Janiece C. Webb was barely 18 years old when she started making her mark at Motorola
Inc. Her job testing semiconductors on the graveyard shift at the company's Phoenix plant
was mind-numbing work. But Webb's questioning nature and her willingness to speak up
meant that something out of the ordinary was bound to happen. "I would just ask, 'Why are
we doing this?' " she remembers. " 'Why do we sit around for 8, 10, sometimes 12 hours
when the machines on the line break down and wait for the mechanics to fix them? There
must be a better way.' "
The shift supervisor figured that he knew how to handle his curious employee: "He'd say,
'You're being paid to straighten leads. Shut up and color.' " But even as a young productionline worker, Webb showed a knack for getting people to buy into her ideas. She would
appeal to their self-interest and would suggest changes in a way that didn't come across as
threatening. "I asked my supervisor if he could give me 10 minutes any time of the day or
night when I wasn't on shift, so I could talk to him about doubling production," she says.
"That got his attention."
With her supervisor's blessing, Webb put together a troubleshooting manual with tips on
how to operate machinery to avoid jams and how to make simple repairs. Then she rallied
her team to see how far they could push their new efficiency. "I said, 'Let's set a goal.' " Her
blue eyes flash like the big diamond earrings she's wearing. " 'We can kick first and second
shifts' butts.' "
It says a lot about Janiece Webb, now 47, that she can still get worked up about a challenge
that she conquered 28 years ago. Today, as senior vice president in charge of the company's
wireless-Internet business, she holds a key job at Motorola. But the relentless spirit of that
spunky assembly-line worker is never far from the surface of a now-polished corporate
executive. Webb has traveled this far because she knows how to build bridges: between her
past and her present, between high-flying strategic vision and in-the-trenches business
reality, between the old-school Motorola and the tumultuous opportunities of a wireless
Web. "I've always been a human modem," she says. "I've created peace between the
marketers and the engineers, between the hard-core techies and the salespeople."
Her relationships inside Motorola start with her own team. The 900 people in the personalnetworks group are in some ways a microcosm of the entrenched interests and turf
consciousness that pervaded Motorola in the past. With Webb's help, the company is trying
to shed those destructive habits. Some members of the group are there because they are
known and trusted by other parts of Motorola, whose cooperation is essential if Webb's
wireless-Internet crusade is to succeed. Other members are young, energetic, irreverent,
bright -- the next generation of Janiece Webbs. A few others came to Motorola from the
computer industry, and Webb is using them to infect the rest of the team with a bias toward
building relationships with software developers -- something new for Motorola.
"This job is testing me like no other," she says. "It's like trying to train speed swimmers to
do synchronized swimming. The resources at Motorola are powerful, and people here are
saying, 'I'm an expert, I know my game, don't mess with it.' But I'm saying the rules have
changed. It's not enough anymore to be the fastest guy in the pool. We're being judged on
how much we're in sync."
For all of Webb's savvy and drive, though, there's no question that she's in for one heck of a
test. Motorola, an icon of innovation, quality, and growth in the 1980s, crashed to earth in
the 1990s, unable to adjust its deeply ingrained culture to a world transformed by the
Internet. With $33.1 billion in revenue last year, Motorola is still a giant. But it is not nearly
as nimble as it needs to be. Despite being the world's second-largest cell-phone maker
( after Nokia ) in a hot market for wireless communications, Motorola is still a laggard when
it comes to growth and profitability -- not to mention style and design.
Under CEO Christopher B. Galvin, Motorola has been working mightily to regain its former
glory. The company has cut costs and has learned from its stumbles. But if Motorola is going
to become a high-growth company again, then it has to claim a leadership position in the
wireless-Internet business. That puts responsibility squarely on the cashmere-covered
shoulders of Janiece Webb. And it won't be enough to sell piece parts like Web-enabled cellphones, which will quickly become commodities. To make a difference, Webb and her team
have to design, build, and sell complete wireless-Internet systems that go end to end -from transmission equipment to software to handsets -- and that can be woven into the
next generation of wireless systems already being put in place by such companies as
Deutsche Telekom AG, NTT DoCoMo, and Vodafone Group PLC.
"Janice is the kind of leader that Motorola needs times 10," says Noel Tichy, 54, a business
professor at the University of Michigan and an adviser to change-minded CEOs such as
Ford's Jacques Nasser and GE's Jack Welch. "She's got the guts to be a change agent in an
organization that traditionally has not rewarded change."
Then you must quickly move the client through a series of tough decisions. How do you get
clients to react faster than they're used to reacting? Not with tricks or technique, but by
knowing more than your competitor. And the best way to learn more is to increase your
chances at bat. In my office, each person specializes in one aspect of the transaction. The
mantra is, Do what you do best. I list, sell, and negotiate. My buyer's agents only sell. Our
head escrow coordinator closes more escrows in one year than most people close in an
entire career.
The whole team benefits from each individual's expertise. For example, our head broker
studies the lending industry to stay on top of all of the new programs for first-time home
buyers. Not only can our agents describe housing inventory, school ratings, and community
features off the top of their heads, but they also know exactly what the lending industry has
to offer each consumer. We're constantly getting clients who come in from other offices -offices where agents don't know how to get people into various home-loan programs. Our
knowledge base has dramatically increased the pace at which we can do business.
You might not think of yourself as a CEO if you have yet to hire your first employee, but now is the time to
cultivate the CEO traits that make figures like Lee Iacocca, Richard Branson and Oprah Winfrey dynamic,
memorable and powerful.
"When you're in your basement or garage doing your start-up, that's the time to start thinking, acting and
relating like a CEO," says D.A. Benton, author of Secrets of a CEO Coach: Your Personal Training Guide
to Thinking Like a Leader and Acting Like a CEO. "If you wait until you're big enough to have all the
[employees], you'll have missed maybe years of opportunity to learn and develop those skills."
While Benton says many CEO qualities are a given for entrepreneurs--like tenacity, self-confidence and
continuous improvement of your skills--your appearance may still scream "first year in business" rather
than "seasoned CEO." So how do you transform yourself into a powerful CEO? Develop the traits below,
says Benton, and practice, practice, practice--even if it's just on your neighbor while handing out your first
business card.
Think before you speak. "Because you're the boss, you can pretty much do or say what you want,"
Benton explains, "so it's very important that you slow down from day one. Think of the ramifications, the
effect you want, and then choose your words wisely."
Be a bit theatrical. When you enter a room, you want people to notice. "As you start getting customers
and investors, and the media begins to look at you, you'd better be able to look and act like a leader,"
Benton says. She advises you to pause after walking into a room to nonverbally announce, `I'm here.'
When you shake hands, hold the grip for two seconds longer than you normally would.
Strive for modesty in public. You can be theatrical and talk about your accomplishments with pride, but
don't forget to mention the people who helped you get where you are. Give credit where credit is due--to
your partners, family, friends, employees, customers, investors and mentors.
Become a storyteller. Whether you're relating your latest accomplishment to a group of colleagues,
explaining your business plan to venture capitalists, or publicizing your cutting-edge product to a
journalist, you need to tell your story with clarity and succinctness. "The best way [to talk about your
product or service] is to tell a story, paint a picture, give an analogy," says Benton. "[The story] should be
the situation you faced, what you did and what resulted."
Excel at your job and be willing to lead. Most entrepreneurs are good at what they do--it's a
requirement for success--but they may not know how to be leaders. "You have to learn how to get along
with people, affect people, sell, influence, persuade," Benton says. "[A start-up's] employees often aren't
paid much, but they're there because they love the idea and they're invested in it emotionally. They'd
better feel you're supporting them and giving them credit."
How to bring out your inner CEO? Begin by looking for a mentor you can emulate--an entrepreneur, a
politician, a journalist, the leader of your industry association or a local businessperson you admire. "Find
people who have the good stuff," says Benton. "Watch what they do, and then discipline yourself to do the
same."
Railroad Revival
June, 2001
The new owners of the Panama Canal Railway Company have a fine sense of history. Their logo, a red
shield, harks back to the glory days of the first transcontinental railroad, built in 1855. They have
preserved several original cranes and locomotives alongside the tracks. Most of all, they guard the
memory of the runaway success of the line that took men heading from New York to California for the
gold rush. In its day, Panama railway stock was the most valuable on the New York Stock Exchange,
says Thomas Kenna, marketing director of the Panama Railway Co.
Kansas City Southern Railway and Mi-Jack Products, the U.S. companies behind the US$80 million
revival of the railway, will be happy if a bit of that success rubs off. They are dealing in a new kind of
commodity, the 20-foot or 40-foot container boxes that carry an ever greater share of world trade.
The railroad, which will double-stack containers on its freight cars, will have a capacity to shuttle
550,000 20-foot equivalent units (TEUs) across the isthmus each year. The railway has a great selling
point: the cargo gets there before the ship, says Neil McColl, project manager of shipping and port
company Maritime Transport. In moving containers faster than a canal transit, he sees the railway as a
dry canal.
The track runs alongside the canal for almost all its 47 miles and is intended to provide flexibility to
shippers, but Kenna insists, The railway will complement the canal, not compete with it.
Draft and line of sight restrictions mean Panamax ships, the biggest that can pass through the canal,
have to transit with 200 fewer containers than the maximum. Those containers will wind up on the
back of railroad cars, says Kenna. Shippers will now be able to bring cargo through that they had to
leave behind, he says. Some of this is happening by road already but the railway offers a safer, more
secure and reliable service.
Hans Stig Moller, general manager of Maersk Panama, adds that the shipping line will also use rail to
solve another big headache, empty containers stuck at the wrong port.
The single-track railway will run from the port of Balboa near Panama City on the Pacific to Manzanillo
near Colon on the Atlantic, allowing carriers to move cargo across the isthmus in around three hours.
