
Matrix Organization (B2B/B2C)
Ombudsman Competitive Advantage
Open Book Management Competitive Intelligence
Performance Management/ Core Competencies
Performance Measurement Crisis/Risk Management
Six Sigma Downsizing
Suggestion Box The 4Ps
Synergy Innovation
Telework Intangibles
Theory X and Theory Y Intellectual Capital
Total Quality Management Just-in-Time
Virtual Teams Kaizen
Killer App
Manufacturing Lean Manufacturing
Just-in-Time Leveraged Buyout (LBO)
Offshoring Mass Customization
Lean Manufacturing Mission Statement
Outsourcing Offshoring
Skunkworks Outsourcing
Supply Chain One-to-One Marketing
Six Sigma Reengineering
Total Quality Management Relationship Marketing
Scenario Planning
Marketing Six Sigma
Branding Skunkworks
Bricks and Clicks Spin-off/Spinout
The 4Ps Stakeholder Theory/
One-to-One Marketing Management
Relationship Marketing Strategic Alliance
24/7 Supply Chain
Value Proposition Sustainability
xiii
Entries by Subject
SWOT Analysis Employee Assistance

Turnaround Programs
Value Proposition Executive Compensation
Flex-Time
New Economy Horizontal Organization
Bricks and Clicks Learning Organization
Dot.com/Dot.bomb Supply Chain
E-mail
Hacker Policies and Laws
Internet Americans with Disabilities
Intranet/Extranet Act
Knowledge Management Equal Employment
Knowledge Worker Opportunity Commission
Virtual Teams (EEOC)
War for Talent
Women
Organizational Design/ Corner Office
Description Diversity
Bonus Flex-Time
Boundaryless Organization Glass Ceiling
Cafeteria Benefits Job Sharing
Code of Ethics
xiv
Preface
“Business Culture” isn’t tangible. You can shape it; you can talk about its
characteristics; you can describe how people who work in a certain office
behave as a result of it; but business culture isn’t something that can be
physically grasped.
Accordingly, business culture is one of those “soft” yet incredibly pow-
erful elements of business as a whole. The importance of business culture
can perhaps be seen in the way it affects the individuals operating in that
culture. A strong and positive business culture can foster growth in an
organization and bring out the best in people. A weak culture, or a culture
of intimidation, can cause initially productive employees to become dis-
gruntled and unhappy to the point where they leave—it can also keep
those who remain from forming the kinds of teams that win in the market-
place.
Culture can be the difference between a company where employees
spend time together after work, and one where they all go their separate
ways at 5 P.M. It can be the difference between a company where employ-
ees spend a great deal of time meeting secretively behind closed doors,
and a company where they engage freely in a relatively tension-free atmo-
sphere. Culture can be the difference between a company where employees
compete against one another, and a company where employees share in-
Preface
formation and stand united, focused on external competition and on the

customer rather than internal issues.
Importantly, culture can change on a dime. The culture of work is dy-
namic. A new chief executive officer (CEO) can change a company’s cul-
ture pretty quickly. Similarly, a new manager can infuse a department with
a particular culture. Employees at all levels shape the culture of their com-
panies constantly by how they act, what they say to one another, and how
they represent the company to customers.
When you step back and consider business culture as it applies to all
companies—even if you set the boundaries loosely as “companies based in
the United States” and then limit the scope to “office” work—you see
that culture still evolves and changes, morphs and flows quickly at the big-
picture level.
Knowing this, our goal in compiling The Way We Work was to offer our
readers as many trends, definitions, and facts as possible within the covers
of these two volumes in order to capture a colorful and varied freeze-frame
look at office culture in the United States in the early years of the twenty-
first century. It is our hope that the contents will resonate with the people
who are hard at work in offices as of this writing, and help them better
understand the forces and factors that influence their organizations. The
set also offers a wealth of information that can serve as a useful resource
and starting point for high school and college students who are entering
the workforce and seek some guidance on what office work is like, and
how it is evolving.
What You Will Find
Over 100 entries, ranging from American Association of Retired Persons

(AARP) to white collar workers, and covering topics such as diversity,
learning organizations, mission statements, the glass ceiling, generation X
(Y, Z, etc.), and the war for talent, are included in this encyclopedia. The
topics and terms have been selected because each of them, in some way,
shapes the big picture of business culture as we know it.
It must be noted that one person’s opinion of the kinds of things that
shape business culture will naturally differ from someone else’s. And opin-
ions continue to change over time. In part, this transient nature of individ-
ual and general opinion is why a team of people including academic re-
searchers, journalists, corporate coaches, and executives and employees
xvi
Preface
from a wide range of companies came together to compile this book. In

deciding what to include—and what not to include—the team engaged in
often-vigorous debate over whether a certain term, or fact, or trend was
really a “culture-shaper” and so belonged in these pages. The items se-
lected for inclusion needed to have significant influence on business cul-
ture; they also had to have enduring impact. If you don’t expect to see
something, and it’s included, that is because the team determined that the
term or topic was in some way a significant influence on business culture.
If you do expect to see something, and it’s not here, that is most likely
because some other term or topic beat it out in the final analysis. As a
result, many formal and informal networks, associations, and the like are
not called out in the A–Z listings; where possible, these have been in-
cluded as reference sources.
In addition to the A–Z entries, you’ll also find a set of short features
titled “Why I Do This.” These are personal narratives that tap into the
motivations, pros, and cons of a host of individuals’ career choices and in
doing so move beyond office culture to include other kinds of work that
enable and assist office culture. If you think you want to be a Web-market-
ing expert, there is a “Why I Do This” that offers a glimpse into what day-
to-day life in this job is like. Are you more interested in working as a dental
office manager? What about a career as a finance executive? Librarian? Or
maybe a limo driver, enabling a host of executives, consultants, and the
like to work in multiple locations with relative ease? Driving limos is not
only about sitting in traffic; this job offers surprising upsides.
The “Why I Do This” essays do not represent every job available; what
they offer, however, is an insider’s perspective of the world of office work
and its supporting services from a diverse group of people located across
the United States. An outsider’s view of what work in a given office is like
can be vastly misleading; hearing directly from the employees is often an
eye-opener.
The encyclopedia also contains several feature articles that speak to par-
ticular aspects of the culture of work. Some of these—including Rob Gal-
ford’s essay on Leadership Mindsets, and Constantine von Hoffman’s inter-
view on Blogs and Work—were written for these volumes. Others, such as
the articles reprinted from Knowledge@Wharton, an online resource offer-
ing business insights, analysis,and information from a variety of sources,
have been included here because they offer particular insights into other
cultural elements of office life, and because they bring dedicated research
to bear on these issues.
xvii
Preface
The encyclopedia contains one key book chapter, reprinted from Align-
ing the Stars by Thomas Tierney and Jay Lorsch, and appearing here as an
appendix. This piece provides an in-depth look at what culture means in-
side professional service firms. And a series of short pieces, appearing under
the heading Signs of Changing Culture, reflect behaviors, happenings,
trends, and other influences of culture as reported in major newspapers
and magazines during the period when these volumes were being re-
searched.
Finally, the bibliography represents a host of resources available for
those who want to extend their research on business culture, or plumb the
depths of one or another topic in particular.
Themes
Interestingly—though perhaps not surprisingly—across all of the ele-

ments in this work, several common themes emerge. Among them:
• An awareness of the social and environmental issues facing the

world—poverty, inequality and global warming among them—and
an increasing resolve to contribute to solutions.
• A continuing struggle over where the lines are and should be drawn
with regard to the work/life balance. Can anyone who works in an
office really “unplug” anymore? Should they?
• An awareness of the phenomenon of the “rise of the customer,” or
the increasing influence that consumers have on what companies
make and market, and how responsive companies must be to con-
sumers in order to succeed . . .
• A continuing and intensifying struggle to get the most out of hu-
man capital—people—in a competitive landscape where businesses
increasingly compete in their ability to muster and channel talent.
• An ongoing effort to get Web-based business “right” including
marketing, reach, and coordination with physical stores, so that
companies don’t compete against themselves in their online and
physical worlds, and so that customers can expect to shop as easily
whether they’re on the computer or down town.
These themes and others are illuminated in related, cross-referenced en-

tries in this work. They surface in the short, “Signs of Changing Culture”
xviii
Preface
notes, and in the essays, interviews, and articles that flavor the encyclope-
dia throughout. They’re also reflected in the “Why I Do This” narratives,
to the extent that they have shaped people’s expectations of the work they
do, and the way in which they spend their days.
If You’re Looking for a Job
One of the most interesting insights that surfaced during the process of
putting together this encyclopedia is how different one job can be from
another, even given the same necessary skills, and in many cases, the same
job title. Culture is a prime differentiator. People with the “same” jobs at
one company have profoundly different work experiences at another com-
pany, and sometimes, even when working for the same employer in differ-
ent departments, or units, or functions.
This isn’t really a surprising insight. But when you’re faced with it, time
and again, across the amount of information that gets considered for an
encyclopedia, the range of different experiences, even given broad com-
monalities, is daunting.
The take-away from this insight is to search for the culture that fits an
individual, not just one that works as a skills-match. There are any number
of jobs out there that cause people to work in and around an office. But
someone with financial skills can work for a zoo, or a bank, or a fire de-
partment, or an opera company, and have a profoundly different daily ex-
perience at work than their peers-in-skill work in other environments.
Someone who works in human resources can be surrounded by lawyers,
architects, consultants, cleaners, security guards, computer programmers,
writers, designers, nurses, you name it. Again, while the job title may be
the same, each alternative offers a different daily existence.
Extremes
While collecting and coordinating materials for this encyclopedia, we

expected to find general themes. But many cultural “extremes” have also
come to light. Job-seekers again take note. For example, consider the com-
pany whose top executive demands complete obedience from his employ-
ees—and also takes it upon himself to manage and support employees’
xix
Preface
personal lives, even offering marital and general life advice on a regular
basis—the kind of company where employees call this senior leader in the
middle of the night to discuss their personal lives. Or think about the
insurance company that owns and stocks its own ponds, expects employees
to spend time fishing, and allows them to keep what they catch. (This
company also pays for a weight loss program; employees front some of the
cost, but get their money back if they lose the weight they set out to lose.
If not, the money goes to charity.)
These are merely samples of the individual cultures cultivated by certain
companies. Scratch the surface of any company and you’ll find unique cul-
tural attributes. But scratch the surface of some, and you’ll find “norms”
that truly stand out.
Culture-Shaped Challenges
Our research also highlighted, time and again, the challenges and con-
flicts that make and break individuals, teams, and entire businesses, on any
given workday. Battles rage over health care benefits, workplace standards,
and equal employment opportunity. Tensions spiral out of control when
directors and leadership teams clash over executive compensation, acquisi-
tions, and divestitures. Bosses, peers, and direct reports face off over a
market positions, pricing strategies, performance reviews, and the right
way to make decisions. And all of these conflicts are framed and fueled by
the culture at work in the organization at hand.
We hope that in these pages, you find resources that shed light on many
different perspectives of “the way we work” and that the material herein
informs your understanding of the forces shaping business culture, and
opens new avenues of thought.
Wherever possible, we’ve included suggestions or links to additional in-
formation on any given topic for further research. We urge you to utilize
these connections, and hope that you find them useful. Mostly, we hope
you find what’s in these pages interesting and provocative; we hope this
encyclopedia encourages students and professionals alike to examine or re-
examine their role or potential in the world of work as well as their contri-
butions to business culture.
xx
Acknowledgments
This work reflects the efforts of so many people—too many to name here.
You know who you are. Your essays, your thoughts about business culture,
your views about your own choice of jobs and careers, and your advice
about sources and content are reflected on every page that follows. You
have our profound and heartfelt gratitude.
We would like to recognize a few people explicitly, because of their
unique and substantive contributions to this work:
Our thanks go to Nick Phillipson, who had the idea to do an encyclope-
dia of business culture designed primarily for students considering “office”
work. His vision shaped the project from the early days; his thoughtful
editing provided the guidelines for the encyclopedia’s various elements.
Without Nick, the project would not have existed. Without Green-
wood’s Kristi Ward, it would not have been completed. Kristi stepped in
at a crucial time to edit, to encourage, and literally to pull together and
organize all of the many different editorial components that make up the
whole. Her unflagging enthusiasm, her patience, and her expertise drove
the project forward. She truly shouldered this encyclopedia and pushed it
to completion.
Christine Marra’s efforts were also utterly essential to the project’s com-
pletion. Christine stepped in to edit the many alphabetical entries and
other components of the encyclopedia. Her keen eye, efficient editing, and
Acknowledgments
level-headed approach kept the project on track, and allowed us to picture

what it would look like as a finished work, even when it was far from being
finished.
Credit for the content in the A–Z entries goes largely to a team of
skilled researchers, namely Marie M. Bell, Diane R. Walker, Catherine A.
Cotins, and Rochelle Stewart. An encyclopedia requires researchers who
are able to cast a wide net, assess a great deal of information, and select
and present that which they believe really “captures” a definition succinctly
and clearly. These folks were up to that task.
We would like to acknowledge, with deeply felt thanks, Sheryl Rowe’s
formidable editing and production skills, Bridget Austiguy-Preschel’s pro-
duction expertise, Megan Chalek’s diligence and attention to detail, and
the patience and skill of all of the other people who worked tirelessly be-
hind the scenes at Greenwood to see this through.
Finally, our thanks as ever go to our families, for their patience, toler-
ance, encouragement and love.
xxii
M
Made in Japan
During the early part of the twentieth century the term “Made in Japan”
or for that matter “Made in any other Asian country” was generally associ-
ated with cheap, unsophisticated products of inferior quality. At that time,
consumers looking at a product label would see “Made in Japan” or China
or India or some other country, and assume the product was poorly made.
If their budget allowed for it, a consumer would almost certainly opt for
an item of higher quality with the “Made in the USA” label. Following
World War II, however, the stigma around “Made in Japan” began to
evaporate with the rise of Japanese manufacturing expertise and by the
1970s a “Made in Japan” tag was associated with high quality, reliable
products.
The transformation of Japan’s manufacturing sector was the result of
both circumstance and planning. During World War II, the Japanese econ-
omy was decimated and its manufacturing capacity almost literally flat-
tened. Following the war, there was massive reinvestment in public and
private infrastructure that created a “fresh start” for the business sector
with new physical plants and the opportunity to institute new business
practices. Additionally, the Japanese government created a group called
MITI—the Ministry of International Trade and Industry. During the
1950s and 60s this group successfully focused on growth especially in the
steel and shipbuilding industries.
The success in steel and shipbuilding was followed by subsequent wins
in cars, electrical goods, precision products, and semi-conductors. Subse-
quent to the 1980s the Japanese economy experienced limited growth and
the success of MITI as an agent of progress was questioned. For example,
the Wall Street Journal noted (December 11, 1984), “A generation ago,
Mr. Honda wanted to expand his motorcycle company by making cars
. . . But they [MITI] wanted only two companies—Toyota and Nissan.”
Going against MITI policy, Honda went on to become not only a leading
car maker but to create a path for other car manufacturers to follow.
Some of the world’s most powerful consumer goods brand names today
Made in Japan
are Japanese, including Sony, Mitsubishi Electric, NEC, and Fujitsu. The
success of the Japanese companies is often attributed to the product’s cus-
tomer driven design and reliability. In breaking into the U.S. markets,
Japanese companies generally speaking, had limited access to service net-
works and therefore invested in product design, manufacturing processes,
and management techniques that encouraged “built-in” reliability at rea-
sonable prices. Goods that didn’t break down as frequently required less
service and therefore the Japanese companies did not need to build as
extensive a service delivery network.
Increasingly there have been questions raised about what it means to
be “Made in Japan.” Like other manufacturers before them, Japanese firms
have begun to manufacture their products outside of Japan. A Toyota ve-
hicle purchased in the United States could probably have been assembled
on a production line in the United States rather than actually made in
Japan, though often the parts might have been made in Japan and the
manufacturing techniques developed in Japan and then deployed at the
local manufacturing site. The same can be said for an “American” car man-
ufactured by Ford or GM where parts, design, and in some cases even
assembly may have occurred outside U.S. borders.
Other nations, most notably Korea and other countries broadly de-
scribed as the “Asian Tigers” have sought to replicate the Japanese success.
In Korea, large family conglomerates called chaebols were useful “tools of
government policy . . . providing lots of jobs and driving economic
growth through exports” (Economist, April 22, 2006, page 63). Moreover,
in doing so they became leaders in providing worldclass products to the
world market; often in direct competition with Japanese firms. Leading
the way are companies like Samsung in electronics and Hyundai-Kia in the
automotive industry.
The most recent transformation has been “Made in China.” Until rela-
tively recently, like Japan before it, China’s products had been viewed as
price competitive at the expense of quality. That has changed within the
decade. Unlike Japan that predominantly used capital investment to fuel
its industrial rise, China, with its population of 1.3 billion—over four
times that of the United States—has used labor as the driver of its eco-
nomic engine. With labor costs about one-tenth that of an average U.S.
worker, Chinese business has a competitive advantage, especially in labor
intensive industries such as apparel and footwear. As the Communist gov-
ernment has loosened trade restrictions, China has benefited. As Fortune
234
Made in Japan
magazine noted (September 18, 2006), “In 2005, China exported $202
billion more to America than it imported, accounting for more than a
quarter of the U.S. trade deficit.”
An interesting consequence of China’s industrial expansion has been its
need for resources and its quest for them. The Chicago Tribune noted in
December 2006:
China had enough oil to sustain itself just fifteen years ago. Now it is
one of the world’s thirstiest oil addicts, importing 40 percent of what
it needs. Only the United States consumes more. Each new factory
churning out goods made in China and each new car on Chinese
highways adds to a ravenous appetite for raw materials . . . satisfying
that appetite has sent Chinese oil explorers around the world.
In addition to the competition for raw materials, the rise of Asian—and

other regions—manufacturing has created a balance of payments deficit
for the United States as Americans have purchased more imported prod-
ucts than it has exported to those countries. Several politicians and econo-
mists have expressed special concern about the increased negative balance
of trade with China. Others, however, have noted that the U.S. consumers
may have benefited as manufacturing has shifted to less expensive China
from more expensive Asian locations. For example, the New York Times
noted (September 7, 2006), “China may be good for our trade balance.
American consumers seem determined to spend money, and Chinese busi-
nessmen have made the bill cheaper.” In 1985, China, Japan, Hong Kong,
Taiwan, and South Korea accounted for 52.3 percent of America’s trade
deficit. By 2005, this percentage had fallen to 40.9 percent, in part because
of cost savings from buying Chinese.
See also: Just-in-Time
Further Reading
“Asia will Lose as ‘Made in China’ Goes Local,” by Andy Mukherjee, Bloomberg
.com, September 18, 2007. (www.bloomberg.com).
Made in Japan: Akio Morita and Sony (Paperback) by Akio Morita, Edwin M.
Reingold, and Mitsuko Shimomura, Signet (1988).
235
Management by Objectives
Management by Objectives (MBO) is a method used by management to
define objectives for each employee in an organization and then compare
their performance against those objectives. Ideally the goals of each indi-
vidual are aligned with those of the entire organization and will be de-
signed with a great deal of input from the individual both in terms of
setting the targets and tracking performance against the objectives. Al-
though known primarily a tool of business, MBO is also used in govern-
ment, most notably by President Nixon in 1973 with his Management by
Objectives initiative that asked each department head to seek a sharper
focus on results.
The individual’s objectives are tied to the broader organization’s objec-
tives so that if done correctly, achieving individual objectives will contrib-
ute to the organization achieving its business objectives. Ideally, manage-
ment and employees buy into the objectives and understand how their
individual objectives are tied into the broader organizational objectives.
Ultimately it is thought that employees will take greater responsibility for
achieving their own objectives if they can observe and understand a direct
link to the objectives of their organization. The end goal of using MBO
in an organization is to focus on the desired results and attempt to align
the results at the business unit level, functional level, and individual level
with the desired business results.
MBO was first popularized as a business concept by Peter Drucker in
1954 in his book The Practice of Management. According to Drucker,
managers today often get so absorbed with day to day activities and tasks
that they overlook how their work contributes to the mission or purpose
of the broader organization. By implementing MBO, organizations can
help their managers and individual employees to reconnect with the cen-
tral purpose of their organization. A number of important principles of
MBO as described by Drucker are the cascading of organizational goals
and objectives, identification of specific objectives for each individual, par-
ticipative decision making, explicit timeframe for delivering results, and
performance evaluation and feedback to close the loop.
The MBO method also introduced the SMART—specific, measurable,
achievable, realistic and time related—criteria for setting objectives so that
users of the process set targets that can be measured and tracked.
In practice MBO usually involves implementation of a four step process:
236
Why I Do This: Clinical Educator, Critical Care Services

Marie Connolly, RN, CCRN
My family was stunned when, at eighteen, I proudly announced my inten-
tion to making nursing my career. After all, I was the “sensitive one,” who
was afraid of old people when I was young. I was the child who fainted ev-
ery time a kid in the class got sick to their stomach. I wasn’t too sure I
would be able to make a difference as a nurse myself, but something inside
made me feel that it was the right choice for me.
That was twenty-nine years ago. I have been working and loving my job
ever since. The difference between medicine and nursing is, at least to me,
that medicine treats the diseases, and nursing treats the human beings af-
flicted with those diseases. Nursing balances the science of the profession
and the art of caring in a complete and whole feeling of satisfaction. You
are a medical professional, a teacher, an advocate, a psychologist, and a hu-
man touch for your patients when you are a nurse.
My first love in nursing was in intensive care, and I have been in that
field most of my years. My subspecialty is cardiology and cardiovascular sur-
gery. However, I’ve had so many experiences, from delivering babies to
holding someone’s hand as they die. I’ve been a caring participant in some
of life’s most painful and tragic moments, and have been lucky enough to
see some true miracles.
My job right now is to help other nurses and teach them to be special-
ists in cardiac and critical care. I plan new therapies and processes to contin-
ually improve the ways we care for patients and families. And, at least once
or twice a day, I stop in to a patient’s room to see how they are, and
spend a few minutes with them, perhaps answering questions they may
have about their conditions. To me, there is nothing better than being at
the bedside with a patient who needs care, whether physical or emotional,
just to make things a little bit better.
One of the biggest benefits of this career is the ability to learn and grow,
and to change your specialty, if you choose to, many times before your ca-
reer is at an end. You will never have to search for work, for the entire
world is in need of skilled and caring nurses in all fields of practice.
You can make a small difference at a very big moment, or a big differ-
ence in a small one—either way, you make a difference.
And that’s why I do what I do.
237
organizational objective setting, manager objective setting, individual ob-

jective setting, and objective review.
Organizational Objective Setting: The first step requires top manage-
ment of the enterprise to review and clearly articulate the central purpose
of the organization. The top management then sets objectives for the or-
ganization that will provide direction to the entire organization.
Manager Objective Setting: Using the organization’s objectives as a
starting point, senior managers throughout the organization develop the
objectives of their business units or divisions. These business unit objec-
tives should be clearly articulated such that the members of that unit un-
derstand how achieving their unit’s objectives will contribute to the objec-
tives of the broader organization or business.
Individual Objective Setting: Based on the objectives for his or her orga-
nizational unit, each employee works with his or her manager to set indi-
vidual objectives which once again must meet the SMART criteria.
Objective Review: After objectives have been set at every level of the
organization from top management down to the first line supervisors and
each individual employee of an organization, the organization is prepared
to implement a management by objective system. This requires each man-
ager and each of his or her employees review the objectives set out at the
start and identify where progress has been made and where there continue
to be opportunities to improve against the objectives. In many organiza-
tions that use Management by Objective as a performance improvement
tool as well as a tool to deliver results, there will be an interim review that
is intended to help the individual reach the desired results with the benefit
of mid-term feedback and coaching.
In addition to the proliferation of MBO systems in the corporate world,
this system of management has also been implemented in several of the
military agencies in the United States in an attempt to address the per-
ceived inefficiencies in those organizations. While the branches of the mili-
tary in the United States are known for their authoritarian form of man-
agement—as opposed to participatory management styles—supporters of
using MBO in the military argue that the MBO method can be imple-
mented in this type of organization when military managers are trained to
adapt their management styles to fit the situation they are managing. A
further challenge of implementing MBO in non-business organizations is
the nature of the results expected. Unlike corporate situations, military
and other government situations may not have the same financial results
238
Managerial Grid
as the driver of their system. Obviously in this situation, the results orien-
tation will require some additional efforts to identify appropriate quantifi-
able and measurable results or targets.
Critics of MBO practices argue that is it much too easy for managers to
fail to outline, and agree with their employees, what it is that everyone is
trying to achieve. MBO requires carefully written descriptions of the ob-
jectives and a timeline for monitoring and achieving those results. It also
requires that managers are skilled at performance management discussions
and familiar with the best way to share feedback with their employees. The
process, if done well, requires that managers and their staff agree to what
is expected, over what period of time, and with what potential benefits to
the organization and to the individual employee.
For example, in a sales organization, the manager and the employee will
likely agree on a specific level of change in revenue, pipeline activity, or
lead generation. In a call center, the manager and the employee may iden-
tify an increase in call volume over a period of time or successful resolution
of customer service inquiries. In production, the objectives will likely in-
volve improved efficiency and/or cycle time or output. In all cases, it is
important to identify the timeframe during which the improvements are
expected and to set very specific and measurable targets.
Other critics of MBO practices argue that this system triggers unethical
behaviors from employees who may be tempted to distort financials or
other data to achieve their targets.
See also: Drucker, Peter
Further Reading
Beyond Management Objectives: A Management Classic, by Joe D. Batten, Re-
source Publications, December (2003).
What Management Is: How it Works and Why It’s Everyone’s Business, by Joan
Magretta and Nan Stone, Free Press (April 2002).
Managerial Grid
The Managerial Grid is a behavioral management model. It was intro-
duced by Robert Blake and Jane Mouton in 1964, and identifies five dif-
ferent styles of leadership based on concern for people or relationships and
concern for production or task. This model of management style attempts
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Managerial Grid
to identify a path, for each manager, to the ideal management or leader-

ship style based on that manager’s starting point and attributes. Blake and
Mouton later set up a company called Scientific Methods, Inc. to share
their concepts of organizational development and management effective-
ness more broadly in the corporate world.
The Managerial Grid is composed of two axes: “concern for people/
relationship” which is plotted on the vertical axis and “concern for task/
production” which is plotted along the horizontal axis. Concern for peo-
ple and relationships is the degree to which the manager or leader consid-
ers the needs of the team member and their areas of personal and profes-
sional development when deciding how to achieve the desired results or
accomplish a given task. Concern for task or production is the degree to
which a manager or leader emphasizes the results, objectives, or organiza-
tional efficiency when he or she decides how to accomplish a task or
achieve the desired business results.
Supporters of this model of leadership behavior argue that it is appealing
because of the simplicity of using two dimensions to describe managerial
or leadership behavior. Critics argue that because of the simplicity of the
model, the managerial grid can not effectively be used to categorize or
develop managers and leaders.
While many managers score near the middle of the two axes, the authors
use the extremes to identify four types of leaders: authoritarian leaders who
are high on task and low on people, team leaders who are high on task
and high on people, country club leaders who are low on task and high
on people, and finally impoverished leaders who are both low on task and
on people.
The authoritarian leader scores high on the task axis and low on the
people or relationship axis. These leaders are very task oriented and consid-
ered to be quite hard on their employees or staff. Leaders with this score
do not encourage cooperation or collaboration in their work and focus
largely on schedules, assigning blame, and on completion of the specific
task. Individuals who work for this type of manager find it difficult to
contribute or develop professionally.
The team leader scores high on the task axis as well as on the relation-
ship or people axis. This type of leader uses the power of positive examples
and collaborative work to create an environment where all team members
feel their perspective is valued and their input is encouraged. These leaders
encourage professional development of the individual team members and
240
Managerial Grid
the idea that the total is greater than the sum of the parts. They support
team development as well as individual development and therefore create
and lead very effective and productive teams.
The country club leader scores low on task and high on the people axis.
This type of leader uses rewards to motivate teams and individuals and is
most likely very uncomfortable exercising discipline or coercion to accom-
plish goals. The country club leader is most fearful of damaging his or her
relationship with other members of his or her staff or team.
The impoverished leader scores low on both the task and relationship/
people axis. This type of leader is often considered to delegate and ignore
his or her staff. They are committed to neither the task of the business nor
the creation, development, or maintenance of the relationships. This type
of leader will often find their teams struggle with achieving results and are
frustrated with the dynamics of the team itself.
A fifth style of leadership is often referred to as the middle of the road
leader. Leaders who score in the middle of the grid on both task and
people are considered middle of the road leaders. Leaders who score in this
range attempt to balance the company goals with those of their staff or
team. These leaders are considered to achieve acceptable though usually
unremarkable performance.
See also: Executive Coach
Further Reading
The New Managerial Grid, by Robert R. Blake and Jane S. Mouton, Jaico Pub-
lishing House, New Ed ed. (April 2005).

“Dude, You Need a CEO”: The Return of Michael Dell
Published: February 7, 2007 in Knowledge@Wharton
It’s a common occurrence in Corporate America: An entrepreneurial
founder starts a successful business, builds it to a certain size and hands
it over to a CEO to run. But then, when things don’t go well, the
241
Managerial Grid
founder steps back in to take direct control of the organization. That,

essentially, is what happened last week when Michael Dell returned to
become the CEO of Dell, replacing Kevin Rollins. What will it take to
turn Dell around? Wharton management professor Peter Cappelli is the
director of the school’s Center for Human Resources. He spoke with
Knowledge@Wharton about these issues.
Knowledge@Wharton: Let me start out by asking you a question

about a founder coming back to take the CEO job at a company
as Michael Dell did. What is the track record of success in such
cases?
Cappelli: I think the record is mixed. And I think that it probably
helps to step back a little and ask ourselves something about the
context of this. Generally, there’s a sense that organizations need
different skills at different times. And so, the people who have
founded organizations and have the entrepreneurial zeal and the
ideas and such often aren’t the people who can take the organiza-
tion to the next phase.
Sometimes you need more administrative skills, more manage-
ment skills. Sometimes leadership and zeal isn’t enough. On the
other hand, the founders have a symbolism that becomes very im-
portant when they step back in—in terms of the sense that they
give the employees or their ability to sell ideas to the outside audi-
ence at different points in time.
I think this is really the punch line: Organizations need different
things, and you could imagine them changing leaders as a way to
try to make that happen.
Knowledge@Wharton: One of the first things that Dell had done
after taking charge [again] was to send out this memo that we just
heard about, saying that there would be no bonuses for 2006. He
described the year as one in which there had been great efforts,
but not great results. Do you think that doing away with bonuses
is a good idea?
Cappelli: Well, I think that with all management changes like this,
there is the distinction between the symbolism and the substance.
With respect to this particular case, the end of bonuses—particu-
larly articulated by not only the founder, but the guy who has the
242
Managerial Grid
biggest financial stake in the company—is really kind of a powerful

message.
And, it’s a powerful message that comes from the owners . . .
that something has got to change. So it certainly is on the symbolism
ground, an important statement to shake people up. I think it’s also
a statement to the investment community and to outsiders, too, that
we’re taking this seriously. Does it de-motivate people? Yes. Are
there some down sides to that? The answer is yes, probably.
I think one of the questions you ask yourself is: What is the pur-
pose of this? And I think a lot of the purpose is the symbolism and
the messages to not just insiders, but to outsiders.
Knowledge@Wharton: Another key point in Dell’s memo was his
attack on bureaucracy, which he says has slowed down the com-
pany. Is this surprising for a company that built its reputation on
the speed with which its supply chain could make customized com-
puters for customers? And, how does bureaucracy creep into an en-
trepreneurial organization?
Cappelli: Well, maybe I’ll just take a step back on this question and
make what may be sort of an unusual observation. I think to a
large extent these companies don’t know what they’re doing. They
don’t know what they’re doing in the sense that they are facing dif-
ferent environments and they need to respond to them and they’re
not sure how. So in this case, for example, Dell was the darling of
many people in the business world because they had this model that
seemed to work just incredibly well, and lots of people were copying
it, and then the environment changed. It’s not that they got bad at
executing their model. At least I don’t think that’s the complaint. It is
that the environment changed. They got different competitors who
came in with different ideas and the playing field changed.
Now the question is, how do you respond to that? I was looking
over the press releases and the analysts’ comments on the transi-
tion at Dell. They almost all universally praise the idea that Michael
Dell is coming back. They almost all universally have nothing to say
about what it is that he’ll actually do. Some of them are honest
enough to say, “Well, the problems don’t change with him coming
back” and “it’s not clear what he’s going to do.”
The other thing that I thought was interesting about that com-
243
Managerial Grid
ment from Dell is that one of the things that Kevin Rollins was
seen as good at, was being particularly tough, particularly cost fo-
cused—which is exactly what a lot of the analysts say Dell has to
do to go forward. In fact, he seemed to be pretty good at the
kinds of things that most of the analysts say they ought to be
doing.
I think this suggests something general about what’s going on in
the business world now with leadership ranks—that leaders are a
substitute for strategy. Companies really rarely have a clear sense
about the direction that they need to go in when something like
this happens—that is, the environment around them changes. They
substitute new leadership for new strategy.
Whenever there is a change in the direction of a company, it al-
ways involves new leaders. I think that this is partly a signal to the
investment community, frankly, that they’re going to do something
different, but what it is, we don’t know yet. I think as a result the
leadership gets churned much more often than it would have in
generations previous, and much more often than it actually de-
serves to be churned.
As far as I can tell, what Dell says it wants to do [is] exactly the
kind of stuff that Kevin Rollins was good at. And it just wasn’t
working well enough. Changing leadership is just a signal to the
business community that “we’re taking this seriously and we’re go-
ing to try something maybe even a little different going forward.”
Knowledge@Wharton: Speaking of Kevin Rollins, what do you
think was his biggest mistake? Or, is he just a victim of the com-
pany needing to send a signal to the investment community that a
change is in the offing?
Cappelli: I don’t see that he made any obvious mistakes. I met him
a few years ago. He seems to be a very articulate guy, a good
spokesperson for the company, and apparently he was focused on
the kinds of things that the company always saw as their strengths
and competitive advantage.
Now, you hear things about his management style—that he was
overbearing, or too tough a taskmaster, and all that sort of stuff.
Of course, that’s exactly what the analysts are saying the company
needs now, right? I think he was in the wrong place at the wrong
244
Managerial Grid
time, and I think that happens to a lot of executives now. And, I

think it’s more a function of the way business works now.
Knowledge@Wharton: Will this move make it harder for Dell to
start grooming a successor—given what happened to Rollins, and
the fact that Michael Dell himself was only forty-one and could al-
ways step back in and take the reigns again?
Cappelli: Well, I think the answer to the second point—that it’s hard
to put somebody in this job because the founder is always breath-
ing over your shoulder—there’s probably something to that, al-
though it’s true in any organization. The average life of a CEO now
is about 3 years or so. Any time a company gets in trouble now,
the CEO gets dumped. So, I don’t think anybody [probably] is go-
ing into these jobs with a sense that they’re necessarily going to
have a long run. And, I think that this is maybe a big problem for
U.S. corporations. They are so focused, even the leadership of the
companies, on short-term performance that the CEO’s recognize
that if things go bad in the company, they’re going to get tossed
out—it makes their focus on short-term performance even
stronger. I think, frankly, companies aren’t thinking about groom-
ing successors these days, anyway. They talk about it sometimes.
They may for a while have somebody in the pipeline who looks like
a successor. But then the environment changes and that guy’s
kicked out, and somebody new is brought in from the outside. You
know the talk and the reality are so different on these things, that
at some point the talk doesn’t even make sense.
Knowledge@Wharton: Before it got into its recent troubles, Dell
seemed to be highly successful in the PC business, but less so in
other consumer electronics products. Are there any lessons here for
companies that don’t stick to their knitting?
Cappelli: Well, I suppose that certainly is the one lesson that people
would begin to point to, and that is to stick to what you’re good
at. Dell’s computer market was good not just because of its market-
ing, but because of the way it was able to assemble the computers
in the first place, the modular assembly processes that lay behind
that. I guess the extent to which you can keep the whole model to-
gether is crucial—that it’s not just the way you sell things, but it’s
the way you build them and all of these things fit together. And, if
245
Managerial Grid
you start branching out away from that, you could have some prob-
lems.
Knowledge@Wharton: In contrast to Dell, Apple’s had tremendous
success with its foray into consumer electronics with the iPod, and
it wants to build further on that success with the iPhone. Are there
any lessons that Dell could learn from Apple?
Cappelli: Well, we have some ideas about why Apple has worked
well. Apple is a company that is making its money in a completely
different way. Apple is making its money by innovation. Dell was
making its money by selling the same stuff, more or less, that every-
body else was selling, selling it cheaper, and selling it in a custo-
mized way.
You could see why the return of the founder at Apple might be
a bigger deal than the return of the founder at Dell. Apple is a com-
pany that is really trying to go directly to the consumer and per-
suade them that something is new and novel. And you bring back
the founder, who was famous for doing something new and novel.
Maybe it helped energize Apple to do this, but it certainly helped
to sell it.
At Dell, it’s not so obvious that they’ve got the same market and
the same problem and that the same solution would work there.
So, I think the short answer is that there are not a lot of lessons [re-
ally] for Dell from Apple. I think that this is probably also some-
thing that we should just confess to: In this modern business envi-
ronment, where things are changing so quickly, strategies are so
ad-hoc and so volatile.
Companies really don’t have good ideas about what they’re do-
ing. They’re changing all the time in response to the business envi-
ronment. We don’t mean to suggest this is because they are not
smart enough or not capable enough. It’s just an incredibly hard
problem they’ve got—not just to make money, but to figure out
how to make money when the markets are changing or your com-
petitors are changing around you, and new products come in all of
a sudden that you didn’t anticipate.
And how you respond to this is very tricky. [Companies] really
don’t know; they are fishing and it’s understandable why they are
fishing. But I think the big lesson from this Dell experience is that
when companies get into trouble, they change their executives,
246
Mass Customization
whether it makes sense in terms of a new direction or not. They

change their executives because people expect that a changed exec-
utive will mean a change in policy. Maybe it’s easier to change pol-
icy with a new executive, too. That might be true. But I think a lot
of this is symbolism. And it’s not because the company has got a
clear, new agenda, a new direction, and they necessarily need dif-
ferent people with different competencies to do it, and that they
know how to put all of that stuff together.
Knowledge@Wharton: One last question: If Michael Dell was sit-
ting in this room with us right now, what advice would you give
him?
Cappelli: I’m not sure that we have any clear advice to give him. I
think that it would be interesting to hear how he’s thinking about
the problem. And I think the very best thing that one could hope,
that executives do in situations like this, is to think carefully and ob-
jectively about what the problem is, what their capabilities are and
how they can respond to these situations.
The quality of thinking is probably the best that you can hope
for in these contexts. The other thing that you can probably be
sure of is that, in a year or two, whatever they thought today is
going to be irrelevant and they’ll be on to something else.
Mass Customization
Mass customization means making and selling—or going to market
with—mass-produced goods that are tailored or tweaked somehow to
meet the needs or desires of individual customers. The process is widely
considered to combine the best of “custom made” and “mass produced”
goods.
Mass production is the production of large quantities of low cost prod-
ucts or services. Custom-made products or services generally cost more to
produce, and can therefore demand a price premium over mass-produced
products or services. Historically, mass produced products were not tai-
lored for individual tastes or needs. Consumers were willing to purchase
products that weren’t exactly what they wanted because those “mass pro-
duced” goods were less expensive than custom-made alternatives. Tradi-
247
Mass Customization
tionally, companies have assumed that trade offs between high quality and
low cost or production efficiency and customization are required decisions
they must make for their business.
Mass customization seeks the elusive middle ground. The idea is that by
using leading edge production processes, tools, or methods, a company
can produce customized products and/or services at more affordable and
competitive prices. In essence, mass customization is considered the fron-
tier in delivering products to a target market of one customer. Mass cus-
tomization, in marketing, manufacturing, or management, uses much
more flexible computer assisted production systems to produce the custom
output but at a fraction of the cost of traditional manufacturing. The criti-
cal element is the ability to provide flexibility of individual customization.
Dell is perhaps one of the most well known examples of a company
that provides mass customization of its products. Dell calls their innovative
approach “build to order.” Each computer that leaves a Dell warehouse
has been configured to the particular customer’s specifications. In essence,
each Dell product is made to order which traditionally would have in-
volved much higher production costs. Dell has been able to deliver mass
customization by implementing an order entry system that requires rela-
tively little or no involvement by Dell employees in the order entry and
product specification process. By reducing order entry and sales costs, Dell
is able to produce custom products at much lower cost and can pass along
the savings to their customers. The result is to give each customer what
he or she wants at a cost that traditionally would have been associated only
with mass production.
Other examples of successful mass customization include some cosmetic
companies that create unique mixes of their product to provide custom
cosmetics and a number of clothing manufacturers where you can have
custom jeans or blouses produced to your exact specifications.
The automobile industry has struggled with the potential for mass cus-
tomization for decades. At this point consumers can specify some compo-
nents on their automobiles but only very high end vehicles would be con-
sidered truly customized and therefore do not fit the definition of mass
customization. Essentially, the automobile industry has settled for offering
various configurations on mass produced products while at times hoping
to convince consumers that they have more input on the actual design of
their vehicles.
248
Matrix Organizations
In mass customization, customers are integrated into the value creation

process. They define, configure, or modify a company’s “solution” (prod-
uct or offering) to fit their needs. Customization demands that the cus-
tomer share his or her product or service needs into the design specifica-
tion process. Mass customization is a product or service differentiation
strategy for a company, in other words, but it involves the customer in the
design of their product in some way.
Companies that embrace mass customization are often targeting cus-
tomers who were previously purchasing mass produced products. While
these customers are often willing to pay some premium for the customiza-
tion of their products, customers are not usually willing to pay the full
premium of customized products. The advantage of mass customization is
that the product is customized to the needs of the individual customer but
both the company and the customer share some of the cost savings of
using more innovative technologies of mass customized products. Another
advantage: the product is usually “demanded” before it is created. So com-
panies have a built-in system that can guide their rate of production.
See also: Just-in-Time
Further Reading
Markets of One: Creating Customer-Unique Value through Mass Customization,
by James H. Gilmore and B. Joseph Pine (eds.), Harvard Business School
Press (February 2000)
Mass Customization: The New Frontier in Business Competition (paperback), by B.
Joseph Pine and Stan Davis, Harvard Business School Press, New Ed ed.
(April 1999)
Matrix organizations are companies in which people are organized by
function (the type of job they perform, such as accounting) but also by
project (what they’re working on and where in the company that work fits
at a given time).
In the 1970s and 1980s, the business environment became far more
complex, due to several factors: the globalization of markets, new technol-
249
ogies, faster product life cycles, and even more intense competition. While
these factors demanded faster and more complex solutions and strategies,
many corporations realized that, internally, they were organized in a way
that actually hindered their ability to respond.
Traditionally, most companies were organized into one of two types of
structures: top-down hierarchies or project/product-focused organizations.
• Top-down hierarchies, also known as functional organizations. In

this type of structure, the CEO provides overall direction, while the
managers of each major function (marketing, sales, finance, etc.)
report to him/her. The employees in each major function report
to its manager.
The same structure exists within each “function” or discipline.
For example, in a marketing department, the managers of each
marketing function (sales, advertising, public relations, marketing
research, etc.) report to the head of the marketing department.
Although organization charts for this type of structure are typi-
cally drawn in a hierarchical pyramid design, no company operates
in quite such a stringent and restricted manner. The line of author-
ity from the CEO down makes clear to all employees the company’s
philosophy, policies, business objectives, etc.
• At the other end of the continuum is the project, or product-
focused organization. In this type of structure, a multi-disciplinary
team is formed, mirroring the functional structure but organized
under a project manager. These teams are focused on a specific
project or product launch, and are often temporary in nature.
A matrix organization was derived as a combination of both forms of orga-

nizations, in an effort to maintain the advantages of each. Although both
project and matrix structures are cross-functional, there are key differences.
Project organizations are focused around specific and finite projects, while
matrix organizations deal with ongoing management issues.
In a matrix, an employee has a dual reporting relationship, one func-
tional and one operational. For example, an accountant’s functional man-
ager may be the chief financial officer, but his/her project manager is the
team leader. The functional reporting relationship is generally the stronger
of the two relationships, since the functional manager performs the em-
ployee’s performance evaluation, and determines the employee’s compen-
250
sation. Needless to say, this can put the employee in a difficult position;
they may receive conflicting direction from their bosses. For this to work,
communication between managers is critical. Matrix organizations are
quite common in the case of a headquarters and branch offices, nationally
or internationally. An IT specialist in the London office may report func-
tionally to the chief technology officer at headquarters in New York, but
also reports operationally to the London Regional Manager.
Matrix organizations are by nature complex, and the approach offers
some clear pros and cons. Supporters of matrix management, for their
part, tend to stress that, with the matrix approach:
• There is greater sharing of information across functions,