There will be three trains on the rails at a time and up to 10 trains in each direction every 24 hours.
The company will lay another track if needed. Prices for the cargo service, expected to begin in June,
have yet to be set.
Concrete ties. The companies running the railway are experienced. Kansas City runs the so-called
Nafta railway that has a network from Canada to Mexico. Mi-Jack is a leading manufacturer of cargo
handling equipment and operator of rail yards. The International Finance Corp., the private investment
arm of the World Bank, also has a small equity stake.
The company was awarded a 50-year investment and operating concession in 1998. It has imported
250,000 tons of ballast from Nova Scotia, Canada to ensure good drainage during Panamas tropical
storms, 150,000 tons of concrete ties that will survive the hot and humid conditions and 11,000 tons
of 130-pound continuously welded rail.
Unlike the old days, the railroad will not be a big employer. It will only need about 50 people because
of its computerized signaling and automated guidance systems. The railway will also carry passengers.
You dont make any money on passenger services but we were asked to do that as a service to the
country, says Kenna. The funny thing is that the railway here brings back bad memories because the
service was so poor. On the old passenger railway the driver stopped the train and someone got out
and waved a flag to stop the traffic. We have to tell people that this one does not stop. All 17 crossing
points will be automated.
Passengers will experience what is famed as one of the most stunning railway journeys in the world,
complete with a bar, movable seats and wood paneling. Services were scheduled to start in April, with
200 business passengers traveling daily from Panama City to Colon and back. The cost, $550 for a
monthly season ticket, is not cheap, but its certainly better than the $50 in gold demanded by the
railway in 1855.
READING ING 2
Totally New, Totally Exciting
June, 2001
Maria Cristina Criscuolo received an unusual Christmas gift last year. Her husband presented her with
the car she had longed for. She was even more impressed, she says, when she found out that he
discreetly bought it online.
Gosh! He is a such a meticulous person. He is anything but gullible ... I was really impressed, she
says. Her husband, Ben Hur Criscuolo, 49, was also thrilled by the experience. This is totally new and
exciting! he says.
A technology consultant with German chemical giant BASF in So Paulo, Criscuolo has, like many,
bought books and CDs from Brazilian Web sites. But this was a much bigger deal.
I saw an ad on TV It said this model was launched exclusively via Internet, so I logged in, he
recalls. I selected the color and the options. I filled in the form, then I paid 1,000 reais [US$470] as a
deposit with my credit card. I got a receipt and a password. Then the system asked me to choose a
dealership where the car would be delivered within 10 days. The whole process, he says, took no
more than 10 minutes.
Indeed, General Motors has played a pioneering role in Brazilian e-commerce. The worlds largest car
manufacturer intends to sell up to 80% of its new, sub-compact Celta online in 2001. The small, oneliter engine cars are manufactured exclusively at GMs $650 million plant in the state of Rio Grande do
Sul in southern Brazil. The first few months of online promotion show promise: More than 33,500 cars
were sold in the six months ending February, 60% of them online, says GM. A Celta goes for about
$6,500.
Once off-line, not everything went as smoothly for Criscuolo. When he called the dealer to ask about
the car, no one seemed aware of his order. A salesman told him that it was impossible to buy a car
online. In a slight panic, Criscuolo went in person to the dealership. A salesman checked with the GM
office and confirmed that everything was OK.
The car did arrive on time, and Criscuolo finalized payment with the dealer and got the present to his
wife in time for Christmas. Pleased with the experience, Criscuolo nevertheless has doubts: I am not
sure I would have taken the risk to pay the full amount online, he says.
Irineu Motta Cabral had more luck. A truck dealer and insurance broker in the small southern village of
Antonio Prado, about 100 miles from the Celta plant, Motto found that buying his new car online was
hassle free. Its actually a ground-breaking technique, says Motta, 48. I just got tired of the usual
salesman crap.
The main advantage for the consumer, apart from the slight discount that GM offers for online sales,
now around $90 although it once was nearly $500, is the convenience. Price is not negotiable.
Manufacturers get a break, too; cars sold online pay less in sales taxes to federal authorities and are
exempt from some other, minor taxes. But GM is taking pains not to alienate dealers. This ecommerce initiative is not intended to bypass dealers. It would be impossible to do so anyway, says
Farid Anabtawi, GMs e-commerce director in So Paulo. The Internet is a fantastic tool, but its only
one element of a wider strategy. Also important, Anabtawi says, are direct sales from plant to
customer (although the buyer has to pick it up at a dealer just the same); single pricing nationwide,
freight included; and quick delivery, thanks to five Celta distribution centers.
Not everyone buys their Celta online. Even young professionals working in the New Economy, such as
webmaster Ana Lucia Stavale, 28, like to see the car in person before closing any deal. I had already
managed to sell my older car, and I had to buy a new one quickly, she says. I was in a real hurry.
Too much of a hurry for the Internet? Odd but true, but for GM and other companies exploring the
virtual sales floor, this kind of business learning experience cant be bought at any price.
READING ING 2?
CEO Factory
June, 2001
Fernando Aguirre was puzzled when Procter & Gamble transferred him to Brazil. It was 1992 and Latin
Americas largest country was spinning through political upheaval, currency changes and chronic
hyperinflation. Aguirre spoke no Portuguese. In fact, he had never been to Brazil.
It was one of those decisions that I thought must be a mistake, says Aguirre, who spent four years
in So Paulo as a general manager and, eventually, vice president before accepting a promotion to
return to his native Mexico. In Brazil, he had to make fast decisions, anticipate what the next day
might bring amid the volatility and crunch more numbers than in any accounting class at business
school.
Whoever decided to send me there made the best decision of my career, Aguirre now says.
P&Gs deftness for selecting, grooming and promoting talent like Aguirre has won the multinational
praise from corporate search companies in the region. When Latin Trade queried headhunters for
candidates for its Super CEO issue [March 2001], the names of current and former Procter & Gamble
executives surfaced repeatedly. Some search companies say this was, in part, predictable since people
in marketingP&Gs fortespend a lot of time in the public spotlight and are well known. But other
region watchers say theres more to it.
They have an old school style and they prove that the old school is still good, says Jean-Dominique
Virchaux, senior partner at executive search company Heidrick & Struggles in Miami. Their executives
are extremely well trained, disciplined and methodical.
Key to the firms old school style is ongoing training. The development of people at P&G is
important, explains Linda Ulrey, a spokeswoman at company headquarters in Cincinnati, Ohio. We
give people significant responsibilities early on. And we do on-the-job coaching and training.
Each new hire immediately teams with supervisors to develop a training plan that runs the range
from classroom studies to role playing. As they gain experience, employees may be sent to Procter &
Gamble College, an in-house program in which senior executives teach business courses. Progress is
evaluated as frequently as every month.
So thorough is the training that someone like Susana Elspuru, former P&G general manager for Peru,
Bolivia and Ecuador, reached the upper tiers in the corporation without the benefit of a business
degree. She is a geologist.
Even before such training begins, says Melanie Healey, P&G general manager in Vene-zuela, her
employer knows how to identify people who have the skills and characteristics necessary to want to
win. Its no secret that the company goes after the brightest candidates at the regions best
universities, recruiting graduates while they are still in school.
Its seen in the region as the place to get your first job, says Virchaux. Adds Rodrigo Ocampo,
managing director for Latin America at executive search company A.T. Kearney: It hires young MBAs
and imbues them with the Procter & Gamble model, which ispar excelencethe model for product
management.
Thats not to say the company posts nothing but successes. P&G recently announced widespread
layoffs in response to slowing sales, blaming the economic downturn in the United States. And some
of its CEOs successes have as much to do with P&Gs willingness to pump money into its marketing as
it does with their skills.
Still, executive search companies like its rigorous training. In addition to leadership courses,
employees are cross-trainedmarketing people learn about product management, salespeople learn
about marketing. No one is promoted without training and it generally takes 10 to 12 years before
executives are given a shot at a general manager post.
About 95% to 98% of the time we promote from within, Ulrey says. Its an important principal:
someone from outside isnt going to swoop in and take the position. The policy means that managers
understand their subordinates jobs because they probably had them at some point. And promotion
from within boosts morale.
The right stuff. P&G executives describe their company as data driven not a place for decisions
based on gut feelings. Honesty and integrity are mantras and a broad skill base is crucial. To some,
P&Gs corporatespeakfor the bosses frequently use the same upbeat phrasessmacks of regimented
thinking. This is a company where everyone steps to the beat of the same drummer.
Still, corporate search companies say P&G does a lot of things right, such as doling out foreign
assignments to executives like Aguirre and Brazil-born Healey. Those people [now] have an
integrated view of what the consumer wants in the region. And, within the region, they understand the
individual markets, Virchaux says.
Aguirre, 43, joined the company in Mexico but within six years was transferred to its Ohio
headquarters. Eighteen months later, he took a two-year assignment in Toronto, Canada. He then
accepted another posting in Mexico before moving to Brazil. Last year, he became president of the
companys Global Feminine Care divisionthe first Mexican to reach that corporate level.
But moving has its downside, too. Peruvian Elspuru left P&G in 2000 after 11 years in Peru. The
reason? After pushing sales in Peru to more than $150 million annually she was targeted for a transfer
to Venezuela. She and her family wanted to stay put.
Corporate search experts suggest P&Gs insular training makes it difficult for its employees to succeed
in companies with different corporate cultures, but Aguirre disagrees. This is a springboard to go
elsewhere, He says. Charles Herrington, president of AOL Latin America, is a P&G alum. So is Telesp
CEO Manoel Amorim in So Paulo.
The business world is full of ex-P&Gers doing very, very well, says Aguirre.
Cheaper Skies
June, 2001
Few executives at age 32 run an airline and shape the future of air travel in a nation the size of Brazil.
But Constantino de Oliveiro Jr. is doing just that.
Outside his second-floor office off the Anchieta motorway in So Paulo, local and long-distance buses
roar in and out all day, a constant reminder of the lucrative business his father founded nearly 50
years ago. Grupo Aurea is one of Brazil's largest nationwide transport companies, with 6,000 buses
and annual revenues of around US$500 million. But de Oliveiros sights are not on Brazil's highways.
Theyre on its open skies.
In January, he launched Gol Transportes Aereos, the nation's first low-cost, low-fare airline modeled
after Dallas-based Southwest Airlines and Britains EasyJet. Gol is the most successful of a wave of
start-up airlines promising to make air travel more accessible to millions of Brazilians who could never
before afford to fly.
It is high time someone started up a discount airline in Brazil, says Bob Booth, president of Miamibased Aviation Management Services. Air fares were very high there. Discount air travel is a new
concept in Brazil, where airlines have traditionally catered to upscale customers.
Gol is not the only discount airline to challenge the big four. At least three other carriers have grabbed
market share since aviation authorities deregulated air fares in 1998, allowing charter airlines to sell
tickets on the retail market. The Civil Aviation Authority is currently processing requests for 11 more
airlines, including at least one more domestic passenger airline.
Last years joint study by Brazil's Civil Aviation Authority (DAC) and the Finance Ministry's Department
of Economic Studies found tickets were more expensive in Brazil than in other major markets due to
a lack of competition.
The company's namea good choice in a nation obsessed by socceris stamped in bright orange
letters on the side of each plane. Inside the aircraft, forget about a hot lunch or a whisky on the rocks.
Onboard service is bare bones. Flight attendants and ground personnel dress casually in T-shirts.
Ticketing is entirely electronic, mostly by Internet and telephone. There are no assigned seats. Theres
no first class.
Gol's marketing research concludes that there are 25 million middle class Brazilians who might fly
regularly if fares were lower. I have no doubt there is demand for a discount airline, says Jose Carlos
Martinelli, a So Paulo-based aviation consultant. There is room for several Gols.
Today, only 5 million Brazilians out of a population of 170 million fly on a regular basis. Gol currently
operates six Boeing 737-700 aircraft 52 times a day to nine major citiesSo Paulo, Rio de Janeiro,
Salvador, Porto Alegre, Belo Horizonte, Florianopolis, Brasilia, Campinas and Recife. In May, a seventh
plane was slated to join the fleet.
Gol banks on its customers snapping up fares that come in 20% to 50% below those of the four
leading airlines. Varig, TAM, Vasp and TransBrasil now account for 95% of the Brazilian market. While
Varig charges $210 for a round-trip ticket from So Paulo to Rio, Gol's fare runs $75 to $100. TAM
charges $547 for a ticket from Salvador to Florianopolis; a Gol ticket costs $344. Of course I will fly
more often, says Jose Carlos Souza, standing at the Gol check-in counter in So Paulo. Who
wouldnt?
Secret to success. Low fares fill Gols planes but they make profits harder to achieve. De Oliveiro
says the trick is to keep a lid on the payroll. He has only 100 employees per airplane, compared to the
regions average 140 to 150. The high $300,000-per-month cost of leasing the Boeing aircraft is
balanced out by the planes fuel efficiency and low maintenance costs. Gol started hitting its targetto
fly 120,000 passengers per monthin the first months of this year. At that rate, equivalent to an
average passenger load of 60%, de Oliveiro says hell see profit in about three years.
He's got the right, low-cost strategy. Now, he needs to ensure high aircraft utilization, says Booth.
READING ING 2
Packaging Your Product to Sell Quickly
Distinctive packaging is critical if you want your brands to stand out--whether they're on the crowded specialty food
shelves at pet stores or at more conventional
Distinctive Packaging is critical if you want your brands to stand out--whether they're on the crowded specialty food
shelves at pet stores or at more conventional retailers. We needed pet owners to realize quickly that Oink-Oink
products are something special, since pork products are basic commodity items.
The brightly colored cartoon characters on our packages usually are a pig and a dog in a funny setting. For example,
a 50 package of Oinkerpucks, our cellophane-wrapped baked meatroll with slices the size of hockey pucks, shows
a dog and a pig playing hockey in skating outfits. These designs have been an instant hit, especially with kids, who
drive a lot of their parents' impulse buys.
I come up with the settings after talking to a few employees, including our national sales manager, our public
relations manager and our in-house artist. We are all dog owners. Each week, we'll slam a few beers down and get
creative. I don't see the need to do focus groups, because my instincts have never let me down. After the artist
designs the packages, we contract with an outside company that produces them.
To increase sales, we do four special packages a year tied to holidays. For instance, at Christmas, we sell the $14.99
Winter Wonder Bone, a 14- to 16-inch smoked beef bone. Illustrated on the corrugated cardboard box is a Santa pig
in a sleigh, dangling a bone in front of a dog dressed as a reindeer. Around Valentine's Day, we sell two pork hearts
in a heart-shaped box for $2.99. True, that extra packaging increases production costs, but it's worth it.
Some of our products, such as pig ears and smoked bones, are bundled in red plastic net bags with the characters on
a cardboard tag so that customers can smell and touch the items. They really do smell like bacon! We put moister
items in plastic shrink-wrap in-side sturdy white cardboard boxes with big cutouts that let our buyers peek at the
snacks.
Though we were probably the first company in the country to sell these kinds of quirky smoked-meat dog snacks,
the competition is heating up. We're confident that our superior packaging will continue to work for us. The other
guys' packages are drab by comparison, using only one color and no fun graphics.
In fact, people like our characters so much that I'm thinking about developing a line of Oink-Oink clothing. But right
now our biggest goal is to get Oinkers in mass-merchandising stores like K Mart and Wal-Mart. We want to make
sure that every dog in America has an Oinker on his plate. I think we will.
Think of things that never were and ask, "Why not?" Bobby Kennedy's famous motto is an apt description of the
first ingredient necessary to create a great new product. Terrific products come from inspired ideas. When George de
Mestral took an annoying burr from his sock and placed it underneath his microscope, creating a breakthrough
product like Velcro was the last thing on his mind. He spent the next 10 years trying to duplicate artificially what
nature made effortlessly.
The power of one. The second lesson in innovation is that one man can make a difference. Whatever product you
look at, you will invariably find there was some man or woman behind it who was steadfastly committed to its
success. Ed Lowe was nothing but a young, ambitious veteran with tons of unsold clay when he decided that he had
a better cat litter. Crisscrossing the country in his old car, bartering his way into cat shows, and changing cat boxes
one at a time is what it took for him to make Kitty Litter a success.
Keep it simple, stupid. No, no one is calling you dumb. Rather, the rule keep it simple, stupid, and its acronym
KISS is a great way to remember the third lesson of innovation. If you are going to offer something new and
improved, make sure that it is simple and does one or two things very well.
First is best. Getting your product to market first can often mean the difference between having winner and being a
loser. Post-its were first. Tupperware was first. Pampers were first. Barbie was first.
Try, try again. The path of the innovator may not follow a straight line, grasshopper. Getting a product right often
takes trial and error, followed by a few mistakes, a couple of bonehead moves and only then, maybe, a homerun.
When Dr. Percy Spencer noticed that the chocolate bar in his pocket melted after standing near a magnetron tube, he
Today's tip: Getting referrals is one of the best ways to drum-up new business. One way to get them is to reward
current customers for valuable referrals. Offer the referrer a discount, or maybe a membership in an elite customer
group with special privileges, such as early notice of sales or special offers. Also, a thank you note or email
acknowledging a referral can often lead to more referrals
NAME:
DATE:
UNIVERSIDAD DEL SALVADOR
INGLES II - NIVELACIN
Cheaper Skies
June, 2001
Few executives at age 32 run an airline and shape the
future of air travel in a nation the size of Brazil. But
Constantino de Oliveiro Jr. is doing just that.
Outside his second-floor office off the Anchieta
motorway in So Paulo, local and long-distance buses
roar in and out all day, a constant reminder of the
lucrative business his father founded nearly 50 years
ago. Grupo Aurea is one of Brazil's largest nationwide
transport companies, with 6,000 buses and annual
revenues of around US$500 million. But de Oliveiros
sights are not on Brazil's highways. Theyre on its open
skies.
In January, he launched Gol Transportes Aereos, the
nation's first low-cost, low-fare airline modeled after
Dallas-based Southwest Airlines and Britains EasyJet.
Gol is the most successful of a wave of start-up airlines
promising to make air travel more accessible to millions
of Brazilians who could never before afford to fly.
It is high time someone started up a discount airline in
Brazil, says Bob Booth, president of Miami-based
Aviation Management Services. Air fares were very
high there. Discount air travel is a new concept in
Brazil, where airlines have traditionally catered to
upscale customers.
Gol is not the only discount airline to challenge the big
four. At least three other carriers have grabbed market
share since aviation authorities deregulated air fares in
1998, allowing charter airlines to sell tickets on the
retail market. The Civil Aviation Authority is currently
processing requests for 11 more airlines, including at
least one more domestic passenger airline.
Last years joint study by Brazil's Civil Aviation Authority
(DAC) and the Finance Ministry's Department of
Economic Studies found tickets were more expensive in
Brazil than in other major markets due to a lack of
competition.
The company's namea good choice in a nation
obsessed by socceris stamped in bright orange letters
on the side of each plane. Inside the aircraft, forget
about a hot lunch or a whisky on the rocks. Onboard
VOCABULARY
network - research and development - businesses - worldwide - consumers - provides employees - communications - consulting - runs - supplier - revenues
AT&T Corp. is among the world's premier voice and data __________________ companies, serving
__________________, businesses, and government. With annual __________________ of more than $62 billion
and 160,000 __________________. AT&T __________________ services to customers __________________.