• This type of structure does not require as many layers of manage-
ment as a functional organization,
• Greater flexibility of staffing. A manager can “loan” an employee,
knowing that change is not permanent,
• Improved professional development for employees, who are not
“siloed” within their function. Instead, they are exposed to other
disciplines, and can more easily view the big picture.
While those who don’t prefer a matrix approach note that:
• The dual reporting relationship can be confusing to employees and

result in divided loyalties,
• The success of this management structure is contingent upon the
cooperation and close working relationship of the functional and
operational managers,
• The two managers may have different goals, objectives, and priori-
ties, and there may be differences concerning the allocation of re-
sources,
• Overlapping responsibilities could lead to turf battles.
The challenges of working in a matrix organization are magnified as a

company grows. Small companies, especially start-ups often find them-
selves operating to some extent in an essentially matrix organization—with
smaller numbers people are more likely to know and trust each other, and
share staff and information to get the job done. As organizations grow
and relationships become more distant, and at times even competitive, the
251
Megatrends
matrix organization becomes more strained. Often the impact of the strain
is most evident in middle management who is caught having to report to
two bosses with competing objectives. For example, in meeting the needs
of the functional boss they will fail to meet the assignments of the opera-
tional boss. Faced with such a “no-win” scenario they will often make an
informal decision about “who is my real boss” (i.e., the one that impacts
compensation or advancement the most) and work to meet that person’s
objectives. Other scenarios arise even when the two bosses in a matrix
organization are aligned in terms of goals and objectives. Often the result
is the volume of work—essentially doing the work of multiple people in a
single role. When the strain of matrix management becomes evident, em-
ployees have become known to feel “lost in the matrix,” alluding to the
1999 movie when the central character faces two levels of reality—the
everyday existence and a more significant underlying reality.
See also: Learning Organization
Further Reading
The Matrix Organization Reloaded: Adventures in Team and Project Management
(Creating Corporate Cultures), by Marvin R. Gottlieb, Praeger Publishers
(August 2007).
Megatrends
Megatrend is the term most commonly used to indicate a widespread
trend or major impact or in other words those trends that would widely
be considered to be “larger than life.” A megatrend is a large scale change,
often social, economic, political, environmental, or technological change
or phenomenon that emerges slowly but likely to have long-term staying
power and the ability to have widespread impact for a long period of time.
In most instances, a megatrend will impact more than one country and
may in fact have consequences on a global scale. Megatrends typically in-
clude several sub trends that will have significant impact in and of them-
selves and when combined have a far greater impact than the sub trends
themselves. Examples of megatrends include global warming or global cli-
mate change, aging population, bioengineering, spirituality, and popula-
252
Megatrends
tion growth. Businesses that are able to capitalize on a megatrend, by of-

fering products or services that tap into the far-reaching influence of a
trend often experience a period of growth and success.
One of the more talked about and perhaps controversial megatrends,
global climate change, is described by former Presidential candidate Al
Gore in his 2005 documentary movie entitled An Inconvenient Truth.
This megatrend includes the sub trends of sea level rise, decrease in ozone,
and atmospheric warming, all of which will have significant impact on a
global level.
In the case of aging population, the sub trends include buying habits,
elder care, health care, and issues related to retirement. The aging popula-
tion impacts individuals, government agencies, health care agencies, the
health care system, as well as the hiring and benefits functions in corpora-
tions around the globe.
Bioengineering as a megatrend includes sub trends such as stem cell
research, genetic engineering, DNA research, and cloning issues. This
megatrend has already had significant impact on industry as well as gov-
ernment policies around the world.
In business culture, the term megatrend was first coined by John Nais-
bitt who identifies himself as a futurist, in his 1982 book entitled Mega-
trends: Ten New Directions Transforming Our Lives. While Naisbitt’s work
was considered by many critics to have a largely United States orientation
and therefore not entirely fitting the more far reaching and global orienta-
tion of the term megatrend, Naisbitt did identify a number of important
megatrends that have had significant impact on the global community in
the past two decades. In 1990 Naisbitt co-authored another book with his
then wife, Patricia Aburdene entitled Megatrends 2000: Ten New Direc-
tions for the 1990s. Some of the megatrends that Aburdene and Naisbitt
successfully predicted include: the emergence of the information society,
the development of a global economy, hierarchies moving to networking,
and the global economic boom of the 1990s. In 2005, Aburdene pub-
lished a third book Megatrends 2010: The Rise of Conscious Capitalism
which focuses more on what she refers to as the spiritual evolution of
business including the sub trends of value-driven consumers, socially re-
sponsible investment, and a new model of corporate leadership that does
not look or behave like the traditional authoritarian and highly compen-
sated model of management.
253
Mid-Career
The term megatrend also has been used by many organizations in the
name of their company or organizations to draw attention to their prod-
ucts, services, and mission. One example, American Megatrends Incorpo-
rated (AMI), based in the United States develops PC based hardware that
the company claims is often leading edge product such as motherboards
based on Intel’s 386 and 486 processor platforms, first to support USB,
and the first to create BUI BIOS interface with mouse support.
While Naisbitt and Aburdene are the most popularly noted authors on
the subject of megatrends and have expanded their predictions to global
issues and issues of social justice, many other authors and experts compile
lists each year or decade on what they predict will be the megatrends of
the next century. These individuals, knowns as “futurists” highlight the
trends (though often not megatrends) that will impact business and the
world.
Further Reading
Megatrends 2010: The Rise of Conscious Capitalism, by Patricia Aburdene, Hamp-
ton Roads Publishing Company, New Ed ed. (May 2007).
Mid-Career
Mid-career may be thought of as the professional equivalent of the mid-
life crisis and refers to the period of time in an individual’s professional life
when they are not yet ready or able to retire and yet clearly no longer a
novice or young professional starting out in the work force. For some
individuals who have been in one profession or even employed by the same
company for a long period of time, mid-career is often defined as that
period of time when they evaluate their past and consider what they most
want to do with their future. For some, this involves self evaluation and
potentially a career shift to work that is more fulfilling or for which they
have greater passion. For others, mid-career signals a desire to work less
and spend more time on leisure activities. And yet for others, particularly
women reentering the workforce after their children have grown, mid-
career is a new professional beginning. For a final group, those who have
been out-placed, fired, or made redundant by their employers, mid-career
254
Mid-Career
is a personal and professional crisis for which they were largely or entirely
unprepared.
Mid-career issues affect professionals and individuals in just about every
industry segment. Medicine, law, business, government, the ministry, and
academia have each confronted issues of mid-career burn out or skill loss
among workers. Blue collar workers also experience mid-career issues but
the majority of research and interest has been focused on the mid-career
issues affecting white collar workers or professionals.
Many professionals experience a growing sense of uneasiness in their 40s
and 50s that the work they are doing was not what they intended to do
with the rest of their lives or they thought what they were doing was their
life work but find they are no longer satisfied with the work they are doing.
Professionals who have lost the enthusiasm they once had for their work
often share the following traits: their work has little connection to those
things that they truly care about, they are often good at their work but
not fulfilled by it, and they tend to work towards short term results rather
than long term goals. Many in this group find that their definition of suc-
cess has changed from job title, level of expertise, and/or financial security
to definitions of success that involve personal achievements and relation-
ships with others or with their community.
Other mid-career business people have become alienated from their
work in large companies and look to establish themselves either as entre-
preneurs or executives in smaller companies where they believe that can
have a more direct impact on the business—an opportunity for once to be
the one to call the shots and make the rules. While many such mid-career
transitions are successful, some fail. One counselor in such transitions has
identified issues in mid-career executive transitions from the big pond to
the small pond. They include: being all things to all people (without the
support personnel they can delegate to), constant distractions from small
problems, a loss of influence and prestige, and a loss of control over their
time.
Professional who have been made redundant or been fired from their
jobs have an increasing set of resources available to help them find their
next position. Some employers provide a range of services for their former
employees including outplacement employment counseling, use of tempo-
rary office space, and extended benefits plans.
For some individuals, mid-career evaluation and planning is triggered
by a crisis, either personal or professional in nature. For others, mid-career
255
Mid-Career
evaluation is part of their personal or professional development journey.

An entire industry has also grown up around the need for services targeted
at mid-career professionals. Some firms specialize in coaching to help mid-
career professionals consider what options are appealing both inside and
outside their current organization. Other firms specialize in working with
companies that wish to support their former employees while other firms
specialize in working with individuals.
Several educational institutions have established programs specifically
targeted at mid-career professionals and some such as Harvard Business
School have created programs specifically targeted at the women alumni
who are reentering the workforce after a number of years away for personal
or family leave. The media has also highlighted a number of well known
business executives who have left a successful career at mid-career in pur-
suit of a new career in politics, nonprofits, or other social enterprise orga-
nizations. Notably, a number of successful and high profile executives have
moved into more advisory roles with their current organizations to pursue
more philanthropic goals making use of their own high profile status.
For example, by July 2008, Bill Gates has committed to moving out of
his professional role and focusing on the Bill and Melinda Gates Founda-
tion where he believes he can have a greater impact by donating some of
his personal resources and expertise to worthy global causes. One of the
former presidents of the United States, Ronald Reagan, was originally a
movie actor and later turned to politics. And a large number of movie and
TV actors have contributed significantly to global issues while remaining
involved in their film careers. George Clooney has received attention re-
cently for his work in Darfur while Angelina Jolie has traveled the globe
to advance issues of social justice. Yet for ordinary people opting for a
mid-career change, especially in change from the for-profit to the not-for-
profit sectors, there can be significant consequences. For example, a sales
executive in a technology firm saw her income fall from $200,000 to
$40,000 when she began teaching in a public school. Although happy
with her mid-career choice and the fulfillment it brought, there were sub-
stantive lifestyle changes that accompanied it.
The idea of finding oneself at “mid-career” invites a host of questions
and decisions. It can be a source of angst; it can be a time when people
begin to contemplate their legacies. It can also be source of inspiration,
and motivation to make the next steps as meaningful as possible.
See also: Lifetime Employment; War for Talent
256
Mission Statement
Further Reading
The Mid-Career Success Guide: Planning for the Second Half of Your Working Life,
by Sally J. Power, Praeger Publishers (2006).
“Navigating Through a Mid-Career Crisis,” located on www.allbusiness.com.
www.humanresources.about.com
Mission Statement
A mission statement defines a company’s fundamental goals and is a key
component in the development of an organization’s corporate culture. A
meaningful mission statement can get employees to take their jobs to
heart, to care about their company, and to align their actions with the core
goals of the corporation. Some companies have a singular mission state-
ment, while others combine a mission statement with corporate values.
Some companies’ mission statements reflect the founder’s core values
and beliefs. Others are less personality driven and describe the mission
more in terms of strategy and outcome. Generally speaking though, an
effective mission statement has four components: purpose for the com-
pany, a strategy, a set of values, and standards and behaviors. Unless an
expression from the founders, defining a mission statement is a significant
task involving many levels of people in an organization. The process gener-
ally begins with a senior management team developing and then editing
several versions of the mission statement. When a draft is ready, the com-
pany will then solicit input from others in the organization, usually
through focus groups or surveys. Based on that input, the draft is revised
and finalized.
Arguably creating the wording for the mission statement is the easiest
part of the process. To make the mission statement meaningful in the or-
ganization it then needs to be communicated and reinforced by manage-
ment. Scrutiny by employees is high—they want to know that manage-
ment is willing “to walk the talk of the mission statement,” and that this
is not yet another flavor of the month program that will come and go.
Several techniques have been used to inculcate a mission statement into
an organization including face-to-face meetings, town hall sessions where
employees are invited to ask questions, and newsletters that highlight em-
ployees that have accomplished a task aligned with the mission statement.
From a structural perspective, companies also review human resources pol-
257
Mission Statement
icies and compensation practices to ensure that they are aligned with the
mission statement.
One of the most powerful uses of the mission statement occurred in
1982 after seven people died after taking Tylenol laced with cyanide. Al-
though it was found that the tampering had occurred after the Tylenol
had been shipped from the factory, J&J (Johnson & Johnson) issued a
nation-wide recall for its most profitable product and halted associated
advertising and promotion. Then CEO James Burke applied his company’s
mission statement, the J&J Credo, to every component of the situation
with special emphasis on the first line, “We believe our first responsibility
is to the doctors, nurses, and patients, to mothers and fathers, and all
others who use our products and services.”
Although the J&J Credo was written by General Robert Wood Johnson
fifty years earlier, it stood the company in good stead. As noted in the
book Say It and Live It (page 37), James Burke was quoted as saying,
“After the crisis was over we realized that no meeting had been called to
make the first critical decision. Every one of us knew what we had to do.
We had the Credo to guide us.” With that guide J&J was able to re-
cover—with its market share falling to about 7 percent after the incident,
but ultimately rebounding to its 35 percent share.
Following are a few sample mission statements. It is often an interesting
exercise to see if the company can be identified through its statement
alone.
Ben & Jerry’s as seen at: http://www.benjerry.com/our_company/

our_mission/index.cfm. Ben & Jerry’s is founded on and dedicated
to a sustainable corporate concept of linked prosperity.
Our mission consists of three interrelated parts:
Product Mission
To make, distribute & sell the finest quality all natural ice cream &
euphoric concoctions with a continued commitment to incorporating
wholesome, natural ingredients and promoting business practices that
respect the Earth and the Environment.
Economic Mission
To operate the Company on a sustainable financial basis of profit-
able growth, increasing value for our stakeholders & expanding op-
portunities for development and career growth for our employees.
258
Mission Statement
Social Mission
To operate the company in a way that actively recognizes the cen-
tral role that business plays in society by initiating innovative ways to
improve the quality of life locally, nationally & internationally.
Intel as seen at: http://www.intel.com/intel/company/corp1.htm

Intel’s mission statement, values, and objectives
Our mission
Delight our customers, employees, and shareholders by relentlessly
delivering the platform and technology advancements that become
essential to the way we work and live.
Our values
Customer orientation
Results orientation
Risk taking
Great place to work
Quality
Discipline
Our objectives
Extend leadership in silicon and platform manufacturing
Deliver architectural innovation for market-driving platforms
Drive worldwide growth
Mission statements can be powerful sources of motivation and focus in

times of crisis. They can also provide strong day-to-day guidance at the
broadest levels. Most mission statements likely do not live up to this prom-
ise. But the potential is what keeps companies honing their statements,
and ensuring that employees understand and engage with them.
See also: Code of Ethics; Competitive Advantage; Value Proposition
Further Reading
For a humorous take on mission statements: http://www.dilbert.com/comics/
dilbert/games/career/bin/ms.cgi.
How to Write a Mission Statement, by Janel M. Radtke, published 1998, located
at www.tgci.com/magazine.
www.businessplans.org (Business Resource Software, Inc., Center for Business
Planning)
259
Moments of Truth
Moments of Truth
In 1986, Jan Carlzon, the former president of Scandinavian Airlines, wrote
a book, Moments of Truth, chronicling his leadership of the airline during
a turnaround. His management philosophy was defined around what he
called “moments of truth,” which are opportunities when employees of
an organization interface with those outside the organization (primarily
customers). The interaction at these moments defines the organization’s
ability to live up to its promise, especially when something has gone
wrong. In his book, Carlzon defined the moment of truth in business as
this: “Anytime a customer comes into contact with any aspect of a busi-
ness, however remote, is an opportunity to form an impression.”
At SAS, Carlzon focused on the frequent business traveler and using the
“moment of truth” methodology analyzed the airlines’ operation to en-
sure that it was attuned to that market. For example, Carlzon noted, “We
decided to stop regarding expenses as an evil that we should minimize and
to begin looking at them as resources for improving our competitiveness.
Expenses, could, in fact give us a competitive edge, if they contributed to
our goal of serving the business customer . . . We decided to be one per-
cent better at 100 things instead of 100 percent better at one thing” (Mo-
ments of Truth, p. 24).
While the business world was impressed with Carlzon’s leadership of SAS,
it was captivated by the notion of moments of truth and with it the ability to
improve customer service. As the U.S. economy was moving toward service
industries, the concept had particular resonance. In his book Carlzon high-
lighted moments of truth in the airline business: when a reservation is made,
when bags are checked, when the customer obtains his/her boarding pass,
when they are at the gate, how they are treated by flight attendants during
the flight, and how they are greeted at the destination, etc.
Yet every business can define its own moments of truth and those mo-
ments of truth change as the industry changes. Consider retail banking.
Several years ago, the customer went to the bank during the restrictive
hours of 10 A.M. to 3 P.M. They waited in line to see a teller to transact
their business. Today, most of retail banking in done at automated teller
machines for routine transactions—hence the moments of truth have
changed from the politeness and knowledge of the teller to the accuracy
and maintenance of the ATM network and the fees charged. Yet the con-
cept of delivery during a moment of truth continues. A McKinsey study
260
Moments of Truth
Why I Do This: Commercial Airline Pilot

Eric McIntosh
I’m a pilot for a major airline. I fly a 767 internationally, from New York’s Ken-
nedy Airport to locations throughout Europe and Western Asia, including Mos-
cow and Bombay.
Pilots are often away from home a lot—but in this job, you do have a lot of
control over how much you do. Basically, as a commercial pilot, you work
hourly. That is, you get paid by the hour. I get paid from the time the airplane
leaves the gate, to the time it pulls into the gate at the destination. But you do
have a lot of control over how much you work. For example, a typical month
for me would include maybe four trips, with each trip lasting three or four days.
Flying out, staying at the destination overnight, flying back. I generally work an
average of fourteen days per month—less in the summer, more in the winter.
I suspect that for a lot of people, becoming a pilot is something you think
about fairly early on. I knew from the time I was twelve years old that I wanted
to be a pilot. An airline pilot came into my school for a career day, and I was
hooked. My dad had been a military pilot, as well, and even though he had re-
tired when I was very young, I knew that he had enjoyed flying.
There are a lot of hurdles to clear, if you want to become a pilot. First you
need a four-year college degree; the airlines tend to prefer science and engineer-
ing degrees. Then once you have your degree, you can either get your training
through the military, or on your own. I flew for the United States Air Force for
eight and a half years, where I received all my training. The civilian route is very
expensive; it’s a huge investment, by the time you get all of the certifications
and licenses required. When you go civilian, you also have to start working for
smaller, regional airlines, where the pay is lower and the hours are longer.
There are a lot of great things about my job. I enjoy the challenge of flying a
big airplane and all the responsibility associated with that. I enjoy the fact that it
is very task oriented; I also enjoy that the job is a big challenge during the
flight, but that as soon as the flight is over, you’re done. You hang your hat at
work. When you’re not working, you’re not working.
You might like this kind of job if you enjoy a lot of responsibility and a high
degree of challenge. Every time I fly, the job is a little bit different. You might
also enjoy this kind of job if you like being your own boss. I work for a huge or-
ganization, but the organizational tree doesn’t seem to apply directly. No one re-
ally second guesses you; you are making the decisions. You feel as if you’re your
own boss, even though technically you’re not.
Loving travel is also a piece of it. I didn’t get into this job because of the
travel per se. But the travel in and of itself is very interesting; you do spend a
few days in lots of different locations; you get twenty-four hours in these spots,
and you do get to see the world, albeit one day at a time. Of course, I also hate
being away from my family. That’s one of the downsides of the job. That, and
dealing with jetlag. But when you’re gone 15 days a month, you really enjoy
being home when you’re home. And when you’re home, you’re really there,
24/7, for a time. That’s a great thing.
261
Myers-Briggs Type Indicator®
(“Better Service in Banks,” McKinsey Quarterly, Issue 1, 2005) that en-

tailed the survey of 2,100 retail banking customers found that customers
that had a “negative experience during the previous twenty-four months
kept 4 percent less with the bank than those that had a positive experi-
ence.”
For management then there were three important lessons that evolved
from Moments of Truth. 1) Understand your target customer. 2) Create
not only the products and services that the target desires, but also the
business policies and procedures that support service delivery to that cus-
tomer. 3) Create a system of empowerment that allows for service recovery
when the organization fails in a moment of truth. Indeed, the latter point
often stays with the customer. For example, most people have had the
experience of ordering a meal in a restaurant and it arriving with some
flaw. When the restaurant realizes it has fallen short during that moment
of truth and attempts to recover by offering a free substitute it will often
regain what it lost.
See also: Change Agent/Change Management; Turnaround
Further Reading
“Moments of Truth,” in the Sounding Off column in Sounding Line, by John
Ashenhurst, Editor, located at http://www.soundingline-archives.com/
0301_Editorial.htm.
Moments of Truth, by Jan Carlzon, Collins (1989).
Myers-Briggs Type Indicator® (MBTI)

The Myers-Briggs Type Indicator® (MBTI) is a self-administered person-
ality inventory, based on C.G. Jung’s work in the 1920s on psychological
types. The objective of this inventory is to help people understand their
own preferred way of perceiving information and drawing conclusions. It
is also used as an aid to understanding how other people perceive informa-
tion and make judgments.
C.G. Jung’s work on personality type was first presented in Germany in
1913. In 1917, Katharine Briggs began her own personality research, and
developed a four-type framework.
In 1926, Katharine Briggs published two articles on Jung’s theories.
Her daughter, Isabel Briggs Myers, built on her mother’s research work,
262
and in 1942 the “Briggs-Myers Type Indicator® was created, followed by

a handbook in 1944. In 1956, the indicator was officially changed to the
Myers-Briggs Type Indicator® (MBTI).”
Detractors of the Indicator note that neither Katharine Briggs nor Isabel
Myers had scientific, medical, psychiatric, or psychological qualifications.
The Indicator identifies people’s self-reported preferences on four di-
mensions. It is important to note that each dimension is on a continuum.
This typology purports to measure your preferred style along this con-
tinuum.
1. Extraversion/Introversion. Do you prefer to deal with people,

situations, and other “external” things (extraversion), or do you
prefer to deal with ideas, beliefs, etc., that make up your “inner
world” (introversion)?
2. Sensing/Intuition. Do you prefer to deal with facts, concrete is-
sues, descriptions (sensing), or do you prefer to think about new
ideas, possibilities, things less obvious (intuition)?
3. Thinking/Feeling. Are you prone to make decisions based on
logic, analysis, and objective approaches (thinking), or are your
decisions based on personal beliefs and values (feeling)?
4. Judging/Perceiving. Do you prefer a highly organized life, based
on established ideas, or are you open to new possibilities and less
structure?
The assessment instrument is comprised of ninety-three multiple-choice

questions. The results of the assessment are categorized into one of sixteen
personality “types,” based on interaction of the dimensions noted above.
Each type has its own specific characteristics, as well as its own acronym,
indicating preferences. For example, “ENTJ” refers to “extravert, intu-
ition, thinking, judging.” The descriptors of someone within this typol-
ogy: assumes a leadership role quickly, blunt, decisive; Forceful in presen-
tation of ideas; Quickly sees problems with current procedures and
policies; and enjoys developing systems to solve organizational issues as
well as long-term planning. An ENTJ is most likely well read, and enjoys
both expanding their own knowledge, as well as informing others.
It is important to note what the Indicator does not measure: ability,
character, mental health. All types are equally desirable; there is no one
preferred type. The Indicator is frequently used in a corporate environ-
ment, for team building and professional development purposes.
263
The results of this typology are geared toward helping the individual
understand their own preferred thinking and work style, as well as those
of colleagues or customers. For example, sales approaches can be tailored
according to how the customer prefers to receive information.
The Indicator is not without its detractors. It focuses on how you prefer
to act, not how you actually do, so its value as an assessment tool has been
questioned. Test/retest reliability is apparently low, particularly after some
time has passed. But despite its detractors, the Myers-Briggs Type Indica-
tor® has endured, with its sixtieth anniversary in October 2006 and re-
mains one of the most popular and widely administered tools, with about
2.5 million tests conducted annually. As Douglas Shuit noted in Workforce
Management, in December 2003, “Both critics and supporters say that the
Indicator endures because it does a good job of pointing up differences
between people, offers individuals a revealing glimpse of themselves, and
is a valuable asset in team-building, improving communication, and resolv-
ing personality-based conflict.”
See also: Emotional Intelligence; Headhunter; The Peter Principle
Further Reading
www.myersbriggs.org
264
N
Napster
Napster was a company that existed for only a short time as a source for
downloading free music, yet it opened up a Pandora’s box of legal and
ethical issues regarding how we obtain the music that we listen to.
In the late 1990s the MP3 file format for music files had hit its stride.
The MP3 format made song files small enough that they could be moved
around the Internet and downloaded to a personal computer quickly
enough for the general consumer to use. Originally, websites like MP3
.com provided a location where anyone could upload a song and store it
on a central database. Anyone wanting a song on the database had to
search for it, find it, and download it. While this worked, it was cumber-
some as there wasn’t one central location for all of the songs.
In 1999, eighteen-year-old Shawn Fanning was frustrated with not be-
ing able to find the MP3 files that he and his friends wanted, and he came
up with the idea that if you used a Peer to Peer file sharing system, you
could eliminate the central server and bulky search requirements. With the
help of some friends and the financial backing of his uncle, Shawn wrote
the code to create Napster. With peer-to-peer file sharing you download
the actual files right to your computer rather than accessing them on a
central server.
In general, Napster worked as follows: Someone who wanted to down-
load a song needed a computer with the Napster program, a directory that
had been shared, and a connection to the Internet. They opened their
Napster program, typed in the song they wanted, and the system went out
over the Internet to search for another computer on the Internet that had
the song for which the user was searching. Once found, the song could
be downloaded directly to the first user’s computer from the other com-
puter, and then played as many times as the user wished.
This was immensely popular especially on college campuses as many col-
leges and universities were just completing large investments in school-
wide networks so students and faculty would be able to use computers
effectively in classes. Combine with that the fact that college students as a
Napster
whole tend to like music, and don’t typically have a lot of money, and you
had the perfect scenario for Napster to find a dedicated audience for free
music downloading.
As one might expect, the music companies and artists were divided in
their response to this idea. Some felt that this was great free advertising,
but others thought that it was illegal as royalties were not being paid to
the artists and the music companies felt that they were losing sales. The
heavy metal band Metallica filed a lawsuit against Napster in 2000 because
a demo of a not-yet-released song had been circulated on Napster. On the
other hand, some lesser-known groups had welcomed the free distribution
and publicity that Napster had provided for them, and had found that sales
of their songs had increased. The downside to this was that the artists lost
control of distribution. While several studies have been done on this issue,
there had not been conclusive evidence to determine which side of this
argument is correct.
Yet another angle of the argument is the ethical one. Some suggested
that even though the songs were available free of charge on Napster, the
consumer had an ethical obligation to purchase them.
The Recording Industry Association of America (RIAA) filed a lawsuit
almost immediately after Napster went into business, with the goal of
shutting Napster down because they claimed Napster was distributing
copyrighted information. Napster’s defense was that in the peer-to-peer
system technically the consumers were the ones sharing the information
with each other so it wasn’t illegal. However, a court order in March 2001
restricted Napster from trading copyrighted material on its network and
in order to comply with that order Napster shut down completely.
Napster then settled the case by paying fees and advance royalties. To
support these debts Napster tried to change from a free service to a pay-
service but was unsuccessful. After a couple of unsuccessful buyout bids, a
company by the name of Roxio bought the Napster name and logo at a
bankruptcy auction and used it to brand a subscription music service that
is still in existence today.
While the Napster company story is an interesting one, what is perhaps
the most significant thing about Napster is how it brought the MP3 file
sharing debate to the forefront of the music industry. While the legal and
ethical debate continues, what is clear to everyone is that peer-to-peer mu-
sic file sharing is here to stay.
The success of Napster also spawned the development of legal digital
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NASDAQ
music distribution. In 2006, estimates suggested that almost 140 million

songs were downloaded per quarter. The most successful to date has been
iTunes that has approximately 70 percent of the online song market—it
is also the fourth largest leading music retailer overall. The second largest
vendor is eMusic with a 10 percent share. Notably, other digital music
distributors’ products are not compatible with the iPod—the leading MP3
player.
The success of iTunes continues to attract other players to the market
including Microsoft with Zune—a product that, like Apple, offers both
hardware and software. Others such as Yahoo, Inc. are attempting to inte-
grate their music products with other players such as cell phones. Those
already in the market such as eMusic are offering customers that still buy
CDs, CD-style packaging for some of their digital albums.
For many of the legal download music services the challenge continues
to be how to acquire a large music database of material, how to extract
payment for downloads, and then how to maintain and grow the customer
base. Yahoo Music Unlimited’s approach is to offer a subscription model
that allows customers unlimited downloads for a flat monthly fee—but
when the subscription ends the music literally stops playing. Microsoft’s
Zune offers individual songs for 99 cents, or an unlimited download sub-
scription for about $15 a month.
See also: Innovation; Internet
Further Reading
“The Day the Napster Died,” by Brad King, published in Wired, May 15, 2002
located on www.howstuffworks.com.
“How the Old Napster Worked,” by Jeff Tyson, located online at www.how
stuffworks.com.
www.napster.com
NASDAQ
The NASDAQ is one of the leading stock exchanges in the United States.
The two primary stock markets are the NASDAQ (which accounts for
more than 56 percent of total share volume traded) and the New York
Stock Exchange, the NYSE or the Big Board (which accounts for about
37 percent of total share volume and has about 2,800 listed companies).
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NASDAQ
Traditionally, the NYSE has been viewed as the premier, venerable market
that defined U.S. commerce, with the NASDAQ as a more brash upstart
market. As such, many traditionally think of the NYSE as populated by
the Blue Chip companies and the NASDAQ by technology companies.
While this may be true, the NASDAQ has emerged as a substantive trading
force that is home to over 3,200 companies.
The origins of the NASDAQ began in 1961 when the U.S. Congress
authorized the Securities and Exchange Commission (SEC) to study frag-
mentation in the over the counter trading market. That study charged
the National Association of Securities Dealers (NASD) to implement an
automated solution. Ten years later the National Association of Securities
Dealers Automated Quotations (NASDAQ) began trading; providing
quotes for 2,500 over the counter securities. With continued investment
in technology and outreach to companies anxious to trade publicly to raise
capital, the NASDAQ continued to grow and innovate. In 1993 the
market developed three new indexes to track growth industries: biotech-
nology, computers, and telecommunications. In 1994, the NASDAQ sur-
passed the NYSE in yearly stock volume, and in 1999 the NASDAQ be-
came the world’s biggest stock market by volume. In 2000 the NASDAQ
membership voted to restructure the governance of the exchanges and
spun off the NASDAQ into a shareholder-owned for-profit company. The
NASDAQ is significantly different from the NYSE in several ways. For
example, investors can trade stocks on any exchange, regardless of where
the stock is listed. IBM stock is listed on the NYSE but could be traded
on the NASDAQ or any other exchange. While the NASDAQ welcomes
other stocks not listed with it, the NYSE trades few stocks that do not
officially list on their own exchange.
The two exchanges also trade in different ways. On the NYSE, orders
go to a “specialist” for each stock. The specialist works on the trading
floor in New York, working to maintain a “fair and orderly market” for
the stock. The specialist acts as the market maker (posting buy and selling
quotes) and auctioneer (matching orders of customers sent to the NYSE
floor). In general large orders are negotiated face-to-face while smaller
orders are routed electronically to the specialist’s order book. Access to
the floor is limited to members who have a seat on the exchange. There
are about 1,366 members and the cost of a seat is about $1.5 million.
By contrast, the NASDAQ’s electronic market, given its origins is a
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NASDAQ
“fully computerized” market with an open architecture. It has no special-

ists. Instead, NASDAQ operates a system, which includes approximately
300 market makers who compete in NASDAQ stocks. Orders are not in
one central position; but are spread over many market makers, with over
fifteen market makers in a given NASDAQ security. The market markers
post their bid and ask prices into the NASDAQ network where they can
be viewed by all participants. On average, there are sixty-seven market
makers for NASDAQ-listed S&P 500 stocks. In the most active NASDAQ
stocks, no market maker handles more than 3–5 percent of business in
one stock at any time.
Traditionally the NASDAQ has been home to emerging companies and
industries. For example, the NASDAQ 100 is approximately 57 percent
technology companies, 20 percent consumer services, and 15 percent
health care. Given its heavy technology weighting the NASDAQ was af-
fected significantly by the Internet boom and subsequent bursting of the
Internet bubble. In March 2000 the NASDAQ reached the peak of its
upward momentum—an all time high of 5,132 an 88 percent increase
from 1999. From that high in March, the index fell led by losses in tech-
nology, media, telecommunications, and Internet shares. As reported in
the New York Times (December 30, 2000), the NASDAQ had its worst
year since its founding with leading companies such as Dell Computer
falling 66 percent and Microsoft 63 percent. Others fared even more
poorly with Priceline.com falling 97 percent, Yahoo 86 percent, and Ama-
zon.com 77 percent for the year.
Despite the hits taken by the NASDAQ in 2000, the market has re-
bounded. In 2004, the NASDAQ added 148 initial public offerings (IPOs),
twenty-five of the new listing were foreign companies. It also traded 98.5
million shares daily on average, and had an average daily volume of $34.8
billion and an 8.8 trillion total dollar volume.
See also: Sarbanes–Oxley Act of 2002
Further Reading
www.nasdaq.com
269
National Secretaries Day
National Secretaries Day

In 1952 Mary Barrett, president of The National Secretaries Association,
a group of office product manufacturers, and Harry Klemfuss, public rela-
tions account executive at Young & Rubicam organized a “National Secre-
taries Week” campaign. The goal of the campaign was to recognize the
work that secretaries did for organizations and promote how valuable they
were to the organization. There was a shortage of skilled office labor at
the time and this campaign was an effort to keep current secretaries in
their jobs and encourage others to aspire to a secretarial career. National
Secretaries Day was one specific day in the week on which to focus on the
secretary.
The first National Secretary’s Week was proclaimed by U.S. Secretary
of Commerce Charles Sawyer as June 1–7, 1952, with the first National
Secretaries Day being June 4, the Wednesday of that week. Two years
later the National Secretaries Association changed the date of National
Secretaries Week to be the last full week in April with National Secretaries
Day falling on the Wednesday of that week, and that designation remains
today.
While the dates and recognition remain constant, many things have
changed about National Secretaries Day over the years as the role of the
traditional secretary has evolved. The name was changed to Professional
Secretaries Day in 1981 when the organization’s name was changed to
Professional Secretaries International (PSI). The organization’s name was
again changed in 1998 to the International Association of Administrative
Professionals (IAAP) and in 2000 Professional Secretaries Day was changed
to Administrative Professionals Day, the name that remains in effect today.
Popular myth holds that Administrative Professionals Day was created
by greeting card companies, candy manufacturers, and florists for their
own financial gain, and it is often referred to as a “Hallmark Holiday.” In
fact it was actually created by the organization charged with promoting
Administrative Professionals and their careers. That being said, Adminis-
trative Professionals are often given gifts of cards, candy, and flowers dur-
ing Administrative Professionals Week, or on Administrative Professionals
Day so it is easy to see from where the myth originated.
While administrative professionals are often treated to lunch by their
bosses on Administrative Professionals Day, the IAAP suggests that super-
visors recognize Administrative Professionals “ . . . by providing training
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Networking
for their administrative staff through seminars, continuing education, or

self-study materials. Another suggestion is to make a commitment toward
delegating responsibilities that better utilize the skills of administrative
professionals.”
See also: Performance Management/Performance Measurement
Further Reading
www.iaap-hq.org (International Association of Administrative Professionals)
Networking
In today’s business culture networking is widespread. There is career net-
working, business networking, computer networking, network effects,
peer to peer networks, dial-up networking, etc. What each of these terms
have in common is the linking of different groups—people, groups, com-
panies, or institutions—for the exchange of services, products, or informa-
tion.
Clearly the best known opportunity for networking in recent years has
been the Internet, providing the means for its 700 million users to con-
nect, browse, and communicate. Information is exchanged, contacts are
made, music is listened to, and business is transacted. The Center for In-
formation and Research on Civic Learning and Engagement noted in
2004, that “The Internet has become a powerful force in political cam-
paigns.” Using the networking afforded by the Internet, young people had
become engaged in the political process in “blogs, chat rooms, and meet-
ings organized via the Internet.” The most prominent use of Internet net-
working in politics was seen in former Vermont Governor Howard Dean’s
run for the Democratic presidential candidacy in 2003. Using the meetup
.com website Dean was able to bring together over 30,000 supporters to
his cause.
“It’s not what you know, it’s who you know,” is the phrase most com-
monly associated with networking, applying not only to networking for a
new job or career advancement but also to building sales. The reality is
that all things being equal, people will hire or do business with people
they know, like, and/or trust and networking is a means of building those
relationships. To some extent, “the old boys network” and the “golf club
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Networking
Why I Do This: Real Estate Brokers

Ed and Agnes Chatelain
We both have Master’s degrees in archaeology/anthropology—it should
be noted that our degrees predate the Raiders of the Lost Arc movies. Im-
mediately after graduate school we both pursued careers in our chosen dis-
cipline—we both taught college courses and Ed worked as a county histori-
cal archaeologist and Agnes worked for the American Anthropological
Society as a lobbyist.
After several years of working in our chosen careers we made a decision
to pursue an entrepreneurial lifestyle. To this end we bought an ice cream
shop and bakery in a resort community. We found that we enjoyed living
in a small community and the additional freedom that being in one’s own
business provides.
While we had the ice cream store we constantly tinkered with the
menus, rhw management styles, and explored a variety of aspects of the
food service industry. Eventually, we felt that we had brought the business
along as far as we were interested so we began searching for a new opportu-
nity and settled on real estate sales.
The real estate industry encompasses a huge number of entrepreneurial
opportunities, i.e., sales, rentals, new construction, renovation, commercial,
industrial, and residential development to name a few. Also, the real estate
industry affords one the opportunity to utilize all high school or college
degrees, certifications, life experience, hobbies, interests, and intuitive
knowledge that a person has developed. For instance, on any given day a
real estate professional can be required to review plot plans, research deeds,
discuss sales potential with architects and builders, price houses for home-
owners, advise clients on interior design and landscaping, photograph
houses, write advertising copy, and a myriad of other things. Real estate is
a dynamic fast changing business in which any person can find a niche if
they are interested in working hard. Finally, the real estate industry directly
rewards competence, diligence, and hard work by providing direct compen-
sation and the opportunity to make one’s own hours and pursue one’s
own lifestyle as long as one is self motivated. As a result, we have happily
pursued our careers in real estate and continue to find it interesting, satisfy-
ing, and lucrative.
network” still exist, so many believe that networking is especially impor-

tant for those outside those networks to build relationships and trust.
When looking for a new job or advancing in an existing career, network-
ing might entail making a list of the people that you know personally or
professionally, meeting with them, and seeking their counsel about those
opportunities or industries that might be the best fit for you and your
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Networking
aspirations. For college graduates, the alumni network is often an addi-

tional source of material. Often graduates of a school will offer to provide
guidance and information, though not a job offer. For others, belonging
to a professional organization can provide access to individuals that might
be helpful in creating a network to mentor and direct an individual in their
next career move.
In sales, one of the best prospects is a referral from someone within their
network. If a sales rep has a large and diverse group of referrals, he or she
is more likely to meet their sales goals. For example, in financial services
once an advisor has established a relationship with a client, they might well
ask if that person knows others that might be interested in financial advice.
If the advisor receives such a referral he is more likely to be able to sell the
business, because that person has a relationship with the originating cus-
tomer and assumes a level of trust and competency in the reps offerings.
There are numerous books and articles on the art of networking—and
that is a gross understatement. To quote just one, consider Stacey L. Brad-
ford’s article, entitled “Experts Offer Their Tips for Fruitful Networking”
(published in the Wall Street Journal Online, at www.careerjournal.com),
“When it comes to finding a job, nothing beats good, old-fashioned net-
working—contacting friends, relatives, and former colleagues, setting up
face-to-face meetings in the hope of getting job referrals. Yes, it is awk-
ward, but here’s why it simply has to be done: At any given time, about
80 percent of all available jobs aren’t posted in the classifieds or on job
boards, says BH Careers International, a New York career-management
firm. And 60 percent of people surveyed by BH said they got their last job
by networking.” There’s incentive.
See also: Headhunter; War for Talent
Further Reading
Dig Your Well Before You’re Thirsty: The Only Networking Book You’ll Ever Need,
by Harvey Mackay, Currency, 1st Currency pbk. ed. (February 16, 1999).
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Networking

At Work, “Nice” is on the Rise. In a Huge Shift from
the “Me First,” “Greed is Good” Attitudes of the 1980s,
Corporations Seek a Kinder, Gentler Culture
By Marilyn Gardner, Staff writer of The Christian Science Monitor. Re-
produced with permission from the October 16, 2006 issue of The Chris-
tian Science Monitor (www.csmonitor.com). © 2006 The Christian Sci-
ence Monitor. All rights reserved.
Patrick Morris could call it “a tale of two companies.” As a new col-
lege graduate beginning his first job in public relations at a major cos-
metics firm in New York, he knew he would be the proverbial low man
on the totem pole.
“You feel you’re going to get put upon and crunched and tossed
around,” he says. But instead of the huge egos and “attitude” he ex-
pected, he found himself surrounded by good, caring people. “It made
all the difference in the world and helped to shape me into the profes-
sional I am today.”
By contrast, his next job at a television shopping channel proved to
be “an environment full of finger-pointing and backstabbing,” he says.
“It became a nightmare to go into the office.”
In comic strips and movies, tyrannical bosses produce plenty of
laughs. Think of Mr. Dithers, Dagwood Bumstead’s nemesis in Blondie,
or Miranda in The Devil Wears Prada. But in real life, managers like
these are hardly funny.
Today, in a competitive age that sometimes takes a “nice guys finish
last” approach to business, a quiet cultural change appears to be under
way. “Nice” and “kind” are becoming operative philosophies in some
companies, among them Mr. Morris’s first employer. Those adjectives
are also showing up in titles of books and organizations. They stand in
sharp contrast to the 1980s, when a “greed is good” attitude prevailed
in some quarters and business books carried titles such as “Corporate
Combat” and “Office Warfare.”
“There’s a huge shift we’ve observed,” says Russ Edelman, one of
the founders of Nice Guy Strategies, a consulting firm in Newburyport,
Mass. “Companies are fundamentally saying, ’We need to employ more
ethical practices as well as create an environment that supports a nicer
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Networking
mind-set.’ Organizations are asking, ’How can we create an environ-

ment that is friendly, welcoming, and warm, but also ensure that people
in the company are held accountable and can achieve success?’ There’s
a balance people are struggling with.”
Workplace observers attribute some of the changes to a reaction
against corporate scandals at Enron and Tyco. “In the past decade there
have been a lot of egomaniacal bosses,” says Tim Hiltabiddle, one of
Mr. Edelman’s business partners. Sept. 11 also heightened the yearning
for a kinder workplace, he says.
Yet that approach is “not about everything being nicey-nice,” Mr. Hil-
tabiddle emphasizes. Nor does it mean being wimpy and naive, lacking
backbone, or serving as a doormat. Being too nice, in fact, carries its own
perils. “People might take advantage of your good nature,” he says.
As one way of framing the issue, Hiltabiddle and Edelman sat down in
a restaurant and drew up a Nice Guys Bill of Rights on napkins. Those
rights include speaking up, setting boundaries, taking risks, valuing your
time, and being accountable. Studies show that niceness can also produce
bottom-line rewards, such as increasing productivity and reducing turn-
over, says Robin Koval, an advertising executive in New York and coau-
thor, with Linda Kaplan Thaler, of The Power of Nice: How to Conquer
the Business World With Kindness (Doubleday). Being nice, she adds, can
mean “having the courage and creativity to stand up for what you want,
but doing it in a way that is not ugly or threatening.”
Women, Ms. Koval finds, are typically taught the importance of being
nice. That can produce stereotypes. Noting the popularity of the book,
Nice Girls Don’t Get the Corner Office, she says, “We take issue with
that. We think we’re nice girls, and we have corner offices.”
For men, nice is a more liberating idea, Koval adds. “They’re the ones
who have been socialized to think, ’I’ve got to be a tough guy, never
show my emotions, it’s a dog-eat-dog world out there.’”
But “dog eat dog” isn’t the only modus operandi. “To be successful
in business, you need to have a certain threshold of knowledge of your
industry and techniques,” says Peter Handal, CEO of Dale Carnegie
Training in New York. “But it’s not enough just to be good at what you
do. In my experience, the people who reach the top are nice. They’re
people-friendly. They’re ones who can communicate with people
around them, up and down.”
They’re also the ones who avoid what Duane Boyce, author of The
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Networking
Anatomy of Peace, calls “false niceness.” He explains the term this way:
“If I’m not focused on results, I’m just expecting my friendliness, my po-
liteness to get me by. That’s not nice.”
In the political arena, this is shaping up to be another season filled
with harsh campaign ads as candidates trade jibes and paint negative im-
ages of their opponents.
“It’s so disheartening that election after election becomes about tear-
ing down the other person,” Hiltabiddle says. “It’s not constructive in
building something; it’s tearing down.”
Yet politics creates unique challenges. Assuming the role of a politi-
cian, Mr. Handal says, “The way I get ahead is either I sell people on
me, or I knock you. There’s only a binary choice. In business or nonprof-
its, there are lots of choices.
“Who moves up in organizations? People who are liked.”
Customer service is another field filled with negative images. “People
are tired of the indifference that we’re receiving from so many compa-
nies these days in the name of customer service,” says Ed Horrell, au-
thor of The Kindness Revolution: The Company-wide Culture Shift That
Inspires Phenomenal Customer Service. He notes that consumers want
service “peppered with some respect and dignity and kindness.”
Mr. Horrell praises companies known for excellent service, such as
Nordstrom, FedEx, L.L. Bean, and Chick-Fil-A. Their emphasis on core
values—dignity, respect, courtesy, kindness—begins at the top and re-
quires commitment from the CEO and managers all the way down to
front-line workers. “The way they treat their employees is virtually al-
ways the way they’ll treat their customers.”
For Morris, the publicist who tells the tale of two very different com-
panies, the positive examples set by his bosses and co-workers at the
cosmetics firm continue to influence his work as public relations director
of his firm in Troy, N.Y.
“If you want people to perform, and you want people to do a good
job, you have to treat them nicely,” he says. “It’s not to say you don’t
lose your cool sometimes. But if somebody makes a mistake, what’s not
going to help them is to have an intensely negative reaction to it.
What’s going to help is to say, ’How do you think this happened?
What do you think we should do to fix it? What steps should we take
next time that this doesn’t become a problem?’ That’s the way I was
taught.”
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Networking
That kind of approach can pay big dividends. Pamela Gregg of the
University of Dayton Research Institute in Ohio praises her bosses for
“going out of their way to be nice to those around them.” In addition
to being fair and expressing appreciation for jobs well done, she says,
they give employees “free rein to take risks and make what we can of
our jobs.”
Everyone works hard, Ms. Gregg says, so her bosses often lighten the
mood with levity. One employee will soon celebrate forty-five years
with the institute. For others, twenty, thirty, and forty years of service
are not uncommon. Last year the Dayton Business Journal rated it one
of the Top 10 winners in its “Best Places to Work in the Miami Valley”
contest.
In an era of corporate downsizing, even cutbacks offer an opportu-
nity for companies to soften their approach. “The act of laying some-
one off does not mean you’re unkind,” Horrell says. “A kind person
does not want to do that, but there’s a kind way to do it.”
Making a case that “nice is very powerful,” Koval says, “We all have
to network with each other. We all work in teams. Unless you’re a
chemist in a lab bent over a test tube, nobody works alone. The old
command-and-control way of doing business is clearly over.” She adds,
“Meanness is so last millennium. Niceness is the future.”
277
O
Offshoring
When a U.S. company either opens a unit outside of the borders of the
United States to manufacture goods or to conduct services, or hires an-
other company outside of the United States to do those things, it is called
offshoring. Generally, companies “offshore” work to take advantage of
lower-cost labor in other countries.
One of the pioneers of offshore outsourcing was Jack Welch. While
CEO of General Electric in the early 1990s, Welch introduced a new rule
for GE’s offshore activities called the 70:70:70 rule. In a communication
to employees, “Welch mandated that 70 percent of GE’s work would be
outsourced. Out of this, 70 percent of that work would be completed
from offshore development centers. And out of this, about 70 percent
would be sent to India. This comes out to about 30 percent of GE’s work
being outsourced to India” (EBS, www.ebstrategy.com/oursing/basics/
definition.htm) The success of GE and other companies marked a contin-
ued interest in offshoring.
In recent years, as the quality of education and expertise has increased
in developing countries like India and China, more U.S. companies have
been offshoring (and outsourcing) work. Earlier waves of offshoring pri-
marily encompassed manufacturing and blue collar works but, in recent
years, offshoring has come to include, increasingly, service capabilities that
require well-educated employees. For example, as noted in Fortune (July
25, 2005), “Texas Instruments is conducting critical parts of its next-
generation chip development—extraordinarily complex work on which the
company is betting its future—in India. American computer programmers
who made $100,000 a year or more are getting fired because Indians and
Chinese do the same work for one-fifth the cost or less.”
The McKinsey Global Institute predicts that some industries could be
profoundly changed: For example, “in packaged software worldwide, 49
percent of jobs could in theory be outsourced to low-wage countries; in
infotech services, 44 percent. In other industries the potential job shifts
Offshoring
are smaller but still so large they’d create major dislocations: Some 25
percent of worldwide banking jobs could be sent offshore, 19 percent of
insurance jobs, 13 percent of pharmaceutical jobs. Further 52 percent of
engineering jobs and 31 percent of accounting jobs could be offshored.
(Source: “America Isn’t Ready [Here’s What To Do About It],” Fortune,
July 25, 2005.)
That same McKinsey study calculated almost 10 million U.S. service
jobs could be subject to offshoring—should that occur it would result in
the U.S. unemployment rate climbing from 5 percent to 11.4 percent. But
estimates suggest that only 40 percent of those jobs will ultimately be
offshored from high-wage countries to low-wage countries by 2008. For-
rester Research puts the number at 3.4 million white-collar jobs by 2015.
Researchers at the University of California at Berkeley believe the number
will be far larger, perhaps 14 million.
Yet, when a company makes a decision to offshore a business or a busi-
ness process, it is not a guarantee to make a profit. As Ravi Avon and
Jitendra V. Singh, note in the Harvard Business Review article, “Getting
Offshoring Right,” “It’s not easy to make money by offshoring business
processes, many CEO’s are discovering. Companies benefit only when
they pick the right processes, calculate both the operational and structural
risks, and match organizational forms to meet needs.” In other cases, com-
panies can be profitable but choose to scale back offshoring when it meets
with customer dissatisfaction. For example, in 2003, in response to com-
plaints about customer service calls, Dell selectively chose to bring back
some of its overseas business customer service in Texas, Idaho, and Ten-
nessee from sites in India.
See also: Outsourcing
Further Reading
Offshoring: Understanding the Emerging Global Labor Market (McKinsey Global
Institute), by Diana Farrell (ed.), Harvard Business School Press (December
19, 2006).
280
Ombudsman
Ombudsman
An ombudsman is an official who investigates complaints made against a
group or organization by people outside that group or organization. The
ombudsman sometimes follows his/her investigation with mediation to
obtain a resolution of the complaint. Ombudsmen exist in three main en-
vironments: government and corporate organizations, non-corporate or-
ganizations, and the news media.
While ombudsmen have been found in history dating back to the Qin
Dynasty in China, their modern use stems from Sweden where they have
been used successfully in the Swedish Parliament since the early 1800s.
Many other countries have ombudsmen, but none have been as successful
at implementing the role as the Scandinavians.
The term ombudsman is derived from the Norse word, umbodhsmadhr,
a non-gender-specific term meaning deputy. It is therefore correct to use
ombudsman as a gender-neutral word, but equally correct to refer to
someone as an ombudswoman, or a group as ombudspeople if the situa-
tion warrants.
Most ombudsman offices have a stated procedure that is used to submit
a complaint, and a prescribed course of action that the ombudsman fol-
lows once a complaint has been submitted. Regardless of the system, the
ombudsman thoroughly investigates the issues and communicates with all
those involved.
Ombudsmen are most frequently found in government where they rep-
resent the rights of the citizens with respect to governmental issues. While
these ombudsmen are typically appointed by a government official, their
main focus is to investigate complaints brought by citizens against the gov-
ernment or governmental agency.
An example of a governmental ombudsman is the Office of the National
Ombudsman with the U.S. Small Business Administration, whose mission
is “ . . . to assist small businesses when they experience excessive federal
regulatory enforcement actions, such as repetitive audits or investigations,
excessive fines, penalties, threats, retaliation, or other unfair enforcement
action by a federal agency.”
Other ombudsman offices that assist the general public are those such
as the Long Term Care Ombudsman and the Foster Care Ombudsman.
In both corporate and noncorporate organizations the ombudsman is
charged with investigating complaints against the organization made by
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Ombudsman
Why I Do This: Director, Public Records and Open Public Meetings

Eliza Saunders
I work for the largest public research university in the United States. I am
the chief compliance officer for the freedom of information and the open
public meetings acts. What does this mean? We get requests from the pub-
lic, asking for records, and we make sure that the university gives out what
is legally releaseable.
So if someone asks, for example, to have copies of all emails from a par-
ticular Dean for a given time period, my staff gets them, and then reads
them and “redacts” information—that is, takes information out—as al-
lowed by the law. We do this for any kind of record—any information in
any format. It could be a database, it could be performance evaluations,
whatever.
How did I find this job? I was working in the IT department, and some-
one literally came up to me and asked me to consider this job.
My background includes working for the registrar’s office at Boston Uni-
versity; I have also been the administrator of admissions at the Harvard
Medical School; I’ve worked in the financial industry and in the health
care field.
I have a master’s degree in public relations, which oddly enough helps a
lot in this field, because most of our more complicated requests come from
the media or from attorneys. It helps to be familiar with working as an “ex-
ternal contact” for a company.
You might like this job if you’re detail oriented, if you’re good at identi-
fying problems, and if you can handle working in high pressure situations
with high level executives. You also have to be able to handle quiet. It’s
dead quiet in my office most of the time. And, you also have to love to
read and do research.
employees within the organization. An organizational ombudsman medi-

ates resolutions to the issues investigated more often than ombudsmen do
in government.
An organizational ombudsman works for the organization, and is usu-
ally high-ranking but is not part of the management team. In order to
more easily remain neutral, the ombudsman often reports directly to the
Board of Directors and not to management. Examples of types of com-
plaints that would be brought to an organizational ombudsman include
(but are not limited to): Fair Employment Practices, Harassment, Envi-
ronmental Health and Safety, Supplier Relationships, and Petty Theft. An
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Ombudsman
ombudsman provides a means through which a whistleblower can voice

their concerns.
The first North American news ombudsman was appointed at the Cou-
rier-Journal in Louisville, Kentucky in 1967. Sometimes referred to as
“readers representatives,” the job of the news ombudsman is to review
customer’s complaints and work to find a satisfactory resolution. These
complaints can range from comments about news accuracy, to ethics, to
fairness in reporting.
The recently appointed ombudsman (as of this writing) at National
Public Radio (NPR) stated his task as follows: “My mission is to listen to
your concerns, criticisms, and compliments about National Public Radio’s
shows and to communicate those issues to the NPR staff. My commitment
to you is to take your concerns seriously, to attempt to get answers to
your questions, responses to your comments, and to write a column based
on those conversations and the reporting I do after we’ve talked.”
The majority of today’s U.S. news ombudsmen work for newspapers,
with others representing the public’s concerns at radio and television net-
works. It is important to note, however, that there are many fewer news
organizations without an ombudsman than there are with an ombudsman.
There are a number of trade organizations for Ombudsmen such as the
Organization of News Ombudsmen (ONO), The International Ombuds-
man Association (IOA), and the International Ombudsman Institute (IOI)
to name a few. These organizations provide seminars, information, and a
forum through which ombudsmen can discuss issues with each other, such
as maintaining neutrality and ways to handle angry callers.
In business there have been formal or informal ombudsman roles, where
employees can go to an impartial party to discuss problems and com-
plaints. At times a formal role has been created following crisis in a busi-
ness. For example, British Petroleum (BP) created a new ombudsman po-
sition in its U.S. division shortly after problems in Alaska at Prudhoe Bay.
At BP the ombudsman staff operated a twenty-four hour telephone service
that workers could call to report complaints. The BP ombudsman de-
scribed his job in the Wall Street Journal (September 5, 2006) as to “do
whatever is necessary to ascertain the facts about and identify the solutions
for problems that exist today as well as those likely to become issues in the
future.”
Regardless of their environment, the major issue facing ombudsmen is
283
One-to-One Marketing
how to remain neutral, and perhaps more importantly how to maintain

the image of remaining neutral, as they investigate issues such as harass-
ment, or other unethical charges that can often be very polarizing. Essen-
tially, their job is to investigate and sometimes criticize their own em-
ployer. In order to maintain their neutrality, ombudsmen follow strict
procedures and focus on being extremely thorough.
See also: Suggestion Box
Further Reading
Conflict Resolution and the Ombudsman: A Bibliography on the Ombudsman Con-
cept in the Corporate, University and Medical Environments, by Laura Ferris
Brown, Library and Information Center on the Resolution of Disputes,
American Arbitration Association (1993).
When a company is communicating with a single customer at a time, and
tailoring their interaction to suit that particular customer’s needs, it is
called one-to-one marketing.
Put another way, in the field of marketing, one-to-one marketing means
developing a relationship with a customer and tailoring products and ser-
vices to that customer—customization for a customer of one. The idea is
that when the company engages the customer in a meaningful dialogue,
they will develop products and services more meaningful to that customer
and gain a greater and greater share of that customer’s total purchases.
Many companies have discovered that actually executing such a market-
ing plan is challenging. As some of the best known champions of one-to-
one marketing, Don Peppers and Martha Rogers, noted in the article, “Is
Your Company Ready for One-to-One Marketing? (Harvard Business Re-
view, January–February 1999), “The mechanics of implementation are
complex. It’s one thing to train a sales staff to be warm and attentive, it’s
quite another to identify, track, and interact with an individual customer
and then reconfigure your product or service to meet that customer’s
needs.”
The authors advocate four steps in the creation of a successful one-to-
one marketing program: “identifying customers, differentiating among
them, interacting with them, and customize your product or service to
284
meet each customer’s needs.” A company’s readiness for a one-to-one

marketing program is then dependent on the company’s ability to know
its customers, be able to differentiate their needs, interact with them, and
customize products or services for them. While this seems relatively simple,
there are potential roadblocks. For example, some companies do not sell
their products directly to customers (the end-user) but rather sell through
a retail network. As a result they may not know their customers nor be in
a position to interact with them.
Technology has been a facilitator of many one-to-one marketing pro-
grams. E-mail allows companies to contact customers directly and sell to
them based on their recorded purchase histories. Advanced software pro-
grams like Customer Relationship Management (CRM) track customer
history and purchase patterns. Companies, like Dell, use technology to
allow customers to customize their computers in the purchase process.
Amazon.com, the online store, uses past purchase history to offer custom-
ers complementary products when the customer first logs onto its site.
Despite its benefits, one-to-one marketing has its drawbacks. As Paul
Nunes and Jeffrey Merrihue noted in “The Continuing Power of Mass
Advertising” (MIT Sloan Management Review, Winter 2007), “While the
‘market of one’ approach can pay off, it requires significant upfront invest-
ment including: implementing customer relationship management soft-
ware applications; filtering, enhancing and cleaning customer data; and
personalizing interactions (e-mail, billing, offers, and so on). These activi-
ties take time and coordination of multiple parts of the organization (mar-
keting, customer service, sales, information technology), which for compa-
nies that are trying to be highly reactive to changing environment, can be
daunting.”
Overall critics suggest that one-to-one marketing is expensive and needs
to be better integrated into an overall marketing strategy that selectively
combines one-to-one marketing with one-to-many marketing tactics.
See also: The 4Ps; Relationship Marketing
Further Reading
The One to One Future, by Don Peppers and Martha Rogers, Currency, 1st Cur-
rency pbk. ed. (December 14, 1996).
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Open Book Management

The management concept of Open Book Management implies that a com-
pany’s financials are available for any employee to see. It also implies that
employees are going to need to understand what they see; it’s up to them
to make those numbers improve.
Open Book Management might be compared to a student whose
teacher announced an “open-book” test. It is likely that the student would
feel relief at not having to memorize everything quickly. And that relief
may then morph into the realization that the student would now have to
know how to find all of the answers quickly and effectively so they could
finish the test on time and with the correct answers.
To a certain extent, this mingled relief and pressure are felt by employ-
ees often when they learn they are going to work for a company that prac-
tices Open Book Management, or that their current company is going to
change to Open Book Management. Elation comes at the idea that they
are going to have access to all of the financial documents of the company
followed by either the fear that it is “just talk and no substance” or the
realization that they are going to have to understand those financials.
Open Book Management as a term was used by John Case, who was a
senior writer at Inc. magazine in 1995 when he coined the phrase, accord-
ing to www.inc.com. Case went on to write a book on the topic, entitled
Open-Book Management: The Coming Business Revolution (Collins paper-
back reprint, May 1996). In it, he described the approach, and also dis-
cussed the work of Jack Stack. Stack pioneered the approach—though it
wasn’t called Open Book Management at the time—when he became the
new plant manager at SRC, a failing division of International Harvester.
Stack had an idea that if each and every employee at SRC had access to
the numbers, a vested interest in the numbers, and the power to affect the
numbers, then those employees would work harder to ensure that those
“numbers” improved, and that profitability would increase. With that ap-
proach as a lynchpin of his strategy, Stack and twelve other employees
purchased the business from International Harvester in 1983.
Getting disconcerted line employees who were considering voting in a
union to believe that they could contribute more to the company and thus
manage their own futures was no easy task. However, by training employ-
ees on how to read financial statements, determining goals for each area
of the company, and then rewarding employees when those goals were
286
met, Stack did turn SRC around. Stack viewed business as a “game” and
one that he wanted to win. He presented the “Great Game of Business”
(his term) to the workers at SRC by determining a number that each area
needed to achieve in order to win the game. These numbers were derived
from what the company actually needed to achieve to improve its profit-
ability. Then, in order to ensure that everyone understood the “game,” he
provided training courses for everyone to attend that would teach them to
understand the numbers.
Because he worked in manufacturing, the “numbers” were not always
sales related. For example, sometimes the number was for safety—like re-
ducing the number of accidents, or the number might be related to equip-
ment needs—like determining whether to repair or replace a piece of
equipment. Rewards for meeting the goal started small and got larger as
the goals became larger. Eventually, he even had employees involved in
rewriting the compensation plan.
One of the keys to his success was also his willingness to communicate
with employees. Not only did he talk with them one-on-one, and listen
when they talked, he also implemented stock-ticker-like boards in each
area of the company—even the cafeteria—so that the employees would be
able to see at all times how they were doing compared to their goal. He
and the other managers and supervisors at SRC even made it a habit to
hang out at a local pool bar every afternoon from 4–6 P.M. where employ-
ees could talk with them in a more casual setting—over a game of pool.
The success of Open Book Management at SRC was not just from
showing employees the company’s statistics. It was a complete change in
the culture of the company from one where the workers just worked to
receive their paycheck, to one where the workers worked for themselves—
their compensation plan included an Employee Stock Ownership Plan
(ESOP). Presented with the opportunity and the power to affect the com-
pany’s revenues, workers believed in Jack and his plan, which lead to suc-
cess for everyone.
Implementing Open Book Management is not something that can be
done easily, nor is it something that can be accomplished overnight. It
takes a great deal of commitment by management to effect the culture
change necessary in order for it to work. Many companies that consider
changing to Open Book Management are doing so as a “last resort.” They
are failing and have tried every other management tool that they know of
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Outsourcing
without success, so they turn to this as their last gasp, so to speak. This
means that employees are usually disgruntled, sometimes overworked, and
don’t necessarily trust the management team to begin with. These are
large hurdles over which the management team needs to jump before they
can begin to see an improvement.
However, the commitment to success can pay off. After a company gives
employees the training they need in order to understand their goals, and
the power to make changes in their work for the success of the company,
it is up to each and every employee to “buy in” to the concept and apply
themselves to learning and improving. Provided they do this, everyone
wins in the Great Game of Business.
As John Case put it, “The beauty of open-book management is that it
really works. It helps companies compete in today’s mercurial marketplace
by getting everybody on the payroll thinking and acting like a businessper-
son, an owner, rather than like a traditional hired hand” (www.inc.com/
guides/leadership_strat).
See also: Learning Organization
Further Reading
“Communication: Open-Book Management 101: The Story of How One Com-
pany Embraced Open-Book Management and What Affect It Had on the
Staff,” by Donna Fenn in Inc.com, published August 1996, on www.in-
c.com.
Outsourcing
Outsourcing, sometimes called “contracting out,” is a relatively new func-
tion of modern-day business and started in the 1980s. Outsourcing refers
to the practice of transferring the supplier of some products or services
from inside the organization to outside the organization. Key to the defi-
nition of outsourcing is that the control of the function being outsourced
is also given to the outside organization.
A report of the Panel of the National Academy of Public Administration
in January 2006 defines outsourcing as follows: “Outsourcing refers to a
business restructuring or change in current business practice that shifts
operations or processes previously performed within the company to an
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Outsourcing
outside entity—an independent third party.” Outsourcing can be estab-

lished with a company in the original company’s country or outside that
country. When performed with a company outside the country it is often
referred to as “Offshore Outsourcing.”
The move toward flexible work schedules and the concept of “working
from home” that has developed in the past decade or so has supplied the
workforce with many well-qualified professionals who can perform con-
tract services to a variety of companies. Technology advances have made
this source of outsourcing possible in a way that never existed before.
Some of the benefits of outsourcing include lower labor cost, better
product quality, more efficiency, and increased productivity. Critics of out-
sourcing cite concern with whether or not product quality is really im-
proved, the decrease in jobs for local laborers—both blue and white collar,
and customer security issues. Indeed, there was a well-publicized case in
2005 where several employees in India outsourced by Citibank were able
to hack into the Citibank database and steal $350,000 from customer ac-
counts.
It seems that both sides of the outsourcing debate have validity. While
there are certainly companies that have benefited both financially and or-
ganizationally, a number of companies also report that their results from
outsourcing were not as phenomenal as they had expected due to poor
quality or other manufacturing or communication issues.
Many companies outsource in more than one area. For example, a com-
pany that manufactures art supplies and sells them at wholesale to retail
stores might find that it has lower production costs if it outsources the
manufacture of its items to China. China’s per piece cost to manufacture
the art supplies is so much less than the cost to manufacture the same
supplies in the United States, that even when you take shipping costs into
account, it costs less to have them manufactured in China than the United
States. That very same company may find that it is also more expensive to
have local labor receive, pack, and ship their products from their corporate
headquarters than it would be to have the products shipped to a fulfillment
company in the United States and have the orders sent to the retail stores
directly from there, leaving only the design, administrative, and corporate
divisions in residence at the company’s headquarters.
With outsourcing, the traditional roles of business entities are changed
significantly. An expanded level of trust must be established between the
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Outsourcing
companies doing business with each other in this fashion. Consider the
example above in which the art supply company is actually giving the ful-
fillment company confidential information about their customers, orders,
and delivery that were unheard of before the advent of outsourcing.
For the first twenty years or so that companies were outsourcing, the
jobs that were outsourced were mainly blue collar and low paid positions.
While this caused concern among some labor groups that local jobs were
being lost, companies were able to continue outsourcing because the
lower costs simply made them more competitive, allowing them to charge
less or make greater profits on their sales.
Today more white collar research and development (R&D) and techni-
cal jobs are being outsourced, which is causing a much larger uproar in
the business community as companies are divided about the advisability of
this. One of the most visible examples of outsourcing R&D is how many
of the large technology companies are purchasing completed designs for
digital products (like cell phones and MP3 players) from Asian companies,
changing them only slightly to meet the U.S. consumer’s needs (and in
some cases not changing them at all) and then putting their own brand
name on them. U.S. consumers rarely know who designed the products
they are purchasing. This type of outsourcing is not limited to technology
however. Pharmaceutical companies, airline manufacturers, and biotech
companies are taking advantage of lower R&D costs for outsourced design
as well.
China and India both have a large number of engineers who work for
lower wages than their U.S. counterparts, and are hotbeds of what is being
termed “intellectual property” that they can market to large corporations.
Advances in technology over the past several years have fueled their mar-
ketability because it is now possible to work and communicate over the
internet and e-mail without having to physically be in the same location.
It is for these reasons that many companies outsource to China and India.
Some say that Research & Design (R&D) will become the “next manu-
facturing” and that in the not-too-distant future, companies will be re-
structuring again and this time instead of outsourcing just manufacturing,
they will be outsourcing R&D as well. Others, like Apple Computer, con-
tend that outsourcing all of a company’s R&D will lead to a competitive
disadvantage and they insist upon keeping R&D in-house.
Regardless of the extent to which a company outsources, the concept is
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Outsourcing
here to stay and when managed well, can prove to be a financial win for
both companies involved.
See also: Core Competencies
Further Reading
“The Future of Outsourcing,” by Pete Engardio, with Michael Arndt in Green
Bay, Wis., and Dean Foust in Charlotte, N.C., a special report in Business
Week, January 30, 2006, located on www.businessweek.com.
291
P
Performance Management/
Performance Measurement
There is a saying in business, “that if something is not measured it does

not get done,” hence the need for performance measurement and perfor-
mance management. Generally speaking, there are two types of perfor-
mance measurement: measurement of the performance of the organization
and measurement of the people within it. While both have qualitative and
quantitative aspects to them, the measurement of the organization’s per-
formance tends to be more quantitative and objective, while measuring
the performance of people is more qualitative and subjective.
One of the most important measures of an organization’s performance
is how it is doing financially. A company’s financial statements are the best
known measures of its financial performance. There are three major finan-
cial statements. The first of these is the balance sheet, which provides a
“snapshot” of the company at a point in time—usually its year end. The
balance sheet lists the organization’s assets, liabilities, and the level of
shareholder equity in the enterprise. The second financial indicator is the
income statement, which summarizes performance over a period of time.
It begins with the revenues earned in the period and subtracts the costs to
determine the income of the business. Finally, the statement of financial
position provides insight into how cash flowed in and out of the business
during the year.
For publicly-traded companies, the performance indicated by their fi-
nancial statements has an almost immediate impact on their value. Earn-
ings are announced quarterly, and if the company “beats” market expecta-
tions the price of its stock tends to rise. Conversely, when a company fails
to meet earnings expectation, the stock price falls. As stock performance is
tied to executive compensation, senior executives in organizations spend
significant time trying to align market expectation and company perfor-
mance. Some industry observers suggest that too much time is focused
on meeting quarterly performance expectations at the price of long-term
strategy—indeed, that managers are working to “meet the numbers”

rather than increase the value of the business.
The data in the financial statements provide the basis for a vast amount
of performance analysis, including financial ratios such as return on assets,
return on investment, and gross margins, that are used to determine the
viability and strength of the organization. For the markets to operate effi-
ciently, there has to be trust in the reporting system. The Securities and
Exchange Commission (SEC) has authority for establishing accounting
and reporting standards under the Securities and Exchange Act of 1934.
The SEC has recognized the standards of the Financial Accounting Stan-
dards Board (FASB) in the preparation of financial statements, and compa-
nies adhere to those rules in the preparation of financial statements. While
most would agree that the performance presented in financial statements
is reliable, there have been notable scandals involving Enron, dating of
stock options of executives, etc.
In addition to financial statements that report performance to an exter-
nal audience, there are a host of internal performance measures. Some
companies, for example, will use a “balanced scorecard” approach to inter-
nal performance management. Developed by Robert Kaplan and David
Norton, this approach attempts to balance a company’s financial measure-
ments—which “tell the story of past events,” according to Kaplan and
Norton—with three additional perspectives: the Learning and Growth
Perspective, the Business Process Perspective, and the Customer Perspec-
tive. The Learning and Growth Perspective has to do generally with a
company’s ability to change and adapt over time; the Business Process
Perspective is all about those processes at which the company expects to
excel; and the Customer Perspective is about a company’s appearance to
customers. Through measuring all four dimensions, a company can hope
to improve itself on many levels, not just the financial.
Another level of performance measurement and management is at the
individual level. In order to fairly compensate employees and set expecta-
tions for them, companies provide ongoing employee appraisals. Many es-
tablish a performance plan for employees that is aligned with the goals and
objectives of the organization. The performance plan calls for the develop-
ment of certain competencies and achievement of defined objectives.
GE is generally perceived to be a leader in performance management.
Under the direction of then CEO Jack Welch, GE began an aggressive
performance review system that identified and gave bonuses to the top 20
294
percent of employees; over time those identified as the bottom 20 percent

left the company—voluntarily or involuntarily. The result was a culture
that was performance driven with “dead weight” constantly removed and
the talent pool constantly improved.
Most companies will conduct an annual formal performance review of
employee’s achievements against their performance plan. Traditionally, it
entails self-evaluation by the employee and a separate evaluation by the
supervisor. The two individuals then meet and review performance. Both
parties sign the review to indicate agreement on the performance and often
use the session to set goals for the next fiscal year. Often too the perfor-
mance on the appraisal is used to determine the variable (bonus) part of
compensation. More recently, companies have begun using a 360-degree
appraisal process in which an evaluation form is sent to peers and subordi-
nates beyond the individual and the supervisor.
Ultimately, both performance measurement and management are im-
portant for a company’s continued health and success—much as seeing a
doctor for a regular check-up is important for us as individuals. While the
system can be abused, e.g., with managers focusing on immediate fixes
and not long-term success, performance tools provide an overall map on
which to chart progress, and even help determine steps to be taken in the
here and now to help the body corporate carry on to a healthy and profit-
able future.
See also: Benchmarking; General Electric (GE) Workout; Management
by Objectives; 360-Degree Feedback
Further Reading
www.worldatwork.org

Most Companies Are Only Moderately Successful—Or Worse—
When It Comes to Executing Strategy, Executives Say
New York, March 19, 2007
Few executives (3 percent) say their companies are very successful at ex-
ecuting corporate strategies, while the majority (62 percent) admit that
their organizations are only moderately successful—or worse—at strat-
295
egy execution. That’s according to a new global survey commissioned

by American Management Association (AMA) and conducted by the Hu-
man Resource Institute (HRI).
The AMA/HRI survey “The Keys to Strategy Execution” included re-
sponses from 1,526 managers and HR experts from around the world.
The survey was conducted in conjunction with AMA’s affiliates and
global partners, including Canadian Management Centre in Toronto,
Management Centre Europe in Brussels, AMA Latin America in Mexico
City, and AMA Asia in Tokyo.
“Our survey found that executives and managers are trained to plan
strategies, but believe they often fall short in execution due to a lack of
skills and the existence of a process to facilitate implementation of
plans,” said Edward T. Reilly, AMA’s president and CEO. “The findings
show that strategy execution can improve as executives learn how to fo-
cus and align daily activities to strategic goals. To ensure this, top lead-
ers must be committed to clear, direct, and constant communication,
and committed to the change necessary to implement evolving strate-
gies,” Reilly said.
The companies that reported relatively high success at executing strat-
egies, however, seem to reap real dividends. That is, organizations that
were good at executing strategies were also more likely to cite success
in the marketplace, as measured by self-reported revenue growth, mar-
ket share, profitability, and customer satisfaction.
The AMA/HRI survey gauged respondents’ ability to implement strate-
gies in two ways: by asking them to rate their execution success and by
asking them about the extent to which they use and value fifty-seven
different strategy-implementation practices. The research found that,
above all else, clarity of communication is crucial to the execution of
strategy.
The pivotal role of clarity was demonstrated by the fact that “creat-
ing a clear strategy” was ranked as the single most important practice.
What’s more, out of fifty-seven different approaches to strategy execu-
tion, “defining clear goals to support strategy,” “ensuring clear account-
ability” and “having a clear focus on implementing/executing strategy”
were among the top six important practices.
The problem, however, is that organizations are not achieving clarity
to the degree they should. Although clear strategies and clear goals
were of top importance, they were only ranked eleventh and tenth in
296
terms of the extent to which companies use those approaches. There

was a particularly large difference between the extent to which compa-
nies value a clear strategy and the extent to which they actually deliver
a clear strategy.
As might be expected, companies that perform better in the market-
place are much more likely than lower performers to provide clarity. In
fact, out of the top six major areas of difference between higher and
lower performers, three of them (clear strategy, clear goals, and clear
focus) deal with clarity.
Another major finding of the survey is that alignment practices are
widely used and highly valued among responding organizations. Align-
ment practices account for four out of the top ten most commonly used
strategy execution methods. They are also among the top ten most
highly valued practices. Among the most highly ranked practices are
“aligning strategy with the corporate vision/mission statement,” “align-
ing organizational goals with strategy,” “aligning business units’ goals
with organizational goals,” and “aligning business units with strategy.”
Higher-performing organizations are considerably more likely than
other organizations to use certain alignment strategies. Specifically,
higher performers are more likely to align organizational goals with strat-
egy and to align incentives, rewards, and recognition with strategy.
Speed and adaptability are also differentiators between higher and
lower market performers. To a much greater extent than lower perform-
ers, higher performers demonstrate “the ability to quickly and effec-
tively execute when new strategic opportunities arise.” Another differen-
tiator is “having an adaptive organizational infrastructure.” These
findings suggest that adaptive organizational infrastructures—in combi-
nation with clarity and alignment—help organizations react more
quickly to new strategic opportunities.
Leadership practices also influence strategy execution, but there seems
to be an overall leadership development deficit in this area. Organizations
do not build “execution-focused leadership capabilities” or use “succes-
sion planning to develop leaders who are good at strategy execution” to
a sufficient degree, given the importance that respondents attach to these
practices. However, higher-performing organizations use these practices
to a higher degree than their lower-performing counterparts.
In what could be a related finding, the survey discovered that organi-
zations that have the same CEO for over five years say they’re better at
297
strategy execution than organizations with less seasoned leaders. An

analysis of the survey’s Strategy Execution Index shows the same trend.
Therefore, it appears that stable leadership is linked to strategy execu-
tion, an important finding at a time when CEO “churn” rates are at
record highs. An alternate interpretation of the data is that leaders who
are good at execution are more likely to retain the top job over long pe-
riods of time.
The single greatest barrier to strategy execution, the survey found, is
a lack of adequate resources. Not only does the proper allocation of re-
sources increase a strategy’s chances of success, it’s a clear sign from
leadership that the strategy is viewed as a high corporate priority.
Of course, every organization has different execution challenges. The
AMA/HRI survey suggests, however, that mastering certain basics such
as clarity, alignment, leadership, adaptability, and resources goes a long
way toward enabling companies to turn their best strategic plans into or-
ganizational successes.
“The Keys to Strategy Execution” survey summary is available at
www.amanet.org/research
About AMA: American Management Association is a world leader

in professional development and performance-based learning solu-
tions. AMA provides individuals and organizations worldwide
with the knowledge, skills, and tools to achieve performance ex-
cellence, adapt to changing realities, and prosper in a complex
and competitive world. Each year, thousands of customers learn
new skills and behaviors, gain more confidence, advance their ca-
reers and contribute to the success of their organizations. AMA
offers a range of unique seminars, workshops, conferences, custo-
mized corporate programs, online learning, newsletters, journals,
and AMA books. Visit online at www.amanet.org.
About HRI: For over 30 years, the Human Resource Institute (HRI)
has remained dedicated to providing world-class research in the
area of people management issues, trends, and practices.
Founded in 1969 at the University of Michigan’s Institute for So-
cial Research by Dr. William Pyle in collaboration with Dr. Rensis
Likert and Dr. George Odiorne, HRI is currently affiliated with
the University of Tampa and is widely recognized as one of the
top five institutes of its kind in the United States. HRI provides its
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The Peter Principle
members with accurate and timely research that helps facilitate a

better understanding of all the people management issues that
member organizations face today as well as the trends that are
shaping the future. Currently, HRI is following approximately 150
demographic, social, economic, technological, political, legal, and
management trends, and there are over 100 major corporations
supporting this research with annual grants.
The Peter Principle

The Peter Principle is a theory articulated by Canadian education professor
Laurence J. Peter (working from the University of British Columbia and
the University of Southern California) in a best-selling book, The Peter
Principle: Why Things Will Always Go Wrong (1969). The central theme
is that “in a hierarchy, every employee tends to rise to his level of incompe-
tence.” Accordingly, real work is only accomplished by those who have
not yet reached their personal level of incompetence. As a result, slow
growth or no growth organizations are much more likely to have incom-
petent people at many levels than growing companies that are adding peo-
ple and positions and that can evade realization of the Peter Principle as
long as growth continues.
The Peter Principle maintains that in a business, people are promoted
to new positions based on how well they perform in their existing position,
and not necessarily on whether they already have the skills to succeed at
the new position. If they are competent in that new role they will proceed
up the ranks to another higher level position. Especially in companies with
many layers of management there is an inherent presumption that the em-
ployee will be able to do “that little bit more” required at the next level
to succeed. According to the Peter Principle the employee will continue
to rise until they reach their personal level of incompetence, and will not
be promoted further. Provided that their level of incompetence is not
gross, they will not be fired from the organization but at the same time
will not see additional career growth, leaving the incompetent person in
place in the position. Indeed, according to Dr. Peter, as long as incompe-
tence does not threaten the hierarchy, it is usually tolerated by the system.
But “supercompetence frequently leads to dismissal because it disrupts the
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The Peter Principle
hierarchy. That is why it is more objectionable than impotence within an

organization. Ordinary incompetence is a bar to promotion, but is not a
cause for firing.”
Research has shown that a person who rises to his/her level of incompe-
tence often does not have trouble with their learned skills, but rather with
the new skills that they must acquire and use. For example, consider an
engineer who has been responsible for managing throughput on a produc-
tion line. As she rises through the organization she has the engineering
skills and experience to manage more lines and even the production of
other products. But when she becomes Head of Operations she might
need other non-engineering skills such as negotiation and finance. If she
lacks those skills or is unable to acquire them directly or indirectly, she
becomes a victim of the Peter Principle, locked in the level of her own
incompetence.
The Peter Principle is not a hard and fast rule, and companies work to
overcome the Peter Principle tendencies. For example, human resources
departments work to identify the skill sets required for positions within an
organization. Ideally, before a person advances into a new role, he or she
is provided with opportunities to acquire the new skills necessary to suc-
ceed. Other firms offer mentoring programs so that higher level employees
who have achieved in those positions can assist those on the rise to under-
stand the skills that will be necessary as they progress in the organization.
In recent years, the Peter Principle has been supplemented by the Dil-
bert Principle, based on the popular comic strip by Scott Adams. In essence
the Dilbert Principle suggests that the incompetent rather than the compe-
tent are moved into managerial roles, where they are likely to do the least
amount of damage to the company. While it is commonly accepted that
sub-par employees are shuffled around in an organization, few accept this
principle’s overall application in the workplace.
See also: Dilbert; Intellectual Capital; Managerial Grid
Further Reading
The Dilbert Principle: A Cubicle’s-Eye View of Bosses, Meetings, Management Fads
& Other Workplace Afflictions, by Scott Adams, Collins (June 4, 1997).
The Peter Principle, by Laurence J. Peter, Buccaneer Books (February 1993).
“Raising CEO Longevity,” a blog posted on September 19, 2007 on www
.brandingstrategyinsider.com
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Peters, Tom
Peters, Tom
Tom Peters is considered an expert on business management practices and
has been featured in nearly every well-known business magazine. His ideas
regarding the value of people in the success of a business revolutionized
the way businesses treated such “soft” issues as personnel in relation to
“hard” issues like financials and business strategy.
At least two biographies have been written about him and he remains a
business icon for many academics, intellectuals, and business professionals
around the globe. Born in 1942 in Baltimore, Maryland, Peters studied
engineering at Cornell before getting an MBA and PhD from Stanford
University. He served in the U.S. Navy and worked in the White House
before jointing McKinsey in the mid-1970s as a consultant. He left Mc-
Kinsey in 1981 to found what is now known as the Tom Peters Group,
which includes a consulting business and manages his speaking engage-
ments. Tom Peters now resides in Vermont with his wife Susan.
In their popular management book In Search of Excellence, which was
first published in 1982, Tom Peters and Robert Waterman argued that
there were eight common themes that could explain the difference be-
tween highly successful companies and their average peers or competitors.
In Search of Excellence continues to experience tremendous popularity and
remains a widely read business book. It was also the first management
book to hit the best-seller list and paved the way for a long line of manage-
ment experts turned guru to grace the list of best-selling titles.
The eight themes from In Search of Excellence are:
1. A bias for action

2. Close to the customer
3. Autonomy and entrepreneurship
4. Productivity through people
5. Hands-on, value-driven (“walk the talk”)
6. Stick to the knitting (also known as focus on the core business)
7. Simple form, lean staff
8. Simultaneous loose-tight properties
At the time they published their seminal work, Peters and Waterman
were consultants in the San Francisco office of McKinsey, one of the best
known strategy consulting firms in the world. The book grew out of a
McKinsey research project on the issues of organization, people, and struc-
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Peters, Tom
ture. The early research from the project was shared with some of Mc-
Kinsey’s larger U.S. and global clients and received a great deal of interest.
The findings in their book are founded on the original McKinsey 7-S
model, which argues that the fit between seven key elements of a business
are critical to its success: structure, strategy, and systems (often considered
the hard issues), plus style of management, skills, staff, and shared values
(often considered the soft issues). The model is designed to identify the
interconnectedness of the 7-S’s. Although the “harder” issues are easier to
change and influence (being more tangible, like computer systems and
organizational hierarchies), failure to take into account the “soft” issues
(such as the frustration of the staff as they try to use the computer system,
or the reaction of management to such frustration) can cause a company
to become an average performer or even fail.
The book was a pioneer in demonstrating the value of people in the
success of any business. This was contrary to much of the research and
literature up to that point, which advocated for a more traditional finan-
cials-oriented perspective on businesses. Peters claimed that these “soft”
issues were in fact hard ones that had been overlooked by traditional busi-
ness experts and observers.
Books by Tom Peters: In Search of Excellence (co-written with Robert
H. Waterman, Jr., 1982); A Passion for Excellence (co-written with Nancy
Austin, 1985); Thriving on Chaos (1987); Liberation Management (1992);
The Tom Peters Seminar: Crazy Times Call for Crazy Organizations
(1993); The Pursuit of WOW! (1994); The Circle of Innovation: You Can’t
Shrink Your Way to Greatness (1997); The Brand You50, The Project50
and The Professional Service Firm50 (1999); Re-imagine! Business Excel-
lence in a Disruptive Age (2003).
See also: Benchmarking; Competitive Advantage; Empowerment; Gen-
eral Electric (GE) Workout; Herman Miller Furniture; Learning Organiza-
tion; Performance Management/Performance Measurement; 360-Degree
Feedback
Further Reading
www.tompeters.com
302
Portfolio Career
Portfolio Career
Why pick one job for your entire life when your interests are likely to
change over time? Would not the ideal situation be one in which you
could choose a job to fit your current interests? Or would this lead you to
a destitute old age, truly skilled in no one thing, a master of nothing at
all?
A “portfolio career” is a career path including many different jobs and
job functions. It was first defined in the 1980s by Charles Handy, who
suggested that rather than choosing an occupation and staying with it
through their working careers, people would undertake a portfolio of ca-
reers, changing jobs, functions, etc. as their interests changed. There have
been many books and articles on the subject since, and it remains at least
a moderately popular idea. For instance, The Guardian (“Graduate: Mix
and Match: Why Pick Just One Job When You Could Have Two, or
Three?,” November 4, 2006) noted,
The arguments for pursuing a portfolio career at the beginning of

one’s adult life are clear. Harvard psychology professor Daniel Gil-
bert, author of bestseller, Stumbling on Happiness, believes the best
way to figure out what will make you happy is to try it. A portfolio
career gives you the opportunity to try three or four types of work at
the same time, and to keep switching choices until you come up with
a portfolio you like.
Yet there are concerns about a portfolio career approach. One is that
individuals might become a “jack of all trades” but a “master of none,”
and with it lack the specialized knowledge it takes to succeed in certain
disciplines. Others note that a portfolio career might be of genuine inter-
est, but financing one can be difficult, as most people would constantly
start at entry-level positions that are generally not well paid.
Businesses may not be particularly keen on the idea, either. Other than
in jobs in which a high turnover rate is expected (e.g., retail or fast-food
jobs), an organization invests a lot in training an employee to do the work
required. This investment is lost if the employee becomes bored and
moves on. On the other hand, perhaps some businesses will move to hiring
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Portfolio Career
Why I Do This: Limo Driver, NREMT-P

(Nationally Registered Emergency Medical Technician, Paramedic)
Chris is also a full-time firefighter/paramedic.
Chris Greim
When I’m not at the fire station, I have been working for the past three
years as a limo driver. As elegant as that sounds we do so much more than
just drive limos. I have driven six, eight, ten, and fourteen passenger vehi-
cles. Also I drive fifteen passenger vans, and several Lincoln Sedans. My
job varies from transporting people to and from their homes to and from
several local airports. We take people “out” for the night, concerts, ball
games, weddings, bachelor/bachelorette parties, and proms just to name a
few. I have driven as far away as 350 miles to Pennsylvania and most re-
cently about 250 miles to New York City. Yes the job definitely has some
great benefits and it can be quite glitzy.
It’s hard to describe in a short period of time why I like my job but I
have to say I absolutely love it. First when you have people in the limo
they are usually there because they want to be and therefore I find that I
am dealing with very happy people. I enjoy people. There is so much to be
learned from people if you just listen. Another aspect of the job I enjoy, lis-
tening. You get people, who are going on vacation or business trips, and
they sometimes talk and sometimes they are very engrossed in their busi-
ness. When people take a limo to go out you never know where you may
end up. Sometimes it’s out for dinner, maybe a concert, or a late night run
to the casino. Either way you need to be flexible and always have a smile
on your face.
I have to say that as much fun and enjoyment I get out of seeing people
happy for whatever reason they take a limo, there is nothing as gratifying
as the look on young teenagers faces as a shiny black or white limousine
pulling into their driveways for the prom. For most it’s their first time ever
in a limo and they are so excited anyway. I always give the prom goers a lit-
tle extra attention and really roll out the red carpet. For all the fun and ex-
citement there is in a limo, sometimes you are just picking people up from
the airport and that’s ok too.
No matter what the job is or where it takes me I always look forward to
going to work. I never know exactly where I may end up. Typically I will
go in the morning and sometimes be there all day. Sometimes it’s one air-
port trip sometimes it’s a wedding that begins in the morning and winds
up very late that night dropping off the newly weds as they head off for
their honeymoon. My job is to transport my customers from point A to
point B and everywhere in between, safely, and with courtesy. Yes I have
had celebrities, and yes the tips are great. But the bottom line is I love
what I do. It’s fun and satisfying. If someone needs a ride and I can pro-
vide them with a little pampering and a smile I feel my job is complete.
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Portfolio Career
contract workers when possible, thus avoiding most of the costs of training
and also avoiding payment of benefits, various taxes, and other expenses.
Still, to the individual, the idea of following one’s dreams, wherever
they might lead and in whatever direction they might flow, is appealing, if
not always practical.
Charles Handy
Charles Handy is, as The Economist (May 26, 2006) describes, “the wise
old man of British management, an avuncular figure with a keen ear for a
memorable metaphor. His books have titles like The Empty Raincoat and
The Elephant and the Flea, and he talks of phenomena such as “the sham-
rock organisation” (companies with three levels of employment: full-time
workers; subcontractors/outsourcers; and part-time specialists) and “the
portfolio worker (people who have a number of ‘jobs, clients and types of
work’ simultaneously).”
Like the titles of his books, Charles Handy has an interesting back-
ground. Handy was the son of a Protestant Irish vicar, went to Oxford
and worked in remote locations for Shell Oil before attending MIT and
working as a professor at the London Business School. Today, he is a self-
described social-philosopher.
Works by Charles Handy: Understanding Organizations (London: Pen-
guin, 1976); The Future of Work (Oxford: Basil Blackwell, 1984); Gods of
Management (London: Business Books, 1986); The Making of Managers
(London: Longman, 1988); The Age of Unreason (London: Business
Books, 1989); The Empty Raincoat (London: Hutchinson, 1994); The
Hungry Spirit (London: Hutchinson, 1997).
See also: Free Agent; Lifetime Employment; Mid-Career
Further Reading
Building Your Career Portfolio, by Carol A. Poore, Cengage Delmar Learning,
1st ed. (May 1, 2001).
“When Many Careers are Better than One,” by Randy Ray, special to the Globe
and Mail, posted on www.theglobeandmail.com on May 9, 2007.
305
PowerPoint
PowerPoint
PowerPoint is the presentation software package produced by Microsoft.
Part of the Microsoft Office Suite, it is intended to help its users prepare
presentations for work, school, or other uses. In the same way that the
Word program helps with word processing and Excel with spreadsheets,
PowerPoint helps its users organize and present their thoughts clearly and
concisely for presentations. Although not the early market leader in the
presentation software space (that was held by Harvard Graphics), Power-
Point rose to prominence with the increasing popularity of the Microsoft
Office software suite. With a foundation in business, the use of Power-
Point spread to associations, groups, and schools.
Early features of PowerPoint incorporated graphics and build-ins that
allowed users to build up individual data points to create a final slide that
summarized key points. Such a building-block approach was designed to
help users build their arguments as the data on the slide concurrently filled
up. Other features were standardized templates for presentations and op-
portunities for inserting company logos and other items that made the
presentation feel like it was part of the fabric of the organization.
With updates to Microsoft Office, there have been steady changes to the
PowerPoint software program. A new release in 2007 promised increased
security and opportunities for collaboration among users, including a rede-
signed interface; reuse of content through slide libraries; features allowing
the user to manage, track, and review presentations more easily; and an
increased ability to share presentations by converting them to other file
formats.
While there are an estimated thirty million PowerPoint presentations
given every day, and the tool has proven its usefulness, there are many who
are less then enthused about listening to another PowerPoint presentation.
Expressions such as “mind-numbing” are common, and for some Power-
Point presentations have become a proxy for hard-driving business.
Indeed the backlash against PowerPoint has created phrases such as
“death by PowerPoint” and even a book by the same name, as well as
more instructional texts such as Solving the PowerPoint Predicament: Using
Digital Media for Effective Communication. A running joke is that those
that complain about PowerPoint will give you a PowerPoint slide with
bullets of their pet peeves about the program and its use.
Despite criticisms of PowerPoint, it legitimately offers benefits. If used
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PowerPoint
well, it can add life to lifeless presentations, it can keep the presenter on
message, and it can be a helpful aid. For example, if a presenter freezes in
front of an audience they are often able to get going by reading off the
first line of the first slide. Suggestions about how to improve PowerPoint
presentations are as much for the person presenting as for the actual pre-
sentation. They include:
• Don’t read from the slides verbatim. Presumably the audience is

able to read for themselves and the presenter should be using the
points as a starting point for a deeper discussion.
• Don’t overload the slides with material. More text in a smaller sized
font just creates tired eyes, not a more informed audience.
• Don’t overdo artwork and effects so that these tools detract rather
than enhance the flow and delivery of the presentation.
• If multiple people are presenting, collect all the presentations on a
single machine so as to minimize interruptions associated with
plugging and unplugging gear. Do think about the audience and
the message that you want to communicate rather than immedi-
ately launching into bullet point sound bites.
By following common sense and keeping the audience in mind, Power-

Point presentations can be an effective way to organize communication.
However, one needs to recognize that PowerPoint is but a tool. If the
presentation is a flop, the root of the problem is with the presenter or his/
her material, rather than the tool itself.
See also: Training and Development
Further Reading
Teach Yourself PowerPoint 2007, by Moira Stephen, McGraw-Hill, 4th ed. (July
23, 2007).
307
R
Real Time
The term real time comes from its use in original simulation exercises—ex-
ercises, either virtual or real, simulating an event or series of events—and
has primarily been used in business as a reference to computing and com-
puter science. Originally real time referred to a simulation that matched
the rate of the real process it was simulating and that was no slower nor
any faster than that process. It is often used to mean the time required for
a computer to solve a problem, measured from the time data are fed to
the program to the time a solution is received.
In today’s information intense environment, real time is used to describe
instant access to current information with no delay in time, such as real
time stock, options, bondd or futures quotes on the Internet or real time
video conferencing. In both cases, there are tremendous advantages to
having real time communications. In the case of stock, options, bond, or
futures quotes, since prices change constantly, someone who is buying or
selling will want to have access to accurate and current information when
deciding whether and when to execute a trade. In the case of videoconfer-
encing, the tool would not serve its purpose if participants could not com-
municate with each other as though they were in the same room.
An event that happens in real time happens essentially at the same mo-
ment, and both the sender and receiver have access to the event or trans-
mission of information. For example, when you chat in a chat room or
send an instant message, you are interacting in real time. On the other
hand, when you send or receive an e-mail message, that communication is
not occurring in real time, as there is some delay between when the sender
sends the message and when the receiver reads and responds to the mes-
sage.
Other examples of real time computer systems that are critical for safety
and/or production requirements include: antilock brakes, which respond
immediately to changes in road conditions to benefit the driver; manufac-
turing and industrial robots, which respond quickly to keep assembly and
production lines moving at full speed; and space flight computers, which
Real Time
Why I Do This: Librarian

Sheila Putnam
The stereotypical librarian with thick glasses, severely styled hair, and
orthopedic shoes went out with the dinosaurs. Librarians today are multi-
talented, cutting-edge technicians who handle a tremendous variety of
needs and requests.
There’s no typical day in a library because every patron’s situation is
unique. Over the course of a week I read to little kids; make creative dis-
plays; help folks with copying, faxing, scanning and Internet searching;
choose books to buy; process materials; recommend movies; sell goods;
and talk to lots of interesting people.
I started out as a volunteer and learned on the job. Good people skills,
attention to detail, and the willingness to learn new skills are important
qualifications. But the biggest thing is to love reading!
respond to changing conditions in order to keep the rocket ship on course.