Backed by the __________________ capabilities of AT&T Labs, the company __________________ the world's
largest, most sophisticated communications __________________ and has one of the largest digital wireless
networks in North America. The company is a leading __________________ of data and Internet services for
__________________ and offers outsourcing, __________________ and networking-integration to large
businesses. It is also the nation's largest direct Internet access service for consumers.
NAME:
DATE:
UNIVERSIDAD DEL SALVADOR
INGLES II - NIVELACIN
VOCABULARY
credit card - corporate - businesses - range - branches - provides consumers - leader - financial - operates - nationwide - customers
Bank One Corporation, headquartered in Chicago, is the nation's fifth-largest bank holding company, with
assets of more than $270 billion. It ________________ a full ________________ of ________________
services to large ________________ and middle market commercial ________________ and retail
________________. It is the largest Visa ________________ issuerand the third-largest bank lender to
small ________________. A ________________ in the retail market, Bank One ________________
more than 1,800 ________________ and a ________________ network of ATMs.
Mobil is one of the few oil companies in the U.S. which maintains an active research organization
dedicated to keeping its gasoline in step with new vehicle testing technology. We're always looking for
new additive technology which might give our gasoline an extra "edge."
Processing hydrocarbon feedstocks into the chemical precursors of all manner of modern products plastics, detergents, solvents and coatings, to name but a few; supplying catalysts to the oil refining and
petrochemical industries.
Gas and Power
Processing, selling and delivering natural gas by long-distance pipeline and - in liquefied form - by tanker;
selling and delivering the liquid by-products of natural gas processing; providing local gas supplies;
developing and operating power stations.
Renewables
Cultivating sustainable, commercial hardwood forests; converting wood fuel into marketable energy
products; implementing rural electrification projects in developing countries; manufacturing and marketing
solar panels and associated electrical systems; developing wind energy projects
Oil Products
Refining and processing crude oil and other feedstocks into transportation fuels, lubricants,
heating and fuel oils, liquefied petroleum gas and bitumen; distributing and marketing them - together with
complementary services - to meet customer needs.
Texaco Highlights
Operating in more than 150 countries, Texaco and its affiliates explore for, find and produce oil and
natural gas; manufacture and market high-quality fuels and lubricant products; operate trading,
transportation and distribution facilities; and produce alternate forms of energy for power, manufacturing
and chemicals.
Exploration and Production
We find and produce oil and natural gas from a global portfolio of new and mature fields. Our highly
focused exploration program is concentrated in the deepwater Gulf of Mexico, Latin America and West
Africa, while our core production areas also include the U.S., the U.K. North Sea, the Middle East, and the
Pacific Rim.
Total production of 1.15 million barrels of oil equivalent per day.
818,000 barrels of oil per day and 1,948 million cubic feet of gas per day.
Net proven reserves of about 4.9 billion barrels of oil equivalent at year-end 2000. The fifth year in a row
reserves have increased.
Reserve replacement rate of 172 percent for the year 2000, excluding sales & purchases.
The average life of Texaco's reserves is 11.3 years. This is the longest life the company has seen in over
24 years.
Global Gas and Power
Texaco is identifying new opportunities to leverage our strengths in natural gas, power generation and
gasification technology. Texaco is one of the largest natural gas producer-marketers in the United States,
operating more than 1,500 miles of pipeline, 50 interconnects and eight billion cubic feet of storage.
Texaco currently has equity interests in 46 power projects operating or under development around the
world, with a total generating capacity in excess of 5,400 megawatts. Additionally, Texaco is the
recognized leader in gasification technology, an environmentally superior process that can convert lowvalue materials - like refinery residue - into a clean synthesis gas.
hydride batteries. With headquarters in Bethel, Connecticut, USA, Duracell sells its batteries throughout the world,
primarily under the DURACELL trademark.
Duracells success is rooted in the beliefs of company founder P.R. Mallory. Mallorys basic business tenets
"invest in research" and "the customer is king" positioned the company in its early days for continuing success.
Over fifty years later, in December 1996, the Duracell merger with The Gillette Company was finalized. In 2000,
Duracell sales were $2.577 billion, and DURACELL batteries are the most popular brand of alkaline batteries in the
world.
According to ACNielsen, Duracell leads the U.S. alkaline battery category with a total 46.1 percent dollar share for
the 52 weeks ending December 30, 2000. During the same period, ACNielsen reported that Duracell is the U.S.
market leader in photo lithium batteries, commanding a 71.8 percent dollar share. Duracell is also number one in
U.S. retail hearing aid batteries, with a 43.6 percent dollar share.
The Duracell story begins in 1944 in Tarrytown, New York, USA. The company entered the battery business when
Samuel Ruben, an independent inventor, joined forces with Philip Rogers Mallory, the founder of P.R. Mallory &
Co., Inc., Duracells predecessor company, to introduce the worlds first mercury battery, the forerunner of todays
alkaline battery. Rubens mercury battery was first sold to the U.S. military to replace the poorly performing zinc
carbon batteries that were previously used in World War II military equipment. Following the war, Rubens mercury
battery technology was used to produce the first hearing aid button cell.
In 1960, the company introduced AA size alkaline batteries and, two years later, the AAA size. In 1964, the
DURACELL brand name was adopted, which, according to independent research, is one of the most esteemed
brands worldwide. Seven years later, the distinctive copper and black CopperTop graphic was introduced.
Subsequently, the company in 1980 changed its name from P.R. Mallory & Co. to Duracell Inc.
Duracell has a long tradition of introducing value-added features to its product line. For example, the company was
the first consumer battery company to introduce "freshness dating" on alkaline battery packaging in 1987. In 1990,
Duracell introduced the "Copper Top Tester" -- the first on-pack battery tester -- to help consumers determine when
to replace their batteries. In 1992, the company began marketing environmentally improved alkaline batteries, which
contained no added mercury, but had the same quality and performance long associated with the DURACELL brand.
Subsequently, to allow consumers to test battery power anytime, anywhere, the company introduced "PowerCheck,"
the first fuel-gauge-style on-cell tester, in 1996.
As the use of portable electronic devices expands and new power-hungry devices are introduced every day, Duracell
has taken a leadership role in providing batteries to meet consumers continuing needs for portable power. In 1998,
the company introduced premium DURACELL ULTRA alkaline batteries, applying breakthrough alkaline
technology to meet the extraordinary power requirements of todays high-drain devices. In doing so, Duracell
segmented the alkaline battery category, offering consumers the superior performance of DURACELL ULTRA for
power-demanding devices such as flash cameras, halogen flashlights and remote-controlled toys, and DURACELL
batteries for dependable, long-lasting performance in traditional devices such as clocks and radios.
DURACELL ULTRA achieved a record $399 million in worldwide sales in 1999 its first full year of marketing
making it the most successful new battery product ever launched. In 1999, DURACELL ULTRAs worldwide
revenue exceeded the alkaline revenue of long-standing alkaline battery brands including Rayovac, Philips, Varta
and Kodak.
Through Duracells Global Science Center, comprised of scientists and engineers from all over the world, the
company continues to invest in ways to enhance the performance of its alkaline and specialty batteries.
From its long history of innovation and its focus on best serving the needs of the consumer, Duracell continues to set
the standard for primary portable power.
VOCABULARY ING 1
About Duracell
Part of the Boston-based Gillette Company, Duracell is the world's leading manufacturer and marketer of highperformance alkaline batteries. Duracell also sells primary lithium and zinc air batteries, as well as rechargeable
nickel-metal hydride batteries. Gillette is the world leader in male grooming, a category that includes blades, razors
and shaving preparations. The Company also holds the number one position worldwide in sales of selected female
grooming products, such as wet shaving products and hair epilation devices. In addition, Gillette is the global market
leader in toothbrushes and oral care appliances.
NIKE, Inc.
Company Description
Basketball players wanna be like Mike, but shoe companies wanna be like NIKE. NIKE is the world's #1 shoe
company and controls more than 45% of the US athletic shoe market. The company designs and sells shoes for just
about every sport, including baseball, volleyball, cheerleading, and wrestling. NIKE also sells Cole Haan dress and
casual shoes and a line of athletic wear and equipment, such as hockey sticks, skates, and timepieces. In addition, it
operates NIKETOWN shoe and sportswear stores and is opening JORDAN in-store outlets in urban markets. NIKE
sells its products to about 20,000 US accounts, in about 110 other countries, and online. Chairman, CEO, and cofounder Phil Knight owns about 34% of the firm.
Key People
Chairman and CEO: Philip H. Knight
VC: Richard K. Donahue
President & COO: Thomas E. Clarke
CFO: Donald Blair
VP: Martin P. Coles
Fiscal Year-End: May
Sales: 8,776.9
1-Yr Sales Growth: (8.1%)
1-Yr Net Income: 451.4
1-Yr Net Inc. Growth: 13.0%
Number of Employees: 20,700
1-Yr Employee Growth: (9.2%)
BSCH's main rival in Latin America, fellow Spanish bank Bilbao Vizcaya Argentaria (BBVA) (NYSE: BBV), told
BNamericas.com earlier this week that it expects a pre-tax profit of US$1.6bn from its LatAm operations in 2002.
BSCH considers net attributable income a better gauge of profitability than pretax profit because the latter does not
consider minority interests, the BSCH spokesperson said, explaining that BBVA must pay more of its profits to
minority shareholders because it usually has a smaller stake in its subsidiaries than BSCH does.
"BSCH would be more profitable to BBVA in any kind of profit comparison because BSCH expects annual pretax
profits of US$1.4bn from our Latin American operations this year, while BBVA expects US$1.6bn in two years
time," the BSCH spokesperson said.