Many vehicles come standard with Global Positioning System (GPS) de-
vices, which provide real time information on driving directions between
a vehicle’s current location and the desired destination. While GPS devices
are not routinely considered safety features, they can serve to provide
peace of mind and even safety for many drivers.
Examples of systems that are not typically real time include banking back
office functions, human resource management systems, and order tracking
systems. While you can go on line and track a package that you ordered
via the Internet, it is unlikely that you can observe your package en route
to you. You can find the last place it was handled, but not the current
street location of the truck that is carrying your package. That said, as
information technology and computing become more sophisticated and
the consumer demand increases for real time systems across supply and
distribution chains, many enterprises have implemented real time systems
in these areas as well. And enterprises have found that these systems can
provide both significant cost savings and in some cases competitive differ-
entiation from others in their industry or market space.
See also: E-mail; Intranet/Extranet; Networking; 24/7; Virtual Teams
Further Reading
Real-Time Strategic Change, by Robert W. Jacobs, Berrett-Koehler Publishers,
New Ed ed. (January 15, 1997).
310
Reengineering
Reengineering
Reengineering, also referred to as Business Process Reengineering (BPR),
Business Process Redesign, Business Transformation, and Process Change
Management, is a management approach that is intended to examine the
underlying processes that support a business and improve their efficiency.
Most often this involves eliminating as much as possible any non-value
adding activities and tasks. Reengineering essentially means doing things
differently and involves fundamentally changing the way an enterprise or
organization conducts business to align their underlying business processes
and workflow with their business strategy.
Instead of organizing an enterprise into functional areas (such as fi-
nance, marketing, operations, sales, etc.) and looking at the tasks per-
formed by each of those functions, according to reengineering theory, en-
terprises should organize around a series of processes that often cross
functional boundaries and even enterprise boundaries (such as suppliers,
distributors, customers, and other business partners). This may involve
creating new processes that span supply and distribution chains across or-
ganizations, including materials acquisition, production, marketing, and
distribution.
Reengineering became popular in business culture in the early 1990s
when Michael Hammer and James Champy published a series of books
including Reengineering the Corporation, Reengineering Management, and
The Agenda. The premise of Hammer and Champy’s work on reengineer-
ing is that by examining the business objectives of the organization and
redesigning the workflow and business processes from the “ground up” to
align with its business objectives, an organization can achieve increased
productivity, improved performance, greater cost savings, and superior
customer service. The ultimate goal of reengineering, according to the
authors, is to create competitive advantage for an organization. Rather
than consuming valuable time and resources passing tasks from one func-
tional area of an organization to another, proponents of reengineering the-
ory argue that an organization can generate greater value by creating pro-
cesses that span these functions and are designed to deliver the product or
services more efficiently.
Reengineering involves applying the resources of an organization,
namely the people, technology, and processes, in a more rational way
in order to better support business strategies and objectives in today’s
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Reengineering
environment. While not essential, the use of information technology to

improve performance and reduce cost is often integral to the reengineer-
ing process. A redesign of processes is followed by the application of
appropriate technology to support the newly designed workflow and
processes.
Implementation of reengineering theory led to several other develop-
ments in leading management practices, including the use of cross-func-
tional teams, customer relationship management (CRM), enterprise re-
source planning (ERP), and supply chain management.
Throughout the 1990s enterprises were eager to benefit from the finan-
cial advantages promised by the reengineering movement. While reengin-
eering differs from earlier and later forms of cost reduction efforts in that
it is intended to be customer and business strategy oriented, by the mid-
1990s reengineering had earned a bad reputation as many reengineering
projects in practice resulted in significant workforce reductions.
Critics of reengineering often note that one of its pitfalls is that the
enterprise becomes so focused on internal issues that it fails to identify
areas of competitive differentiation and competitive advantage, such as
new products or services or radical changes in the marketplace. In one
classic example, American Express spent considerable time and resources
to reengineer its credit card business. In isolation, the work at American
Express might have been considered a success. On the other hand, while
American Express was reengineering, Visa and Master Card, its competi-
tors, introduced a new product known today as the corporate procurement
card that generated far greater economic benefits than American Express’s
reengineering work. It took American Express more than a year to catch
up with its competitors in the corporate procurement business.
Other critics argue that the value of reengineering as a way to produce
sustainable competitive advantage is limited, as reengineering efforts can
easily be copied by competitors and are therefore not sustainable. Add to
this the costs in time, money, and corporate focus, and reengineering loses
much of its glow. If done well, reengineering may bring about a radical
improvement, but a business must be absolutely sure that this process is
the best solution for its needs.
See also: Change Agent/Change Management; Crisis/Risk Manage-
ment; Mission Statement; Performance Management/Performance Mea-
surement
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Relationship Marketing
Further Reading
Built to Last: Successful Habits of Visionary Companies, by Jim Collins and Jerry
I. Porras, Collins (November 2, 2004).
Reengineering the Corporation: A Manifesto for Business Revolution, by Michael
Hammer and James Champy, Collins Business Essentials (December 2003).
The American Marketing Association defines relationship marketing as
“Marketing with the conscious aim to develop and manage long-term
and/or trusting relationships with customers, distributors, suppliers, or
other parties in the marketing environment.”
So what does that really mean for a business? Often a business will have
two different types of customers. The first is transactional customers—cus-
tomers that will buy your product once, provide only a modest or one-
time contribution to your profits, and may or may not purchase from you
again. By contrast, relationship customers purchase frequently, often in
large quantities, and generally will have an ongoing need for your product.
Clearly you want to have a relationship with the latter group of customers
and be in a position to influence their purchase decisions. At times, mar-
keters think of transactional customers as the target in consumer market-
ing and relationship customers as the target in business-to-business mar-
keting—though that is not always the case.
As a result companies use different tactics in marketing to relationship
and transactional customers. There are fewer relationship customers and
therefore businesses will have a sales force targeted directly to their rela-
tionship accounts. The sales force will attempt to meet and even anticipate
the needs for the customer for sales and service. Moreover, effective rela-
tionship marketing will work to capture the lifetime value of that cus-
tomer. Building a relationship with a customer takes time, and by nurtur-
ing the customer relationship the company can receive a constant and
increasing flow of orders.
Dell is an example of a company that effectively used relationship mar-
keting to establish its business, using relationship marketing techniques to
penetrate 25 percent of the Fortune 500 companies (Dell Online, Case #
598–116, Harvard Business Publishing, 1999). V. Kasturi Rangan noted
313
in Transforming Your Go-To-Market Strategy: Three Principles of Channel

Stewardship (Harvard Business School Press, 2006)
Dell segmented its customers along two dimensions. The first was by
demographics: customer size, industry (such as education or govern-
ment), and so on. The second dimension was customer buying behav-
ior: either relationship or transaction. Relationship customers bought
in large quantities on an ongoing basis. They sought standardized
product features that were compatible with their installed base. For
these reasons, price was an important buying criterion for relationship
customers. On the other hand, transaction customers—mainly small
and medium-sized businesses—viewed each purchase as a one-time
occasion and emphasized up-to-date product features more than
price.
Each segment had different demand-chain needs and also repre-
sented differing revenue potential. Dell created a sales model (part of
Dell’s supply-chain capability) with a differing cost to serve based on
profit potential. Relationship customers bought through Dell sales
representatives. The largest customers had dedicated teams, including
program managers and technical support as well as sales personnel. By
contrast, the transaction customer sales force was almost exclusively
telephone based. Customers called Dell and received knowledgeable
support from telephone sales reps. By combining buying behavior and
segmentation based on size and industry, Dell was able to sense and
respond to the distinct demand-chain needs of fine-grained segments.
Starting in the late 1990s companies began to use technology to help

them better execute relationship marketing strategies to existing customers
and build relationships with customers too small to reach effectively with-
out technology. While there are many such productivity tools, the most
visible is Customer Relationship Management (CRM). The market leader
in CRM was Siebel Systems, who pioneered the market space. (Seibel was
subsequently purchased by Oracle.) The Siebel CRM system sought to
provide technical support for all the business processes that touch a cus-
tomer, including billing and delivery, and included applications for sales
force automation, sales order entry, sales and customer history, and prod-
uct configuration.
Regardless of—or perhaps because of—the technology used, relation-
314
ship marketing is still an important part of business today, enabling busi-

nesses to better reach potential long-term customers and keep on top of
those customers’ needs. In a business environment with finite numbers of
long-term customers, a company continually needs to demonstrate its abil-
ity to market effectively to this important customer base.
See also: Best Practice; Competitive Advantage; Intangibles; Mass Cus-
tomization
Further Reading
Masters of Sales, by Ivan R. Misner and Don Morgan, Entrepreneur Press, 1st ed.
(August 15, 2007).
315
S
Sarbanes–Oxley Act of 2002
In recent years, there have been several large-scale corporate accounting
scandals in the United States. Enron, WorldCom, and Tyco International,
among others, have made headlines due to the enrichment of their execu-
tive management teams through insider trading and questionable account-
ing practices.
These practices, while enriching upper management, were almost always
at the expense of employees and shareholders. Billions of dollars were lost
as employee retirement plans dissolved away and shareholder investments
became worthless. These huge losses shook the financial markets, resulting
in investor mistrust and uncertainty.
In July 2002, in reaction to these highly publicized scandals, Senator
Paul Sarbanes (D-MD) and Representative Michael Oxley (R-OH) drafted
legislation designed to improve the accuracy and reliability of financial dis-
closures.
This legislation, known as the Sarbanes–Oxley Act of 2002 (Pub. L.
No. 107–204, 116 Stat. 745), was overwhelmingly approved by both
houses of Congress; it passed the House by a vote of 423–3 and by the
Senate 99–0. The Sarbanes–Oxley Act mandates a wide-sweeping ac-
counting framework for all public companies doing business in the United
States. The Sarbanes–Oxley Act is now considered to be the most signifi-
cant legislation affecting United States securities laws since the New Deal
in the 1930s.
On July 30, 2002, President George W. Bush signed the Act into law.
Upon signing it, he commented:
And today I sign the most far-reaching reforms of American business

practices since the time of Franklin Delano Roosevelt. This new law
sends very clear messages that all concerned must heed. This law says
to every dishonest corporate leader: you will be exposed and pun-
ished; the era of low standards and false profits is over; no boardroom
in America is above or beyond the law.
This law says to honest corporate leaders: your integrity will be

recognized and rewarded, because the shadow of suspicion will be
lifted from good companies that respect the rules.
This law says to corporate accountants: the high standards of your
profession will be enforced without exception; the auditors will be
audited; the accountants will be held to account.
This law says to shareholders that the financial information you re-
ceive from a company will be true and reliable, for those who deliber-
ately sign their names to deception will be punished.
This law says to workers: we will not tolerate reckless practices that
artificially drive up stock prices and eventually destroy the companies,
and the pensions, and your jobs.
And this law says to every American: there will not be a different
ethical standard for corporate America than the standard that applies
to everyone else. The honesty you expect in your small businesses, or
in your workplaces, in your community or in your home, will be ex-
pected and enforced in every corporate suite in this country . . . .
Corporate misdeeds will be found and will be punished. This law
authorizes new funding for investigators and technology at the Secu-
rities and Exchange Commission to uncover wrongdoing. The SEC
will now have the administrative authority to bar dishonest directors
and officers from ever again serving in positions of corporate responsi-
bility. The penalties for obstructing justice and shredding documents
are greatly increased. Corporate crime will no longer pay. CEOs who
profit by betraying the public trust will be forced to return those gains
to investors. And the maximum prison term for common types of
fraud has quadrupled from five to twenty years.
Major provisions of Sarbanes–Oxley include:
• The establishment of the Public Company Accounting Oversight

Board, a private, nonprofit corporation whose primary duty is to
ensure that financial statements are audited according to indepen-
dent standards.
• A regulation that companies must evaluate and disclose the effec-
tiveness of their financial internal controls and that independent
auditors must confirm such disclosure.
• Chief Executive Officers and Chief Financial Officers must sign off
on their company’s financial reports.
318
• A requirement that companies establish fully independent audit

committees, whose responsibility is to oversee the relationship be-
tween the company and its auditor.
• Prohibitions against personal loans to any executive officer or di-
rector
• Detailed restrictions on insider trading
• Stiffer penalties for violations of securities law
• Protections for employee whistleblowers
While most support the aims of the Sarbanes–Oxley legislation, its appli-
cation has received mixed reviews. For some, “Sox,” unlike the Boston
Red Sox, is a burden that many would like to see scaled-back. Indeed the
checking of internal controls inherent in Sarbanes–Oxley is such that some
critics suggest that the law damages U.S. business competitiveness, with
estimates suggesting that $6 billion was spent in 2006 alone in complying
with Sarbanes–Oxley, with the financial burden especially onerous for
some 6 million publicly-traded small businesses. In September 2006, The
Economist noted, “Americans and foreign firms alike see Sarbanes–Oxley
which was passed in the wake of the Enron scandal as intrusive, expensive,
and heavy-handed.” However, in a Fortune magazine article, Paul Sar-
banes responded to the criticism, noting, “These people have already for-
gotten what happened at Enron and Worldcom. . . . The bill is about en-
suring that public companies have a legitimate system of financial controls.
To me that is a worthwhile cost.”
See also: Code of Ethics; Enron; Whistleblower
Further Reading
The Complete Guides to Sarbanes-Oxley: Understanding How Sarbanes-Oxley Af-
fects Your Business, by Stephen M. Bainbridge, Adams Business (2007).
“Stop Whining About SarbOx!” by Andy Serwer, Fortune, New York: Aug 7,
2006, Issue 3, page 39.
What is Sarbanes-Oxley? by Guy Lander, McGraw Hill (November 2003).
http://thecaq.aicpa.org/ (The Center for Audit Quality)
319
Scenario Planning
Scenario Planning
Have you ever wondered “what if,” followed by a hypothetical series of
events? Almost everyone has thought about future events in this way.
“What if I don’t get in to my first choice college?” or “What if I flunk my
math test?” are examples of future hypothetical events.
In scenario planning, multiple “scenarios” or contingency plans are de-
veloped to address such what ifs should they become a reality. For exam-
ple, what are some different scenarios that might result if you were not
accepted at your first choice college? You might:
• attend another college that accepted you, and transfer after a year;
• attend another college that accepted you, and decide that you
like it;
• decide to work for a year and reapply to your first choice.
Businesses have adopted scenario planning as a way of being prepared for

different future contingencies. Scenario planning is a proactive way to
think and plan for future developments, instead of simply being passive as
change occurs.
Scenario planning was first developed by the Rand Corporation for mili-
tary use following World War II. The U.S. Air Force tried to predict what
its enemies might do, so they could prepare different response strategies.
Businesses began to adopt scenario planning as a discipline in the early
1970s. Royal Dutch Shell pioneered work in this area. Shell wanted to
understand the numerous external events and factors that were likely to
affect the price of oil in the United States, factors that were not under the
direct control of Shell.
At the time, numerous events were unfolding in the energy sector:
• Oil reserves in the United States were slowly depleting;

• American demand for oil was steadily increasing;
• OPEC countries were organizing, developing into a cartel. Most of
the countries in OPEC were Islamic, and they resented Western
support of Israel in the 1967 six-day war.
Shell developed numerous scenarios to account for any significant

change in these factors. The outcome of this process was the development
of contingency plans should any of these key factors transpire or change
320
Scenario Planning
Why I Do This: Home Care Provider;

Dental Assistant, Correctional Facility; Animal Caretaker
Lisa Dell Bonney
I do a number of things because I’m raising two children, and I like the
daily variety. These jobs fit into my schedule, and the way I want to live.
My “main” job is being a home health care provider. I take care of a
woman who is fifty-three years old. She was in a terrible car accident when
she was eighteen, and since then, she needs twenty-four-hour care. She
can’t walk; she’s blind; and she can do very little for herself. I enjoy taking
care of her, and listening to what she says, and how she responds to the
things that I say. A lot of people are scared of people who are this incapaci-
tated. If you were to meet her, you might say, “How do you take care of
her?” But I relate to her very well. I do four-hour shifts with her, and I
also do night shifts—from 7 P.M. through 8 A.M. the next day.
I found this job in the help wanted section of the newspaper. I didn’t
have any experience in the field. You might like this kind of work if you’re
a compassionate person, and you don’t mind helping people keep them-
selves clean and taken care of, in the most basic of ways. It doesn’t sound
as if you could find satisfaction in doing this, but you really can. It shows
you what’s important in life; if you’re having a bad day and you go to
work, you realize pretty quickly, “Hey, it’s not a bad day, really.”
One of my other jobs is assisting the dentist at the county house of cor-
rections. The jail. There’s a room set up like a dentist’s office, and the in-
mates have appointments, and come in, just as you would go to the den-
tist. I hand the dentist the instruments; I sterilize the equipment; I prep
for various procedures; and I make sure that all of the equipment is ac-
counted for. The inmates are incarcerated for reasons ranging from passing
bad checks, to murder. I found this job in the local paper, too. I didn’t
have any experience. They taught me on the job. I enjoy talking to the in-
mates. They don’t see many people who aren’t either prisoners or correc-
tional officers, so they tend to want to talk, which is fine.
Finally, I take care of a number of dogs and horses for their owners.
That’s a natural job for me; I love animals. I got these jobs through word
of mouth. Some of them are only for a weekend; some are for a week or
more.
in the future. Shell also recognized that the environment in which it oper-
ated was constantly changing, requiring updates to scenarios on a frequent
basis.
In a corporation, each key discipline—new product development, mar-
keting, finance, human resources, etc.—is subject to external influences.
These influences might be economic, political, technological, environmen-
321
Scenario Planning
tal, or demographic areas, to name just a few. In companies using scenario

planning, it is common for each discipline to develop its own scenario
planning to account for these outside contingencies.
The Scenario Planning Process
Scenario planning is a collaborative, conversation-led process, which en-

ables the integration of a wide array of ideas. There are sequential steps,
resulting in the formulation of contingency planning for an array of future
events that may confront the company. Scenario planning is not the same
thing as forecasting, which relies on a linear projection of past events into
the future. Scenarios are not built via consensus, but rather respect, and
accommodate different points of view.
Generally, scenario planning follows this sequence:
• Identify the specific issue or decision under discussion. For exam-

ple, a company may be in the process of deciding whether or not
to acquire another company, or branch into new areas for product
development, or where to locate a new factory.
• Decide on a timeframe for the future, and the degree of uncertainty
of your scenarios. The degree of uncertainty is higher the more
years out you go; scenarios that project out to twenty years have
higher degrees of uncertainty than do scenarios looking two years
out.
• Specify all the external forces that might affect the company, the
industry segment, etc.
• Select the two or three most important of these external forces.
Develop multiple scenarios representing.
• The current situation as it now stands (baseline).
• If external influence A were to dominate.
• If external situation B were to dominate.
• Hypothesize how other key players might behave under each sce-
nario. Key players may include government regulators, customers,
suppliers, competitors, etc.
• Examine each scenario to identify potential opportunities and/or
threats.
322
Shareholder Value
At the end of this process, the company is in a position to develop an

action plan for each scenario, thus being in a far better position than if it
simply reacted to change. If management disseminates these scenarios and
contingency plans throughout the organization, it is far easier for employ-
ees to band together and implement required action, since they already
have a roadmap approved by their management.
See also: Benchmarking; Budget; Change Agent/Change Management;
Competitive Advantage; Crisis/Risk Management; Entrepreneur; Mission
Statement
Further Reading
Scenario Planning Handbook: Developing Strategies in Uncertain Times, by Ian
Wilson, and Bill Ralston, South-Western Educational Pub., 1st ed. (June 9,
2006).
Scenario Planning: The Link Between Future and Strategy, by Mats Lindgren, and
Hans Bandhold, Palgrave Macmillan (February 22, 2003).
“Three Decades of Scenario Planning in Shell,” by Peter Cornelius, Alexander
Van de Putte, and Mattia Romani, California Management Review. Berke-
ley: Fall 2005. Vol. 48, Issue 1; pg. 92.
www.valuebasedmanagement.net
Shareholder Value
Shareholder value is the value returned to shareholders (owners) of a busi-
ness. From the perspective of the balance sheet, shareholder value is a sim-
ple calculation: assets less liabilities equals shareholder value. Despite sim-
plicity of calculation the concept of shareholder value is complex.
In its purest form, the managers of a company stand in place of the
shareholders. More formally they have a fiduciary responsibility to the
shareholders—a responsibility to act in the shareholders’ best interests. In
an ideal state, this means growing the company and increasing profitabil-
ity, and with it returns to the shareholders. This can be accomplished in a
variety of ways including new products, new strategies, acquisitions, etc.
These traditional strategies can be successful and create increased share-
holder value or be “disasters” and destroy shareholder value.
Bad strategy or its execution can lead to dramatic losses in shareholder
323
Shareholder Value
value. For example, consider what happened to shareholder value at Bos-

ton Scientific following an ill-advised purchase of a related company, Gui-
dant in 2006.
Shortly after Boston Scientific [made] a $27 billion acquisition of Gui-
dant in March, the purchase started to look like a horrible mistake. The
overall market for Guidant’s main product began to fall after growing 20
percent a year. Analysts blamed Guidant: Its string of quality-related prod-
uct recalls likely caused cardiac patients and their physicians to lose confi-
dence in its brand name. As if that weren’t enough, safety concerns
cropped up over Boston Scientific’s other important product, drug-coated
stents. This year the company lost about 40 percent of its shareholder
value (BusinessWeek, December 18, 2006).
As seen above, in some cases it is clear how management action (or
inaction) has a direct effect on shareholder value. In other cases, the link-
age is less clear. One such area is corporate social responsibility. One side
argues that when a company is being socially responsible it is “doing
good” and that will in turn create a positive positioning for the company
that will improve its profitability and return to shareholders. This is the
idea of “doing well by doing good.” On the other side of this argument
is that corporate social responsibility cannot be connected to shareholder
value and as such that corporations should leave the choice of social giving
to individual shareholders.
In May 28, 2005, The Economist took on this debate (“The biggest
contract—Business and Society”) noting that on one side of the current
debate is the view that social issues are peripheral to the challenges of
corporate management. The sole legitimate purpose of business is to cre-
ate shareholder value. On the other side are the proponents of corporate
social responsibility, who argue that corporations need to go further in
mitigating their social impact. The article suggests that a starting point
toward a solution might be “for CEOs to articulate publicly the purpose
of business in less dry terms than shareholder value. Shareholder value
should continue to be seen as the critical measure of business success.
However, it may be more accurate, more motivating—and indeed more
beneficial to shareholder value over the long term—to describe business’s
ultimate purpose as the efficient provision of goods and services that soci-
ety wants.”
Given the importance of shareholder value, much has been written on
ways that management can increase it. Given criticism that managers often
324
Six Sigma
act to increase near term shareholder value (and with it their own salaries)
at the expense of long term value, Alfred Rappaport, emeritus professor at
Northwestern University, offered “Ten Ways to Create Shareholder
Value” (Harvard Business Review, September 2006). Among the ten:
1. Do not manage earning or provide earnings guidance

2. Make strategic decisions that maximize the expected value even
if they lower near term earnings
3. Make acquisitions that maximize expected value even if they
lower near term earnings
4. Carry only assets that maximize value
5. Return cash to shareholders when there are no credible value-
creating opportunities to invest in the business
See also: Intangibles; Intellectual Capital; Lean Manufacturing; Mission

Statement; Reengineering; Spin-off/Spinout; Stakeholder Theory/Man-
agement
Further Reading
Creating Shareholder Value: A Guide for Managers and Investors, by Alfred Rap-
paport, Free Press, rev. sub. ed. (December 1, 1997).
Shareholder Value: Key To Corporate Development, edited by Christopher J.
Clarke, 1st ed., New York: Pergamon Press (1993).
“Ten Things That Destroy Shareholder Value,” Stanley Bing, Fortune, New York:
Jul 24, 2000. Vol. 142, Issue 3; pg. 69.
Six Sigma
As BusinessWeek noted in December 2006, many have come to know the
Motorola company for its “cool cell phone,” but the company’s most last-
ing “claim to fame” is the quality improvement process called Six Sigma.
Six Sigma is a quality management process that strives for the development
of near-perfect products and services.
The Greek letter “Sigma” stands for a statistical concept that describes
how far a given process deviates from perfection. “Six Sigma quality”
means that, in a given process, there may not be more than 3.4 defects
per million “opportunities” or, in other words, there needs to be nearly
325
Six Sigma
Why I Do This: Senior Consultant in the Health & Benefits Practice

Human Resource Consulting Firm
Frank Lawson*
The cost of health care to individuals and companies in the United States
has been increasing at double-digit rates for the better part of the last
seven years. To combat this rising cost of health care (and to stem these ris-
ing costs from cutting into profits), companies have implemented many
strategies in attempting to reduce their expenditures on employee health
care. These include cost shifting (i.e., company pays less; employee pays
more), cutback (or elimination) of health benefits and/or adjustment of
coverage for medical benefits and pharmacy benefits. Although all these
strategies can and have been used, little attention had been paid to the ef-
fect of individual behavior, its impact on one’s health and subsequent im-
pact on health care costs. Many companies now are embracing the adop-
tion of Health and Productivity Management solutions as a way to help
reduce health care costs for both the employer and employee under the
premise that a healthy (or healthier) employee uses less health care.
My job is helping companies to support their employees in maintaining
their health and productivity, help them make wise decisions about the use
of health care services, and to help limit health-related benefit expenses. I
work closely with major corporations, health plans and other provider orga-
nizations to develop strategies tailored to the employee and enrollee popu-
lation.
My day to day job can vary greatly based on the number of clients I’m
working with at any given moment in time. I can be working one day with
a company that is in the initial stages of developing a health and productiv-
ity program for their employees while at the same time working with other
companies who are selection vendors to implement their health and pro-
ductivity management program. It’s rare that two companies are at the
same place in reference to their internal health care initiatives and I’m
working with more than one client at once. Thus my day-to-day job is
never consistent.
I like my job because I believe very strongly in improving and/or main-
taining one’s personal health. Working for Mercer’s Health & Productivity
specialty practice, I’m working to help companies improve the health and
well-being of their employees through the implementation of different care
management programs. By providing employees with different tools by
which they can maintain and/or improve their health, these companies can
actually become more financially sound. I also like my job because no day
is the same. I work on various client projects at once. Variety keeps me
fresh!!
I think someone who enjoys strategy development and thinking through
problems would enjoy this job (and be good at it). I think anyone who is
passionate about their personal health and who understands how being
healthy improves one’s quality of life would also be good in this job.
*Name changed for privacy.
326
Six Sigma
flawless execution of any particular process. For most corporations, Six

Sigma is a tool that helps them improve their performance and decrease
product flaws, leading to an improvement in product quality, employee
morale, and, ultimately, profitability.
Six Sigma uses a defined methodology, based on data and statistical
analyses, to measure and improve a company’s operational performance,
practices, systems, and products. Through this approach, defects are iden-
tified and then prevented, thereby anticipating and exceeding the expecta-
tions of customers. Increased customer loyalty is the expected result.
The term Six Sigma was coined by a Motorola engineer Bill Smith, and
is a registered trademark of Motorola. It is the culmination of much qual-
ity management work that preceded it:
• In the nineteenth century, Carl Frederick Gauss developed the sta-

tistical concepts of the normal distribution and the least-squares
approximation method, on which Six Sigma is based.
• In the 1920s, Walter Shewhart of the Bell Telephone Company
used the concept of Six Sigma in his work on quality management.
Dr. Shewhart believed that a lack of information greatly hampered
the efforts of control and management processes in a production
environment.
Dr. Shewhart developed his “Statistical Process Control” as an aid in man-

agement decision-making. He demonstrated that three sigma from the
mean is the point in a process that required correction.
In the 1980s, Motorola faced serious competition from Japanese manu-
facturers. One Japanese company acquired a Motorola television factory
and produced televisions with one-twentieth the number of defects com-
pared with the Motorola televisions. Motorola’s CEO at the time, Bob
Galvin, realized that his company must become serious about quality and
commissioned his engineers to work on quality improvement.
Upon studying the problem, the engineers realized that the quality stan-
dards that were currently in use were insufficient. Measuring defects per
thousands of opportunities was not fine enough to affect product quality.
Motorola shifted its quality standard to Six Sigma, with the result being a
notable improvement in product quality, increased profitability, and large
savings from a reduction in waste.
Motorola also developed a “benchmarking” program that assessed the
327
Six Sigma
specific level of quality of its own products and those of its competitors.
Through this process, many of Motorola’s products have achieved “best in
class” status. In 1988, Motorola was awarded the much-coveted Malcolm
Baldrige Award for Quality.
Other companies adopted Six Sigma early on and have remained com-
mitted to the approach over time. General Electric, Raytheon, and Honey-
well International were among the early pioneers.
Six Sigma has evolved over the course of its lifetime and has been
adopted by dozens of companies. Six Sigma now encompasses not simply
metrics, but also a methodology and a management system:
• As a metric (3.4 defects per million opportunities, known as

DPMO);
• To improve existing business processes, Six Sigma employs the
DMAIC methodology (define opportunity, measure performance,
analyze opportunity, improve performance, control performance);
• To develop new products or processes, Six Sigma employs the
DMADV process (define, measure, analyze, design, verify).
As a management system, Six Sigma is different from other quality man-

agement programs in that it is a top-down solution, designed to help orga-
nizations focus on:
• Understanding and managing customer requirements;

• Aligning key business processes and resources to achieve these re-
quirements;
• Employing rigorous data analysis to minimize variation in those
processes;
• Developing quick, sustainable improvement to key processes.
Motorola found, through its own mistakes, that Six Sigma only works if its
CEO and executives are fully trained and supportive of the methodology.
Training of the other employees follows down the hierarchy to the plant
worker. This way, managers helped train workers and explain the complex
statistical methodology.
There are five key roles within an organization that are necessary for
successful Six Sigma implementation:
328
Six Sigma
1. Executive Leadership (CEO and other executives) are responsible

for determining the focus of Six Sigma implementation. It also
provides the other players with the resources needed to explore
new ideas for breakthrough improvements.
2. Champions are responsible for Six Sigma execution across the or-
ganization in an integrated manner. Champions are also mentors
to Black Belts.
3. Master Black Belts’ sole job responsibility is Six Sigma. They act as
in-house expert coaches for the organization.
4. Black Belts work under Master Black Belts to apply Six Sigma
methodology to specific projects. They devote 100% of their time
to Six Sigma.
5. Green Belts are responsible for Six Sigma implementation along
with their other job responsibilities. They work under the supervi-
sion of Black Belts and help achieve the overall results.
The results of Six Sigma continue. A research study by a leading man-

agement consulting firm indicated that about 35 percent of U.S. compa-
nies have a Six Sigma study in place. For its part, with its adherence to its
Six Sigma mantra, Motorola has continued to thrive with profits of $4.6
billion on revenues of $36.8 billion in 2005.
See also: Benchmarking; Best Practice; Core Competencies; Made in
Japan; Performance Management/Performance Measurement; Total
Quality Management (TQM)
Further Reading
Lean Six Sigma For Supply Chain Management: The 10-Step Solution Process, by
James W. Martin, McGraw-Hill (2007).
The Six Sigma Leader : How Top Executives Will Prevail In The 21st Century, by
Peter S. Pande; foreword by W. James McNerney, Jr., McGraw-Hill (2007).
“Six Sigma: So Yesterday?; In An Innovation Economy, It’s No Longer A Cure-
All,” by Brian Hindo amd Brian Grow. BusinessWeek, New York: Jun 11,
2007, Issue 4038; pg. 11.
329
Skunkworks
Skunkworks
Formally, Skunk Works is a registered trademark of Lockheed Martin. Per
a Lockheed Martin press release, initially Skunk Works was the informal
name for the group “led by Clarence L. ‘Kelly’ Johnson that produced
many of America’s most technologically advanced aircraft. . . . [The]
Skunk Works has made an indelible mark on aviation history. The Skunk
Works is regarded worldwide as one of the most respected design and
development names in aeronautics.
During the heat of World War II, Johnson, Lockheed’s famed aircraft
designer, forged a team of engineers behind tightly closed doors in make-
shift facilities in Burbank, California, and designed and developed the P-
80 Shooting Star, the Air Force’s first truly operational jet fighter, in a
mere 143 days. Since then, this organization continues within Lockheed
Martin and has given shape to many “firsts” such as the F-104 Starfighter,
the first Mach 2 aircraft; the U-2 reconnaissance aircraft, which is still the
highest flying single engine airplane; and the SR-71 Blackbird reconnais-
sance aircraft, which was the first to fly at speeds in excess of Mach 3. The
SR 71, which has been retired, is still the highest flying and fastest jet
aircraft ever developed (http://www.lockheedmartin.com/wms/findPage
.do?dsp=fec&ci=11787&rsbci=0&fti=0&ti=0&sc=400).
More informally, a skunkworks is a secretive project group engaged in
product development or enhancement operating outside the bounds of a
company’s usual research and development process. Some see these “off-
line” operations as providing a source of innovation and rejuvenation for
a company, while others perceive them as secretive and subversive.
One of the most recent examples of a successful skunkworks project was
outlined in a Fortune magazine article (“Razr’s Edge,” June 8, 2006). It
described the development of the innovative phone as
In reality, the RAZR—a play on a code name the geeks themselves

dreamed up—was hatched in colorless cubicles in exurban Liberty-
ville, an hour’s drive north of Chicago. It was a skunkworks project
whose tight-knit team repeatedly flouted Motorola’s own rules for
developing new products. They kept the project top-secret, even from
their colleagues. They used materials and techniques Motorola had
never tried before. After contentious internal battles, they threw out
accepted models of what a mobile telephone should look and feel like.
330
Spin-off/Spinout
In short, the team that created the RAZR broke the mold, and in the
process rejuvenated the company.
Other successful skunkwork projects have been the Toshiba laptop and
the Xerox Alto. Skunkworks projects are not always viewed positively. For
example, an earlier Fortune article by Michael Schrage notes, “What’s That
Bad Odor at Innovation Skunkworks?” (Fortune, December 22, 1999).
“When an enterprise goes skunk, what’s the real message? Top manage-
ment effectively acknowledges that their corporation is incapable of inter-
nal organic innovation and must set up a different organization with differ-
ent people, different values, and different incentives.”
See also: Brainstorming; Competitive Advantage; Empowerment; In-
tangibles
Further Reading
“M Powered,” by Ian Wylie, Fast Company magazine, November 2005, page 92,
Issue 100.
Skunk Works: A Personal Memoir of My Years of Lockheed, by Ben R. Rich and
Leo Janos, Back Bay Books, 1st pbk. ed. (February 1, 1996).
“Skunk Works, 1990s-Style,” Peter Gwynne. Research Technology Management.
Washington: Jul/Aug 1997. Vol. 40, Issue 4; page 18.
Spin-off/Spinout
Most television watchers know what a spin-off is—it is an offshoot of an
existing, usually successful television program. In 1974, the popular show
Happy Days resulted in the spin-off Laverne and Shirley. Other more cur-
rent examples are the spin-off Frasier from the popular show Cheers, and
CSI Miami from CSI.
While TV shows generally have to be successful to spawn spin-offs, in
business the opposite is often the case. From a financial theory point of
view, a company as a whole should represent more than the sum of its
parts. When that is not the case, managers consider “selling” or spinning
off part of their business. In other instances, spin-offs are the result of a
government decree when a player is deemed to have an unfair monopoly
position in the market. One of the most well-known examples is ATT, the
Bell Telephone system, the entity known as Ma Bell. When its break-up
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Spin-off/Spinout
was ordered, the company spun into what became known as the Baby Bells
(for example Bell South, Verizon).
Fortune magazine (“How to Play the Spin Off Game,” March 7, 2005)
defined spin-off in two ways. The first was the pure spin-off, where the
“parent simply distributes new, publicly traded shares in a division or a
subsidiary to its existing shareholders.” The other form of spin-off was
called a carve-out, where the parent sells only part of the sub or division
(typically around 20 percent) to the public through an initial public of-
fering.
In its February 20, 2002, edition, the Financial Times offered insight
and advice to achieve a successful spin with three key steps. A Booz Allen
Hamilton study of all 232 spins by S&P 500 companies in the past decade
found that while 26 percent generated extraordinary value, 74 percent un-
derperformed the stock market. The median-performing spin-off gener-
ated annual returns for shareholders of 5.7 percentage points in its first
two years—worse than the S&P 500.
The first step in a successful spin is ensuring that both parent and spin
have viable business and financial structures. On average, companies taking
the spin option underperform the S&P 500 by 8 percentage points in the
year before the announcement. Spins are often used tactically by manage-
ment to decorate an unattractive balance sheet. Spun companies are three
times more likely than average to fall into bankruptcy because the parent
saddles them with excessive debt, onerous contracts, or impaired assets.
The second step in managing a successful spin is to meet or exceed
earnings expectations in the first two years, when Wall Street is forming
its view of a new management team. Booz Allen’s analysis suggests that,
in this period, an earnings shortfall has a greater effect on the stock price
of a spin-off than on the average publicly traded company.
The third step in a successful spin—and the place where most fall
short—is continued growth. Growth is more of a challenge for spins be-
cause many are spawned by the desire to separate and sell off a poor-
performing or low-growth business.
See also: Lean Manufacturing; Outsourcing; Reengineering; Strategic
Alliances
Further Reading
“A Positive Spin on Spinoffs,” by Anne Kates Smith, Kiplinger’s Personal Finance.
Washington: Jul 2007. Vol. 61, Issue 7; pp. 14–15.
332
Stakeholder Theory/Management
Spin-Off To Pay-Off : An Analytical Guide To Investing In Corporate Divestitures,

by Joseph W. Cornell, McGraw-Hill (1998)
Spin-Offs and Equity Carve-Outs, by James A. Miles, J. Randall Woodridge, J.
Randall Woolridge, and Mark Tocchet, Financial Executives Research Foun-
dation, 1st ed. (May 1, 1999)
In 1984, R. Edward Freeman published the book Strategic Management:
A Stakeholder Approach (Marshfield, MA, Pittman Publishing). The book
argued that effective management of the firm went beyond creating share-
holder value. The book argued that others, called stakeholders, were also
of strategic importance. For Freeman, a stakeholder was more than a
shareholder; it “was any group or individual who can affect or who is af-
fected by the achievement of a firm’s objectives” (p. 25), and might in-
clude customers, employees, suppliers, government, and communities.
The notion that a company would consider the impact on others be-
yond shareholders was revolutionary, though one that has gained accep-
tance over time. In “The Lessons from Stakeholder Theory for U.S. Busi-
ness Leaders (Business Horizons, 2005, 48, 255–264), author Ronald
Clement of the Kelley School of Business at Indiana offered observations
learned from the stakeholder model that were of importance to business.
Three of those observations were that:
• Corporations are facing increasing pressures to respond to stake-

holders. Pressure is coming from varied sources including the
movement to make socially responsible investments, employee atti-
tudes toward work, and customers that want to purchase from so-
cially responsible companies (seen in the success of cause marketing
programs).
• Corporations have a legal basis for responding to a broad range
of stakeholders. This has been established by legislation that limits
pollution and other environmental factors.
• Corporations could improve the bottom line by responding to
stakeholder concerns.
One of the more obvious examples of a corporate response to stake-

holder concerns has been the recent actions of Wal-Mart. In recent years,
the discounter has grown tremendously, from Sam Walton’s small store in
333
Bentonville, Arkansas, to a mega-corporation with sales of $315 billion

in its fiscal year 2006. As it continued to grow, it opened larger and larg-
er stores, and according to some with an extreme view Wal-Mart also
squeezed out local competition, drove suppliers to the edge of bankruptcy,
and took advantage of poorly educated workers by offering low wages
and minimal benefits. Backlashes began against Wal-Mart, with “Stop Wal-
Mart” campaigns in some areas targeted for development. Faced with such
a wave, Wal-Mart took an active hand in addressing these stakeholder
groups’ communities—about the positive benefits that a Wal-Mart store
brings, such as lower prices and opportunities for employment. Impor-
tantly Wal-Mart took its campaign to potential employees and customers,
with advertising to highlight employee advancement and other qualities
that Wal-Mart offered.
Another way to consider stakeholder management is at a personal level.
To be effective, one needs to sell ideas, not only to one’s immediate boss,
but also to subordinates and also peers internally in the organization, and
perhaps external audiences as well—key customers, legislators, or even
bankers or other capital providers. Several techniques have been suggested,
most having two levels. The first is to recognize who the stakeholders are
and the second is to prioritize them in some way so as to effectively meet
their needs. The World Bank suggests the following attributes to consider
in a stakeholder analysis: the stakeholders’ position on an issue, the level
of influence (power) they hold, the level of interest they have in an issue,
and the group with which they are associated (http://www1.worldbank
.org/publicsector/anticorrupt/PoliticalEconomy/stakeholderanalysis.htm).
Generally speaking, those with high levels of power and high levels of in-
terest should be managed closely; those with high interest but low power
would be kept informed; those with high power and low interest would
be kept satisfied, while minimal effort would be expended toward those
with low power and low interest.
See also: Shareholder Value
Further Reading
The Lessons from Stakeholder Theory for U.S. Business Leaders, by Ronald W. Clem-
ent, Greenwich: Business Horizons. May/Jun 2005. Vol. 48, Issue 3; pg.
255.
Redefining the Corporation: Stakeholder Management and Organizational Wealth,
by James Post, Lee Preston, and Sybille Sachs, Stanford Business Books, 1st
ed. (April 16, 2002).
334
Strategic Alliances
Stakeholder Theory and Organizational Ethics, by Robert Phillips, 1st ed., San
Francisco: Berrett-Koehler (2003).
Strategic Alliances
The consulting company Bain and Company defines strategic alliances as
“agreements between firms in which each commits resources to achieve a
common set of objectives” that may include accessing new technology,
improving products or product quality, or entering new markets. “Compa-
nies may form strategic alliances with a wide variety of players: customers,
suppliers, competitors, universities, or divisions of government. Through
strategic alliances, companies can improve competitive positioning, gain
entry to new markets, supplement critical skills and share the risk or cost
of major development projects” (http://www.bain.com/management_
tools/tools_alliances.asp?groupCode=2).
Further, Bain recommends that firms seeking a successful strategic alli-
ance take the following steps:
• Define their business vision and strategy in order to understand

how an alliance fits their objectives;
• Evaluate and select potential partners based on the level of synergy
and the ability of the firms to work together;
• Develop a working relationship and mutual recognition of oppor-
tunities with the prospective partner;
• Negotiate and implement a formal agreement that includes systems
to monitor performance (http://www.bain.com/management_
tools/tools_alliances.asp?groupCode=2).
While the pull of a strategic alliance is strong, actual execution of a suc-

cessful strategic alliance has proven elusive for many. As the authors of
“How to Make Strategic Alliances Work” (MIT Sloan Management Re-
view, Summer 2001, p. 37) note:
Strategic alliances—a fast and flexible way to access complementary

resources and skills that reside in other companies—have become an
important tool for achieving sustainable competitive advantage. . . .
Currently the top 500 global companies have an average of sixty ma-
335
Strategic Alliances
Why I Do This: Physician Assistant in Emergency Medicine

Scott Purrone
Physician assistants (PAs) are health care professionals licensed to practice
medicine with physician supervision. As part of their comprehensive respon-
sibilities, PAs conduct physical exams, diagnose and treat illnesses, order
and interpret tests, counsel on preventive health care, assist in surgery, and
in virtually all states can write prescriptions. Within the physician–PA rela-
tionship, physician assistants exercise autonomy in medical decision making
and provide a broad range of diagnostic and therapeutic services. A PA’s
practice may also include education, research, and administrative services.
Because of the close working relationship the PAs have with physicians,
PAs are educated in the medical model designed to complement physician
training. Upon graduation, physician assistants take a national certification
examination. To maintain their national certification, PAs must log 100
hours of continuing medical education every two years and sit for a recerti-
fication every six years. Graduation from an accredited physician assistant
program and passage of the national certifying exam are required for state
licensure.
I am a physician assistant who practices in emergency medicine. I usually
work about 32–40 hours per week, mostly evening/night shift. A typical
shift for me involves me running a minor care area of the emergency de-
partment for five and a half hours and then moving up to the main emer-
gency department seeing all levels of ill patients. I perform a majority of
the procedures in the ED (sutures, fracture reductions, etc.). I enjoy what
I do because in emergency medicine, you never know what is going to
walk through the door and how you may help. One minute it could be
very slow and the next minute can be very busy. It is also a very challeng-
ing occupation because a lot of the time, you are playing medical detective.
The nice thing is, you have physician supervision to back you up.
I highly recommend considering this career if you are interested in medi-
cine. The salary is good as is the lifestyle. The other nice benefit is, if you
get tired of one specialty, you can always switch to another without going
back to school.
jor strategic alliances each. Yet alliances are fraught with risks, and
almost half fail.
They recommend developing a dedicated division to execute and manage

strategic alliances in order to create a higher success rate. The strategic
alliance division would be responsible for the “life-cycle” of the alliances:
identifying and building the business case, assessing and selecting potential
partners, negotiating the agreements between the parties, managing the
336
Suggestion Box
alliance, assessing its continued contribution to the value of the organiza-

tion and ultimately overseeing its termination.
Despite the perils, some companies thrive on strategic alliances. For ex-
ample, Fortune magazine says (in “Are Strategic Alliances Working?” Sep-
tember 21, 1992), “Corning, the $3 billion-a-year, glass and ceramics
maker is renowned for making partnerships work.” The article goes on to
cite Corning’s relationships with Dow, Siemens (from Germany), and Vi-
tor (from Mexico) and continues that “Alliances are so central to Corn-
ing’s strategy that the corporation now defines itself as a ‘network of orga-
nizations.’”
See also: Business-to-Business/Business-to-Consumer (B2B/B2C); Com-
petitive Advantage; Scenario Planning; Value Proposition
Further Reading
Mastering Alliance Strategy: A Comprehensive Guide to Design, Management, and
Organization (Jossey Bass Business and Management Series) by James D.
Bamford, Benjamin Gomes-Casseres, and Michael S. Robinson, Jossey-Bass
(December 27, 2002).
“Politics & Economics: Steelmakers Seek New Tie-Ups That Are Short of True
Mergers,” Paul Glader, Wall Street Journal. New York: Oct 13, 2006. pg.
A.4.
Strategic Alliances: An Entrepreneurial Approach to Globalization, by Michael Y.
Yoshino, and U. Srinivasa Rangan, Harvard Business School Press (April
1995).
Suggestion Box
A suggestion box is a place for people to offer new ideas and solutions to
old problems. Often it is quite literally a box, usually locked so that no
one can tamper with its contents.
More recently, the suggestion box has taken an electronic form. Cus-
tomers are often encouraged to put suggestions into the box to improve
products or services. Employee suggestion boxes offer an opportunity for
people in the organization to raise concerns about an issue, suggest an
improvement to a process, or even report wrongdoing in an organization.
Most organizations leave the choice of including his/her name open to
the individual submitting something to the suggestion box.
Yet many organizations find their suggestion boxes empty. Some peo-
337
Supply Chain
ple, especially customers, may not want to invest their time in improving
another’s company. Others might avoid using a suggestion box because
communication is open and they go straight to their supervisor with sug-
gestions. Yet another group fails to use the suggestion box because they
fear recrimination and a culture of “shooting the messenger.” Even
though the box may be anonymous, those in this group are concerned
that the suggestion could and would be traced back to them with dire
consequences.
Yet, as the New York Times noted in “The Silent May Have Something
to Say” (November 5, 2006), “Companies lose more than creative ideas
when employees feel muzzled. People who feel they cannot or should not
speak their mind at work often become less engaged in their work. That
in turn means they are less inclined to give their all to their jobs, and
increases the odds that they will leave if another opportunity comes along.
“While many employers say they want all kinds of ideas, tips, and criti-
cism from their employees, they have often done little more than hang up
a suggestion box—something even the eighth shogun of Japan managed
to do outside his palace in the eighteenth century.” The article went on
to discuss how more companies are trying to improve communications
channels with employees using methods such as brainstorming sessions
and tools such as company intranets.
See also: Brainstorming; Empowerment; General Electric (GE) Work-
out; Intellectual Capital; Learning Organization
Further Reading
“Encouraging Suggestive Behavior,” by Barry Nalebuff, and Ian Ayres. Harvard
Business Review. Boston: Dec 2004. Vol. 82, Iss. 12; pg. 18.
“Stuff the Suggestions Box,” by Geoffrey C. Lloyd. Total Quality Management.
Abingdon: Aug 1999. Vol. 10, Issue 6; pg. 869.
Supply Chain
A “supply chain” refers to the entire process of bringing a product to
market, beginning with raw materials and ending with the sale of the final
product to the customer. This “chain,” also known as a logistics network,
is comprised of all of the departments, functions, information, and re-
sources involved in producing and supplying the product to the customer.
338
Supply Chain
Most corporations seek to optimize the activities of their supply chain

as a way of gaining competitive advantage. This process is known as “sup-
ply chain management.” The term “supply chain management” was first
used by a Booz Allen Hamilton consultant in 1982, as companies realized
the value of strategically managing the supply chain processes.
The primary objective of supply chain management is to meet customer
demands in as timely a manner as possible, through the most efficient and
economical use of resources. These resources include distribution capacity,
inventory, and labor.
Supply chain management includes the planning and oversight of all of
the processes of the supply chain, including materials, information, and
financials, both internally and externally. Additionally, supply chain man-
agement includes coordination with channel partners and key suppliers.
Different models have been developed to manage and optimize these
activities for efficiency and economy. Two well-known models include
SCOR®, a model developed by the Supply-Chain Management Council,
and the SCM® model, developed by The Global Supply Chain Forum
(GSCF). Each of the processes involves its own set of tracking, key metrics,
etc. Supply chain management software assists in managing this effort.
Software facilitates the flow of supply chain information. This, combined
with accurate inputs, results in the ability to make or ship only as much of
a product as needed. This practice is known as “just-in-time manufactur-
ing.” The goal is to reduce the amount of inventory a company keeps on
hand. Lower levels of inventory can cut costs dramatically, since there is
less production of surplus goods and their accompanying storage costs.
Although different industries have somewhat differing processes, the ac-
tivities of the supply chain tend to be somewhat similar across organiza-
tions and involve the basic steps outlined below.
1. Planning: The first step in supply chain management is the devel-

opment of a plan for managing the resources essential to meeting
customer demand for a company’s product or service. Another key
planning activity is the development and implementation of a set
of metrics. These should be designed to monitor and assess each
supply chain activity for efficiency, costs, and high quality cus-
tomer value.
2. Sourcing: Second, identify key suppliers to deliver the raw materi-
als, goods, and services required for the end product. Design pric-
339
Sustainability
ing, payment, and delivery processes. Develop systems for manag-

ing inventory of goods received from suppliers.
3. Manufacturing: Next, establish a timetable for all elements of
product production, including testing, packaging, and readying
for delivery. Key metrics at this stage include product quality mea-
surement, production output, and worker productivity.
4. Delivery: This is also referred to as the logistical phase. This in-
volves the implementation of processes to receive customer orders,
invoice customers, development of a network of warehouses to
distribute the product, and select carriers to deliver product.
5. Returns: Develop procedures for the return of defective product
and offer technical support to customers who are experiencing dif-
ficulty.
See also: Just-in-Time; Lean Manufacturing; Mass Customization; Out-

sourcing; Strategic Alliances
Further Reading
“Keeping the Supply Chain in Focus,” by Roger Morton, Logistics Today. Cleve-
land: Jul 2007. Vol. 48, Issue 7; pg. 12.
Supply Chain Management, by Sunil Chopra and Peter Meindl, Prentice Hall, 3rd
ed. (March 28, 2006).
Supply Chain Management Best Practices, by David Blanchard, Wiley (December
5, 2006).
Sustainability
Until recently the word sustainability in business was associated with “sus-
tainable” competitive advantage—a lasting advantage that would not be
immediately replicable by its competitors. Microsoft is an example of a
company with this type of sustainability.
Built to Last by James Collins and Jerry Porras drew on a six-year re-
search project at the Stanford University Graduate School of Business,
took eighteen long lasting companies that had outperformed the stock
market, and sought to determine the factors that made them exceptional.
As Fast Company (“Was Built to Last to Last,” November, 2004) summa-
340
Sustainability
rized, “The authors discovered that the visionary companies did certain
things very differently from their duller rivals, things that in large part were
more about the internal than the external and had little to do with tech-
nology or number crunching. Among these were having ‘cult-like cul-
tures;’ adhering to an ideology that went beyond the simple pursuit of
profits; relying on homegrown management; focusing on creating a lasting
organization-called ‘clock building,’ as opposed to ‘time telling;’ and hav-
ing the ability to see things not as either-or propositions (the ‘genius of
the “and,”’ in the authors’ words, as opposed to the ‘tyranny of the
“or”’).” “A visionary company,” they wrote, “doesn’t simply balance be-
tween preserving a tightly held core ideology and stimulating vigorous
change and movement; it does both to the extreme.”
With most companies wanting sustainability and to be “built to last,”
the book became a bestseller, selling over 3.5 million copies worldwide.
More recently sustainability has become associated with a company’s
contribution to the environment. The EPA (www.epa.gov/sustainability)
defines sustainability as “the ability to achieve continuing economic pros-
perity while protecting the natural systems of the planet and providing a
high quality of life for its people. Achieving sustainable solutions calls for
stewardship, with everyone taking responsibility for solving the problems
of today and tomorrow—individuals, communities, businesses, and gov-
ernments are all stewards of the environment.”
The EPA provides more insight on sustainability with:
Common use of the term “sustainability,” in the context of modern

environmentalism, began with the publication of the World Commis-
sion on Environment and Development report, “Our Common Fu-
ture,” in 1987. Also known as the Brundtland Report, this document
characterized sustainable development as “development that meets
the needs of the present without compromising the ability of future
generations to meet their own needs.” This concept of sustainability
encompasses ideas, aspirations and values that continue to inspire
public and private organizations to become better stewards of the en-
vironment and promote positive economic growth and social objec-
tives. The principles of sustainability can stimulate technological inno-
vation, advance competitiveness and improve our quality of life
(www.epa.gov/sustainability/basicinfo.htm#what).
341
Sustainability
As corporations have embraced the environmental notion of sustainabil-

ity, they have begun to report some progress, at least in terms of how they
identify themselves as environmentally responsible. For example, UPS, the
delivery service, issued its first Corporate Sustainability Report in 2003
that indicated its vision, strategy, and goals in this area, along with its key
performance indicators for marking achievement toward its goals.
Another example is Procter & Gamble. Within its website http://www-
.pg.com/company/our_commitment/social_responsibility.jhtml, P&G re-
ports on its social responsibility, highlighting the company’s commitment
to “caring for our communities, environment, and sustainability.” Within
sustainability, P&G provides access to a Sustainability Report and notes,
P&G directly contributes to sustainable development by providing

products and services that improve the lives of consumers, whether in
terms of health, hygiene, or convenience. Through our activities, we
also contribute to the economic and social well-being of a range of
other stakeholders, including employees, shareholders, local commu-
nities in which we operate, and more widely to regional, national,
and international development. So, P&G contributes to sustainable
development both through “what we do” and “how we do it”
See also: Competitive Advantage; Intangibles; Intellectual Capital; Six

Sigma; Value Proposition
Further Reading
The Next Sustainability Wave: Building Boardroom Buy-in (Conscientious Com-
merce), by Bob Willard and Hunter Lovins, New Society Publishers (April
2005).
The Sustainability Handbook : The Complete Management Guide To Achieving So-
cial, Economic, And Environmental Responsibility, by William R. Blackburn,
Environmental Law Institute (2007).
“Working with the Enemy,” by Danielle Sacks, and Charles Fishman. Fast Com-
pany. Boston: Sep 2007, Issue 118; pg. 74.
342
SWOT Analysis
SWOT Analysis
A SWOT analysis is a strategic planning tool. A SWOT (strengths, weak-
nesses, opportunities, and threats) Analysis is different from a SWAT (spe-
cial weapons and tactics) team. The goal of a SWOT analysis is to provide
a snap-shot of a company’s position at a specific point in time, and from
that undertake actions that will improve its competitive position—perhaps
even requiring the actions of a corporate-equivalent SWAT team.
The origins of SWOT analysis can be traced to research conducted at
the Stanford Research Institute by Robert Stewart and Albert Humphrey
during the 1960s. The research was funded by Fortune 500 companies
and sought to address the issue of “why corporate planning in terms of
long-range planning was not working, did not pay off, and was an expen-
sive investment in futility,” and to develop a solution to this problem.
The continued use of the analysis is testament to its usefulness. A thor-
ough SWOT analysis is more than a back-of-the-envelope listing of bullet
points; it is a thorough study of each of the elements of the analysis. Addi-
tionally, each of the elements needs to be considered in light of a specific
goal.
Strengths
What are the company’s internal strengths as it seeks to achieve its goal?
The answer can be varied. Some potential strengths are proprietary prod-
ucts, strong management, superior quality, or excellent supplier relation-
ships. Strengths should be calibrated absolutely and relative to industry
competition. For example, you may believe that product quality is a
“strength,” but if you score poorly on quality in customer surveys, it may
be a weakness instead.
Weaknesses
What are the company’s weaknesses as it seeks to achieve its goal? At

times weaknesses can be the opposite of strengths. Possible weaknesses
could be a lack of talent, poor brands, high manufacturing costs, or
strained distribution relationships.
343
SWOT Analysis
Why I Do This: Museum Interpreter

Ellie Sipkins
When you are a museum interpreter, you have an adventure every work-
ing day. Just when you think you have your head full of knowledge to
share with the guests, you learn something new.
Usually, the house itself is a treasure of amazing and beautiful archi-
tecture and decorative arts. But when you are giving people a tour, and
telling stories about the people who lived there, the house suddenly
takes on a personality as well. And, as you continue to have the opportu-
nity to share your knowledge, you find that members of the tour often
have information to share with you as well.
When you begin a tour, you accompany a group of strangers. But
when you reach the last room, you often find that not only are the
strangers your friends, but that they have become friends with each
other. The warm applause and the comments about how knowledgeable
you are, what a great tour it was, and what a wonderful guide you are
give you all the joy you could wish for from a job.
If you have a willingness to learn many different things, and you are
comfortable being with and talking to groups of people, and you have a
desire to have them leave knowing about the house and have a great
time doing it, you will be a happy museum interpreter. These are your
qualifications.
Finding a museum is not difficult, and most historic houses are in
need of willing applicants. The pay, however, is often much less than
you’d make at other, more prestigious jobs. You share the available
funds with a house that is always hungry for repairs and updates.
If you choose the profession, though, it can be a steppingstone to
other exciting careers. For example, you’ll have the opportunity to meet
craftsman specializing in a variety of areas of expertise, and you’ll learn
about their jobs. You’ll meet decorative arts conservators, architecture
conservators, people who reproduce antique painted surfaces, people
who repair old clocks, reproduce colored class, and help to preserve ev-
ery conceivable thing. You might see a nineteenth-century painting be-
ing faithfully reproduced by twenty-first century techniques. You’ll learn
about all of the different kinds of jobs that weave in and around what
you are doing.
Being a museum interpreter in an historic house is the gateway to a
fascinating world where the past is meeting the future every time you
say, “Hello, Welcome to our house!”
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SWOT Analysis
Opportunities
While strengths and weaknesses are internal to the firm, opportunities

and threats are those factors found external to the firm. Opportunities
might be emerging technology (such was the case with expansion of the
Internet in the 1990s), reduction in regulation (deregulation of telecom-
munications or the airline industry sparked new opportunities), or a new
customer need.
Threats
Threats include any opponent to a company’s well-being. They are often

related to actions taken by a competitor: a new competitor, a competitor’s
new and innovative product or service, a price war, etc. A threat could also
come from an action taken by a third party, such as a new tax or environ-
mental legislation that affects your company. Finally, a threat can come
from other causes, such as a change in weather patterns or a downward
trend in the economy.
By 2004, SWOT analysis had been “fully developed, and proven to cope
with today’s problems of setting and agreeing realistic annual objectives
without depending on outside consultants or expensive staff resources,”
according to Humphrey (see http://www.businessballs.com/swotanalysis
freetemplate.htm). It is still a popular analysis tool today.
See also: Benchmarking; Mission Statement; Scenario Planning
Further Reading
“Performing a SWOT analysis. (Checklist 005) (strengths weaknesses opportuni-
ties threats),” Chartered Management Institute: Checklists: Marketing Strat-
egy, by Thomson Gale, October 1, 2005.
Strategic Management and Business Analysis, by David Williamson, Peter Cooke,
Wyn Jenkins, and Keith Michael Moreton, Butterworth-Heinemann, pap/
cdr. ed. (December 17, 2003).
“Using a Market Analysis,” by Jack Brennan, Golf Course News, Yarmouth: Feb
2005. Vol. 17, Issue 2; pg. 22.
345
Synergy
Synergy
Can one plus one ever be more than two? In the world of business merg-
ers, firms are always looking for such a Holy Grail: a new, combined com-
pany greater than the sum of its parts. Synergy is just that, and companies
search harder for it than Arthur’s knights did the Grail. Unfortunately,
false grails abound, and while the search for synergy is exhaustive, actually
finding it and enjoying it is elusive.
Thus, synergy is often cited as the driving force behind a merger or
acquisition, as seen in the AOL–Time Warner merger. BusinessWeek noted
in an article titled “AOL has No Future,” January 27, 2003, “that AOL
Time Warner has been talking about synergy and multimedia millions for
three years now. But the payoff keeps getting pushed back, and the burden
of AOL grows heavier by the day. Now, as Stephen M. Case prepares to
step down as chairman of the combined company, directors should snap
to their senses and dump the Internet unit. Sell it. Spin it off. Give it away,
if need be. The magic is gone.”
Again the power of synergy was a driver of Procter and Gamble’s acqui-
sition of Gillette. Time magazine quoted P&G’s CEO in a February 7,
2005, article titled “Land of the Giants P&G’s Megadeal with Gillette is
Just the Latest in a New Wave of Merger Mania. Investors Beware,” “The
hardest advantage to measure is that merger buzzword synergy. P&G
knows a lot about women. Gillette knows a lot about men,” Lafley [P&G’s
CEO] told investors. “It’s very simple, but it’s a potent combination.”
In the same article, Robert McDonald, a P&G senior executive, hinted
to Time that new products that could capitalize on each firm’s strengths.
“We have the best-selling male fragrance in Hugo Boss,” he says, “How
about a Hugo Boss designer razor?”
Synergy is difficult to achieve. Yet it is a constant attraction for compa-
nies looking to spark marketplace winners. For example, when CVS (the
retail drug store) acquired Caremark, a pharmacy benefit manager, in
2006, the Wall Street Journal noted (“CVS, Caremark Unite to Create
Drug-Sale Giant,” November 2, 2006)
The combined company could realize strategic benefits over both its
archrivals. CVS and Caremark said they would gain $400 million in
“operating synergies”—increased purchasing power and cost sav-
ings—via the deal. CVS could also use its retailing leverage to run
promotions on items like beauty aids at its 6,200 outlets to attract
346
Synergy
new PBM clients. Conversely, Caremark has tens of millions of mem-

bers, translating into a potential windfall of new foot traffic to CVS
stores.
The results of this acquisition have yet to be seen.

See also: Spin-off/Spinout; Strategic Alliances
Further Reading
Alignment: Using the Balanced Scorecard to Create Corporate Synergies, by Robert
S. Kaplan and David P. Norton, Harvard Business School Press (April 24,
2006).
“Coevolving: At last, A Way to Make Synergies Work,” by Kathleen M. Eisenh-
ardt, and D. Charles Galunic, Harvard Business Review, Boston: Jan/Feb
2000. Vol. 78, Issue 1; p. 91.
The Synergy Trap, by Mark L. Sirower, Free Press (January 23, 1997).
347
T
Telework
The term telework refers to the use of telecommunications to substitute
for physical business travel. Telework typically includes use of a variety of
telecommunications, tools such as the phone, fax, e-mail, video conferenc-
ing, webconnections and others for travel either to an office or distant
meeting. Physicist and engineer Jack Nilles coined the terms “telecommut-
ing” and “telework” in 1973 when he was a professor at the University
of Southern California (USC) and Director for Interdisciplinary Research
there.
Nilles went on to found the consulting firm, JALA International in
1980. According to the JALA website (www.jala.com), Nilles is known as
the “father of telecommuting/teleworking,” and he has “developed and/
or evaluated telecommuting projects for a variety of Fortune 100 compa-
nies, the state governments of California, Arizona, and Washington, the
city of Los Angeles, and other companies and organizations in the United
States, Europe, and South America.
Sales representatives who travel from one customer to another through-
out the day or week were the early pioneers of this type of work. Business
consultants have also made use of telework options for decades when they
spend large portions of their workday or work week at a client’s business
rather than at their employers’ office.
Now, telework is often widely practiced across many different functions
within many types of businesses. Telework may include employees who
work from home or a satellite office or from their car in place of the tradi-
tional desk job at the company’s physical building. Telework also includes
situations in which employees from multiple offices, working together as a
team, schedule videoconferencing meetings or conference calls that replace
expensive and time-consuming travel to a single meeting place. In addi-
tion, many self-employed professionals “telework” from home offices.
The expanding field of distance learning is also a type of telework where
the teachers and students do not need to be in the same classroom to
conduct class but have access to shared electronic space that is used to
Telework
Why I Do This: Business Analyst, Financial Services Industry

Michael Goodwin
The primary responsibility of my job is gathering detailed business require-
ments to build or enhance on-line information delivery platforms (web ap-
plications) and provide support for them. I work with the application users
(clients and internal staff) to define the requirements and ensure the devel-
opment staff understands what is being requested. When the finished prod-
uct is complete I coordinate the set up of access to the web application
and provide training on its functions and features. I provide product sup-
port to the users when they encounter a problem or require assistance re-
trieving a desired set of results or if they have questions about the results
they received. I resolve the problems when possible and the problems
which cannot be resolved immediately are documented in detail for review
and resolution by the development team. I also coordinate meetings to ob-
tain updates from the development staff and provide updates to the clients.
I graduated from college with a BS in Business Administration as an ac-
counting major. I was offered a job through a friend of a friend at a finan-
cial services company. The thing I like most about my job is the interac-
tion with people and the satisfaction I get from helping people who are
experiencing problems using the application. I initially went into this line
of work because of the job stability in the financial services industry and
the financial compensation. A person with personality traits and skills that I
feel would enjoy this job are attention to detail, ability to communicate ver-
bally and in writing, people oriented, and the ability to problem solve.
At the present time, I have chosen to pursue a career change now be-
cause I am not happy with my chosen profession. And so the message I
have for people trying to decide on their career is: Do not to base your de-
cision on financial compensation alone—rather, consider what you like to
do and where you want to live.
exchange information between the teacher and students or among stu-

dents.
The benefits of telework can be great and varied. These include reduced
commuting costs and time, increased productivity, more flexible “office
hours,” and greater job satisfaction. Some teleworkers find that with re-
duced commute time, they have more time for leisure activities or family
time, which creates less stress from work and less resentment of work’s im-
position on other pursuits. On a broader level, telework can reduce overall
congestion on the roads, decrease the use of gasoline, and cause less of an
impact on the environment than more traditional working arrangements.
350
Telework
For employers, providing a telework option can also increase retention

rates among employees who are trying to balance work and family de-
mands. Telework can be used as a valuable recruiting tool. The costs asso-
ciated with telework, such as a home based computer and connectivity
to the employer’s systems, or increase in management time to supervise
teleworking staff, can generally be offset by the overall benefits of telework
arrangements.
Employers who consider implementing telework options in response to
employee requests or a part of their own business model for reducing over-
head costs, often find that there are some job categories and some types
of jobs that lend themselves to telework better than others. Writers and
editors, for example, can generally work from remote locations quite eas-
ily. Additionally, some employers find that it is possible to offer the option
of telework for one or two days per week but that employees need to
spend a significant portion of their work week in more traditional offices.
It is also critical for any manager or employer considering telework ar-
rangements to clarify the performance criteria and expectations so that
both teleworks and non-teleworks are clear on what is expected of the
teleworkers when they are not in the office.
Yet telework is not for everyone. Some employees working outside the
office, find themselves isolated with the lack of co-workers and frustrated
by what it means to run an office off-site (dealing with telecommunica-
tions and technology glitches). Even for the most tech-savvy, there is a
certain amount of ramping up time. It can be difficult to get used to a
work-world where, in a traditional office setting, an employee might
“brainstorm” with a colleague in a spur-of-the-moment meeting. In a tele-
work situation, most if not all “meetings” must be scheduled.
In the past few years, “telework” has become, to many, just plain work,
according to a study conducted by the Telework Coalition in 2006. Ac-
cording to the Telework Coalition press release, the study (which was
sponsored by Intel) examined private and public sector employers repre-
senting more than 500,000 employees and almost 150,000 teleworkers
and “mobile” workers. The press release said that the study “looked at
how these large organizations addressed and overcame obstacles and ob-
jections to create successful programs that benefit both the organization
and its employees through reduced real estate costs, increased employee
retention, and a much higher rate of employee satisfaction.”
351
Telework
According to Chuck Wilsker, president and CEO of the Telework Coali-

tion, who was quoted in the press release: “An important finding is that
virtual work, mobile work, telecommuting, telework, or distributed work,
whatever it is called, is now regarded as ‘Just Work.’ Most study partici-
pants emphasized the importance of the mobility that telework enables
when dealing in a global economy. Whenever, and wherever the job can
best be done, it gets done.”
“As long as employees have a laptop, high speed Internet access, and a
phone, they are in business wherever they are. And, with the convergence
of these three technologies, whether a wireless equipped laptop with a
VoIP phone, or a new generation PDA, work can be done from almost
anywhere,” he said (www.telcoa.org, press release entitled “Benchmarking
Study Finds ‘Telework’ has Evolved into a Mainstream Way of Working;
Now, ‘It’s Just Work’ ” dated March 9, 2006).
See also: Flex-Time; War for Talent
Further Reading
Association for Commuter Transportation (www.actweb.org) is a non-profit orga-
nization supporting TDM programs.
ecommute (www.ecommute.net/program) is a U.S. federal government spon-
sored study of the impacts and benefits of telecommuting.
Home Computing Initiatives (www.dti.gov.uk/hci) is a website that describes
how employers can implement Home Computing Initiatives.
Smarter Choices—Changing the Way We Travel, by Sally Cairns, et al., UK De-
partment for Transport (www.dft.gov.uk), July 2004. This comprehensive
study provides detailed evaluation of the potential travel impacts and costs
of various mobility management strategies.
Teletrips (www.teletrips.com) promotes the benefits of Telework and other TDM
strategies.
Virtual Mobility Website (www.virtual-mobility.com) is an information site spon-
sored by the UK Department for Transport, Local Government and the
Regions.
http://eto.org.uk (European Telework Online)
www.ivc.ca (Canadian Telework Association)
www.telecommute.org (International Telework Association)
352
Temporary Workers

Telecommuting Today: A Snapshot
“Work at Home Summary” by the Bureau of Labor Statistics of the U.S.
Department of Labor. September 22, 2005. http://www.bls.gov/news
.release/homey.nr0.htm
The likelihood of working at home varies greatly by occupation. This
is not surprising, since some jobs are more readily done away from the
workplace than others. Almost 30 percent of workers in management,
professional, and related occupations reported working at home in May
2004. Nearly two-thirds of persons who usually worked at home were
employed in these occupations.
About one in five sales workers usually worked at home. In contrast,
only 3 percent of workers in production, transportation, and material
moving occupations performed job-related work at home. From an in-
dustry perspective, workers employed in professional and business ser-
vices, in financial activities, and in education and health services were
among those most likely to work at home in 2004.
Temporary Workers
In the workforce there are full- and part-time workers and another cate-
gory called temporary workers. Temporary workers, or “temps,” work for
a period of time in a job to fill a void in the regular workforce. That void
might be caused by a surge in demand, a maternity leave, or an illness.
The Department of Labor defines temporary workers as those in “con-
tingent and alternative employment” arrangements. A contingent worker
is one who is working without an implicit or explicit contract for ongoing
employment. According to the Department of Labor (www.bls.gov/news
.release/conemp.nr0.htm), in February 2005 there were about 5.7 million
contingent workers in the United States (under its broadest definition)
representing about 4 percent of total employment. Another 7.4 percent of
the workforce (about 10.3 million workers) were defined as independent
contractors (consultants or freelance workers), 1.8 percent were on-call
workers, .9 percent were temporary help where a temporary help agency
paid them, and another .6 percent were workers provided by contract firms.
353
Temporary Workers
Traditionally, “temporary workers” filled unskilled, manual labor jobs.

However, “The Changing Temporary Workforce” (Occupational Outlook
Quarterly, 1999, p. 25) notes that “the image of temporary workers doing
repetitive, low-skilled tasks has grown as outdated as the black and white
television. Higher skilled workers, ranging from laboratory technicians to
lawyers increasingly make themselves available to temporary assignments.”
Independent contractors tend to be older than workers in a more tradi-
tional arrangement, with 81 percent aged thirty-five or older compared to
65 percent of the “regular” workforce. Also according to the Department
of Labor findings these workers were more likely to be in “management,
business, and financial operations; sales and related occupations; and con-
struction and extraction occupations.” Notably unlike most other tempo-
rary workers, independent contracts were in their role by choice, with
“fewer than one in ten independent contractors saying they would prefer
a more traditional work arrangement.”
The rationale for the supply and the demand for temporary workers
varies. Some suggest that companies actually are avoiding paying for full
time employees with the cost of benefits when they hire temporary work-
ers. Others suggest that the supply of temporary workers has risen with
the rise of women in business where educated, well-paid women might
prefer temporary assignments to have more flexibility for family life.
Workers in all forms of temporary work arrangements had significantly
less access to health insurance and other benefits such as pension plans.
Homeland Security and Temporary Workers
There is another kind of “temporary worker” as defined by the Depart-

ment of Homeland Security. These are individuals with nonimmigrant vi-
sas eligible to work in the United States for a short, defined period of
time. According to the State Department website, “The Immigration and
Nationality Act provides several categories of nonimmigrant visas for a per-
son who wishes to work temporarily in the United States. There are annual
numerical limits on some classifications which are shown in parentheses.
H-1B classification applies to persons in a specialty occupation which

requires the theoretical and practical application of a body of highly
specialized knowledge requiring completion of a specific course of
354
Temporary Workers
higher education. This classification requires a labor attestation is-

sued by the Secretary of Labor (65,000). This classification also
applies to Government-to-Government research and development,
or co-production projects administered by the Department of De-
fense (100);
H-2A classification applies to temporary or seasonal agricultural
workers;
H-2B classification applies to temporary or seasonal nonagricultural
workers. This classification requires a temporary labor certification
issued by the Secretary of Labor (66,000);
H-3 classification applies to trainees other than medical or academic.
This classification also applies to practical training in the education
of handicapped children (50) (www.state.gov).
In recent years, there has been increased focus on these temporary work-
ers, as it is believed that many remain in the United States after their tem-
porary work visa has expired. In his 2007 State of the Union address,
President George Bush called for the creation of a temporary worker pro-
gram aimed at this group. Specifically, he noted,
[s]uch a program will serve the needs of our economy by providing a

lawful and fair way to match willing employers with willing foreign
workers to fill jobs that Americans have not taken. The program will
also serve our law enforcement and national security objectives by tak-
ing pressure off the border and freeing our hard-working Border Pa-
trol to focus on terrorists, human traffickers, violent criminals, drug
runners, and gangs.
The Temporary Worker Program Should Be Grounded

In The Following Principles:
• American Workers Must Be Given Priority Over Guest Workers.

Employers should be allowed to hire guest workers only for jobs
that Americans have not taken.
• The Program Must Be Truly Temporary. Participation should be
for a limited period of time, and the guest workers must return
home after their authorized period of stay. Those who fail to
return home in accordance with the law should become perma-
nently ineligible for a green card and for citizenship.
355
• Participation Should Fluctuate With Market Conditions. When

the economy is booming, and there are not enough American
workers available to help businesses grow, the program should
be open to more participants. But when times are tough and
Americans struggle to find jobs, the economy cannot and should
not support as many guest workers.
See also: Free Agent; Job Sharing
Further Reading
Foreign Temporary Workers in America: Policies that Benefit the U.S. Economy, by
Lindsay B. Lowell (ed.), Quorum Books (April 30, 1999).
“Temp Workers Fill Labor Pool” (human resources management), by L. J. But-
terfield, Fairfield County Business Journal (January 23, 2006), Volume: 45
Issue: 4 Page: 21(1).

In his 1960 book The Human Side of Enterprise, the American social psy-
chologist Douglas McGregor proposed his now famous XY Theory model
of management. Based on research he conducted in organizations during
the prior three decades, McGregor argued that managers fundamentally
fall into either Theory X or Theory Y styles of management. Theory X and
Theory Y are still often referenced in the field of management and motiva-
tion, though more recent management experts and studies have ques-
tioned the inflexibility of McGregor’s model. XY Theory, while not often
referred to as such, is still considered a pertinent description of the man-
agement of people in organizations.
Theory X, which is characterized as “authoritarian management style,”
assumes that the average person dislikes work and will do what he or she
can to avoid work. Under this assumption, people must be forced to work
towards the goals of the organization or risk punishment. Theory X also
assumes that people prefer to be directed in their work, to avoid responsi-
bility, are generally lacking in ambition, and want security above all else.
Those who employ a Theory X management style consider that their job
is to achieve results for the organization despite the people who are re-
sponsible for the tasks.
356
Theory Y, which is characterized as “participative management style,”

assumes that the average person will put as much effort into work as he or
she puts into leisure activities. Under this assumption, people are capable
of applying self-control and self-direction to their work to achieve the ob-
jectives of the organization without the need for coercion, external con-
trol, or threat of punishment. Commitment to and achievement of work
objectives is considered to be a result of the rewards and not the threat of
punishment associated with their achievements. People not only accept
but actively seek out greater responsibility. People with this style of man-
agement use greater imagination and creativity in their approach to solving
problems and managing the people who work with or for them.
In his work McGregor argues that those managers who tend towards a
Theory X style of management generally achieve poor results. On the
other hand, McGregor argues that more enlightened managers who tend
towards a Theory Y style of management generally produce better perfor-
mance and results. In addition, Theory Y managers generally allow people
whom they manage to grow and develop to a much greater degree than
those who use a Theory X style of management.
Despite widely held beliefs that Theory Y management styles are supe-
rior to Theory X management styles, Theory X styles still exist and even
prevail in many organizations. Working for a Theory X boss can be diffi-
cult. These types of managers are known to be results- and deadline-
driven, often to the exclusion of everything else. They can be intolerant,
aloof, or even arrogant. In extreme situations, they are the managers who
have the shortest tempers, demand compliance, and issue threats and
edicts. It is not considered common to see a Theory X manager make use
of project teams, delegate work, demonstrate concern about staff or mo-
rale, or thank or praise others for their efforts or contributions. Worse yet,
these managers have been known to apportion blame rather than learn
from experience. They do not welcome suggestions from others with dif-
ferent perspectives. Managers with this management style will be resistant
to feedback, particularly from peers or subordinates, and unable to hear
feedback as anything more than criticism from superiors. In general, these
managers are unhappy individuals, particularly at work but often in their
personal lives as well.
There are a variety of approaches that may help individuals to success-
fully manage their Theory X bosses. Perhaps the best advice is to avoid
confrontation with a Theory X manager and focus on achieving results, on
357
time, and on budget. Since Theory X managers are very concerned with
facts and figures, work for these individuals should be measurable and re-
portable. Refrain from including information that might be considered in-
consequential such as the human factors or soft issues. And deliver on your
commitments or risk retribution. If you consistently deliver results to a
Theory X manager, you will earn the right to approach your tasks with less
oversight in the future. This approach is considered to be the only ap-
proach that will be successful when managing upwards with Theory X
bosses.
While McGregor’s Theory X and Theory Y management and motivation
model revolutionized much of management theory, there are critics of his
model. Some critics of the model point out that workers today face differ-
ent work environments than when McGregor conducted his research and
that since those workers and managers have much greater job insecurity,
the workplace and culture of enterprises today reinforces Theory X styles
of management. Other critics argue that McGregor’s model assumes that
any manager or individual is capable of changing management styles when
confronted with the apparent superiority of one style over another. Mc-
Gregor’s critics claim that the apparent failure of Theory X management
styles is merely a mismatch of management style with personality style and
that by better matching management styles to individuals, either style
could and would be effective. These critics argue that this is precisely why
Theory X management styles still exist and in fact in some organizations
are quite common. If this is true, then effective training for managers be-
comes more complex and might involve a greater understanding of how
to fit the managers, the teams, team members, and tasks to take greater
advantage of the diverse set of abilities of the individuals involved as well
as the business objectives.
See also: Management by Objectives; Open Book Management; Perfor-
mance Management/Performance Measurement; Stakeholder Theory/
Management
Further Reading
“Douglas McGregor: Theory X and Theory Y,” Thinkers (December 1, 1999).
The Human Side of Enterprise, Annotated Edition, by Douglas McGregor, Mc-
Graw-Hill, 1st ed. (December 21, 2005).
358
360-Degree Feedback
360-Degree Feedback
Historically, and traditionally, bosses “reviewed” their employees once a
year. And in doing so, many didn’t reach much further than their own
notebooks for information on which to base their reviews. Today, many
more companies are conducting reviews that are the product of much
more intensive and complex processes. It’s the norm in an increasing num-
bers of companies, for bosses to ask a person’s colleagues, direct reports,
and sometimes even customers for their thoughts on how that person is
doing, in what areas they excel, and how they might improve their perfor-
mance going forward.
These newer more inclusive and intensive review processes are common-
place in many professional services firms, but they’re also an increasingly
“typical” practice in companies across a spectrum of industries.
The idea of “360-feedback” is one way to approach such a review. Sim-
ply put, 360-degree feedback means finding out what your boss, your col-
leagues, your direct reports, and maybe even your customers, think of your
performance at work. This type of feedback is also often referred to as
“multi-source” feedback. The 360-degree method means that the input
comes from above, below, alongside, and sometimes outside. (Sometimes,
companies will conduct interviews with important clients to get this sort
of feedback; at the other end of the spectrum, a simple e-mail question-
naire asking customers to rate their customer service experience can also
provide insights.)
The idea is that it is useful to be aware of how your performance looks
from many different perspectives, because what looks good to one party
might not look as good to another. If you’re a manager, the theory goes,
it is just as important to know what your “manag-ees” think of your skill
and style as what your own supervisor thinks.
How does the 360-approach help a company? In some cases, it can help
leaders better understand how their management style is received in differ-
ent venues throughout a company. With this understanding, leaders can
then calibrate their style to try to be more effective managers to a range
of employees.
As noted earlier, there are many methods for conducting high-quality
360-degree feedback. Some companies employ third–party consultants to
keep the process objective. Others have formal “input” cycles where em-
ployees write short “reviews” of the people they work with and then a
359
360-Degree Feedback
manager gathers the reviews and builds a “consensus” review from the
pieces. Some top managers hire coaches to conduct these reviews on their
behalf, in an attempt to get honest feedback from direct reports who
might otherwise be reluctant to speak their minds.
The idea can be intimidating. But consider what Kris Frieswick wrote in
CFO Magazine, June 1, 2001, in an article entitled “Truth and Conse-
quences: Why Tough ‘360’ Reviews and Employee Ranking are Gaining
Fans”:
“Working as a senior finance executive at Boeing would be a pretty

great job, right?
Before you answer, consider what would happen during your an-
nual review: CFO Michael Sears would gather all your direct reports
in a room, where they would discuss your strengths and weaknesses.
Then he would confront you with their opinions, citing examples to
back him up.
Few finance executives—or anybody for that matter—would be
completely comfortable with such a review process. But Sears swears
by it. As far as he knows, it hasn’t scared anybody off,” he says.
Frieswick goes on to write that Sears has used this approach for more than
ten years. And that although Sears’ techniques is a “particularly intense”
variation on the 360-degree approach, that in general, the 360 methods,
while controversial, can be a real boon to companies. The issue, Frieswick
writes, is that more traditional review methods focus on measuring what
employees do, whereas this approach gets at how the work gets done, and
what kind of effect it has on colleagues and employees and their abilities
or motivation to be productive. (Picture a manager saying, “You got 6,000
reports done in the last year, and you were never late.” Could that same
manager also be saying, “You scared away three assistants in one year,
and the people you gather data from think that your twenty-four-hour
turnaround deadlines are unreasonable, and are affecting their productiv-
ity. Here’s how . . . ” Quite possibly. And that’s the difference that a 360-
degree review can potentially bring to the table, and what a more tradi-
tional approach might surface.
Many companies find the technique very useful. But like any tool, it is
only as good as the way it is used. 360-degree feedback has a potential
downside as well. If the reviews are not conducted objectively, with clear
360
Time Management
performance goals in mind, strong guidelines for those offering the feed-
back, and careful management of the results, this type of feedback can
quickly become a “gripe-fest” or worse, offering no discernable value to
the employee in question, or the company at large.
As Susan Healthfield says, in an article called “360-Degree Feedback:
The Good, the Bad, and the Ugly” (www.humanresources.about.com):
“As with any performance feedback process, it can provide you with a
profoundly supportive, organization-affirming method for promoting em-
ployee growth and development. Or, in the worst cases, it saps morale,
destroys motivation, enables disenfranchised employees to go for the jugu-
lar, or plot and scheme revenge scenarios.”
Further Reading
The Art and Science of 360 Degree Feedback,” by Richard Lepsinger and Antoi-
nette D. Lucia, Pfeiffer (May 9, 1997).
Maximizing the Value of 360-degree Feedback: A Process for Successful Individual
and Organizational Development (J-B CCL [Center for Creative Leader-
ship]) by Walter W. Tornow and Manuel London, Jossey-Bass, 1st ed.
(March 23, 1998).
Time Management
Although business has progressed from an eight-hour day to a 24/7 envi-
ronment, there never seems to be enough time in the day, the week, the
month, or even the year for most people to get their jobs done. The work
day keeps expanding, but for most there just doesn’t seem to be enough
time to get it all done. As a result, effective time management skills have
become increasingly important. As the Japanese saying goes, “the busier
you are, the more on time you have to be,” a notion that is opposite to
most American norms, where you are permitted to run late when you are
busy.
Time management has been an important part of companies’ outlooks
for nearly the entire history of companies. It is now of paramount impor-
tance, as ever-increasing competition leads businesses to use every advan-
tage—and every minute—in order to get ahead (or even just to survive).
Technology has facilitated this desire: PDAs, cell phones, e-mail, and
computers in general have revised companies’ expectations of their em-
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Time Management
Why I Do This: Dental Office Manager

Tracie K. Crowley
I graduated from college in 1978 with a degree in Elementary Education.
Teaching jobs were few and far between. I was lucky enough to teach 3rd
grade for a year, but then Massachusetts passed Proposition 21⁄2. I had a
choice at this point to either substitute and hope for a job or to look for
something I could depend upon. I decide to move along.
Several years passed and I had a growing family. It was my choice to put
my “career” decisions on the backburner, so I took a couple of “jobs.” I
was hired by my dentist to fill in as a receptionist. Four years later the den-
tist decided he wanted to computerize the bookkeeping. I spent many
hours enjoying learning and using the dental software. I found it easy to
learn and when the owner of the company offered me a job, I accepted.
I spent the next nine years teaching, supporting, and selling computers
and dental software to dentists in New England, PA, GA, FL, and Texas.
Once a dental office was up and running I would work with the doctor
and staff teaching them how to use the system to get the most out of their
practice.
Nine years was a long time. I worked directly with about 200 dentists
and their office managers. It was exhausting. Now I work for just one den-
tist. He was a friend of mine many years before he offered me the job.
Over the past six years we hired a staff that has become a family and we’ve
worked together to build a very successful dental practice. Daily, I do the
scheduling. The schedule is set in terms of production. The doctor’s sched-
ule is set so that the procedures he will be doing net the maximum produc-
tion. Hygiene schedules need to be full with a list of patients to draw upon
in case of a cancellation. I process all insurance claims, hygiene recall, bank-
ing, payroll, billing, and payments.
My favorite part of the job is our patients. I’ve known many of them for
years. We care about them and they care about us. There is a lot of hand
holding in a dental office. Patients are very nervous. I am the first person
they meet and it’s up to me to put them at ease. Once the doctor and the
hygienist have done their part I explain to the patient how to use their in-
surance and other financing options to pay for the treatments they need.
ployees’ productivity and spurred still more efforts to harness technology

to squeeze even more out of personnel.
There are many sources that offer tools for effective time management.
For example, the American Management Association website offers sug-
gestions from Brian Tracy, author of the book Time Power. They involve
understanding what needs to be done, assigning an importance factor to
the items, and adhering to a means to monitor progress. For example:
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Time Management
• Always work from a list. Write down every single task that you want
to accomplish in the day.
• Organize your daily list by priority. Organize tasks on a daily basis
by understanding its necessity. Categories include must dos down
to nice but not essential tasks
• Commit to using any time management system you like. It could
be a hand-based system or a spiffy PDA or Blackberry, but what is
important is using it regularly until it becomes a habit.
Stephen Covey, author of the book The Seven Habits of Highly Effective
People, offers the following two-by-two matrix that sorts out the urgent
(fire fighting type tasks) and the important tasks that face business people
and people in general.
Urgent Not Urgent
Important Quadrant 1 Quadrant 2

Not Important Quadrant 3 Quadrant 4
Many find themselves operating in Quadrant 1 or Quadrant 3, as the

urgent items often override the tasks that can be left for another day (until
that day comes). Some find the quadrants helpful in sorting out their to-
do lists. Covey advocates spending time in Quadrant 2, as tasks accom-
plished in this sector are likely to have the more long term benefit for
the company. Quadrant 2 activities include tasks like relationship building,
planning, prevention, recognizing new opportunities, and recreation.
Yet for all the advice available companies and individuals struggle with
time management. In 2003, Marakon Associates and The Economist In-
telligence Unit conducted a survey of 187 companies with market values
of at least $1 billion to learn how companies invested their time. The re-
sults were published in an article in the Harvard Business Review (Septem-
ber 2004, “Stop Wasting Valuable Time”) and found that senior manage-
ment spent relatively little time together (averaging twenty-one hours per
month), had unfocused and undisciplined ways of setting agendas, and
spent too little time on strategic (important) decisions.
The article advocated several techniques to “get time back.” Among
them:
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Time Management
1. Separate operational decisions from strategic decisions and deal

with them separately.
2. Spend time together making decisions rather than having discus-
sion sessions.
3. Assess the value of each agenda item.
4. Remove issues from the agenda expeditiously.
5. Present viable options so that real choices are on the table and
decisions can be made.
See also: E-mail; Flex-Time; Intranet/Extranet; Job Sharing; Just-in-

Time; 24/7
Further Reading
The Time Trap: The Classic Book on Time Management,” by Alec MacKenzie, MJF
Books, 3rd ed. (March 2002).
Signs of Changing Culture: A Typical Work Week

“American Time Use Survey Summary” by the Bureau of Labor Statis-
tics (BLS) of the U.S. Department of Labor, July 27, 2006. http://www
.bls.gov/news.release/atus.nr0.htm
The Bureau of Labor Statistics (BLS) of the U.S. Department of Labor
reported that in 2005:
• Many more people worked on weekdays than on weekend days.