Part of BSCH's acquisition strategy over the last couple of years has been to acquire majority stakes in local banks,
and as a result it only pays on average 15% of gross profits to minority shareholders, he said.
BSCH has recently taken its ownership strategy a step further, seeking to buy-out minority shareholders in regional
subsidiaries. The first such buy-out offer was launched by BSCH on Wednesday on its Argentine subsidiary Banco
Rio de la Plata (Rio) (NYSE: BRS).
ING Baring senior banking analyst Paul Warme has said he expects BSCH to launch new tender offers on more of
its regional subsidiaries in the future.
revenues grew 217% to $798,340, its net loss grew 148% to $643,088. The background of some of the companys
principals is also weak. Before White began Houston InterWeb in 1996, he worked as a senior plant technician at a
chemical company while, on the side, selling capacitors he had designed for the cable industry over an online
bulletin board. He concedes that he doesnt even like computers. I hate them, he says.
His Brazilian partners also dont seem very experienced in Web design. Daniel Ferreira and Robert Colvin, who are
stepbrothers, own a Web design start-up called Feixes.net with offices in Rio de Janeiro and So Paulo. But the two
have put together only one Web sitefor Ferreiras cousin Paulo Zulu, a male model in Brazil. Beatriz Fortes, an
executive at Mlab.com.br, Brazils biggest Web site production firm, says shes never heard of them or their
company.
White wont say how much Houston InterWeb Design is investing in this new company, which will be called Brazil
InterWeb Design. In the role of pitchman, Ferreira claims he already has lined up the companys first clienta label
maker he refused to nameand will target Brazilian firms in the textile, cosmetics, media and advertising industries.
Theres a gap in the market for Web design. No one is doing a very good job, he says. The products that Houston
InterWeb has are just perfect for the Brazilian market.
Do-it-yourself IPO. But the question remains: where will Houston InterWeb find the capital to expand into Brazil?
After several failed attempts to raise moneyfirst a private placement, then an initial public offering (IPO) followed
by an acquisition/spinoffthe company finally underwrote its own IPO on the over-the-counter bulletin board in
January 1999, selling 20% of its stock for $500,000. As of Jan. 31, the last date for which financial information was
available, Houston InterWeb Designs cash was already down to $483.
The company cant really sell more stocktheres not much of a public market for it, with only one market maker,
ACAP Financial, in Barrington, Illinois, actively trading its shares. And at press time, its stock was down to $2.25 a
share from its IPO price of $6. White says the company is currently expanding on self-generated funds but doesnt
rule out another public offering later, perhaps of Brazil InterWeb Design.
Brazil is not the companys first Latin American foray. White says he was close to inking a licensing agreement in
Panama a year ago, but his prospective partner sold the company before the deal could be completed. Last July,
Houston InterWeb Design did sign a licensing pact with a Monterrey, Mexico-based Internet software company
called Proses to peddle its SiteBlazer program in northern Mexico. Proses chief Eduardo Azcoita says he has since
sold the product to some 800 customers and is discussing a possible merger with Houston InterWeb. White claims
hes also signed up a licensee in Mexico City, but says his partner is not ready to make an announcement yet.
Houston InterWeb clearly suffers from delusions of grandeur. In one press release, it compares itself to well-known
incubators CMGI and Internet Capital Group in that InterWeb leverages its technology and takes an interest in the
Internet-related ventures it helps build. And build up Houston InterWeb Design in the process?
READING ING 2
From Suds to Strawberries
July 01, 2000
As an unshaven Isaac Rosenberg stood blindfolded, hungry and dirty, he wondered what would become of his life in
his native Colombia. The then-25-year-old was held in isolation for four months after being kidnapped from his
home in Bogota in 1988. Finally, he worked something out with his kidnappers and was released. It was a real
turning point in my life, he says.
The following year, Rosenberg sold his familys decades-old soap-making business Elefante La Llave to AngloDutch multinational conglomerate Unilever for an undisclosed amount. Soon after, Rosenberg headed for the United
States to start a new life.
The 37-year-old Colombian is now building a new empire based on fruit and vegetables. His Miami-based company,
Fashion Fruit, imports specialty producefrom asparagus to mangos to zucchinifrom Latin America. The
company operates the service year-round, meaning New Yorkers can stir-fry fresh Guatemalan snow peas while
snowflakes are falling outside and residents of arid Arizona can plop fresh raspberries atop their ice cream any time
of the year. He expects his sales to approach US$10 million this year.
Starting over wasnt easy for the silver-spooned scion. As the heir to his familys multimillion dollar soap business,
Rosenberg had lived a privileged life up until his kidnappinga U.S. education (at Northeastern University in
Boston), a big house in Bogota and all the other trappings of a wealthy Latin American. I was never that motivated
in school because I had my life already planned, he says.
The plan included taking over the family business that had its roots in Moldavia before World War II. Rosenbergs
grandparents launched the business in the 1930s, building it into a sizable operation until the Soviets invaded the
small European country and confiscated the familys factory. Caught between communist repression and a possible
Nazi invasion, the Rosenbergs fled Europe. To obtain the necessary exit visa, the Jewish family traded its secret
recipe for making soap.
The once thriving entrepreneurs boarded a boat headed for the Panama Canal in 1939 with nothing but a suitcase
crammed full of clothes. The family landed in Panama, but the search for a suitable place to build a factory soon
took them to nearby Colombia. The country offered a large population, strong dependence on imported soap and a
more hospitable climate than that of steamy Panama.
Third generation, third country. Now, decades later, third-generation Isaac Rosenberg has repeated the past,
following in his grandparents footsteps by leaving his homeland in search of a better life. I saw Colombia
changing for the worse and I did not want to raise a family in that environment, he says.
Even after being kidnapped, the decision to leave Colombia was not as obvious for Rosenberg as it was for his
grandparents. It would have been much easier for me to stay, he says. I was a big fish in a small pond. The banks
knew me and doors would always open very fast.
Rosenbergs first destination was New York City, where he began working in 1990 as a research analyst at
investment bank Westsphere Capital, which courted wealthy South Americans eyeing investments in U.S.-based
start-up companies. While on a trip home to Colombia, Rosenberg made friends with one of the banks clients who
had a strawberry farm on the side. The client asked Rosenberg if he could find some buyers in the United States. I
found him buyers so quickly that he decided to hire me as a partner, Rosenberg says.
As he learned more about the produce business, Rosenberg recognized a niche market for specialty imports during
the winter months stateside. He quit his job and started his own company, Fashion Fruit, in 1991.
It was hardly a cakewalk. While Rosenberg was able to fund the business with proceeds from the sale of his familys
soap-making business, he had to arrange financing for growers in Latin Americawhich was difficult because many
of them didnt have assets to speak of. He also had to hire marketing people in Miami who could woo longtime food
distributors who already had steady suppliers. Then there were the years of overproduction, when his profit margins
were squeezed. Markets go up and down and I cant predict whats going to happen, he says.
The decision to leave Colombia is now paying off. He lives in a well-to-do neighborhood north of Miami, has an
American wife, Deborah (whom he met at Northeastern), and loves his job. The company has grown from one
employee in 1991 to 10 employees today. This year, he expects to bring more than 1 million boxes of fruit and
vegetables into the United States, each carrying an average price tag of US$10 a box. He predicts the company will
grow another 50% next year, as he works to expand his specialty produce to the Asian and European markets. He
also plans on launching a Web site to tie into wholesalers.
Powdered milk and condos. Finding a niche was the key to success, Rosenberg says. My father was involved in
everything from the soap business to restaurants to real estate to distributing powdered milk in Colombia, he says.
Here, you cannot be a jack-of-all-trades; the market is too sophisticated for that.
It also helps to have good relations with your suppliers. We chose Isaac because as a Latin, he speaks our language
and understands our needs, says Antonio Maldonado, who has his own snow pea-growing business in Guatemala
and sells most of his produce through Rosenberg. We depend on him to get our products sold in this extremely
competitive market.
Rosenberg is now focused on building his business and identifying new opportunities throughout the region. His
most recent adventure included a trip to Havana last April with the Young Entrepreneurs Organization to meet with
government officials and make contacts in preparation for a post-embargo Cuba.
With the U.S. governments softening stance on Cuba, opportunities for food and medical imports to the Caribbean
island continue to emerge. Rosenberg acknowledges that a Cuba without barriers would do wonders for his business.
But he makes clear he would not export products from Cuba. The fruit there is no good. Cuba lacks pesticides, it
lacks resources, it lacks everything, he says.
Instead, if the embargo is lifted, Rosenberg envisions shipping fruit and vegetables to tourist spots on the island.
With nine years of experience under his belt, Rosenberg is confident he can meet the often capricious needs of
foreign tourists in Cuba. Europeans will only eat white asparagus and Americans wont eat strawberries unless
theyre bright red, he says.
Whats the biggest difference between doing business in the United States versus Latin America? [In the United
States] you make it because of who you are, not because of what your last name is, he says. Given what hes
managed to do in such a short time, hes obviously adapted quickly.
At the close of its 1997 fiscal year, Sears operated 833 department stores, mostly located in the nation's malls and
regional shopping centers. Its off-the-mall formats include 1,325 furniture, hardware, tire and battery as well as
automotive parts stores. In addition, Sears sells certain appliance, hardware, lawn and garden and automotive lines
through 1,384 independently-owned stores, primarily in smaller and rural markets.
The company also provides a wide range of products through its Sears Shop at Home Service, including specialty
catalogs through licenses with third-party distributors, and Sears HomeCentral, including repair services on all
appliance brands, installed home improvements and homeowner convenience services such as pest control and
carpet cleaning.
Sears also is one of Canada's largest retailers with 110 full-line stores, eight furniture stores and more than 1550
independently-owned catalog agents and dealer stores. In 1997, Sears sold its majority interest in Sears, Roebuck de
Mexico
Today the company's mission statement is: Sears: a compelling place to shop, to work and to invest.
Under Cunninghams leadership, Garden City, Michigan, became home to the first Kmart discount department store
in 1962. Seventeen additional Kmart stores opened in 1962, leading to corporate sales of more than $483 million
that year.
Just four years later, sales in 162 Kmart stores and 753 Kresge stores topped the $1 billion mark. Ten more years of
growth ensued, capped off by a record-setting occurrence in 1976. S.S. Kresge opened 271 Kmart stores that year,
becoming the first-ever retailer to launch 17 million square feet of sales space in a single year.
By 1977, nearly 95 percent of S.S. Kresge Company sales were generated by Kmart stores. To reflect this
development, the company changed its name to Kmart Corporation. Ten years later, Kmart sold the remaining
Kresge stores to concentrate fully on discount merchandising.
Big-Time Acquisitions and Divestitures
The 2,000th Kmart store opened in 1981, kicking off a decade of retail expansion and diversification. In 1984,
Kmart Corporation acquired Walden Book Company, Inc., the nations largest retail bookstore chain, and Builders
Square, Inc., a home-improvement retailer. In 1985 Kmart expanded with the acquisition of Pay Less Drug Stores
Northwest, Inc., and again in 1989 when it acquired PACE Membership Warehouse, Inc.
In 1990 Kmart acquired The Sports Authority, Inc., a sporting goods retailer, and a 22 percent ownership interest in
OfficeMax, Inc., an office-supply superstore chain. Kmart went on to increase its ownership of OfficeMax to more
than 90 percent in November 1991. In 1992 Kmart acquired the bookstore chain Borders, Inc., eventually combining
Borders and Waldenbooks into the Borders Group, Inc.
Kmart began to refocus on core businesses in the mid-1990s. Consequently, Kmart sold its PACE Membership
Warehouse subsidiary in 1993; divested its equity interests in The Sports Authority, OfficeMax and Borders Group
in 1994 and 1995; divested Pay Less Drug Stores Northwest in 1996; and sold its Builders Square operations in
1997.
In May 1992 Kmart made its entry into Central Europe by acquiring 13 stores in the Czech Republic and Slovakia,
which subsequently were sold in 1996.
The company also expanded its global operations through joint ventures in Mexico and Singapore in 1993. The
Singapore joint venture was dissolved in 1996, and Kmart sold its interest in the Mexican joint venture a year later.
Also in 1997, Kmart sold its Canadian operations, which had operated since 1929.
TENSES PRESENT PERFECT
Big Changes in the '90s
Kmart unveiled a bold new logo in 1990, setting the stage for renewal and change. It was in that spirit that Kmart
announced an accelerated five-year, $3.5 billion new-store opening, enlargement and modernization program in
1990.
In 1991 Kmart opened the inaugural Super Kmart Center in Medina, Ohio, the first of 106 full-service stores
offering groceries, fresh foods and general merchandise 24 hours a day, seven days a week.
Declining profitability required a full restructuring of the business beginning in 1995. A new Chairman, President
and CEO, Floyd Hall, was recruited to turn Kmart around and regain its discount franchise in the United States. Hall
immediately put into place a solid new team of executives and directors, and together they embarked upon
reorganizing the field management, restructuring the companys finances, refining merchandise assortments and
rejuvenating Kmart stores.
Kmarts turnaround in the eyes of the financial community was evidenced by the three-year, $3.7 billion bank
financing and $1 billion trust convertible preferred stock public offering completed in June 1996.
As the company moved forward with its turnaround, every task was focused on the retailers mission statement:
Kmart will become the discount store of choice by low- and middle-income households by satisfying their routine
and seasonal shopping needs as well as or better than the competition.
PRNewswire - October 15, 2001 - Grupo Televisa, S.A. today announced that it has reached a
definitive agreement with Grupo Prisa), a leading Spanish language communications group, to develop
the radio industry in Mexico. Under the agreement Grupo Prisa will acquire a 50% non-voting stake in
Sistema Radiopolis ("Radiopolis") through a U.S. $50 million investment and a U.S. $10 million capital
contribution. This joint venture is an ideal combination of Prisa's excellency in the Spanish radio
industry with Grupo Televisa's leading position in the Mexican market and will position Radiopolis for
continued growth in Mexican radio. Radiopolis owns 17 radio stations, 6 FM and 11 AM, in Mexico's key
markets -- Mexico City, Guadalajara, and Monterrey -- as well as stations in Veracruz, San Luis Potosi,
and Mexicali, and holds a 9% audience share of the country's radio listeners. Prisa owns the Spanish
radio network SER and Union Radio, which operate a combined 388 radio stations with 6 different
formats. Grupo Prisa is the leader in audience share throughout the day, reaching more than 4 million
people daily.
This merger is subject to the fulfillment of certain applicable corporate requirements, as well as
obtaining all necessary governmental approvals. Grupo Televisa S.A., is the largest media company in
the Spanish-speaking world, and a major player in the international entertainment business. It has
interests in television production and broadcasting, programming for pay television, international
distribution of television programming, direct-to-home satellite services, publishing and publishing
distribution, music recording, cable television, radio production and broadcasting, professional sports
and show business promotions, paging services, feature film production and distribution, dubbing, and
the operation of a horizontal Internet portal. Grupo Televisa also has an unconsolidated equity stake in
Univision, the leading Spanish-language television company in the United States.
Grupo Prisa, is the first communication, education, culture and entertainment group in Spain, which
reaches more than 18 million people through the press and radio on a daily basis, with more than 10
million listeners in its different programs and pay television, with more than 2 million subscribers.
Prisa is leader in the press through its newspaper El Pais; in radio through its network SER; in pay
television through Canal + and Canal Satelite Digital and in publishing through Santillana. Prisa also
develops sport press, economic and local, movies and television production, creating and distributing
digital content, music production and distribution, live entertainment, as well as print and advertising
commercialization. Prisa operates in 22 countries in Europe and America.
The McGraw-Hill Companies has been a leader in providing trusted information and
analysis for well over a century. From the Industrial Revolution to the Internet Revolution, The McGrawHill Companies has filled a critical need for information and insight by helping individuals and businesses
in a broad range of markets.
THE FOUNDATION
Founder James H. McGraw, a teacher in upstate New York, began working in publishing in 1884, and
purchased the American Journal of Railway Appliances in 1888. At the same time, co-founder John A. Hill
was working as an editor at Locomotive Engineer. Over the next fifteen years, the two men pursued their
separate careers specializing in technical and trade publications. In 1899, McGraw incorporated his
publications under the heading of "The McGraw Publishing Company;" in 1902, John Hill followed with
"The Hill Publishing Company."
The two men had crossed paths over the years and their mutual interest in science and technology led to
an alliance in 1909. The book departments of the two publishing companies merged to form the McGrawHill Book Company. John Hill took the office of President; James McGraw became the company's VicePresident. The rest of the functions of the McGraw and Hill companies continued their separate existence,
buying and expanding on numerous publications.
The partnership was developing well, but the sudden death of John A. Hill in 1916 was a blow to the
growing company. Business continued despite the loss, with James McGraw taking over as Book
Company President. In 1917, the remaining parts of the companies merged to form the McGraw-Hill
Publishing Company, Inc. and moved into the Hill Building on Tenth Avenue in New York City. Much as the
companies merged, some of the publications that duplicated each other merged as wellHill's
Engineering News and McGraw's Engineering Record became McGraw-Hill's Engineering News-Record.
DEVELOPMENT
Over the next ten years, the McGraw-Hill Publishing Company continued to expand and prosper.
Acquisitions included the Newton Falls Paper Co. in 1920, and the A.W. Shaw Co. in 1928. Additional
offices were opened in England and California, and new products like Bus Transportation were
introduced. James McGraw retired as President in 1928 and was replaced by Malcolm Muir, but remained
as Chairman of the Board. McGraw-Hill stock was publicly traded for the first time in 1929, which was also
the first year BusinessWeek was published.
James McGraw finally ended his long tenure with the company in 1935 when he stepped down as
Chairman, though he retained the title of Honorary Chairman until his death in 1948. The family's
involvement with the company continued, though, as he was succeeded by his son James McGraw, Jr.
(Jay). Jay took over as President of the company two years later when Malcolm Muir retired. The 1930's
and 1940's saw the continued development of McGraw-Hill, including the appearance of products in the
aviation, health, and atomic energy fields. Jay McGraw retired from the Presidency and Chairmanship in
1950, and was replaced by his younger brother Curtis W. McGraw.
The 1950's brought tremendous expansion in all areas, particularly in the field of educational publishing.
Since the original merging of the two book companies in 1909, McGraw-Hill had been steadily increasing
its offerings in textbooks for college level students. Many of its offerings were, of course, connected to the
traditional strengths of engineering and science, but by the mid-1930's McGraw-Hill had developed
specialties in business, management, and social science textbooks. With the development of the post
World War II baby boom the extension of these efforts into elementary and high school publishing was the
natural next step. With the acquisitions of the Gregg company (a publisher of vocational textbooks) and
the California Test Bureau (a developer of educational testing systems), the company established a
presence in the K-12 area. McGraw-Hill also purchased the companies of Warren C. Platt, a petroleumindustry publisher in 1953, and the future looked promising. Curtis McGraw, however, died suddenly in
September 1953, and his brother Donald C. McGraw had to take over as company President.
EXPANSION
Under Donald the company continued to growa new office was opened in Virginia in 1957, and the
Hightstown Distribution Center was opened in New Jersey the following year. The F.W. Dodge
Corporation was acquired in 1961, and a foreign language-publishing unit was established in 1963.