About 83 percent of employed persons worked on an average
weekday, compared with 32 percent on an average weekend
day.
• Employed persons worked 7.5 hours, on average, on the days
that they worked. They also worked more hours on weekdays
than on weekend days—7.9 versus 5.5 hours.
• Multiple jobholders were about twice as likely to work on a week-
end day or holiday as single jobholders.
• On the days they worked, employed men worked about three-
quarters of an hour more than employed women. The difference
partly reflects women’s greater likelihood of working part time.
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Total Quality Management (TQM)
However, even among full-time workers (those usually working

thirty-five hours or more per week) men worked slightly longer
than women—8.3 versus 7.7 hours.
• About 74 percent of persons employed in management, busi-
ness, and financial operations occupations reported working on a
given day—a greater share than those employed in any other oc-
cupation. Ninety-one percent of people in these occupations
worked on a given weekday, as compared to 83 percent of all
workers.
• Employed women living with a child under age six spent about
an hour less per day working than employed women living in
households with no children. On the other hand, employed men
living with a child under age six worked about the same amount
of time as those living in households with no children.
Total Quality Management (TQM)

In the early 1980s, Hewlett Packard became critical of the quality of U.S.-
made computer chips; it had an eye on the Japanese chip makers and other
companies, who were developing what would later be known in business
parlance as Total Quality Management (TQM). Basically, by checking
quality throughout the manufacturing process, a company could create a
high quality product that had a better chance of being a hit with consum-
ers, reaping profits and prestige.
Interestingly, while the Japanese brought TQM into vogue, it was an
American, W. Edwards Deming, who developed the core principles of
TQM. TQM is a customer-focused tool, with quality for the product de-
termined by the customer’s needs rather than solely engineering standard.
The goal is to satisfy customer needs with quality in the most economical
way. TQM is also employee focused, allowing employees to measure qual-
ity, solve problems, and take remedial actions as necessary to deliver the
product at the standards demanded by customers.
American companies adopted the principles of TQM after the Japanese
proved that quality could be an element of a successful strategy that in-
creased customer satisfaction and reduced costs (less re-working, doing
things right the first time, etc.). Companies such as “Hewlett-Packard and
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Training and Development
Ford Motor Company in the USA and Canada; British Telecom in the
UK; Fujitsu and Toyota in Japan; Crysel in Mexico; and Samsung in South
Korea have found success with their respective TQM programs” (Talha
Mohhamad, “Total Quality Management (TQM): An Overview,” The Bot-
tom Line, 2004, Vol. 17, Issue 1, p. 15).
As Mohhamad further notes in his article, “Managers and experts dis-
agree about how to most effectively apply TQM in their organizations.
Some advise that customer satisfaction is the driving force behind quality
improvement; others suggest quality management is achieved by internal
productivity or cost improvement programs; and still others consider
TQM as a means to introduce participatory management. In general, the
Japanese concentrate on customer satisfaction with a particular focus on
understanding customer needs and expectations. Until very recently,
Americans in general have emphasized the ‘cost of non-conference’ and
the importance of employees meeting the agreed upon requirements for
each process.”
TQM was at its most popular in the mid-1990s, but its star has waned
as other quality management tools have come along, notably Six Sigma.
See also: Six Sigma
Further Reading
Total Quality Management: Strategies and Techniques Proven at Today’s Most Suc-
cessful Companies, by Stephen George and Arnold Weimerskirch, Wiley, 2nd
ed. (February 1998).
Training and Development

One way to think about training and development is that training is learn-
ing about doing today’s job and development is about gaining the skills
to do your next job. Regardless of experience level, almost every employee
needs some level of training when entering a new job. It may be limited
in scope—perhaps a few hours to learn the ropes of doing the job—or it
may be longer term; many days of training if someone is learning a new
computer program or needs to master a series of steps in building a prod-
uct or serving a customer.
Development is more focused on the future, building the skills and ex-
periences that allow employees to grow and advance in the organization.
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Turnaround
There are several tools for employee development, including temporary

assignments, formal education and training, career development work-
shops, and coaching and counseling. Recently, the onus for training and
development has shifted from “something the company does for the em-
ployee” to one where employees are encouraged to be self-learners.
Training and development is acknowledged as a key component to a
successful company. If its people are knowledgeable, the firm will be able
to adapt to changes in the marketplace and continue to succeed. As HR
magazine said in “Talent Management in a Knowledge-Based Economy”
(May 1, 2006), “In today’s knowledge-driven business environment, the
importance of ongoing training and development cannot be overstated.
Increased global competition and the realities of a global market mean
that the skills bar is constantly being raised. Now that organizations (and
nations) are competing on the basis of the knowledge and skills of their
workforces, employee development takes on a heightened significance. Ef-
fective management of workers requires the creation of ongoing opportu-
nities for learning.”
See also: Empowerment; Learning Organization; Performance Manage-
ment/Performance Measurement
Further Reading
Creating, Implementing, & Managing Effective Training & Development: State-
of-the-Art Lessons for Practice, by Kurt Kraiger (ed.), Pfeiffer, 1st ed. (No-
vember 15, 2001).
Turnaround
A turnaround is exactly what its name implies: turning a business around,
usually from losing money to making money. At times, though, a turn-
around might entail another kind of change—in attitude, in customer per-
ception, or in innovation.
An effective corporate turnaround requires strong analytic and leader-
ship skills. With a business under pressure, the leader must communicate
with stakeholders in the enterprise including employees, customers, suppli-
ers, shareholder, and banks so that they understand the timing and scope
of the turnaround plan.
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Turnaround
Within business lore, there are many famous turnaround figures, such as:
Jack Welch, at General Electric. Over a four year period from 1981
through 1985 Welch cut 100,000 jobs and earned the moniker Neutron
Jack after the nuclear bomb that destroys people but leaves buildings stand-
ing. When Welch became CEO of GE, the company had 300 separate busi-
nesses, but beginning in the early 1980s Welch mandated that GE would
only remain in those businesses where it was ranked first or second. By
1985, billions of dollars had been saved and the company restructured.
Louis Gerstner at IBM. When Louis Gerstner became CEO of IBM in
1993, many industry observers predicted its demise as a single entity. Big
Blue, the inventor of the PC, the lifeblood of mainframe computing, was
in disarray. Enter Gerstner, an outsider having come from RJR Nabisco
and American Express Travel Related Services. As the Boston Globe noted
when Gerstner took over at IBM, the nation’s largest maker of computers,
the company had “lost more than $16 billion in the previous four years
while witnessing dramatic decline in market share, product leadership, and
quite frankly, economic relevance.” When Gerstner left IBM in 2003 the
company had enjoyed seven consecutive years of profit and IBM’s stock
price had risen tenfold.
In creating the turnaround, Gerstner acted boldly, aggressively cutting
prices in mainframes to regain market share, selling off assets to raise cash,
and massively reengineering the company to cut costs and increase produc-
tivity. Since Gerstner’s departure another, quieter turnaround occurred at
IBM. In the pre-Gerstner era, IBM had been the king of product develop-
ment; during the Gerstner era it turned to services to drive that turn-
around; and since services stalled Big Blue has become increasingly reliant
on software sales—in 2006, 40 percent of IBM’s earnings came from soft-
ware as IBM under a new leader has reinvented itself again.
Dick Brown at EDS. According to an article by Bill Breen in Fast Com-
pany (“How EDS Got Its Groove Back,” October 1, 2001), when Brown
took over at EDS in January 1999, he “joined a company that was floun-
dering in a world it had created. EDS had pioneered the IT-services indus-
try—the fastest growing industry in the world.” But by 1996 it was “too
slow for the fast-forward IT marketplace.” Yet by the end of July 2001
EDS had increased its quarterly profits by 17 percent, saw a 7.5 percent
rise in revenue, and had an $80 billion backlog of signed contracts.
For many the EDS turnaround demonstrates the importance of culture
in creating change. Again according to Fast Company, “Brown quickly
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signaled that he would not put up with the old culture of information
hoarding and rampant individualism. In one of his first meetings, Brown
moved swiftly to change old beliefs and behaviors at EDS, unleashing a
set of practices—dubbed ‘operating mechanisms’—that were designed to
create a company-wide culture based on instant feedback and direct, unfil-
tered communication.” Changing the norms in how business got done at
EDS was critical to its turnaround success.
Not all turnarounds are successful, nor their leaders famous. One infa-
mous example is that of “Chainsaw Al Dunlop.” As BusinessWeek noted
on July 6, 1998, Dunlap arrived at Sunbeam (the appliance manufacturer)
with sales of $1.2 million in July 1996. “Six months earlier, he had suc-
cessfully completed the sale of Scott Paper Co. Less than four months
later, Dunlap lived up to his reputation as a corporate demolition expert.
He announced the shutdown or sale of two-thirds of Sunbeam’s eighteen
plants and the elimination of half its 12,000 employees.” Yet the turn-
around did not arrive. Ultimately, Dunlap was padding sales with abnor-
mally high inventory levels and accounts receivable. He was subsequently
fired by the board that had appointed him.
See also: Best Practice; Crisis/Risk Management; Downsizing
Further Reading
“Masters of Disaster,” by Regina Fazio Maruca, Fast Company magazine (March
2001, Issue 45, Page 81).
24/7
As the numbers imply, the term “24/7” means twenty-four hours a day,
seven days a week. Although it is now commonly used, the term reportedly
originated within the IT industry, from its need to keep systems up and
running, while providing technological support around the clock.
Now, though, the term has left the bailiwick of IT far behind. Custom-
ers expect to be able to shop, or get all sorts of information or help from
companies at any hour they desire. And this means that the IT employees
are not the only ones who have to be up and available “24/7.” All types
of businesses—at least those who work in customer service—are expected
to be available around the clock.
The following passage was written by Anna Muoio for the September
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1999 issue of Fast Company magazine (issue 28, page 72) and highlights
the 24/7 world operating around us.
The 7-Eleven store isn’t the only place in Boynton Beach, Florida
that’s open all night. So is the human-resources department of Mo-
torola’s fast-paced manufacturing plant. Up in St. Cloud, Minnesota,
Fingerhut (one of the world’s largest direct marketers) offers a car-
starting service for night-shift employees . . .
Though Muoio’s article was written several years ago, it seems we have
not slowed down since then. This is your wake-up call: The night shift
isn’t just for power-plant operators and assembly-line workers anymore.
It’s also for software developers, web producers, stockbrokers, and cus-
tomer-service reps. The sun never sets on knowledge work and the new
economy is open for business, twenty-four hours a day, seven days a
week.”
In her article, Muoio talked about twenty-four-hour child care centers
and employees who dance around in the middle of the night to keep them-
selves awake. She also went on to quote Martin Moore-Ede, MD, who is
the author of a book called The Twenty-Four-Hour Society: Understanding
Human Limits in a World That Never Stops (Addison-Wesley, 1993).
Moore-Ede, according to Muoio, said that most companies don’t cope
with the twenty-four-hour society very well. They staff up, but it’s a
“brute-force” approach, and employees over time “get run ragged.”
Moore-Ede also said, “There is a craziness to the 24-by-7 world,” admits
Moore-Ede who adds, “Just because it’s possible doesn’t mean that it’s
smart.”
Moore-Ede’s statements ring all too true. Consider the fire service,
where some outdated fire and rescue departments in the United States
still require dispatchers to work twenty-four-hour shifts, with only minimal
breaks. Dispatchers are the people who answer the phone when people call
in with an emergency; they also document and help coordinate the re-
sponse. If you’re a firefighter, or a member of the rescue squad, doing a
twenty-four-hour shift generally means you can sleep—in between “calls.”
In and around your work duties, you can also move around, prepare a
meal, exercise, or watch TV. In most departments, dispatchers, too, get
regular breaks. But in some unfortunate venues, they’re “on” almost the
entire time and 24/7 is taken to an extreme.
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Why I Do This: Founder & CEO, Global Marketing Firm

Paige Arnof-Fenn
I am an entrepreneur and business owner, I founded a global marketing
firm to help companies grow and succeed by reaching more customers in
relevant ways. I started my firm by accident really so sometimes I tell peo-
ple I am an accidental entrepreneur. I started my career in finance and
then worked for several big companies before going to small firms and
then founding my own business. I learned a lot in every job but this one is
my favorite, I love the autonomy and flexibility of being your own boss,
but I think I am better having worked for many tough bosses along the
way to learn the ropes.
I worked hard before but I have never worked harder in my life than I
do now working for myself. If you like to push yourself and see what you
can really do without the safety net of a big firm around you, then you will
probably like a more entrepreneurial path too. You have to have a clear vi-
sion and a genuine passion, a good sense of humor, and a lot of energy to
succeed. It is not for everyone but for those who have that entrepreneurial
spirit and attitude, you will never be happy unless you follow your dreams
one day, trust me. When you spend your time thinking about your idea
and trying to figure out ways to execute it because you have to, not be-
cause someone is paying you or telling you to, you have been bitten by the
bug too so embrace it and see where the path takes you. For me, it has
been an incredible journey and I would not trade my experience for any-
thing.
So is 24/7 a good thing? Well, ultimately, the success or failure of a

24/7 work environment probably depends on how the business handles
the phenomenon. In the “new economy,” customers are increasingly ex-
pecting to be able to do things like banking or shopping whenever they
want to, regardless of the hour. Companies that want to meet those expec-
tations need to find out how to do so—and how to ensure that tired or
cranky employees aren’t the norm when the business is going around the
clock.
They might look to companies that have long been operating globally,
for examples. Dealing with time changes created something akin to 24/7
within the international business community long before 24/7 became the
buzzword it is as of this writing. Those pioneering IT departments who
first came up with the term might be another good source of information.
One thing’s fairly certain: 24/7, or “anytime” is rapidly being joined by
“anywhere” in the world of work. Maybe that’s why, along with 24/7,
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there’s also increased interest in terms like “work/family balance,” “being

unplugged,” and “downtime.”
Further Reading
“Are you Sure You’re Up for the 24-hour Economy?” by Anna Muoio, Fast Com-
pany (September 1999), p. 72.
Signs of Changing Culture: Reluctant Vacationers:

Why Americans Work More, Relax Less, than Europeans
Published: July 26, 2006 in Knowledge@Wharton
Beware, Lonely Planet Publications tells readers of its guide to France:
This country largely closes down for the month of August. In Paris, par-
ticularly, shops are shuttered, and even some museums operate for only
limited hours. Locals seem to migrate—en masse—to vacation resorts
along the Atlantic Coast and the Riviera.
The French and, for that matter, people in much of the rest of West-
ern Europe, can afford to check out for a month because they receive
an average of nearly two months a year in paid leave, a combination of
vacation and government holidays, according to the Organisation for
Economic Co-operation and Development. That distinguishes them from
citizens of the United States, who, despite a similarly productive econ-
omy and a comparable standard of living, enjoy about half as much
paid time off. The average American receives approximately four weeks
a year of paid leave, while the average person in France gets seven and
the average German, eight.
Sure, plenty of Americans will take a vacation next month. If you
have ever spent an hour in August sweltering in the lines at Disney
World or stuck in the traffic on New York’s Long Island Expressway,
you know that. But Europeans, with their generous allowances of down-
time, can afford to loll around for the whole month, not just the one
week that’s typical in the United States.
Work and vacation habits in the world’s most economically advanced
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regions weren’t always this way. As recently as the 1960s, Europeans

worked more than people in the United States, according to a 2005
study by Bruce Sacerdote of Dartmouth University and Alberto Alesina
and Ed Glaeser, both of Harvard University. Since then, however, the re-
gions’ appetites for leisure have diverged, with Americans grinding
away for ever-more hours at the office and Europeans taking time to sa-
vor la dolce vita (“the sweet life”). These days, the United States even
outworks famously industrious Japan.
Curse of the Blackberry

What changed? The explanations vary as much as the potential lo-
cales for a summer sojourn. Several experts at Wharton see a role for
culture and history. A Nobel laureate, in contrast, says the difference
boils down to taxes. And Sacerdote, Alesina, and Glaeser chalk it up to
levels of unionization.
Cultural explanations enjoy the most currency in the popular press. In
the United States, publications like the Wall Street Journal brag about
the productivity and work ethic of big-shouldered America, while Euro-
pean commentators sniff about what fun-hating grinds Americans have
become. These are obviously caricatures, but they do appear to hold
some truth, scholars at Wharton say. Europeans seem to place a higher
value on leisure, while Americans tend to prefer earning and spending.
As a result, Americans on average own bigger cars, bigger houses and
more vacation homes, says Witold Rybczynski, a Wharton real estate
professor.
In contrast, Europeans’ self worth is often tied up not with whether
they drive a Lexus or a Porsche but with their ability to enjoy a hefty
holiday, says Mauro Guillen, Wharton management and sociology pro-
fessor and a native of Spain. “It is a sign of social status in Europe to
take a long vacation away from home. Money is not everything in Eu-
rope; status is not only conferred by money. Having fun, or being able
to have fun, also is a sign of success and a source of social esteem.”
Likewise, Christian Schneider, manager of the multinational research
advisory group at the Wharton Center for Human Resources, points out
that European managers often use all of their vacation time, even as
their U.S. counterparts brag about their workaholism. “There’s a ten-
dency to really relax in Europe, to disengage from work,” says Schnei-
der, a native of Germany. “When an American finally does take those
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few days of vacation per year, they are most likely to be in constant
contact with the office.” Call it the curse of the Blackberry.
This cultural chasm can surprise Europeans who come to work in the
United States. Denise Dahlhoff, a director for Wharton Executive Educa-
tion, remembers seeing her vacation days cut nearly in half when she
took a job in the New Jersey office of ACNielsen, a market-research
company. The consultancy she had worked for in Bonn, Germany, gave
her 25 days a year—five days more than the minimum required by Ger-
man law—while Nielsen initially provided only 10. (The United States
has no statutory minimum.) She also learned that, unlike many Ger-
mans, Americans typically check their e-mails even when they leave the
office for just a couple of days. “It’s definitely socially more acceptable
to take vacation in Germany,” she says. “Taking two or three weeks off
without being in touch is fine.”
Cultural differences undoubtedly exist, but for Ed Prescott, a Nobel
Prize-winning economist at Arizona State University, they don’t explain
something as basic as work habits. He instead credits taxes. In a 2003
study, Prescott points out that European countries have much higher
marginal tax rates than the United States. As a result, he argues, Europe-
ans have much less incentive to work additional hours. Why plug away
for 45 hours, instead of 37.5, when the government ends up taking
much of your extra income?
Peter Cappelli, a Wharton management professor and director of the
school’s Center for Human Resources, doesn’t buy that argument. Mar-
ginal tax rates don’t really apply to salaried workers, who are paid a set
amount no matter how long they work and are taxed accordingly. And
it’s these people, not hourly employees, who have lately seen the big-
gest gains in hours worked, he says.
In addition, many surveys have shown that Americans are willing to
accept less money for more vacation, he notes. Even so, their hours
keep creeping higher. “People here are working more than they want
to because that’s cheaper for employers than hiring new employees,”
he adds. “In the U.S., there isn’t much of a way for employees to rebel
against that. Unions only represent a small proportion of people, and
they are mostly blue collar.”
Unions’ Clout
Sacerdote, Alesina, and Glaeser’s analysis mirrors Cappelli’s. They,
too, conclude that different levels of unionization explain why Europe-
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ans work so much less than Americans these days. Simply put, burlier
European unions bargained for more vacation. About nine out of 10
workers in Germany and France are covered by collective-bargaining
agreements, compared with only about two of 10 in the United States,
they point out. Because of their heft, European unions have more mus-
cle in politics and board rooms. As a consequence, they succeed at lob-
bying for policies that benefit their members and employees in general.
In contrast, political decisions in the United States tend to favor em-
ployers.
Yet that argument still seems to leave room for a greater European lik-
ing for leisure; after all, European unions could have fought for higher
pay, not more vacation. Sacerdote, Alesina, and Glaeser say that expedi-
ency, not a cultural predisposition for kicking back, drove their deci-
sions.
In the 1970s, Western Europe’s economy endured a series of eco-
nomic shocks, including the oil crisis, they explain. In response, employ-
ers insisted that they needed to lay off workers. Unions, in turn, pro-
posed retaining workers but cutting everyone’s hours. The outcome
would be the same—a reduction in total hours and thus costs—but it
would achieve savings without layoffs. These “work-sharing” arrange-
ments were often promoted with slogans like “work less; work all,” the
professors write.
“Work sharing may make little sense as a national response to a nega-
tive economic shock,” they add. “But at a single firm, a membership-
maximizing union may indeed find work sharing to be an attractive
policy.”
Once work hours started falling for large numbers of Europeans, a
“social multiplier” kicked in; more people wanted more vacation be-
cause their family and friends were getting it. People enjoy taking time
off together, even if it means inconveniencing themselves to do so.
“We put ourselves through a lot of pain to standardize on things like
our weekends and our vacations because there are big complementari-
ties,” Sacerdote says. Even in America, you can see the hassles that this
tendency causes: Home Depot wouldn’t be so jammed on Saturday
mornings if most people didn’t have the same days off each week.
Regardless of who’s right in the debate, these differences in work hab-
its may not endure. Faced with slow-growing economies and social un-
rest stemming from youth unemployment, some European politicians
have begun to jawbone for change. And corporate managers there
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have begun to squeeze more flexible work rules out of unions, including
longer hours and fewer restrictions on firing, by threatening to move
plants abroad. Just this week, the Wall Street Journal documented how,
in response to these sorts of changes, some German firms have stepped
up hiring at home. If this trend continues, it might not only jumpstart
Western Europe’s economies but also begin to increase average work
hours and decrease paid holidays.
Sacerdote agrees that labor restrictions play a role in Europe’s higher
levels of unemployment. Policies that make employment costly—like
lots of paid leave and restrictions on hiring—can also make employers
reluctant to hire. But he also sees a “bedrock issue” that no amount of
negotiating will solve. “Labor is so much less mobile in Europe,” he
points out. “So when Ireland is booming, it’s not like people pour out
of France into Ireland. Even within Germany, you have high unemploy-
ment in East Germany, yet people don’t move west. In the U.S., it’s la-
bor mobility that helps the labor market. But people don’t just pick up
and move in Europe.”
Undergirding the debate about vacation is the unstated premise that
“more is better.” Besides the occasional Scrooge-like boss, everybody
loves vacation—or at least says they do—and attests to its usefulness as
a way for workers to recharge.
But count Nancy Rothbard, a Wharton management professor,
among the rare skeptics. She cites research that has found that the re-
charge effect lasts about three days. And for many people, those three
days come with a hefty price of their own—and it’s not entirely finan-
cial. “Would more vacation be better for us?” she asks. “It depends on
the tradeoffs.” If it means making less money, some people might pass,
preferring to save for their children’s college educations, their retire-
ments or even a house at the beach—even if they rarely have the time
to use it.
Studies also show that some people bank weeks and weeks of vaca-
tion, she points out. Analysts tend to assume that their bosses discour-
age them from taking their time or that they fear a rock pile of work
when they return. But it’s possible that they just don’t want to leave
work.
Consider parents, she says. Hauling kids on long trips can be more
stressful than staying at home. If people can afford to bring along
grandparents or babysitters, then they can still rest and relax. If they
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24/7
can’t, working may beat refereeing backseat boxing matches in the mini-
van. What’s more, vacations, especially with gas prices at $3 a gallon
and airfares rising, aren’t cheap. “It takes a lot of resources to vacation
with a family. Not everybody can afford to go to Paris.”
Besides, if they go there in August, they might find all the shops
closed.
377
V
Value Proposition
Every company that sells something to customers has a value proposi-
tion—the way in which it adds unique value as compared to its competi-
tors. When customers choose to buy from a company, they buy into the
value proposition of that company consciously or subconsciously, choos-
ing your points of differentiation in the product or its services. For exam-
ple, customers that purchase food from McDonald’s buy into its value
proposition—inexpensive, standardized food, served quickly. A customer
that purchases a Dell computer is subscribing to another value proposi-
tion—customized computers at reasonable prices, but without the ability
to see the machine in advance of purchase. Volvo’s value proposition is
based on the reliability and proven safety of its cars as opposed to cutting
edge design.
In “Customer Value Propositions in Business Markets” (Harvard Busi-
ness Review, March 2006), the authors suggest three generic types of value
propositions:
All benefits. This value proposition is simply the list of all the benefits
a company believes that its offering might deliver to target customers.
There are pitfalls to this approach that include claiming advantages
for features that have limited or no value for the target market and
“that many, even most, of the benefits may be points of parity with
those of the next best alternative, diluting the effect of the few genu-
ine points of difference.”
Favorable points of difference. This type of value proposition ex-
plicitly recognizes that the customer has an alternative. As the authors
point out, this type of value proposition answers the question “Why
should our firm purchase your offering instead of your competitor’s?”
which is a more pertinent question than “Why should I buy your
product?” Yet, “knowing that an element of an offering is a point of
difference relative to the next best alternative does not, however, con-
vey the value of this difference to target customers. Furthermore, a
Virtual Teams
product or service may have several points of difference, complicating

the supplier’s understanding of which ones deliver the greatest value.”
Resonating focus. The authors suggest that “the resonating focus
value proposition should be the gold standard” for value propositions,
noting that “this type of proposition differs from favorable points of
difference in two significant respects. First, more is not better. Al-
though a supplier’s offering may possess several favorable points of
difference, the resonating focus proposition steadfastly concentrates
on the one or two points of difference that deliver, and whose im-
provement will continue to deliver, the greatest value to target cus-
tomers. . . . Second, the resonating focus proposition may contain a
point of parity.”
While value propositions are most readily associated with customers
and marketing, they have begun to be used in other business applica-
tions. For example, in a recent book entitled The HR Value Proposi-
tion (Harvard Business School Press, 2005) the authors argue that
human resources departments need to take on the notion of value,
earn a seat at the executive table based on value, and be able to answer
the question “Why should I listen to you?”
See also: Competitive Advantage; Relationship Marketing
Further Reading
The Core Value Proposition: Capture the Power of Your Business Building Ideas, by
Jack G. Hardy, Trafford Publishing (July 6, 2006).
Virtual Teams
If a large amount of individuals were asked to define the word team, most
would come up with a similar answer—a group working together toward
a common goal. As examples you’ll get innumerable sports references:
baseball teams, football teams, etc. Indeed, working together to win games
is a basic premise of any so-called “team sport.”
Teams have an important function in business as well, and have for de-
cades. Groups of employees are often set up to oversee development or
marketing of a specific product; for instance, video games are often devel-
oped by a team within a company rather than everyone who works there
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Virtual Teams
(e.g., at Sega, the Sonic Team is the group working on, among other
things, the extremely successful Sonic the Hedgehog franchise).
Until roughly fifteen years ago, teams worked together both mentally
and physically, with members present in a single location, though occa-
sionally a member might be “present” on the phone. But beginning in the
1990s, with globalization and the need to be present to customers and
suppliers on a 24/7 basis, virtual teams began to develop. Team members
were scattered across the globe, yet worked together on a variety of tasks
that included developing projects, managing customer service, or crafting
a strategic plan for the organization. This allowed companies to reach far
and wide to utilize the most skilled employees on any team worldwide,
and to have team meetings “on the spot” whenever trouble or deadlines
made a meeting necessary—and without paying for the airfare or wasting
time gathering the team together.
While setting up virtual teams is new for some organizations, others
have been organizing and running virtual teams for many years. As Train-
ing Strategies for Tomorrow (“Nortel and BP Succeed through Virtual
Teamwork,” May/June 2002, p. 3) noted:
For BP, virtual teamwork is relatively old hat. They have been em-
ploying this technique as far back as 1994 and to good effect. For
example, in 1995, work on a North Sea drilling ship ground to a halt
due to equipment failure. Because the workers on board could not
ascertain the cause of the problem, they were faced with the prospect
of taking the ship back to port. Not an appealing option when the
leasing cost was $150,000 a day! Fortunately for the crew, they were
currently participating in a BP pilot project called “Virtual team-
work”—all they had to do was show the faulty machinery to an on-
shore expert through a video satellite link-up which had recently been
installed on the ship. The expert was then able to diagnose the prob-
lem, thus enabling work to continue in a relatively short space of time
and saving BP thousands of dollars.
The same article identifies challenges in developing high performance

virtual teams. Some of them are the same problems as in “in-person”
teams, including interpersonal issues between members, a lack of trust,
and in some cases difficulty using the technology designed to support the
team. Other concerns are ineffective communication (much of communi-
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Virtual Teams
cation is non-verbal), lack of leisure time (as virtual teams can meet at any
time), security concerns (much of the work product is online and vulnera-
ble to hacking), over-emphasis on speed, and too many members (it is
tempting to keep adding people).
See also: Internet; Intranet/Extranet; Networking; Telework
Further Reading
Mastering Virtual Teams: Strategies, Tools, and Techniques That Succeed (Jossey
Bass Business and Management Series), by Debrah L. Duarte and Nancy
Tennant Snyder, Jossey-Bass, 3rd ed. (April 21, 2006).
382
W
War for Talent
In the current climate, businesses have begun to realize that the competi-
tion for talented employees has become worldwide, and has in fact become
so competitive it is nothing short of a war between companies for the
talent to keep them not only afloat but moving into the future.
On October 7, 2006, The Economist article “Survey: The Battle for
Brainpower” put this “War for Talent” into perspective,
In a speech at Harvard University in 1943 Winston Churchill ob-

served that “the empires of the future will be empires of the mind.”
He might have added that the battles of the future will be battles for
talent. To be sure, the old battles for natural resources are still with
us. But they are being supplemented by new ones for talent—not just
among companies (which are competing for “human resources”) but
also among countries (which fret about the “balance of brains” as well
as the “balance of power”).
The war for talent is at its fiercest in high-tech industries. The ar-
rival of an aggressive new superpower—Google—has made it blood-
ier still. The company has assembled a formidable hiring machine to
help it find the people it needs. It has also experimented with clever
new recruiting tools, such as billboards featuring complicated mathe-
matical problems.
With the wave of job losses in the post-Internet bubble, the idea of a
battle for talent seems remote or even far-fetched. Yet, the problem is real.
As Fast Company noted on August 1, 1998 in “The War for Talent,” a lot
of it has to do with demographics. In fifteen years, there will be 15 percent
fewer Americans in the 35–45-year-old range than there are now. At the
same time, the U.S. economy is likely to grow at a rate of 3 percent to 4
percent per year. So over that period, the demand for bright, talented
35–45-year-olds will increase by, say, 25 percent, and the supply will be
going down by 15 percent. That sets the stage for a talent war.
War for Talent
Why I Do This: Divorce Mediator and Lawyer

Susan Matthew
My job is to help divorcing people resolve their differences, solve their
problems, and obtain a divorce through a process that is less time-consum-
ing, emotionally easier, and less expensive than divorce litigation. In order
to explain what divorce mediation is, I have to first explain what it isn’t,
and it isn’t divorce litigation. In divorce litigation, divorcing couples each
hire lawyers and the lawyers and the couples may argue for years over
many different issues in the divorce, from deciding how the property will
be divided to deciding who will have custody of the kids, sometimes asking
a judge to make the decision for them. In divorce mediation, the couples
make the decisions themselves, with my help. I sit with the couples and
help them to talk through their concerns and come up with possible solu-
tions to their problems. My job is to be neutral. I don’t offer any advice
and I don’t make the decisions, but I help the people who are divorcing
have conversations with one another so they can come up with their own
answers to their own problems. Mediators spend a lot of time listening to
people in order to help them solve their problems. Sometimes I write
down exactly what people say to help me explain to the other person how
or why the person is feeling the way that he or she does. I always tell peo-
ple that my job is to help people have a conversation with each other and
to help people figure out what they really want in their divorce.
My typical day involves talking to people on the telephone and explain-
ing divorce mediation to them, meeting with couples for a few hours at a
time in a mediation session, and writing up legal agreements, which docu-
ment the agreement reached in a mediation session. I work in an office
and use the telephone and computer.
I like my job because I went to law school to learn to help people. After
being a divorce lawyer for many years, I decided to stop fighting cases and
start mediating them instead. I like the mediation process because it helps
me to be creative, and it helps me to use my natural skills at listening and
understanding people. I would recommend this job to someone who is
good at listening to other people, who is good at coming up with creative
solutions, and who likes problem solving, talking, thinking, and writing.
Being a mediator is not a good job for someone who wants to be the boss
in a situation. If you are the problem-solver in your family, you are proba-
bly already a mediator!
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Water Cooler
More recent evidence is the number of companies expanding their hu-

man resources function to seek out new people and to upgrade the skills
of current employees. In 2005, “2,300 firms adopted some form of talent-
management technology—and the status and size of human-resource de-
partments have risen accordingly. These days Goldman Sachs has a ‘uni-
versity,’ McKinsey has a ‘people committee’ and Singapore’s Ministry of
Manpower has an international talent division.” (“The Search for Talent,”
The Economist, October 7, 2006).
Moreover, the solution in the war for talent cannot be found in develop-
ing countries. Despite the number of “high-talent” work that has been
outsourced to China and India, these countries themselves have found
increasing shortages of capable people. Nor will the war for talent only be
found in engineering and high-tech; experts predict that there will be a
substantive shortage of skilled people across all occupations.
See also: Headhunter
Further Reading
Managing Across Cultures, by Susan C. Schneider and Jean-Louis Barsoux, Pren-
tice Hall, 2nd ed. (December 3, 2002).
The War for Talent, by Ed Michaels, Helen Handfield-Jones, and Beth Axelrod,
Harvard Business School Press (October 2001).
Water Cooler
Traditionally, the water cooler was just that, a place where people went to
get a glass of cold water on their breaks. It was also a gathering place
where employees could speak informally about a range of issues from the
home team’s performance in the football game to actions going on in the
organization.
For some the water cooler talk symbolizes “real” communication among
ordinary workers broken down without corporate spin. It is informal,
without the need for political or organizational correctness. It is a place to
create the community that brings an organization together. In the opinion
of others, however, water cooler conversations are little more than gossip
and rumor mongering about perceived slights, promotions, and layoffs. As
a result, companies generally try to keep sensitive information from be-
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Water Cooler
coming fodder for water cooler conversation lest it become distorted and
harmful to the organization.
More recently the water cooler has been less of a natural gathering
place—today especially there are fewer communal breaks and more bever-
age options contributing to the decline of the water cooler as a gathering
place. However, the need to gather and informally communicate has not
gone away. Other physical locations have taken the place of the water
cooler. These include the printer; generally employees do not have a dedi-
cated personal printer and as a result congregate waiting to pick up their
print jobs. Another location is the office kitchen, which acts as a site for
community development as well. There is also the “smoker’s area,” where
employees that smoke gather to indulge their habits. What is interesting
about these “new” water coolers is the democratic nature of the groups.
In the informal “smoker’s” water cooler, one would be equally likely to
find junior clerks and executive vice presidents, all drawn together by their
habit and exchanging conversations on a variety of topics from business to
sports and families.
As the Internet has come into prominence the “new age” water cooler
has emerged—e-mail and “blogs” have become the proxy for the water
cooler. But the medium has its problems. For example, a study in the
Journal of Personality and Social Psychology found that emotion and tone
are not always conveyed in e-mail. What a sender thinks is funny may not
be received as such by the recipients because it does not have the associ-
ated body language or vocal clues. Also, unfortunately some employees
believed that these electronic communications sites were a secure place
where people could privately exchange views. In some cases, these views
were brought to the attention of the company and resulted in employees
being let go. Especially in the case of e-mail communication there is no
presumption that the communication is private. Indeed Apple, Delta Air-
lines, Google, Microsoft, and Starbucks have dismissed employees over
blog content
Still, water cooler blogging can also have a positive effect. An Edelman/
Intelliseek survey found that bloggers were twice as likely to put their job
in a positive light than they were to denigrate it.
Whether it be “live” or through an electronic medium, the need for the
water cooler remains strong. Studies have shown that the “water cooler”
chat creates meaningful bonds and sense of community that improves pro-
ductivity and spurs innovation. Additionally such a sense of belonging of-
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Whistleblower
fers an antidote to the problem of retention. Employees with a sense of

belonging and connection with their co-workers are less likely to leave—
and the companies that employ them are more likely to benefit from the
training and investment made in the employees.
See also: Horizontal Organizations; Suggestion Box
Further Reading
The Corporate Culture Handbook: How to Plan, Implement, And Measure a Suc-
cessful Culture Change Programme, by Gabrielle O’Donovan, Liffey Press
(June 30, 2006).
60 People to Avoid at the Water Cooler, by Josh Aiello, Broadway (August 24,
2004).
Whistleblower
To understand the meaning of a whistleblower, it helps to think about a
sporting event. When a foul is committed the referee blows the whistle.
In organizations, especially in business and government, people are called
whistleblowers when they blow the whistle on improprieties. According to
a column by Nancy Cooper, located in the Inc. magazine online resource
center, “Originally, the term ‘whistleblower’ referred to employees who
reported, or attempted to report, fraud in government contracts. How-
ever, as the statutes have evolved, the term has also been attached to pro-
tections for any employee trying to exercise various rights under labor stat-
utes or working to protect the public interest.”
In recent years, there have been many high profile cases of whistleblow-
ers, some of which have been the subject of books and movies. These include:
• Karen Silkwood. The movie Silkwood, starring Meryl Streep, Kurt

Russell, and Cher, tells the story of Karen Silkwood, a famous whis-
tleblower and a chemical technician at the Kerr–McGee’s pluto-
nium fuels production plant in Crescent, Oklahoma. She was a
union member and activist who was critical of plant safety. Shortly
after providing the Atomic Energy Commission with a list of viola-
tions at the plant, Silkwood died in a car accident, fueling some
speculation that she had been forced off the road. In the week prior
to her death, Silkwood was reportedly gathering evidence for the
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Whistleblower
Why I Do This: Vice President/Senior Sales Officer