Donald McGraw retired as President and Chairman in 1968, and was followed by Shelton Fisher, who
also held the position of Chief Operating Officer. Renamed McGraw-Hill, Inc., the company continued to
diversify with new divisions, including the 1966 acquisition of Standard & Poor's, the provider of trusted
financial information and analysis. Standard & Poor's impact was felt almost immediately after its
acquisition when, in 1968, it helped create a new system to identify and track securities. The Committee
on Uniform Security Identification Procedures (CUSIP) number was the brainchild of the American
Bankers Association; Standard & Poor's provided the technological know-how and publishing ability to
maintain the database and publish the annual list of CUSIP numbers.
Other key additions to the McGraw-Hill portfolio included the 1972 acquisitions of television stations in
San Diego, Bakersfield CA., Indianapolis, and Denver. The Company also moved to its present location at
Sixth Avenue and Forty-ninth Street that same year. Shelton Fisher retired from the Company in 1974,
and was followed as President by Harold McGraw, Jr., grandson of the founder and son of a former
company Vice-President. After the company successfully defended against a takeover attempt by
American Express in 1979, the 1980's brought new products and different approaches, including a switch
from media to market orientation. Revenues topped $1 billion for the first time in 1980. Harold McGraw Jr.
retired as President and CEO in 1983, but stayed on as Chairman until 1988 when he was named
Chairman Emeritus. Joseph Dionne, who had been with the company in various capacities since 1967,
followed Harold as President and CEO.
THE INFORMATION AGE
In 1989, working with Eastman Kodak and R.R. Donnelley, McGraw-Hill introduced Primis Custom
Publishingthe first customized publishing system to allow professors to design their own textbooks. In
the 1990s, Primis' share of the market grew to 18.5% and it was acknowledged as the leading U.S.
custom publisher. In 1995, McGraw-Hill unveiled a new corporate identity campaign and became The
McGraw-Hill Companies. The corporation also reorganized its divisions to better serve the public. The
corporate Internet site was also launched in 1995, and a corporate Intranet site was created in 1996, the
same year revenues reached $3 billion.
Joe Dionne retired as CEO in 1998 and was succeeded by Harold W. (Terry) McGraw III, bringing the
leadership of The McGraw-Hill Companies back to the McGraw family. The son of Chairman Emeritus
Harold McGraw Jr., Terry has been with McGraw-Hill since 1980. Under Terry McGraw, the critical issues
of copyright/database protection and e-commerce have taken center stage. Similarly, The McGraw-Hill
Companies' groundbreaking privacy policy has become a model for other companies to follow. In 1999,
on the strength of businesses like Standard & Poor's, BusinessWeek and McGraw-Hill Education, the
corporation achieved its seventh consecutive year of record financial performance and reached an alltime high of $4 billion in revenue.
The future of the enterprise looks bright as the corporation takes its e-business strategy into the year
2000 and beyond, and there is over a century of history to back up the claim that The McGraw-Hill
Companies is one of the premier information providers in the world
Since 1888 our businesses have grown and prospered because we are committed to excellence and
innovation. The integrity, quality, reliability and relevance of our information: online, on the air and in print
in all our brands and for all our markets -- is respected and trusted around the world. It helps people run
their businesses, do their jobs, improve their education and enrich their lives.
Innovation is a hallmark of our heritage. That means reaching higher, seeking new directions, anticipating
and meeting customers needs with new products and better delivery systems. One of the most exciting
areas where we are applying these innovative ideas is in electronic commerce and the many
opportunities created by the digital age. At a time of information clutter, confusion, transformation and
change, we provide our customers with what matters most insight, context, and objective analysis in
ways that set the standard for information distribution.
Youll work with other talented people committed to excellence and innovation in an environment where
people, talent and results matter. And, youll help create new milestones for yourself, our customers, and
our shareholders.
Without the $7,950 videophone, manufactured by London's 7E Communications Ltd., live video from a remote
place like Afghanistan requires a satellite uplink facility comprised of at least a ton of recording and broadcast gear.
Operated by a crew of three to four, the gear is usually housed inside a van.
"Moving all that equipment is a big operation, especially in a war zone," said CNN chief news executive Eason
Jordan.
The videophone has allowed individual television reporters to wriggle close to the action, chiming in via jerky,
pixelated video from the some of the planet's furthest reaches.
The device first grabbed attention in April, when a CNN reporter connected one to a car battery and broadcast live
images of a U.S. spy plane crew departing China's Hainan island.
The videophone allowed CNN to broadcast its footage almost a half-hour earlier than rival broadcasters, who drove
to an uplink facility to transmit their video.
The pictures riled competing journalists and Chinese authorities, who detained the reporter and confiscated the
videophone.
Although the device is considered of little use in the United States - where most areas are within reach of satellite or
microwave transmission facilities - CNN reporters used videophones after the Sept. 11 World Trade Center attack,
transmitting from much closer to "ground zero" than broadcast trucks could reach.
Videophone broadcasts require three separate components, said Gerry Gutman, president of Richtec Inc. of Ocala,
Fla., the North American distributor of the 7E videophone.
The 9-pound videophone itself is used mainly to compress the video for transmission. Few reporters rely on the
rudimentary golf-ball shaped camera that accompanies it, Gutman said. Most reporters connect it to their own
cameras - a portable digital video camera will do.
To stream the video to headquarters, the videophone must be connected to a satellite phone, a device about the size
of a laptop computer. The sat phone recommended by 7E, manufactured by England's Ottercom Ltd., costs $9,950.
The phone relays the signal via a communications satellite parked in geostationary orbit at 22,300 miles above the
earth. Since the signal travels at the speed of light, a "live" satellite broadcast is actually delayed by a half-second,
Gutman said.
The setup also requires installation of a $6,500 7E receiving device at news headquarters that decodes the signal for
broadcast.
Besides CNN, Gutman said he has sold videophones to major television networks including the British Broadcasting
Corp., Fox, ABC and NBC.
Associated Press Television News has also supplied staff in the Afghan theater with videophones, said Sandy
MacIntyre, head of news at APTN.
The units' primitive broadcast quality stems from the limitations of portable satellite telephones, which can transmit
no faster than 128 kilobits per second, just over twice the speed of the 56 kbps dial-up modems used by home
computers, Gutman said.
Large satellite uplink facilities typically stream video at 15 megabits per second, requiring more than 100 times the
bandwidth.
For a man whose company had just seen a huge chunk wiped off its share price and had announced the
loss of 12,000 jobs, Jorgen Centerman on Tuesday was sounding remarkably confident.
Mr Centerman, chief executive of ABB, one of the world's biggest engineering groups, said he was
"proud" his company had performed as well as it had in the first half of the year. "We've got some hard
work ahead, but I'm quite optimistic about the company."
Investors were a lot less sanguine, marking down ABB's shares in response to a 21 per cent decline in the
company's first-half operating earnings. "Mr Centerman's style is to be upbeat, but he has no reason to
be," said one analyst. "Business conditions are rapidly worsening and it's clear he's got a tough job on his
hands."
Mr Centerman, 49, was catapulted into the top job at the Zurich-based ABB at the end of last year, after
the sudden ousting of his predecessor, Goran Lindahl.
Both Swedes, the two men had worked their way up the company under Percy Barnevik, a hard-driving
Swedish manager who pushed on the development of ABB after it was formed in a 1987 mega-merger
between Asea of Sweden and Brown Boveri of Switzerland.
When Mr Lindahl announced his departure in October last year, he said it was because he realised
someone with greater information technology skills was needed to steward the company. The news
surprised onlookers, but few saw reason to query Mr Lindahl's version of events.
It has since transpired that he fell out in a big way with Mr Barnevik - who remains non-executive
chairman of ABB even though he stepped down as chief executive five years ago. Behind the scenes, Mr
Barnevik had accused Mr Lindahl of taking his eye off the business.
Mr Centerman - previously in charge of ABB's industrial automation division - took over.
"It's none of my business what happened [between Mr Barnevik and Mr Lindahl]," he said on Tuesday. "I
didn't know anything about it, because I only went on the ABB board this March."
While not wishing to criticise his predecessor, Mr Centerman said he inherited a "cost structure that I was
not happy with".
That explains partly the cuts of 7 per cent in ABB's workforce announced on Tuesday, which will be
spread over 18 months and save about $500m a year. Mr Centerman has also introduced reorganisation of
the company into "customer-facing" divisions - covering businesses such as energy, utilities and process
industry - in place of product- or service-oriented groupings.
The new chief executive said he was happy about the way the changes were going. "Our customers like
the new structure. They want it yesterday." As for the underlying figures, he preferred to dwell on
earnings before interest and tax, excluding capital gains associated with divestments. On this basis, the
company saw an earnings increase in the first half of this year of 11 per cent, expressed in local
currencies, or 4 per cent in dollars. In another encouraging sign, ABB increased its cash flow.
Mr Centerman said these figures showed a "substantial improvement in operating performance, given the
weak market and the company reorganisation".
Nonetheless, he believed the next year would be "difficult", with few prospects of a substantial upturn in
orders - which in the first half were flat compared with a year previously.
Mr Centerman was keen to distance himself from the remarks of Allen Yurko, the chief executive of
Invensys, a rival UK automation company. Mr Yurko announced his resignation yesterday after saying
industrial production in the US was going through its most serious recession for 30 years.
Mr Centerman said: "We are seeing a much more mixed picture in which there is no clear pattern, either
in terms of geography or in industrial sectors."
Mr Centerman said he was "concerned" about ABB's share price, which has halved this year and was
trading on Tuesday at around levels last seen in October 1998. "The only way for the share price to come
back is through a better operational performance. It's not difficult to figure out what we need to do."