Treasury Services for Investment Bank
Carol Perrault*
I have just entered Corporate Finance after many years of sales experience
in a variety of industries (telecommunications, fitness, luxury goods, con-
sumer finance). My most recent sales experience of five years with a major
consumer credit and finance company prompted my interest in corporate fi-
nance.
To prepare myself for this desired transition and to have the best chance
of success once in a corporate finance role, I took two years while also
working to complete my Executive MBA. With an undergraduate degree
in English, I believe an MBA would be useful and ultimately necessary as
an industry “door-opener.” Two of the most practical skills that I needed
to make a career change were provided by a graduate business degree—
quantitative foundations for financial decision-making and an overall strate-
gic business orientation for assessing opportunities, risks, and framing deci-
sions.
My job is in Treasury Services for a major bank. Treasury Services han-
dles the core cash management needs of middle to large corporate busi-
nesses (small business is usually adequately served by retail banking prod-
ucts).
Core cash management involves business needs for payment, collection,
liquidity, investment management, and trade finance. Treasury products in-
clude sweep accounts, cash deposit and overnight rates, commercial credit,
accounts receivable/payable management, retail and wholesale lockbox ser-
vices, supply chain financing, ACH debit and Fed wire originations, com-
mercial card (corporate card/purchasing card), and US Dollar Clearing.
Specifically, I sell (working with a Treasury team) four account receiv-
ables management products to mid-large corporate clients that seek to ac-
celerate the posting of their receivables. This is accomplished primarily
through electronic payment channels. My employer bank holds nine pa-
tents for check imaging, collections, and supply chain financing.
In working with a team, I sell both internally and externally. A treasury
officer “owns” an account in terms of overall relationship and then I am
brought in when specific products are needed. At that point, I am selling
externally—communicating the features, benefits, and the value proposi-
tion of my products relative to its price to the prospective client.
I like my job because it offers me the opportunity to learn a lot about
the corporate finance industry from one of the top players in the field. The
breadth and resources of the bank also provides me with the ability in the
future to hopefully get into some different areas of banking I am most in-
terested in (M&A work).
Day-to-day, I enjoy learning from intelligent people who similarly like
what they are doing and have industry know-how. Most peers and col-
leagues are forward-thinkers and team players—doing what needs to be
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Whistleblower
done, and doing it well. And, of course, I enjoy the pace, multi-tasking,
and strategic thinking involved in a complex, long term cycle sales process.
What would someone find “unexpected” about my job? How complex it
really is, but smart, talented people make it look simple—one reason why
remuneration in this field can be highly criticized.
Why would you recommend it?
It is fun (for those who like puzzles), never boring (for good or bad!),
and you can pay your bills doing this.
What kind of person might enjoy doing your kind of job?
Driven, ambitious, competitive, problem-solvers, strategic thinkers, must
like many moving parts.
*Name changed for privacy.
union to support her claim that Kerr–McGee was negligent in

maintaining plant safety, yet at the same time she was involved in a
number of unexplained exposures to plutonium.
• Deep Throat. For many, Deep Throat is the ultimate whistle-
blower from the government sector. Keeping his identity secret,
Deep Throat provided insider guidance to reporters from The
Washington Post newspaper, exposing the Watergate scandal and
resulting in the resignation of then-president Richard M. Nixon on
August 9, 1974. Deep Throat’s identity remained secret for thirty
years until it was revealed in 2005 as W. Mark Felt, a high ranking
official in the FBI. Meeting in secret locations, Deep Throat un-
veiled the web of internal spies, secret surveillance, and political
“dirty tricks” that were part of the Watergate scandal. The report-
ers’ story became the best-selling memoir All the President’s Men,
and two years later in 1976 became a movie of the same name that
prominently featured Deep Throat.
• Jeffrey Winguard. In 1989, Winguard was recruited to Brown and
Williamson Tobacco Corp. to develop a safer cigarette. Although
the program was scrapped, he discovered that the company not
only knew its products were addictive; they also used additives that
they knew caused health risks. Not long after bringing the matter
to the attention of the CEO, Winguard was dismissed. In 1995
he played a significant role in blowing the whistle on the tobacco
companies, leading to a $246 billion settlement between tobacco
companies and forty-six states that sued companies to recoup medi-
cal costs from illnesses associated with smoking.
389
White Collar
For many, 2002 was the Year of the Whistleblower when Time maga-
zine selected three high-profile whistleblowers as its Persons of the Year.
They were Sherron Watkins, a former vice-president of Enron who wrote
a letter to that company’s CEO warning of improper accounting methods;
Colleen Rowley, an FBI staff attorney who revealed that the FBI director
had ignored her request for assistance in investigating what would ulti-
mately become one of the 9/11 terrorists; and Cynthia Cooper, who in-
formed the WorldCom’s board that the company had improperly covered
up almost $4 billion in losses. That publicity has created increased scrutiny
of organizations.
As a former federal prosecutor who represents whistleblowers noted in
BusinessWeek (December 16, 2002), a “do the right thing” culture has
developed in which people believe they must ring the alarm when they
suspect wrong-doing—even if there are high personal costs. Notably it has
“recast whistleblowers from crackpots to national champions.”
As might be expected, whistleblowers are often unpopular in their own
organizations and historically have been dismissed, discredited, and black-
balled. The U.S. Department of Labor, through the Occupational Safety
and Health Administration, protects whistleblowers from discrimination
and investigates claims that whistleblowers have been terminated, de-
moted, and/or harassed. Additionally, under the Sarbanes–Oxley legisla-
tion, whistleblowers only need to make a disclosure to a supervisor, law-
enforcement agency, or congressional investigator that could have a mate-
rial impact on a company’s shares.
See also: Code of Ethics
Further Reading
Whistleblowers: Broken Lives and Organizational Power, by C. Fred Alford, Cor-
nell University Press (February 2002).
White Collar
The term “white collar” came into use during the industrialization of U.S.
business. Generally speaking “white collar” workers were literally that—
workers who wore “white shirts” (with white collars) and ties, and carried
a brief case. They were characterized as the managerial and professional
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White Collar
class. By contrast, blue collar workers were factory and trades people who
carried lunch boxes. Both were members of the middle class, with the
white collar worker generally seen as part of the upper middle class and
the blue collar workers the lower middle class.
The rise of unions further identified the struggle as between the white
collar “management” and the blue collar “worker.” Over time a series of
attributes became associated with white collar workers. They were better
paid, better educated, and worked in clean, comfortable offices. Blue collar
workers were paid by the hour, had high school diplomas, and worked in
the dangerous conditions present on the factory floor. Indeed, the cultural
attributes of both groups created a virtual “caste” system, with white collar
workers at the top and blue collar workers at the bottom.
Beginning in the 1970s, some saw white collar workers as a contributing
factor to the decline in the competitiveness of U.S. manufacturing, espe-
cially in the auto industry. White collar workers were typified as sitting in
offices, drawing big salaries, and making decisions divorced from the reali-
ties of the shop floor where the business of manufacturing really happened.
The rise of the Japanese automakers seemed to further illustrate this point.
While U.S. white collar workers were isolated from the manufacturing line,
their Japanese and to some extent German counterparts actively sought
out the feedback from their blue collar work forces. Process improve-
ments, vital to improvements in quality and prices, came about through
the interaction of the white and blue collar workers. In the United States,
however, with its historically adversarial relationship between the white
collar and blue collar workers, there was a greater emphasis on automation
that would reduce the size of the blue collar work force.
As the manufacturing sector declined in the United States, white collar
workers became more prevalent but their status generally diminished, as
so many people fell within the category. White collar workers were office
workers, middle managers, and IT workers rather than rising executives.
Traditionally, white collar workers were paid by the month based on an
annual salary with no allowance for overtime. As the demand of the work
increased, white collar workers worked longer hours with no extra pay,
and there were suggestions that they would create a union. Outsourcing
and downsizing attacked job stability such that white collar workers had
to seek the protection of unions; several of the fastest growing unions in
the United States at the time represented white collar workers (physicians,
nuclear engineers, and psychologists). As the Wall Street Journal noted,
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White Collar
“American architects, radiologists, and tax accountants feel nervous about

Indian competitors” (hence the white collar unions).
The traditionally strong differentiation between white collar and blue
collar workers had political implications. Political strategists created plans
to attract each group based on their defined attributes. Historically blue
collar workers had been easier to reach. They were already organized
through their unions and could be counted on to turn out in large num-
bers on election day.
Increasingly the lines between white collar and blue collar workers were
blurring. White collar workers were becoming more plentiful and enjoyed
less job security. As white collar workers moved “down,” blue collar work-
ers moved “up,” with many traditionally blue collar jobs requiring ad-
vanced technology and electronics skills.
White Collar Crime
According to the FBI website, www.fbi.gov, “The term white collar

crime was reportedly coined in 1939 by Professor Edwin Sutherland and
has since become synonymous with the full range of frauds committed by
business and government professionals. Today’s con artists are more savvy
and sophisticated than ever, engineering everything from slick online
scams to complex stock and health care frauds.”
According to the Legal Information Institute at Cornell Law School,
white-collar offenses included: antitrust violations, computer and Internet
fraud, credit card fraud, phone and telemarketing fraud, bankruptcy fraud,
healthcare fraud, environmental law violations, insurance fraud, mail fraud,
government fraud, tax evasion, financial fraud, securities fraud, insider
trading, bribery, kickbacks, counterfeiting, public corruption, money laun-
dering, embezzlement, economic espionage, and trade secret theft. The
estimated cost to the United States was more than $300 billion annually.
Penalties for white collar crime included fines, forfeitures, restitution, and
imprisonment.
Some perceived white collar crime as a “victimless” crime, one without
violence that did not result in harm. Yet, white collar crime did have vic-
tims—investors that lost retirement savings, increased cost of business op-
eration that resulted in higher prices, and equally important an erosion of
public trust. In comparison to other crimes, white collar crime was difficult
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White Collar
to prove, as offenders were often highly skilled and adept at hiding their
activities through a series of sophisticated transactions.
From the late 1980s through the present there have been several notori-
ous incidences of white collar crime, including the 1989 indictment of
Michael Milken, a renowned junk bond trader for securities fraud. More
recently the scale of white collar crime in scandals such as Enron, Tyco,
and Worldcom has epitomized corporate greed and corruption.
Beyond high profile business cases, white collar criminals are increas-
ingly turning to technology to fuel their schemes. White collar criminals
armed with computer skills are able to hack not only into financial institu-
tions but also into personal records to “steal identities” for use in other
fraudulent acts.
See also: Code of Ethics; Hacker; Whistleblower
Further Reading
The Organization Man, by William H. Whyte, University of Pennsylvania Press,
New Ed ed. (May 2002).
White Collar: The American Middle Classes, by C. Wright Mills and Russell Ja-
coby, Oxford University Press, Fiftieth Anniversary Edition (August 13,
2002).
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Culture: A Force for Alignment

Reprinted by permission of Harvard Business School Press. From Align-
ing the Stars: How to Succeed When Professionals Drive Results, by
Lorsch, Jay W., and Thomas J. Tierney, Boston, MA: 2002, pp. 141–165
Copyright © 2002 by the Harvard Business School Publishing Corpora-
tion; all rights reserved.
It’s 2 A.M. on Sunday in New York, and a partner at a consulting firm

is expecting a phone call from a colleague in Tokyo. He’s going to
be briefing her about a multinational consumer goods company he
worked with two years ago. She’ll be meeting with the company on
Tuesday morning to pitch a long-term project.
The partner in New York is well prepared for the phone call. He
took time on Friday to pull together a package of information—to
review his experiences, to synthesize his knowledge. Time away from
his current clients. Time away from selling new business. Personal
time. For someone in Tokyo he barely knows. There’s no rule book
that says he has to do this, nor will he get any tangible reward.
Appendix
The phone call lasts three hours. His colleague is grateful; he’s glad
he could help. The meeting on Tuesday goes well; the multinational
signs on. The firm beats a direct competitor; the cash register rings.
It’s 2 A.M. on Sunday in New York, and a partner at another consulting

firm is sleeping. A colleague in Tokyo called him last week, asking for
advice on a multinational client with whom she knew he had a great
deal of experience. He spent fifteen minutes on the phone with her,
giving her an overview. He didn’t offer to do more; she didn’t expect
him to do more. Six years ago, he would have taken the time to be
more helpful. But that was then; this is now. The firm isn’t the same
place it once was; it’s every man for himself these days.
Two weeks later, the client takes its business elsewhere, saying in
a letter that the competitor it has chosen to do business with is “better
prepared to handle the needs of a growing, global company.” The
firm takes an imperceptible step toward mediocrity.
What’s the critical difference between these two firms?

In a word: Culture.
Most people believe that culture is amorphous and intangible—some-
thing that exists and influences behavior at the margin, but certainly isn’t
strategic. They also believe that culture is something you inherit, rather
than something you create and manage.
They’re right—but only to a point. Culture is amorphous; it is intangible.
But it directly affects the behavior of every single person in your organiza-
tion. And it isn’t simply inherited; it isn’t just there. To borrow a quote
from Shakespeare, “What’s past is prologue.” Culture is dynamic. And
whether you know it or not, you manage it on a daily basis. You shape
the culture of your firm by the decisions you make or facilitate, which then
affect behavior, which subsequently becomes part of “how things are done
here.” You may be reinforcing the culture you inherited through your
actions; you may also be breaking new ground, changing the culture
of your firm, slightly or drastically, and significantly affecting your firm’s
competitive position as you do.
As we’ve seen, success has a price. Success can bring complexity—a
larger firm, for example, and one that is operating all over the world.
Success—and growth—can also bring a concomitant need for capital and
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Figure A1 Alignment Pyramid: Culture
currency for paying stars, which may lead a private firm to go public.
Changes like these inevitably threaten the strategic identity and alignment
that have driven the firm’s success. But the firms that endure through
growing pains, changes in ownership, and other challenges manage their
culture to minimize the stress of change. They turn to it as a support
mechanism and as a rudder to remind them of their course in the face of
new challenges. And they work to change it, as needed, to adapt to new
circumstances (see Figure A1.)
What Is Culture?
Reduced to its essentials, culture is a system of beliefs that members of
an organization share about the goals and values that are important to
them and about the behavior that is appropriate to attain those goals and
live those values. The concept of culture had its roots in anthropological
studies in the early twentieth century. Social scientists used the term to
refer to the persistent pattern of beliefs and customs they observed in their
studies of South Pacific islanders, African bush dwellers, and American
Indian tribes, among others. Several decades later, scholars interested in
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business organizations recognized that companies and firms also developed

patterns of beliefs and customs, and that those beliefs and customs had
a strong influence on how employees behaved. And so the concept was
brought into the modern business vocabulary.
Culture encompasses beliefs about everything that goes on in a firm.
Culture is never completely codified in a formal rule book or a policy
manual. Instead it is a set of invisible guideposts that define how people
should behave. It establishes the “dos”—what you are expected to do—
and also the “don’ts”—what is implicitly prohibited—at levels ranging
from the smallest of decisions (what to wear) to the largest (what line of
business the firm is in, or whether to accept a certain client).
At Bain, for example—and this is a small thing, but telling—consultants
are obsessive about communicating through voice mail. Messages are sent
and received by hundreds of professionals every hour, from sites around the
globe. People are expected to check voice mail on Saturdays, Sundays, and
even over vacation. The practice isn’t recorded in an employee handbook
or taught in introductory training sessions. But everyone knows that they
must remain connected, in real time, to case teams, colleagues, and clients.
Memos are rare in Bain’s fast-paced environment, and e-mail, while useful,
is only a backup in its highly oral culture.
Hambrecht & Quist provides another good example. At H&Q, seasoned
bankers routinely take associates with them to client meetings, spending
time after the event to debrief. They explain why they approached the
client this way. Why they didn’t start the meeting that way. Why they
reacted as they did when the client said this. Why they didn’t offer that
information. The practice isn’t required by some written policy. It’s not part
of a formal training program. It’s done because that’s the way Hambrecht &
Quist teaches its junior people the art of client management. It’s done
because “That’s the way we do things here.”
There’s a tendency on the part of many top managers to believe that
they can legislate behavior through edicts and devices such as job descrip-
tions. (Think about the millions of dollars in money and time that have
been spent on elaborate new organization charts and job descriptions that
are expected to transform people’s behavior.) The habit is understandable,
given the industrial heritage of business. And in factory settings, where
employees punch time clocks and work on assembly lines, it’s natural that
policy, procedure, and discipline shape behavior even today.
But in PSFs, where people have so much personal discretion and auton-
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omy, culture has more influence on a professional’s behavior than any

job description or corporate policy ever written. Policies and procedures,
manuals, and job descriptions cannot dictate behavior effectively where
professionals work without close supervision, people are running their own
offices and practices, partners are serving their own clients, and leader-
ship is highly decentralized. Culture is a dominant force—if not the domi-
nant force—in determining how the members of the firm actually behave
toward one another and toward their clients. The greater the degree of
freedom, the more important culture is in determining how an individual
works.
Survival of the Culturally Fit

Unfortunately, there are no clear mortality rates for PSFs. Firms are
acquired or drift into obscurity. Once-powerful firms falter, restructure,
revive, and falter again. Flawed strategic or organizational choices drive
much of this failure, yet the root causes often appear to be subtler. What
is it about the organization of professionals that
allows some firms to adapt to marketplace turmoil and prosper, while
others lose share and gradually decline? Why do some firms seem to thrive
on change while others melt down?
The answer, we believe, is found in the organization’s culture. One
reason we chose to study enduring “best-in-class” firms was to see whether
cultural attributes contributed to their sustainability and prosperity. The
evidence is clear: They do. Much as certain biological traits help species
adapt more readily to evolutionary forces, certain cultural beliefs help firms
adapt to economic turmoil and change.
Just as a firm’s culture guides the decisions its members make, day by
day, about the work they perform for clients and their relationships with
colleagues, it shapes the ways that they respond to internal and external
threats. If a firm’s cultural beliefs are well developed along certain crucial
dimensions, it is likely to overcome threats to its success and eventually
prosper. If those beliefs are underdeveloped or seriously flawed, however,
the firm is likely to fail.
While every organization’s culture is distinctive and in many ways unique,
outstanding firms are remarkably similar in the norms and beliefs that
constitute their cultural core. Why the congruence? The explanation lies
in the tensions that are an inherent part of every PSF’s business model.
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Tensions among partners who are both collegial and competitive, and who
constantly vie for a pool of scarce human resources and for the rewards
of their efforts. Tensions within client teams, which form and reform
around specific assignments and provide a breeding ground for conflict at
a personal level. Complex tensions that cut through the entire organiza-
tion, as the community wrestles with issues across business lines, functional
areas, and parts of the globe. Tensions between the needs of stars and
the demands of clients, which can play out almost hour by hour. Finally,
the perennial tension between satisfying one generation of partners at
the expense of coming generations, between consuming today or investing
for tomorrow.
The further we examined each of the firms in our study, the more
evidence we found of the critical role that culture plays in containing these
fundamental tensions. In every case, a core of beliefs had evolved within
the firm, which helped its members accommodate the tensions endemic
to their business. These beliefs did not link neatly to the tensions. It wasn’t,
and isn’t, a matter of matching specific tensions with specific beliefs. Rather,
each belief offset some or all of the tensions, more so or less so, depending
on the circumstance at hand. These core beliefs guided the firm’s behavior
through business cycles and generations, exerting a powerful force for
cohesion and ensuring their survival.
The Cultural Core

Whether we were looking at accounting firms or information technology
companies, advertising agencies or law firms, five core beliefs characterized
the way that the senior stars thought about their organization and their
own relationship to it: belief in partnership, in extraordinary teams, in
community, in stars first/clients first, and in perpetuity (see Figure A2).
Belief in Partnership
By “belief in partnership,” we mean the conviction that senior stars are
owners of the firm, and that regardless of the legal form of ownership, it
must be governed as a partnership. As described in chapter 6, this means
consensus building among the partners before major decisions about strat-
egy are taken and the involvement of senior stars in other aspects of the
governance of the firm, such as how compensation is allocated and who
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Appendix
Figure A2 The Culture Core
is advanced into the ranks of the partnership. It also means that although
it is all right for senior stars to compete with one another, it is not all right
to let these rivalries get out of hand. The firm’s success is the result of the
efforts of the group as a whole. Respect for one another as colleagues is
critical despite the fact that on an immediate, Monday-morning level,
on any given day, one senior star may be pulling ahead of another in
compensation, or in client portfolio size, or on another front altogether.
Diamond Cluster has been a public company since 1997. Nevertheless,
the officers of the company still refer to, and think of one another as,
“partners” and approve each other’s compensation. If there were serious
dissent about the compensation, the partners could remove the CEO and
other senior managers. Similarly, the partners vote on new additions to
their number. All of them feel that Diamond is their firm, and the leadership
and management responsibility is spread among them, even though much
of the equity is publicly owned. Mike Mikolajczyk, one of the firm’s vice
chairmen, explained their approach this way: “The partnership feeling is
maintained through certain processes, like nomination. Every partner gets
one vote, regardless of seniority or equity stake. So even the youngest
junior partners feel like real partners and an important part of the process.”
An important corollary to these convictions, he noted, is the belief that
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“as owners, we are financially interdependent and must work hard for the
firm’s success.”
A small event at Goldman Sachs, which took place at a leadership seminar
in the early 1980s, says volumes about that firm’s belief in partnership. A
seminar for a group of Goldman Sachs partners was held just days after
the firm had incurred a significant loss in its fixed-income trading activity.
By coincidence, none of the partners from that part of the firm were in
attendance. At the time, it was the custom to kick off these sessions with
a talk and a question and answer session with the senior partner, John
Weinberg. After some brief comments, the first question Weinberg was
asked concerned the loss. Before he could answer, other partners expressed
their concerns; implicit in their comments were criticisms of the fixed-
income partners responsible for the loss.
Weinberg’s response? If the firm was going to make as much money
as it did on the upside, the partnership also had to expect some losses.
He went on to confide that those involved had come to him personally—
some of them practically in tears—and that nobody felt worse about what
had happened than they did.
Implied in Weinberg’s words—very thinly veiled—was the partnership
mindset: Don’t go around casting blame on your partners, who have
already accepted their responsibility. The right thing to do is to support
them. Just as you’ll be supported if you encounter a rough patch.
Partnership, in the legal sense, was the founding form of many PSFs,
and this belief takes its roots from that fact. The Goldman Sachs example
we just mentioned took place long before the firm went public. But make
no mistake; the partnership mindset—the core belief in a sense of shared
destiny—is very real in all of these firms, regardless of ownership structure.
The events described above, with a different cast of characters, could
happen at Goldman today.
Belief in Extraordinary Teams

In all the firms we studied, the work of serving clients is performed by
constantly changing teams of professionals. Because the need to serve
clients well and in a timely fashion is paramount, life in those teams can
be hectic and complicated. There’s always a temptation for team members
to want to look good and advance their own careers to the detriment of
their teammates. This core belief discourages that kind of behavior. It also
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sends a strong signal about how you should relate to the people with
whom you work every day on project teams: people with whom you may
very well be competing for advancement or income, and under circum-
stances in which the tradeoffs between getting credit for yourself or for
the team may be acute and personal.
This belief mitigates the tension among stars as they strive for personal
success while simultaneously serving clients well together. (In that way, it
is a natural extension of the belief in partnership that guides the senior-
most stars of a firm.) Young stars learn that they must work together to
succeed. Being an effective team member is what counts; that’s how you
succeed personally. In the words of Pat Gross, founder and chairman of
the executive committee at American Management Systems:
I think part of our advantage is the way we put effective teams

together. If you deconstructed our teams and looked at the individuals,
I’m not sure we could argue that the individuals by themselves are
substantially better than other people. But there is a very strong, team-
oriented culture at AMS. We say, “Let’s get the right people together
to solve a problem,” and there’s a lot of bonding that goes on. We
have a common mission: the project team. It’s the body of the com-
pany. When people come in, that’s what they see. That’s what they
hear. When they come, they join a project team, and if they’re not
comfortable with that, they don’t stay around very long. People try
to communicate this in the recruiting process, because it’s at the core
of the way people at AMS think and operate.
Belief in Community
Belief in community is the proposition that at the end of the day we’re
all part of one firm, and we are expected to work together and help each
other. A natural extension of the two beliefs that precede it, this one is
all-encompassing and includes everyone, not just partners or senior stars,
no matter the location. People in the United States, people overseas, people
in every practice area (remember the example with which we started
the chapter). This belief keeps everyone working together, regardless of
specialty, level of experience, or geographic location. It keeps in check the
tension that naturally develops as people identify with the goals of their
particular part of the firm.
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“People can’t be worried about who gets the credit, and they can’t be
worried ‘this is my deal, my client, stay out,”’ said one Goldman Sachs
banker, talking about the day-to-day efforts of the firm. “In order to serve
clients, we need to bring together the skills related to hundreds of products
and we have to bring to bear many parts of the firm. There needs to be
a culture of excellent communication and commitment to the idea that if
the firm does well, we will all do well, as opposed to ‘I need to figure out
how to look good, how I can do better.’”
As Patrick Pittard, CEO of Heidrick & Struggles, put it, “If you’re in a
ditch, you’ve got people who are there with you trying to get you out.
You’re not alone in troubled times. Say you have a search that has gone
all the way through the process and you think you have it completed and
then at the last minute the candidate bails out on you. Well, you send a
voice mail and you get thirty responses on how to help yourself.”
Belief in Stars First/Clients First

We’ve been arguing, up to this point, that the people you pay are more
important than the people who pay you. We’ve been emphasizing that
point because we recognize that the natural tendency is to put clients first,
and we wanted to stress the strategic importance of stars. But the fact is,
in these outstanding firms, stars and clients are considered equally impor-
tant, and a natural and constant tension exists as each sector vies for the
center position on the firm’s radar. You can’t have satisfied clients without
stars, and you also can’t have stars without satisfied clients.
The dilemma truly is that straightforward. If you’re overinvesting in your
clients, you’ll lose your stars. But if you don’t meet clients’ needs because
of your stars’ desires, you won’t be competitive. The belief that both are
equally important enables firm managers to work for a balance in meeting
conflicting demands between clients and stars. Diamond Cluster deals
with the importance of both constituencies in an interesting way: Young
professionals at Diamond are told “Clients first, firm second, yourself third.”
Partners, however, are told that the emphasis should be “Stars first, clients
second, firm third.” Whether stars or clients are given priority at any given
time depends on circumstances. But over the long run, the balance between
the two is critical to success. If the firm is to succeed, therefore, both
these constituencies must be proactively managed, and each must think
ultimately it occupies the number one spot.
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Belief in Perpetuity
This core belief refers to the shared understanding, at the senior level,
that you and your peers are building a firm that will transcend generations.
That you’re not only “in this together” with your current fellow partners,
but also that part of your job is to help create a firm that will endure so
future partners can succeed. It’s the long view, and it drives people to
behave selflessly in ways that support the firm.
Like many other New York law firms, Skadden Arps was challenged by
the economic downturn in the late 1980s. The firm had always maintained
a performance-based compensation scheme tied to each partner’s contribu-
tion to firm results. But in the worsening economic climate, Joe Flom, one
of the senior partners, along with several peers, became worried that the
younger generation of partners would earn so little that the firm might
lose many of them. Their proposed solution? That the older partners take
a cut in pay so that the next generation could be better compensated. The
partners approved the plan. And the result was not just a change in the
partner compensation plan but also a reaffirmation that the firm was built
to endure, that each generation should worry about the next.
What happens when questions arise about how to distribute the wealth
among different generations at your firm? How do clients get passed on
from retiring partners to their younger peers? This belief in perpetuity
guides those kinds of events—balancing the tensions between older and
younger stars and achieving results that work for the long-term success
of the firm.
Culture and Consequences

In aggregate, these core beliefs constitute a way of thinking about how
an individual star fits into the ecosystem of a firm. The beliefs shape how
people behave on Monday morning, but they do not specify that behavior
in an absolute sense. The belief in partnership, for example, motivates
senior stars to collaborate as partners; the details of that collaboration
change as the partnership expands and diversifies. Just as a belief in democ-
racy or capitalism propels governments and markets, so do core beliefs
propel outstanding PSFs.
The interdependence of these core beliefs is striking. In the absence of
one or more beliefs, a firm will eventually stumble. Without “partnership,”
a firm will gradually disintegrate at the top, as senior stars compete among
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themselves. Without “extraordinary teams,” clients will be underserved

and promising young stars will resign for more fulfilling employment oppor-
tunities. Without “community,” an organization of independent silos will
rapidly evolve—a place where knowledge is hoarded, resources are never
shared, and quality inevitably deteriorates. If a culture is unable to balance
stars and clients, sooner or later one will win at the expense of the other
(and either stars or clients will defect). Finally, without a belief in perpetuity,
a firm will, at a minimum, underinvest in the future—and more than likely
sell out to the highest bidder whenever an attractive cash-out opportunity
presents itself—without considering whether this is in the long-term interest
of the firm’s owners.
There is no escaping the direct linkage between culture and conse-
quences. In robust economic times, commercial success may mask cultural
deterioration. In downturns, the flaws become readily apparent. As the
Japanese say, “A falling tide exposes all rocks.” Culturally strong firms
accommodate and adapt to recessions, while culturally flawed firms strug-
gle to hold ground. Culture can emerge as the defining competitive advan-
tage, in part because it is impossible to copy. Individuals in great firms
rally around a powerful cultural core, while in other firms, they obsess over
their personal circumstances as their business flounders.
Consider Goldman Sachs, whose business principles reflect the firm’s
commitment to its core beliefs. Written down many years ago by John
Whitehead, then one of the managing partners, they are still published in
the annual report each year (see Box A1). The message is clear to employees
and to clients. Regular publication is one small way that Goldman nurtures
commitment to these core beliefs.
Culture Binds
Goldman Sachs’s decision to go public might provide the best example
of a case where culture—including the firm’s core beliefs—sustained the
firm through a time of incredible change.
For over ten years, under the leadership of three capable individuals,
Steve Friedman, Jon Corzine, and Hank Paulson, the partners of Goldman
Sachs debated the merits of selling some of the firm’s equity into the public
market. The partners had decided to take on two limited partners, the
Bishop Estate and Sumitomo Bank, to raise needed capital in 1986, 1992,
and 1994 without abandoning the partnership form of ownership. But the
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Box A1 Goldman Sachs’s Business Principles
1. Our clients’ interests always come first. Our experience shows that if we
serve our clients well, our own success will follow.
2. Our assets are our people, capital, and reputation. If any of these is ever
diminished, the last is the most difficult to restore. We are dedicated to
complying fully with the letter and spirit of the laws, rules, and ethical
principles that govern us. Our continued success depends upon un-
swerving adherence to this standard.
3. We take great pride in the professional quality of our work. We have an
uncompromising determination to achieve excellence in everything we
undertake. Though we may be involved in a wide variety and heavy
volume of activity, we would, if it came to a choice, rather be best than
biggest.
4. We stress creativity and imagination in everything we do. While recog-
nizing that the old way may still be the best way, we constantly strive
to find a better solution to a client’s problems. We pride ourselves on
having pioneered many of the practices and techniques that have be-
come standard in the industry.
5. We make an unusual effort to identify and recruit the very best person
for every job. Although our activities are measured in billions of dollars,
we select our people one by one. In a service business, we know that
without the best people, we cannot be the best firm.
6. We offer our people the opportunity to move ahead more rapidly than
is possible at most other places. We have yet to find the limits to the
responsibility that our best people are able to assume. Advancement
depends solely on ability, performance, and contribution to the firm’s
success, without regard to race, color, religion, sex, age, national origin,
disability, sexual orientation, or any other impermissible criterion of cir-
cumstances.
7. We stress teamwork in everything we do. While individual creativity is
always encouraged, we have found that team effort often produces the
best results. We have no room for those who put their personal interests
ahead of the interests of the firm and its clients.
8. The dedication of our people to the firm and the intense effort they
give their jobs are greater than one finds in most other organizations.
We think that this is an important part of our success.
9. Our profits are a key to our success. They replenish our capital and
attract and keep our best people. It is our practice to share our profits
generously with all who helped create them. Profitability is crucial to
our future.
10. We consider our size an asset that we try to preserve. We want to be
big enough to undertake the largest project that any of our clients could
contemplate, yet small enough to maintain the loyalty, the intimacy,
and the esprit de corps that we will treasure and that contribute greatly
to our success.
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11. We constantly strive to anticipate the rapidly changing needs of our

clients and to develop new services to meet those needs. We know that
the world of finance will not stand still and that complacency can lead
to extinction.
12. We regularly receive confidential information as part of our normal cli-
ent relationships. To breach a confidence or to use confidential informa-
tion improperly or carelessly would be unthinkable.
13. Our business is highly competitive, and we aggressively seek to expand
our client relationships. However, we must always be fair competitors
and must never denigrate other firms.
14. Integrity and honesty are at the heart of our business. We expect our
people to maintain high ethical standards in everything they do, both
in their work for the firm and in their personal lives.
Source: © Goldman Sachs. Reprinted with permission.
discussions about becoming a corporation and selling equity to the public

continued throughout the 1990s. At least six times, the partners vetted
the issues thoroughly, declining to go public for the last time in 1996.
In 1998, the discussions again gained momentum, culminating with a
Quaker-style meeting of all 190 partners at a location outside New York
City at which the partners aired their hopes and concerns about the pro-
posed public offering. “For people who have devoted their lives to this
place, it was exhausting, but in some ways amazing,” one partner told
the New York Times. “People did not hold back.”
The arguments for selling 15 percent of the firm’s equity to the public
were mainly financial. It was a means to realize the immense value of the
firm’s equity for its partners and to raise capital for the firm’s future.
Most apropos to the topic of culture were the reasons put forth for not
going public. The fear was that the core belief in the partnership, as we
have called it, would be lost, endangering the firm’s ability to serve clients
and attract stars. At the final meeting, partner after partner, even those
in favor of the idea, voiced this concern.
Finally the partners voted for the IPO, in essence authorizing the firm’s
management committee to work out the offering terms and timing.
The IPO isn’t the end of the tale, however. The firm sold 15 percent of
its equity to the public (and subsequently made a secondary offering of
40 million shares) and Goldman Sachs is legally a corporation, but the
senior leaders and the partners have done all they can to retain a partnership
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culture. The firm retains the partner compensation plan for which up-
and-coming stars are chosen, just as before they were elected into the
partnership. The firm retains a partnership committee as one way of giving
voice to its partners. Meetings of the partners are still held to discuss
important issues and decisions. In the eyes of the public and the capital
markets, Goldman Sachs may be a legal corporation, but in the eyes of its
senior stars it is culturally still a partnership, and they are working to sustain
this culture.
Convictions, which people hold dear, are not easy to alter. So when a
decision that might affect “the way we do things” comes to bear, it’s
only natural that a partnership—and an organization at large—would be
reluctant to make the move. Recognizing that a strong culture is like glue
can help you overcome such concerns. Culture binds organization, strategy,
and stars together in the face of significant requirements for change. It
can help retain core beliefs and values while allowing major changes in
strategy or organization.
So when a firm goes from private to public, as Goldman Sachs, Korn/
Ferry, and so many others have done, the firm’s leaders can use the cultural
beliefs associated with the partnership to maintain the alignment that
would otherwise be threatened. The formal trappings associated with public
shareholders—quarterly earnings reports, a board of directors, for exam-
ple—can be handled in a manner that supports rather than threatens beliefs
about partnership and community.
The same holds true for international expansion where a firm’s culture
can provide a blueprint for foreign offices. As McKinsey expanded globally
to eighty offices in thirty-two countries, replicating the culture was a critical
imperative. Despite immense variations in nationalities and time zones,
professionals share a common set of beliefs about partnership, teams,
community, and clients and stars.
Culture is a stronger force for unity and coherence than any formal
document could ever be because the stars of a firm with a strong culture
have an emotional commitment to their beliefs. The Goldmans and McK-
inseys of the world have been able to maintain consistent strategic and
organizational approaches due to the strength of their cultures. Wherever
these firms operate—from New York to London to Delhi to Tokyo—their
professionals share a culture that binds them into common practices, sus-
tains their alignment, and gives them an advantage in attracting clients.
Clients perceive a clear and consistent strategic identity because the firm’s
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professionals—wherever they work—share a set of beliefs that maintain

this consistency.
This is especially true when firms are experiencing rapid growth. Growth
delivers a double whammy; it exacerbates organizational complexity and
introduces legions of “culturally raw” recruits. Both characteristics may
easily undermine or confuse cultural beliefs. When a firm hires partners
from industry or completes an acquisition, the dynamics are even more
challenging. Yet firms with strong cultural beliefs are bound together de-
spite these centrifugal forces. Weaker cultures on the other hand are blown
asunder. This in part explains why mergers and acquisitions of PSFs so
often fail in retaining stars. The culture of the acquirer overwhelms the
culture of the acquired, and this alienates the stars of the acquired firm,
causing them to leave.
Strong cultures bind together organizations during times of strategic
change—ranging from IPOs to international expansion to acquisitions.
Once again, core cultural beliefs help sustain competitive advantage for
established firms. How might this apply to first-generation PSFs?
Culture Builds
First-generation professional firms always struggle and most do not suc-
ceed; building an enduring firm is exceptionally challenging. Nowhere was
this more evident than in Internet-focused technology consulting, a sector
that experienced a spectacular run-up and an equally spectacular fall.
Although few of these companies will survive, much can be learned from
the role that culture played in their rapid growth and subsequent collapse.
In 1996, Bob Gett, founder and CEO of newly formed Viant, began to
create his organization’s culture from scratch. After a lengthy professional
career, at firms ranging from Fidelity Software Development Company to
Cambridge Technology Partners, he well understood the importance of
culture. In fact, to emphasize the power of culture, he dubbed himself the
“Chief Cultural Officer.” While Viant’s culture was a critical ingredient in
its ramp up to over $150 million revenue in four years, it was even more
important as the industry collapsed and Viant saw its market capitalization
decline by 95 percent.
Viant’s belief in partnership was forged as Gett recruited his senior team.
Strong capabilities were necessary but not sufficient to get in on the ground
floor of this “new economy” consulting firm. “I looked for culture builders
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who shared a dream about Viant’s potential,” explained Gett. These values
and beliefs became the common denominator across what was otherwise
a diverse leadership team.
The top ten leaders (they were never referred to as “managers” or
“executives”) met for a day to write down their shared beliefs as a touch-
stone for the expanding organization. Even before they specified the full
details of their business plan, these “partners” shook hands on their cultural
contract. Their desks were arranged together in the large open space that
was the firm’s new office. “We were desk to desk every day,” said Gett.
“There was no escaping our shared beliefs as leaders in this venture.”
The cultural belief in extraordinary teams was integral to Viant’s competi-
tive strategy. Traditionally, clients had purchased business strategy services,
creative services, and technology assistance from different firms. Viant
intended to change this paradigm, to blend the three disciplines from very
different worlds, to innovate at the seams where the three intersect. To
better serve clients, Viant needed to somehow operationally integrate the
strategic skills of a Bain & Company with Ogilvy & Mather’s creative talent
and IBM Consulting’s technology capabilities—and to do this effectively
on every single client team!
Part of the solution resided in performance management. Teams (rather
than individuals) were held jointly accountable for projects. Consistent
salary ranges and performance criteria were applied regardless of a consul-
tant’s expertise. Peer review became an integral component of annual
performance reviews, which subsequently determined bonuses and career
progression.
Performance management systems reinforced the cultural belief in di-
verse but integrated teams. As the firm grew, the culture shaped and
informed behavior, encouraging opinionated consultants to be compas-
sionate about each other’s views. The belief in extraordinary teams (and
a potential competitive advantage) was born.
Viant’s core beliefs in partnership and teams provided the foundation
for a pervasive belief in community. This was not some “feel good” factor
to add a dose of “cool” to the business mix. On the contrary, this cultural
dimension was carefully designed to help deliver on the company’s strategic
ambitions.
“People here are really pounding away,” explained Gett during the firm’s
heyday. “They have to feel great about sitting next to other guys and gals
in the room.” Thus the rationale for an office layout that contributed to
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spontaneous interactions. “Vianteers,” as Gett called them, also abhorred

hierarchy. It took four years before the community generated its first
organizational chart.
Office size was capped at 125 people to avoid diluting the sense of
community. New offices were “spawned” by permanent and temporary
transfers to new locations where their primary job was to inoculate the
emerging communities with Viant’s cultural beliefs.
A belief in community was not only critical to retain and motivate stars in
an exceptionally competitive space; it was absolutely necessary to facilitate
effective knowledge sharing. Gett believed that typical consulting firms
deliver client value that rests primarily on the strength of an individual
team, rather than on the knowledge and energy of an entire firm. Gett
intended to harness the “power of the community” to develop a culture
of knowledge sharing and learning, a place where
“silos” and consulting “rock stars” gave way to selfless collaboration. In
2000, Fortune profiled Viant in an article entitled “The House That Knowl-
edge Built.”2 It referenced community-building tactics ranging from a
three-week new-employee orientation (called “Quick Start”), to staffing
rotations that created networks of personal relationships across the firm.
While these systems reinforced a sense of community, it was the cultural
belief that dictated daily knowledge sharing across organizational bound-
aries.
The community orientation was deliberately designed to provide excel-
lence in servicing clients. How, then, did such a client-centered culture
trade off between its star performers and its important clients? As Gett
explained: “We always take the high road in balancing the demands of
our clients against the needs of our consultants, even though we may
suffer short-term pain as a consequence. The high road means that we
never compromise the client situation, that we primarily take their view.
Our cultural belief is that people will be taken care of, that their sacrifices
will be recognized.”
Trading off in favor of current clients did not mean sacrificing the future
of the firm, however. In a powerful cultural statement, Viant management
decided to constrain their growth during the 1998/1999 halcyon days of
market expansion. “We were concerned that excessive growth would
undermine our culture and potentially create client excellence problems,”
said Gett. Despite competitive pressures to maximize growth, spiced by
media commentary that Viant was falling behind, Viant held growth to a
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modest 100 percent per year (compared to the 300 to 400 percent typical
for the industry at the time). “We wanted a culture centered on being the
best, not the biggest, to strive for mind share rather than market share,”
Gett proclaimed.
This perspective and the values it reveals were central to Gett’s dream
of Viant’s endurance. “Viant was not ‘built to flip’ like so many venture
capital–funded start-ups,” he told us. “I have always been driven by com-
mitment to people and excellence, rather than ego or money. Hopefully,
Viant will be ‘built to last.”’
At this time, the jury is still out on his ambition. The bursting bubble of e-
commerce has led to profit shortfalls, layoffs, and consolidation throughout
Viant’s industry. Once again, however, Viant’s cultural beliefs have come to
its aid—though probably not enough to save it. Because the firm nurtured a
belief in perpetuity early on, employees were better able to view the market
turmoil from a long-term perspective. The intense pain of layoffs was
tempered by the understanding that it was “the right thing to do for the
firm.” “Survivors” were motivated to fight the good fight and do whatever
it took to survive and prosper. Voluntary turnover has remained at a low
(by industry standards) 12 percent despite the harsh reality that employee
equity is virtually destroyed.
Whatever the future holds in store for Viant, the value created by its
culture is unmistakeable.
Culture Bends
A strong culture is a common attribute of successful professional firms.
Most of the leaders of the outstanding firms we’ve interviewed, in fact,
believe that culture is one of their key competitive advantages. McKinsey’s
legendary leader, Marvin Bower, for example, consistently emphasized the
importance of being a “true professional” regardless of circumstance. That
cultural attribute is still central to the firm because it is a large part of what
makes McKinsey, McKinsey. It is a critical piece of the firm’s strategic
identity and a strong draw for clients.
But if culture can be a competitive advantage, it can also be a competitive
disadvantage. What if a fast-paced, aggressively informal e-
commerce consultancy is pitching to a traditional, conservative, industrial
company? What if that consulting firm—whose livelihood depends on a
client base that includes such traditional companies—is unable to present
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its case in a way that resonates with the manufacturer’s executives? If

your culture is working against the firm, you have to change it. You start
from where you are—what lies ahead is up to you.
Consider how dramatically the culture at Ogilvy & Mather changed
under the leadership of Charlotte Beers. When Beers took over as CEO
and chairman of Ogilvy & Mather Worldwide in 1992, the firm was losing
important clients and facing declining revenues. The agency had just been
acquired in a hostile takeover by British holding company WPP, and morale
was low. Star performers knew that their game plan wasn’t working, but
they were suspicious of Beers, of Sir Martin Sorrel, WPP’s CEO, who had
chosen her, and of change under Beers’s rule. Sorrel, they feared, was
focused only on the bottom line, and wasn’t interested in preserving the
dedication to creative values in which they deeply believed—values instilled
by the firm’s legendary founder David Ogilvy. Beers, for her part, was also
personally suspect because, as she put it, she was “the daughter of a
Texas cowboy,” whose past success had not been with a big international
Madison Avenue agency, but rather with a smaller, domestic firm in Chi-
cago.
Put another way, the stars at Ogilvy were worried that Sorrel and Beers
represented great threats to the firm’s founding culture—a culture they
were proud of and part of—a culture that had once made the firm a great
success.
Beers understood that, and what she did showed the firm’s stars that
not only did she acknowledge and respect Ogilvy’s culture of creativity
but she also knew what to do to build on that foundation, instill new,
critical core beliefs, and return the firm to greatness in its new context.
In her first few months at Ogilvy, Beers spent a lot of time talking with
investors and clients. She knew that the culture at Ogilvy was something
to be preserved and strengthened, but she also came to the realization
that the firm had no clear direction. By May 1992, she had mustered a
group of Ogilvy employees—some heads of key offices or regions, some
creatives, some account directors—who she felt were on her wavelength.
These were people who wanted to sustain the culture but also understood
the need to reinvent the agency’s focus and structure. This “thirsty for
change” group, as it was called, met first in May 1992 in Vienna, essentially
to raise issues, to talk about what it would take to reinvent and revitalize
the firm. Among their primary concerns was Ogilvy’s geographic fragmen-
tation—the firm was run essentially as a group of national kingdoms and
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was not set up to meet the increasing global needs of multinational clients
in a seamless way. Basically, the firm’s culture lacked a core belief in
community.
They met next in August 1992 at the English resort Chewton Glen. Out
of that meeting came the “Chewton Glen Declaration,” which set three
strategic goals for 1993: (1) client security—focusing energy on current
clients; (2) Better Work, More Often—a call to move beyond the traditional
Ogilvy credo, “We Sell, Or Else,” and develop ways to make brand the
binding focus of the firm; and (3) Financial Discipline—a call to get control
over the firm’s resources. Mostly, the goals were a call to reinforce the
firm’s values about creativity, but in a way that better met client needs.
Shortly thereafter, Beers made a major change in the firm’s structure.
She created a third dimension in its matrix organization: Worldwide Client
Service. (The other two are geographic and functional.) The purpose of
the new dimension was to put a capable leader, Kelly O’Dea, in charge
of encouraging cooperation and coordination in serving global clients across
the high national barriers that were part of the old culture. When the
agency won the IBM worldwide account, the need for the change became
evident to everyone in the firm; without the new structure—and the corre-
sponding new belief in the “global community” philosophy—Ogilvy could
never have provided seamless service to such a multinational client.
Reduced to its essentials, the old culture just didn’t work as well as
it needed to in a changing marketplace. Beers and her “thirsty for change”
friends used their leadership skills, their new ideas about the importance
of brand, and their new structure to support the important embedded
beliefs about creativity and tie them more closely to the brand needs of
clients. At the same time, they enhanced the core belief about the impor-
tance of community.
So What?
Each generation transmits its culture to the next. In older firms, that
means that the culture has been passed through many generations, often
through stories—some accurate, others probably myths. What matters
isn’t absolute veracity but rather that the intended message gets through.
Remember the partners at Goldman Sachs, for example, who say they
received their first performance review from former senior partner Gus
Levy while they were in the men’s room with him. True? Well. . . . But
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even if the accounts aren’t entirely accurate, they’re amusing, they get
attention, and the message is clear: “We believe in performance reviews
and they’re going to be direct and personal.”
Figures like Goldman Sachs’s Levy, McKinsey’s Bower, Ogilvy & Mather’s
David Ogilvy, and Fulbright & Jaworski’s Leon Jaworski become somewhat
larger than life through such oral histories. But beware. It’s too easy to
think of culture as something personal—the stuff of legends and heroes.
In fact, the notion that culture flows from any few leaders—no matter
what their stature—is true mostly in a figurative sense. No single leader can
embody the culture of any given firm, especially if that firm has hundreds, or
thousands, or tens of thousands of employees. Most of the members of
the firm never see the top brass. And if they do, it’s for a few minutes
each year, when they are on a stage or appearing in a videotape.
A firm’s culture will be influenced to a modest extent by the sheer force
of personality coming from the person on that stage. What they say and
how they say it does have an impact. But, as we’ve said, culture is influenced
more substantively through the decisions that a person—and “partners”
throughout the firm—make, which then shape behaviors, which subse-
quently become part of “how things are done here.”
In other words, if you’re the leader of your firm, you may be the walking
personification of the culture you inherited when you took office. And that
may be a good thing. But your firm’s culture isn’t set in stone. It isn’t ever
“done.” The way that you will affect it most is through the strategic and
organizational choices you make or facilitate every Monday morning.
From My Workspace to Yours, Online

“Innovation, Communication, and a New Definition
of ‘Friend from Work’”
An Interview with Constantine von Hoffman, Senior Editor, Brandweek
Magazine, Author, Collateral Damage blog: www.collateraldamage.biz
Q: YouTube, MySpace, Blogs, Plogs—how have all of these changed the
way we work?
A: Way back in the time, like before 1995, it used to be that the best
informed people in the world were the journalists who had access to
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what were called news wires—feeds from news gathering services like
Associated Press and Reuters. They would see stories that were going
on all around the world that never made it into the paper or onto a
newscast. Now, because of the web in general and blogs and blog
aggregators in particular, anyone can have that. I have a huge list of
blogs that I keep an eye on through Bloglines and I can scan them
rapidly looking for the stuff that interests me without having to read
every little thing or dig up the information myself. In essence, I have
a lot of experts out there doing research for me, digging up stories
and facts that I would never find on my own. I actually don’t use
MySpace because I have never found it useful for getting information,
although a lot of other reporters frequently finds trends and ideas
there.
Q: But what’s the “net, net” of that new ability? Do you think people
are:
a) Spending more time at the computer, but the time is really useful
because people are learning things that are making them more produc-
tive?
b) Spending more time at the computer but in large part not learning
anything that significantly affects their work?
c) Spending more time at the computer, learning more interesting
and useful things, but losing, at the same time, a piece of the interper-
sonal dynamic at work that people used to call “synergy”—and that
executives seemed very fond of touting as an “intangible strength”
in corporate life?
Or is it another scenario entirely?
A: Are people more productive because of the net? Yep. For me, that
takes the shape of spending less time chasing down little stuff when
I could be focusing on big stuff. Finding out basic info about a company,
like earnings, HQ location, phone numbers, as opposed to talking to
people about whatever story I’m researching.
Are people spending more time at the computer but in large part
not learning anything that significantly affects their work? Maybe. I
don’t think the web has made us any smarter as individuals. There is
now a higher likelihood that you will be exposed to information that
you would not otherwise have had. Once that is done, it’s still all in
the thinking and the application. Einstein didn’t have a computer. Matt
Drudge does. Who knows how much more (if anything) Einstein could
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have done with the access to info that we have now. Drudge just
regurgitates rumors or—if you’re feeling kind—highlights other peo-
ple’s work but, thanks to the net thing, he has a huge audience and
moments of huge influence. And no original thinking whatsoever. That
said, connectors are important. We need people who watch a lot of
places and point things out that the rest of us would miss.
Are people spending more time at their computers and less with
actual human beings in the company? Yes. My wife is much closer to
people who work with her online on projects than she is with people
in her office who don’t work on projects with her. Has this helped or
hurt corporate synergies? Too soon to tell. Companies have always
had problems keeping people connected and informed. The web hasn’t
made those problems go away and it has given them another excuse
to hide behind: Instead of just sending out newsletters, they now run
blogs and websites and send e-mails that everyone discards just like
the old newsletters. It is still up to individual managers and workers
to make sure they connect.
In short, people are still, by and large, stupid. The web-eroni makes
it easier to connect with other people who share your interests, but
that’s not always the person in the next cubicle. Is that a plus for
business . . . I don’t know.
Or, as someone else put it, you keep giving them books and giving
them books and they keep chewing on the covers.
Q: What about the effect (possible) of blogs, plogs, etc. on innovation?
A Wall Street Journal story (Thursday, October 5, 2006, page B1,
“How Demon Wife Became a Media Star and Other Tales of the ‘Blook’
in Japan” by Yukari Iwatani Kane, said:
Six years ago, a Japanese businessman went online to vent about

his domineering wife. Blogging daily under the pen name “Ka-
zuma,” he detailed how she grabbed food from is plate, sent him
shopping in a typhoon, and made him sleep in the living room
when he caught a cold. Now his terrifying spouse is famous as
Oniyome, or “demon wife,” the star of a book, a television drama,
a comic-book serialization, a videogame and coming soon, a movie.
Demon Wife Diaries, as the book and its spin-offs are titled, is at
the forefront of a trend in new media emerging in Japan—blogs,
chat rooms, and other Internet formats are increasingly providing
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the inspiration, and in many cases, the verbatim content, for books,
television shows, and other old-media products.
What is your take on that?

A: Blooks are a growing phenomenon—someone even gives out awards
for blooks. The first one I was aware of that made a big splash was
by someone under the pen name Salaam Pax, who blogged from Iraq
during our invasion and his posts were later turned into a blook. A
couple of U.S. military veterans of the George W. Bush Desert Classic
have also had some small success with blooks but nothing like what
happened in Japan, which is probably sui generis. Several other writers
have tried to spin their success as bloggers into books but without
much real impact. The biggest of these that I can think of are Wonkette
and Washingtonienne. Both are D.C.-based and focused blogs. The
former combined a fun attitude and light sexual repartee to shine a
gossipy but not all that tawdry light on D.C. (Great quote from Anna
Marie Cox who was Wonkette: “I wanted to ruin someone’s day, not
their life.”) The other one was a blog about the sexual adventures of
a comely female capital hill staffer. Both then wrote novels, which
went approximately nowhere.
Blogs don’t make good books because they are an immediate reac-
tion to the events of the day. They are all about the topical and short-
term. Because of that they usually focus on things that have disappeared
from someone’s memory a month later. They don’t have the depth
to support a full book and if they do they’re not being true blogs. A
blog is your note book, except usually with less detail. It’s the perfect
format for the ADD generation.
That said, blogs, chat rooms and other Internet formats are increas-
ingly providing the inspiration, and in many cases, the verbatim content,
for books, television shows, and other old-media products. Yeah, the
old media is going to continue to chase the new. We haven’t seen the
widespread use of it that Japan has but Japan has a monocultural
society where we definitely do not.
Q: Could you comment on the potential upsides and downsides of web

marketing. Is it getting easier to create a brand? Protect a brand?
A: The web has fundamentally changed how companies have to think of
what a brand is. It used to be that marketers thought that their brand
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was whatever they told customers it was. Marketers operated under

the illusion that they were in control of the brand. This was because
communication methods all worked in one direction—TV, print or
whatever—were all about telling people a message and had no way
for the people to respond. This illusion allowed marketers to ignore
the communication that went on between consumers.
The reality though is that how people talk to each other about a
brand has always been what really defined a brand. Now thanks to
the Web a lot more people are having a lot more conversations about
brands. Pretty much every brand now has an unofficial site where its
fans/consumers gather to swap rumors and talk about their experience
with the product. This runs the gamut from expensive cars to video
games to things like WD40 where people swap tips on new uses for
the stuff. Any marketer who doesn’t at least regularly check out these
sites is an idiot. The smart marketers use them as a place to have actual
conversations with their consumers. The tough part for marketers is
that now it really is a conversation. If you just listen and don’t react
then you will get a richly deserved rep as brand that doesn’t care about
its consumers. You don’t have to do whatever it is that these people
suggest but you do have to give them straight honest answers to their
concerns.
Brands are just as hard to create and protect as they were before.
The brand has always relied first and foremost on the product or service
it delivers to establish its value. What’s tougher now is that if a product
or service screws up everyone knows about it very quickly. Fortunately,
the same is true when customers are happy with a product or service.
Q: There’s an article in the Wall Street Journal (Thursday, March 22,
2007) entitled “A New Force in Advertising—Protest by E-mail” (by
Christina Passariello in Paris, Keith Johnson in Madrid and Suzanne
Vranica in New York). The article talks about how e-mail protests
caused Dolce & Gabbana to pull an image in reaction to strong protests,
many sent via e-mail.
A: This is another example of the change in what it means to market a
brand. Letter campaigns have always been around and sometimes
gained enough momentum to catch the eye of the media. Where this
used to take a while to get organized and reach critical mass, today
it can happen over night. It also can involve a lot of people who never
would have known about it before. In the D&G story, a lot of web
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sites were able to post the ads and people who never picked up a
fashion magazine saw them. This hurt the company’s rep with the
general public—most importantly with investors. It’s impossible to
contain stories now. While there’s no doubt that D&G wanted to be
provocative, if they’d listened better and first showed the ad to people
who didn’t work for them or their ad agency then they would have
been able to see the problem before it happened.
Q: One last question, returning us to the topic of culture at work. What
parts of the workforce do you think stand to “gain” the most from
these increasingly popular—and emerging—forms of communication?
Where is this all taking us, in the context of the way we work?
A: The optimistic take would be that everyone will gain as we become
more able to swap stories with people working on similar projects in
far away places. People will be able to see what other people are doing
that does and doesn’t work. Less time will be spent re-inventing the
wheel.
The pessimistic take is that it will narrow who we talk to. We’ll only
follow those issues and projects that we are already interested in.
People may have greater knowledge of their specialty but less knowl-
edge about bigger issues or what is going on elsewhere. Cross-fertiliza-
tion, which has always been hard for companies, will be even harder.
Reality will probably be somewhere in between. The biggest risk for
companies is thinking that technology will take the place of good
management. Chat rooms, e-mail, wikis, blogs and the like are better
tools than companies have ever had before. But tools do not use
themselves.
421
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Websites and Other Resources

These web sites offer a great deal of data and information about the
factors that influence business culture Some of these resources are sub-
scription-based services; check with your library to see if they offer access
to these services at no charge.
www.businessculture.com
This website offers information on a variety of topics, including business
customs, etiquette, and cultural “norms” that shape work life across borders.
http://knowledge.wharton.upenn.edu
The Wharton School (the business school of the University of Pennsylvania)
shares its intellectual capital through this website, the school’s online busi-
ness journal. Knowledge@Wharton offers free access to information includ-
ing analysis of current business trends, interviews with industry leaders and
Wharton faculty, and articles based on recent business research.
www.hoovers.com
Research companies and industries; research corporate executives and deci-
sion makers.
www.standardandpoors.com
Provider of independent credit ratings, indices, risk evaluation, investment

research, data, and valuations.
www.moodys.com
Investing and finance data; economic analysis.
www.bloomberg.com
Breaking financial, business and economic news worldwide.
http://forrester.com/mag/
A magazine published by Forrester Research, Inc., headquartered in Cam-
bridge, Massachusetts.
www.nyse.com
Official site of the New York Stock Exchange.
www.cnnmoney.com
Internet home of Fortune, Money, Business 2.0, and Fortune Small Business,
including the Fortune 500.
www.ssireview.org
The Stanford Social Innovation Review is a publication of the Center for
Social Innovation at the Stanford Graduate School of Business.
427
Bibliography
http://www.shrm.org/
Society for Human Resource Management 1800 Duke Street, Alexandria,
Virginia 22314.
www.marketingpower.com/
American Marketing Association—a professional association for marketers.
www.amanet.org/
American Management Association—a professional development association
for managers, providing training and networking opportunities.
www.wageproject.org
The WAGE Project, Inc is a 501(c)3 charitable, tax-deductible organization
established to end discrimination against women in the American workplace.
The website includes resources for information, support and advocacy.
www.aarp.org
A resource for policy, advocacy, information, support and connections per-
taining to persons over fifty.
www.valuenewsnetwork.com
“Exploring Tomorrow’s Markets, Enterprise, & Investments” is the tagline
at this interactive website, which offers resources and information for busi-
nesses, government, organizations and individuals on creating value and on
the forces and influences shaping value creating in today’s environment.
www.wsj.com
Website of the Wall Street Journal.
www.nytimes.com
Website of The New York Times.
www.forbes.com
Website of Forbes Magazine.
www.fastcompany.com
Website of Fast Company Magazine.
www.dol.com
Website of the U.S. Department of Labor.
www.sba.gov
Website of the United States Small Business Administration.
www.amanet.org
Website of the American Management Association.
www.marketingpower.org
Website of the American Marketing Association.
www.shrm.org
Website of the Society for Human Resource Management.
428
Bibliography
www.nawbo.org
Website of the National Association of Women Business Owners (NAWBO).
www.nwbc.gov
Website of the National Women’s Business Council.
www.marshall.usc.edu
Accesses the website for the Center for Effective Organizations (resources
include seminars, research, working papers, conferences, books and videos).
www.leadertoleader.org
Website of the Leader to Leader Institute, originally established as the Peter
F. Drucker Foundation for Nonprofit Management.
www.inc.com
This website is a resource for entrepreneurs; also the website of Inc. maga-
zine.
429
Index
Boldface page numbers indicate main entry
AARP (American Association of Re- Advantage, competitive, 67–69

tired Persons), 7–8, 9–10 Affirmative Action, 93
Aburdene, Patricia, 253–54 AFL-CIO (American Federation of La-
Account management director, finan- bor and Congress of Industrial Orga-
cial services firm, 74 nizations), 11–13
Action learning, 1–5 Age discrimination, 5–9
ADA. See Americans with Disabilities Age Discrimination in Employment
Act Act (ADEA), 5–7, 121
Adams, Scott, 89, 91–92, 300 Agenda, The, 311
ADEA (Age Discrimination in Employ- Alignment practices, 297
ment Act), 5–7, 121 Alumni of the organization, 125
Adler, Barry, 209–10 Amazon.com, 285
Administrative Professionals Day, American Association of Retired Per-
270 sons (AARP), 7–8, 9–11
Index
American Federation of Labor and Barsdale, Sigal, 195, 200

Congress of Industrial Organiza- Behavioral demographics and leader-
tions (AFL-CIO), 11–13 ship, 78–79
Americans with Disabilities Act Ben & Jerry’s, 258–59
(ADA), 14–21; disability test, 17; Benchmarking, 29–31
myths and facts about, 18–21; over- Benchmarking PLUS, 31
view, 14–18, 121; purposes and Benefits: cafeteria, 59–61; golden
goals, 15–16 parachute, 148; and job sharing,
Anatomy of Peace, The, 275 200; for lifetime employees, 225;
Anderson, Carol R., 147 medical and health, 112, 115; and
Andrus, Ethel Percy, 10 older employees, 6–7, 10; and tem-
Animal caretaker, 321 porary workers, 354; and workplace
AOL-Time Warner, 346 change, 194
Apple, 134–35, 246 Best Employers for Workers Over Fifty,
Apprentice, The, 22–23 8
Ariens, Dan, 206 Best in class, 29
Arnoff-Fenn, Paige, 371 Best practice, 30, 32–33
Art of War, The, 23–25 Bhardwaj, Manoj, 64
Art of War for Managers: 50 Strategic Bill and Melinda Gates Foundation,
Rules, The, 23–25 256
Ashkenas, Ron, 42 Blackberry, 106–7, 373
Asian tigers, 234 Blake, Robert, 239
Associations and organizations: Ameri- Blanchard, Ken, 33–34
can Association of Retired Persons Blanchard, Marjorie, 33
(AARP), 7–8, 9–11; American Fed- Blogs: as conversation, 181–82;
eration of Labor and Congress of In- growth and development of, 183–
dustrial Organizations (AFL-CIO), 85; human factor in, 185–88; and
11–13; Equal Employment Oppor- networking, 271; and planning,
tunity Commission (EEOC), 6, 8, 180–81; power of, 177–79; and
93, 121–22, 153–54 time commitment, 179–80; trans-
parency, authenticity, and focus in,
B2B/B2C, 56–58 182–83; as water cooler, 386
Baby Boomers, 7–8, 142–46, 193 Blue collar, 34–37
Backlash, 154–55 BMW, 164
Back-of-the-envelope ethics test, 66 Boeing, 360
Backton, Lois, 193–94 Bonney, Lisa Dell, 321
Balanced scorecard, 27–28, 294 Bonus, 38–39, 242–43
Balanced Scorecard: Translating Strat- Boomers, Baby, 7–8, 142–46, 193
egy into Action, The, 27–28 Bootstrapping, 39–41
Bankston, Linda, 28 Borden, Neil H., 132
Barrett, Mary, 270 Boston Scientific, 324
432
Index
Boundaryless organization, 41–42 Champy, James, 311

Boundaryless Organization, The, 42 Change agent/Change management,
Boyce, Duane, 275 64–65
BP, 381 Charles Schwab & Co., 52
Brainstorming, 43–44 China, 234–35, 289
Brand equity, 208 Christensen, Kathleen, 196–97
Branding, 44–52; nonprofit brands, Churchill, Winston, 383
46–52; overview, 44–45 Civil Rights Act, 121
Bricks and clicks, 52–53 Click-and-mortar, 52–53
Briggs, Katherine, 262–63 Clicks and bricks, 52–53
Brown, Dick, 368–69 Climate change, 81–83, 252–53
Budget, 54–56 Clinical educator, critical care services,
Build to order, 248 237
Built to Last, 340 Clooney, George, 256
Burke, James, 258 Coach, executive, 122–23
Bush, George W., 317 Coaching Manager, The, 122
Business analyst, 350 Code of Ethics, 65–67
Business excellence, 30 College professor, psychology, 117
Business in the Community, 79–80 Collins, James, 340
Business Process Perspective, 294 Commercial airline pilot, 261
Business-to-business/Business-to- Common-law employee, 138
consumer (B2B/B2C), 56–58 Compensation, executive, 123–25
Buzz words, 92–93 Competencies, core, 70–72
Competing for the Future, 72
Cafeteria benefits/plans, 59–61 Competitive advantage, 67–69
Callaway, David, 30 Competitive intelligence, 69–70
Capelli, Peter, 194, 227–28, 242–47, Connolly, Marie, 237
374 Consultant, independent, 137–39
Career counselor, 160 Contracting out, 288–91
Career development and placement di- Contractor, 45
rector, 147 Contractor, independent, 138, 354
Career satisfaction, 254–57 Cooper, Barbara, 75
Caremark, 346–47 Cooper, Cynthia, 390
Carlzon, Jan, 260–62 Core competencies, 70–72
Carnegie, Dale, 61 Core values, 66, 276
Case, John, 286–88 Corner office, 73–79
Case, Stephen M., 346 Corporate social responsibility, 79–86
Casual Friday, 62–63 Coupland, Douglas, 144
CBS, 134–35 Covey, Stephen, 363
Center for FaithWalk Leadership, The, Craner, Lorne W., 80
33 Crisis/risk management, 86–88
433
Index
CRM (Customer Relationship Man- Discrimination: age discrimination,

agement), 285, 312, 314 5–9; Americans with Disabilities Act
Crotonville, 1 (ADA), 14–21; and diversity, 93–
Crowley, Tracie, 362 95; Equal Employment Opportunity
Cubicle, 88–89 Commission (EEOC), 6, 8, 93,
Customer Perspective, 294 121–22, 153–54; and glass ceiling,
Customer Relationship Management 146–48
(CRM), 285, 312, 314 Diversity, 93–95
Customer service: B2B/B2C, 57; best Divorce mediator and lawyer, 384
practice, 32; as core competency, Dot.com/Dot.bomb, 95–97
71; and job sharing, 196; moment Downes, Larry, 208–10
of truth, 260–62; negative image of, Downsizing, 97–99
276; offshoring, 280; reengineering, Drapeau, Ann, 44
311; 360 degree feedback, 359; Drucker, Peter, 99–101, 215, 236
24/7, 369–70 Dual reporting relationship, 250
CVS, 346–47 Duffy, Cathy, 87
Dunlop, Al, 369
Dale Carnegie Training, 61 DuPont Engineering Polymers, 28
Data protection and privacy, 153 Duwaike, Jad, 95–96
Davenport, Thomas, 216
Deal, Jennifer, 143 EAP (employee assistance programs),
Deep Throat, 389 108–16
Dell, 241–47, 248, 280, 285, 313–14 Economics and leadership, 76–78
Dell, Michael, 241–47 Edelman, Russ, 274
Deloitte & Touche, 197–99 Editorial director, 209–10
Deming, W. Edwards, 365 Editor-in-Chief, 30
Dental assistant, correctional facility, EDS, 368–69
321 Educational support personnel, 221
Dental office manager, 362 EEOC. See Equal Employment Oppor-
Design, job, 195–96 tunity Commission
Destination elevator, 170 Elancer, 137–39
Diamond, Kartar, 128 E-mail, 103–7, 212, 386
Dilbert, 89, 91–93 Emotional intelligence, 107–8
Dilbert Principle, 300 Employee assistance programs (EAP),
Director, account management, finan- 108–16
cial services firm, 74 Empowerment, 116–18
Director, career development and Empowerment Index, 117
placement, 147 eMusic, 267
Director, public records and open pub- English instructor online, 104
lic meetings, 282 Enron, 118–20
434
Index
Environmentalism, 81–86, 341–42 Free Agent Nation: How America’s

EPA (Equal Pay Act of 1963), 121 New Independent Workers are Trans-
Equal Employment Opportunity Com- forming the Way We Live, 137–38
mission (EEOC), 6, 8, 93, 121–22, Freelancer, 137–39
153–54 Freeman, R. Edward, 333
Equal Pay Act of 1963 (EPA), 121 Friedman, Stewart, 199
Ethics: and corporate social responsibil- Friedman, Thomas, 225–26
ity, 79–86; and Enron, 118–20; Functional organizations, 250
and Sarbanes–Oxley Act, 317–19, Fussell, Paul, 144
390
Ethics, code of, 65–67 Galford, Robert M., 44, 76–79
Evans, Ann, 31 Galvin, Bob, 327
Executive coach, 122–23 Garvin, David, 221
Executive compensation, 123–25 Gates, Bill, 256
Executive recruiters, 158–60 Gauss, Carl Frederick, 327
Exemplary practices, 30 GE (General Electric), 41–42, 279,
Exit interview, 125–26 294–95, 368
Expectation of praise, 145–46 Gender and generation, 193
Experience Economy: Work is Theater Gendron, Marie, 23
and Every Business a Stage, The, General Electric (GE), 41–42, 279,
132 294–95, 368
Extranet/Intranet, 187–89 General Electric (GE) Workout,
141–42
Families and Work Institute, 193 Generation and gender, 193
Fanning, Shawn, 265 Generation X, Y, and Z, 142–46,
Felt, Mark, 389 193, 198
Feng Shui, 127–28 Gerstner, Louis, 368
Fifth Discipline: The Art and Practice GE Workout, 141–42
of the Learning Organization, The, Gillette, 346
220 Gilmore, James H., 132
Financial services firm, account man- Glass ceiling, 146–48
agement director, 74 Glazer, William N., 32–33
Flat organizations, 162–65, 173 Global climate change, 253
Flex-time, 128–30, 199–201 Global marketing firm, founder and
Ford, William Jr., 83–84 CEO of, 371
Ford Motor Company, 83–84, Global warming, 81–83, 252–53
134–35 Going green, 81–86
4Ps, The, 131–36 Golden parachute, 148–49
401(k) vs. pension plan, 60–61 Goleman, Daniel, 107
Free agent, 137–39 Goodwin, Michael, 350
435
Index
Google, 63, 134–35, 383 Humphrey, Albert, 343

Gore, Al, 253 Hunt, James, 122
Gregg, Pamela, 276–77
Greim, Chris, 304 IBM, 224, 368
Guidant, 324 ICM (Institute for Crisis Manage-
ment), 86
Hacker, 151–53 Idea management system, 169
Hamel, Gary, 72 IM (instant messaging), 106
Hammer, Michael, 311 Incompetence, 299–300
Handal, Peter, 275–76 Inconvenient Truth, An, 253
Handy, Charles, 303, 305 Independent consultant, 137–39
Harassment, 153–56 Independent contractor, 138, 354
Harris, Andrea, 68 Independent marketing consultant, 68
Harvard Business Review, 156–57 India, 289
Headhunter, 158–60 Innovation, 167–71
Health & benefits consultant, 326 In Search of Excellence, 301–3
Health and medical benefits, 112, 115 Instant Messaging (IM), 106
Health care costs, 109–16 Institute for Crisis Management
Herman Miller Furniture, 160–61 (ICM), 86
Hersey, Paul, 33 Intangibles, 171–74
Hidden in Plain Sight: How to Find Intel, 259
and Execute Your Company’s Next Intellectual capital, 174–75
Big Growth Strategy, 44, 168 Intellectual Capital: The New Wealth
Hiltabiddle, Tim, 275–76 of Organizations, 175
Hobby/paid work blending, 54 Intelligence, competitive, 69–70
Hochschild, Arlie, 200–201 International Harvester, 286–87
Holme, Lord, 79 Internet, 175–87; birth of, 135; blogs
Home-based business operator, and planning, 180–81; blogs and
137–39 time commitment, 179–80; blogs as
Home care provider, 321 conversation, 181–82; growth and
Homeland security, 354–56 development of blogs, 183–85; hu-
Honda, 233 man factor in blogs, 185–88; and
Horizontal organizations, 162–65 networking, 271; overview, 175–77;
Horrell, Ed, 276–77 power of blogs, 177–79; transpar-
Household activities, 130 ency, authenticity, and focus in
How to Win Friends and Influence Peo- blogs, 182–83
ple, 61 Intranet/Extranet, 187–89
Hrebiniak, Lawrence, 83 iPod, 133–34, 246, 267
Human capital, 175 Irving, Cliff, 46
Human Side of Enterprise, The, 356 iTunes, 267
436
Index
J&J (Johnson & Johnson), 258 Koval, Robin, 275, 277

Jacob, Nanette P., 221 Kramer, Teresa L., 32–33
Japan, made in, 233–35
Jick, Todd, 42 Labor mobility, effect on vacation hab-
JIT (Just-in-Time), 201–4 its, 376
Joachimsthaler, Erich, 44, 168 Landmarks of Tomorrow, 215
Job design, 195–96 Lawson, Frank, 326
Job satisfaction, 194, 350 Lay, Kenneth, 120
Job security, 194–95, 392 Leaders as substitute for strategy, 244
Job sharing, 191–201; and flex-time, Leadership: and behavioral demo-
199–201; and job design, 195–96; graphics, 78–79; change agent/
job satisfaction, 194; and job secu- change management, 64–65; corner
rity, 194–95; overview, 191–92; office, 73–79; emotional intelli-
and plateauing, 192–94; and trade- gence, 107–8; executive coach,
offs, 196–99 122–23; executive compensation,
Johnson, Carol, 128 123–25; golden parachute, 148–
Johnson, Clarence L. “Kelly,” 330–31 49; headhunter, 158–60; mid-
Johnson, Robert Wood, 258 career, 254–57; mindsets, 76–79;
Johnson, Spencer, 34 Moments of Truth, 260–62; Peter
Johnson & Johnson (J&J), 258 Principle, 299–300; portfolio ca-
Jolie, Angelina, 256 reer, 303–5; Theory X and Theory
Jönsson, Berth, 117–18 Y, 356–58; 360-degree feedback,
Jung, C.G., 262 359–61; time management,
Just-in-Time (JIT), 201–4 361–65
Lean manufacturing, 219–20
Kaizen, 205–8 Learn by doing, 1
Kanban card, 202 Learning, action, 1–5
Kaplan, Robert, 27–28, 200, 294 Learning and Growth Perspective,
Kawasaki, Guy, 96 294
Keen, Jack, 172 Learning in Action: A Guide to Put-
Keene, Barry, 45 ting the Learning Organization to
Kerr, Steve, 42 Work, 221
Killer App, 208–12 Learning organization, 220–22
Kindness Revolution: The Company- Learn on the job, 1
wide Culture Shift That Inspires Phe- Leveraged buyout (LBO), 222–23
nomenal Customer Service, The, 276 Levinson, Meredith, 217–18
Klein, Katherine, 227–28, 230–32 Librarian, 310
Klemfuss, Harry, 270 Librarian, reference, 217
Knowledge management, 213–15 Lifetime employment, 224–32; men-
Knowledge worker, 213, 215–18 toring, 226–32; overview, 224–26
437
Index
Limo driver, 304 lationship marketing, 313–15;

Loyalty, 194, 226, 327 24/7, 369–77; value proposition,
379–80
Made in Japan, 233–35 Marketing, New Age of, 133–37
Making Technology Investments Profit- Marketing consultant, independent, 68
able: ROI Map to Better Business Marketing Mix, 131–32
Cases, 172 Marquardt, Michael J., 2–5
Management approaches: action learn- Marquardt Model, 2–5
ing, 1–5; balanced scorecard, 27– Mass career customization, 197
28; benchmarking, 29–31; best Mass customization, 247–49
practice, 32–33; brainstorming, Matrix organizations, 249–52
43–44; change agent/change man- Matthew, Susan, 384
agement, 64–65; empowerment, Maybury, Karol, 117
116–18; flex-time, 128–30, 199– Mayer, John D., 107
201; General Electric (GE) Work- MBO (Management by Objectives),
out, 141–42; horizontal organiza- 236–39
tions, 162–65; knowledge McGrath, Monica, 192, 200
management, 213–15; Manage- McGregor, Douglas, 356–58
ment by Objectives (MBO), 236– McIntosh, Eric, 261
39; managerial grid, 239–47; ma- Medical and health benefits, 112, 115
trix organizations, 249–52; Medieval Technology and Social
ombudsman, 281–84; Open Book Change, 210–11
Management, 286–88; performance Megatrends, 252–54
management/performance measure- Mentoring, 194, 226–32
ment, 293–99; Six Sigma, 141–42, Mid-career, 254–57
325–29; suggestion box, 337–38; Milken, Michael, 393
synergy, 346–47; telework, 349– Mindsets, leadership, 76–79
53. See also Job sharing Minister, 206
Management by Objectives (MBO), Mission statement, 257–59
236–39 Moments of Truth, 260–62
Managerial grid, 239–47 Moore-Ede, Martin, 370
Manufacturing: Just-in-Time (JIT), Morris, Patrick, 274, 276
201–4; lean manufacturing, 219– Motorola, 325, 326–29, 330–31
20; offshoring, 279–80; outsourc- Mouton, Jane, 239
ing, 288–91; Six Sigma, 141–42, MP3 file, 265
325–29; skunkworks, 330–31; sup- Mueller, Jennifer S., 229, 232
ply chain, 338–40; Total Quality Mui, Chunka, 208–10
Management (TQM), 142, 365–66 Museum interpreter, 344
Marketing: branding, 44–52; bricks Myers, Isabel Briggs, 262–63
and clicks, 52–53; 4Ps, 131–36; Myers-Briggs Type Indicator®
one-to-one marketing, 284–85; re- (MBTI), 262–64
438
Index
Naisbitt, John, 253–54 Older Workers Benefits Protection

Napster, 265–67 Act, 7
Nardelli, Robert, 149 Ombudsman, 281–84
NASDAQ, 267–69 One Minute Manager, The, 34
National Public Radio (NPR), 283 One-to-one marketing, 284–85
National Retired Teachers Association, Online editor, 23
10 Online/offline resources, integration
National Secretaries Day, 270–71 of, 52–53
Negative spillover, 194 Open Book Management, 286–88
Neighborly Care Network, 108 Open-Book Management: The Coming
Networking, 40, 271–77 Business Revolution, 286
New Age of Marketing, 133–37 Orts, Eric, 82
New Economy: bricks and clicks, 52– Outsourcing, 288–91
53; dot.com/dot.bomb, 95–97; e- Oxley, Michael, 317
mail, 103–7, 212, 386; hacker,
151–53; intranet/extranet, 187– P&G (Procter & Gamble), 342, 346
89; knowledge management, 213– Paid work/hobby blending, 54
15; knowledge worker, 213, 215– Peer to Peer file sharing, 265
18; virtual teams, 380–82; war for Pendrotty, Daniel F., 148
talent, 198, 383–85. See also In- Pension plan vs. 401(k), 60–61
ternet Pensions, 59, 60–61, 194–95, 226
New Hacker’s Dictionary, The, 151–52 Performance, short-term, 245
New York Stock Exchange (NYSE), Performance management/Perfor-
267–68 mance measurement, 293–99
NGO brands, 46–53 Perrault, Carol, 388–89
Nice, the power of being, 274–77 Peter, Lawrence J., 299–300
Nice Guys Bill of Rights, 275 Peter Principle, 299–300
Nilles, Jack, 349 Peter Principle: Why Things Will Al-
Nissan, 233 ways Go Wrong, The, 299–300
Nongovernmental organization Peters, Tom, 301–3
(NGO) brands, 46–53 Pfizer, 148
Nonprofit brands, 46–52 Physician assistant, emergency medi-
Norton, David, 27–28, 294 cine, 336
NPR (National Public Radio), 283 Pine, Joseph B. II, 132
NYSE (New York Stock Exchange), Pink, Daniel H., 137–38
267–68 Plateauing, 192–201; and flex-time,
199–201; and job design, 195–96;
Obesity, 109–16 and job satisfaction, 194; and job se-
Offshore outsourcing, 289 curity, 194–95; overview, 192–93;
Offshoring, 279–80 tradeoffs, 196–99
Ohno, Taiichi, 202, 219 Plumber, 46
439
Index
Policies and Laws: Age Discrimination Radio, 136

in Employment Act (ADEA), 5–7, Raymond, Eric Steven, 151–52
121; Civil Rights Act, 121; Equal Reagan, Ronald, 256
Employment Opportunity Commis- Real time, 309–10
sion (EEOC), 6, 8, 93, 121–22, Recording Industry Association of
153–54; Equal Pay Act of 1963 America (RIAA), 266
(EPA), 121; Older Workers Benefits Recruiters, executive, 158–60
Protection Act, 7; Rehabilitation Act Reengineering, 311–13
of 1973, 121. See also Americans Reengineering Management, 311
with Disabilities Act Reengineering the Corporation, 311
Porras, Jerry, 340 Reference librarian, 217
Porter, Michael, 67–68 Referrals, 273
Portfolio career, 303–5 Reh, F. John, 29, 98
Pottruck, David S., 52 Rehabilitation Act of 1973, 121
Power of Nice: How to Conquer the Relationship marketing, 313–15
Business World With Kindness, The, Retaliation, 154–55
275 Retiring the Generation Gap: How Em-
PowerPoint, 306–7 ployees Young and Old Can Find
Practice of Management, The, 236, Common Ground, 143
238 Revans, Reg, 2
Prahalad, C. K., 72 RIAA (Recording Industry Association
Praise, expectation of, 145–46 of America), 266
Priorities, 194, 251 Risk/crisis management, 86–88
Privacy and data protection, 153 Rollins, Kevin, 242, 244–45
Probst, Robert, 88 Rose, Mike, 219
Procter & Gamble (P&G), 342, Rothbard, Nancy, 194, 200
346 Rowley, Colleen, 390
Product-focused organizations, 250 Roxio, 266
Professional Secretaries Day, 270 Royal Dutch Shell, 320–21
Project organizations, 250
Promotions, 194–96 Sabbaticals, 200
Psychology professor, college, 117 Salovey, Peter, 107
Public Company Accounting Over- Sarbanes, Paul, 317, 319
sight Board, 318 Sarbanes–Oxley Act of 2002, 317–
Public records and open public meet- 19, 390
ings director, 282 SAS (Scandinavian Airlines), 260
Purrone, Scott, 336 Satisfaction, job, 194
Putnam, Sheila, 310 Saunders, Eliza, 282
SBA (Small Business Association),
Quelch, John A., 46–53 54–55
440
Index
Scandinavian Airlines (SAS), 260 Statutory non-employee, 138

Scandura, Terry, 228–29 Stewart, Robert, 343
Scenario planning, 320–23 Strategic alliances, 335–37
Scott, Lee, 84 Strategic Management: A Stakeholder
Sears, Michael, 360 Approach, 333
Security, job, 194–95, 392 Strategy, leaders as substitute for, 244
Senge, Peter, 220 Strategy execution, 295–99
Senior managing director, 159 Stress, 127–29, 193, 199, 201, 228,
Seven Habits of Highly Effective People, 350, 376
The, 363 Structural capital, 175
70:70:70 Rule, 279 Substance vs. symbolism, 242–43
Shapiro, Benson P., 132 Suggestion box, 337–38
Shareholder value, 324 Sullivan, Kathleen, 74
Sharing, job. See Job sharing Sunbeam, 369
Shewhart, Walter, 327–28 Sun Microsystems, 229–30
Short-term performance, 245 Sun-Tzu, 23–25
Siebel Systems, 314 Supply chain, 338–40
Silkwood, Karen, 387–89 Surplus asset investment recovery man-
Sipkins, Ellie, 344 ager, 202
Sirota, David, 232 Sustainability, 340–42
Situational Leadership Model, 33–34 Sutherland, Edwin, 392
Six Sigma, 141–42, 325–29 SWOT analysis, 343–45
Skilling, Jeffrey, 134–35 Symbolism vs. substance, 242–43
Skunkworks, 330–31 Synergy, 346–47
Slater, Beth, 217
Small Business Association (SBA), Taxes, effect on vacation habits, 374
54–55 Technology-Dependence, 106–7
SMART, 236 Telecommuting, 349–53
Social responsibility, corporate, 79–86 Telework, 349–53
Society of Professional Journalists Telework Coalition, 351–52
Code of Ethics, 65–66 Temporary workers, 353–56
Software hobbyists, 54 Temps, 353–56
Solo practitioner, 137–39 Texas Instruments, 279
Spillover, negative, 194 Thaler, Linda Kaplan, 275
Spin-off/spinout, 331–33 Theory X and Theory Y, 356–58
Stack, Jack, 286–87 360-Degree Feedback, 359–61
Stakeholder theory/management, Tichy, Noel, 1
333–35 Time Bind, The, 200–201
Start-up business, 170–71 Time management, 361–65
Statutory employee, 138 Time Power, 362
441
Index
Time Use Survey Summary, American, Warholic, James A., 57

364–65 Water cooler, 385–87
TIVO, 136 Watergate, 389
Top-down hierarchies, 250 Waterman, Robert, 301
Torpey, Catherine, 206 Watkins, Sherron, 390
Total Quality Management (TQM), Watts, Richard, 79
142, 365–66 Web-based business, 54, 95, 176
Toyoda, Kiichiro, 219 Weight management, 109–16
Toyoda, Sakichi, 219 Weisberg, Anne, 197–99
Toyota, 75, 202, 219–20, 233–34 Welch, Jack: action learning, 2; bound-
TQM (Total Quality Management), aryless organization, 42; competitive
142, 365–66 advantage, 68; GE Workout, 142;
Tracey, Brian, 362 offshore outsourcing, 279; perfor-
Tradeoffs, 196–99 mance management, 294–95; turn-
Training and development, 366–67 around, 368
Trump, Donald, 22 Wengert, Paul, 202
Trusted Leader, The, 44 Whistleblower, 387–90
Turnaround, 367–69 White collar, 390–93
24/7, 369–77 White collar crime, 392–93
Twenty-Four-Hour Society: Understand- White, Lynn Jr., 210–11
ing Human Limits in a World That Wilsker, Chuck, 352
Never Stops, The, 370 Winguard, Jeffrey, 389
Tylenol, 258 Women: corner office, 73–75; diver-
sity, 93–95; flex-time, 128–30,
Ulrich, Dave, 42 199–201; glass ceiling, 146–48;
Unions, effect on vacation habits, 374 household activities, 130. See also
Unleashing the Killer App, 208–10 Job sharing
Woods, Tiger, 224–32
Vacation habits, 372–77 Workaholism, 373
Value proposition, 379–80 Work/life balance, 105, 193, 200
Values, core, 66, 276 Work to rule, 200
Vice president/senior sales officer trea- World is Flat: A Brief History of the
sury services for investment bank, Twenty-First Century, The, 225–
388–89 26
Virtual teams, 380–82
Yahoo, 267
Wall Street Journal ethics test, 66
Wal-Mart, 82, 84–86, 333–34 Zimbra, Inc., 54
War for talent, 198, 383–85 Zune, 267
442
ABOUT THE EDITOR
REGINA FAZIO MARUCA is a freelance business writer and editor,

specializing in marketing, branding, leadership, and organizational culture.
Also a Principal at the Center for Executive Development, she has served
as a Senior Editor at the Harvard Business Review, reporter and editor at
Boston Business Journal, and Associate Managing Editor at New England
Business Magazine, and has conducted interviews with high-profile busi-
ness leaders for Fast Company. Since 2000 she has provided editorial, writ-
ing, and research services for authors at such organizations as Harvard
Business School, Accenture, the Committee of 200, and Boston Univer-
sity. She is coauthor, with Robert M. Galford, of Your Leadership Legacy
and editor of What Managers Say, What Employees Hear (Praeger, 2006).

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The Way We Work

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The paper used in this book complies with the

Alphabetical List of Entries vii

Action Learning Budget

Drucker, Peter Leveraged Buyout (LBO)

Strategic Alliances Total Quality Management (TQM)

Associations and Organizations Megatrends

Diversity Scenario Planning

Employees Influential People

General Electric (GE) Strategy

SWOT Analysis Employee Assistance

formation and stand united, focused on external competition and on the

What You Will Find

Over 100 entries, ranging from American Association of Retired Persons

from a wide range of companies came together to compile this book. In

Interestingly—though perhaps not surprisingly—across all of the ele-

• An awareness of the social and environmental issues facing the

These themes and others are illuminated in related, cross-referenced en-

If You’re Looking for a Job

While collecting and coordinating materials for this encyclopedia, we

level-headed approach kept the project on track, and allowed us to picture

Action Learning: A Powerful New Training Tool

Components of an Action Learning Program

Developed by Professor Reg Revans in England in the middle of the

1. A problem (project, challenge, opportunity, issue, or task).

will be implemented (barring any significant change in the envi-

be a “bona fide occupational qualification” (BFOQ) reasonably nec-

The issue of age discrimination is receiving increasing scrutiny as the

American Association of Retired Persons

The organization was founded in 1958 by a retired high school principal

• To promote independence, dignity, and purpose for older persons

• A work training program for low-income persons age fifty-five and

• Support for housing counselors in their work with older homeown-

In addition, the Foundation supports AARP Foundation Litigation, a na-

American Federation of Labor and Congress of

Today’s unions represent nearly nine million working women and

The organization’s mission, according to the website, reads as follows:

The mission of the AFL-CIO is to improve the lives of working fami-

affect our working lives—from capital investments, to the quality of

The AFL-CIO is governed by a quadrennial convention at which all

Americans with Disabilities Act

transportation, communication, recreation, institutionalization, health ser-

(b) Purpose.—It is the purpose of this Act—

Another good source of information about the Americans with Disabili-

is to facilitate the employment and retention of workers with disabili-

1. Employment (Title I) Business must provide reasonable accom-

vices to people with disabilities, participation in programs or activities

The ADA’s protection applies primarily, but not exclusively, to “dis-

1. He or she has a physical or mental impairment that substan-

Other individuals who are protected in certain circumstances in-

The www.ada.gov website is a primary source of information for the

Myths and Facts about the Americans with Disabilities Act

MYTH: ADA suits are flooding the courts.

MYTH: The ADA is rigid and requires businesses to spend lots of

MYTH: The government thinks everything is readily achievable.

MYTH: The ADA requires businesses to remove barriers overnight.

MYTH: Restaurants must provide menus in Braille.

MYTH: The ADA requires extensive renovation of all state and

MYTH: Sign language interpreters are required everywhere.

MYTH: The ADA forces business and government to spend lots of

accommodation must be provided if it would result in an undue hard-

MYTH: Many ADA cases involve frivolous issues.