That may well be true, but Mr Centerman's battle to turn ABB round might be a lot tougher than he is
keen to admit.
Although the minimum wage is an hourly wage, this doesn't mean that you have to pay your employees
by the hour. You may choose to pay a salary, commission, wages plus tips or piece rate, as long as the
total amount paid divided by the total number of hours worked is equal to at least the minimum wage.
To figure out how much you are legally required to pay your employees, you must (1) determine whether
your business and your employees are covered by the minimum wage laws; (2) find out what the
minimum wage is in your state; and (3) determine whether you may deduct any amount from the
minimum wage.
Minimum Wage Requirements Do Not Apply to All Employees
The main law affecting workers' pay is the federal Fair Labor Standards Act (FLSA), found at 29 U.S.C.
sections 201 and following. Although the FLSA is very broad, some employers and employees are not
covered. Generally, your business must abide by the FLSA if you have $500,000 or more in annual sales.
Even if your business is smaller, however, your employees are entitled to the minimum wage if they work
in what Congress calls "interstate commerce." This includes any employee who makes a phone call to or
from another state, sends mail out of state or handles goods that have come from or will go to another
state.
There are a few exceptions. The following workers do not have to be paid the federal minimum wage:
Independent contractors. Only employees are entitled to the minimum wage.
Outside salespeople (a salesperson who works a route, for example)
Workers on small farms
Switchboard operators employed by phone companies with no more than 750 stations
Employees of seasonal amusement or recreational businesses
Employees of local newspapers having a circulation of less than 4,000
Newspaper deliverers, and
Apprentices, students and learners -- certain inexperienced workers as defined by federal law.
Keep in mind that you must pay the higher of the federal or state minimum wage. Even if your employees
are exempt from the federal minimum wage laws, they may still be covered under your state law. If so,
you must pay them the state minimum wage. To learn more about your state minimum wage law, contact
your state labor department.
The federal minimum wage is currently $5.15 per hour.
Deductions
Under federal law and the laws of some states, you may be allowed to deduct certain amounts from the
minimum wage due an employee. For example, if you provide room and board to your employees, you
can deduct money from their paychecks as reimbursement as long as the employee agrees.
You may also be entitled to a "tip credit" under federal law. If an employee makes at least $20 per month
in tips, you only have to pay half the minimum wage. However, if the employee's wage plus actual earned
tips does not add up to the minimum wage, you must pay the difference. Some states -- including
California -- do not allow employers to take a tip credit. So if you are a California employer, you must
pay tipped employees the minimum wage.
OB (Organizational Behaviour)
--------------------------------------------------------------------------------
May 2, 2001
Working in an office can be a trying experience.
Often the easiest part of the Job is the actual work. The trouble comes in trying to get along with your
supervisors and co-workers. And how they behave is often a function of the corporate culture, company
ethos, and the subsequent behavior of individuals within the organization. There are a myriad of methods
that you can use to adjust to the seemingly bizarre behaviors that confront you in the workplace, and how
well you adapt depends on who you are, and how you perceive yourself.
Some people isolate themselves as much as possible, realizing that they get more work completed without
interruptions - and limit their chances for negative interaction with colleagues. They regard work and
home as separated entities, and try not to confuse the two. They tend to avoid revealing much about their
life outside of work to people they work with, and are unlikely to join in workplace gossip or games.
They may realize that substantial interaction under stress at work causes them to blow up at co-workers
(and supervisors!).
Other workers need the support, advice, interaction, and camaraderie of not only their peers, but
supervisors as well. They want (maybe even need) to have fun at work, and many of their friends started
out as co-workers first. Self described "people persons" (ugh) live for the hustle and bustle that makes an
office seem more like a home away from home. Interoffice gossip, email jokes, and goofing on friends at
work makes their day go by quicker, and may (arguably) prolong their productivity and tenure at the firm.
To survive (and thrive) in the workplace you need to come to grips with the corporate culture that
predates your arrival on the Job, and integrate it with your personal idiosyncrasies.
-------------------------------------------------------------------------------Keep It Short
-------------------------------------------------------------------------------April 9, 2001
Everyone's got some advice about how to make your resume stand out from the rest. Here's ours:
Keep it short and relevant.
Your typical HR person is probably as lazy as you are. Before you get huffy, consider: the recipient of
your resume is probably less excited about reading your work history than you are about writing it. To
make matters worse, they probably have piles of them to sift through. So the kitten stationery and purple
ink aren't likely to make you a shoe-in, and the two-page cover letter detailing your involvement in local
recycling drives and other community events probably won't help, either.
No, the HR department really just wants the facts. While you may be devoted to community programs,
save those details for the interview, and treat your resume for what it really is: your ticket to get into an
interview.
The best basic format we've seen has been a single sheet with the following:
- Name
- Address
- Phone and email
- Skills
- Work History
- Education
- And finally, a note to the effect of "References and further details available upon request."
Try it out. See what it does to your responses
ew York: Waiting for Work
Thousands of job seekers lined up outside Madison Square Garden this week hoping for a chance to bring
some normalcy back to their lives.
FORTUNE.COM
Friday, October 19, 2001
By Jonah Freedman
Send to a Friend Print Subscribe to Fortune
Recruiters had their hands full. Carrolyn Nieto, an NYU administrative staffer who was looking to fill
security and maintenance positions, estimated that maybe 20 out of the 300 resumes she collected were
from individuals out of work because of the Sept. 11 attacks. "We were hoping to help out those who lost
their jobs as a result of the tragedy, but it's a free-for-all," she said as she left the Expo Center. "It seems
like every unemployed person in the Tri-State Area is in there."
Or outside, waiting in the blustery mid-autumn cold. The Job Expo was scheduled to close at 4 p.m., but
with an increasing mass of job hunters gathering, officials closed the doors nearly two hours early. That
left a line of thousands inching their way along a path of police barricades, still snaking around the corner
and trickling hundreds of feet down West 33rd Street.
Luckily for the nervous job seekers who faced the prospect of not being able to even get in, many
recruiters ventured outside to continue screening candidates. "It's like a mob scene inside," said Renee
Ludwig of the Long Island placement firm Wilke Staffing. "I only came out to smoke a cigarette and
realized I'd do more good outside than in."
Most of those in line were dressed in their best interviewing attire, and many clutched cell phones to their
ears as Ludwig and other recruiters scoured the line for applicants, accepting scads of resumes and doing
their best to address questions. In the end, a New York City survey of the companies attending found that
of the 6,000 job seekers who made it in, more than 20,000 screenings and interviews were scheduled.
More than 4,000 applicants are already being considered for various positions ranging from white-collar
jobs at J.P. Morgan Chase and Ernst & Young to entry-level or seasonal posts at the Duane Reade drug
store chain and Macy's department store.
And for those who stood out in the cold and never made it in?
"We want to encourage those who could not be accommodated at the job fair or anyone whose job has
been affected by the World Trade Center disaster to come to next week's fair at the Garden," said Matthew
Higgins, press secretary for Mayor Rudolph Giuliani. That's right, the city has scheduled another event to
accommodate the overflow crowd. October 25--same time, same place, same hope.
Shelly Lazarus, chairman and CEO, Ogilvy & Mather Worldwide
"When I was 22, I was an intern at General Foods. It was during the Vietnam war, and the assistant and
the associate product managers went into the Reserves. So never having worked before, I took over the
jobs of two men. I would write down all the vocab and things I didn't understand and go over them with
my boss. Each day I filled up less of the yellow pad. If you have enough energy, you can do anything, and
you don't have to do it all yourself. Just find the right person and ask questions."
David Stern, commissioner of the National Basketball Association
"My dad owned Stern's Delicatessen in Manhattan. I mopped, packed, did whatever you had to do to keep
it running. The worst part was trying to meet my father's standards."
Ben Stein, host of Win Ben Stein's Money
"It was a summer job when I was 15, at Shoe Giant in Langley Park. Maryland was very segregated, and a
lot of black people came to the store. I found them incredibly pleasant and easy to do business with. They
didn't have the suspicious, crazy attitude of the white customers. And this is really what started me--I
know this sounds strange--on the road to being active in civil rights."
Donald Trump
"I graduated from the Wharton School of Finance on a Saturday, and Monday morning I was working for
my father in Brooklyn. I was very familiar with construction through my father, but this was a hardhat job
and I was supervising the different trades. I was very proud of that. I got it built on time and under budget,
which I've done numerous times since."
Richard Scrushy, chairman, CEO, and founder of HealthSouth Corp.
"My first job was at Thirsty Boy Milkshakes. This was when I was 8 or 9--back then they didn't have the
child labor laws they have now. When I was older, I worked for a brick mason. Laying brick makes
everything I have ever done in my life look easy. That's when I decided to go to school, because physical
labor was so hard."
Dunkin' Donuts Redux
If you were to go back to your first job, what would be different? FORTUNE's Cait Murphy finds out.
FORTUNE
Monday, October 1, 2001
By Cait Murphy
Send to a Friend Print Subscribe to Fortune
So who's making the coffee? Immigrants. Every single worker at the Cos Cob Dunkin' Donuts, from the
owners, who were born in Greece, to the manager (Guatemala), to the most senior baker (Brazil) and the
longest-serving counter help (Taiwan), is an immigrant. These are not great jobs. Pay starts at $6.85 an
hour, and there are no benefits to speak of. Some hope to work hard for a few years and return home with
enough savings to jump-start their children's prospects. Others are struggling--with the language, with the
society, with their fatigue. But it's not impossible that this can be the start of something better.
Take Jose Illescas. His first job at Dunkin' Donuts in 1976 was as a night cleaner, scrubbing the
bathrooms and kitchen equipment. He now manages this and three other shops; he also owns a
landscaping business and a home in Old Greenwich. Or Laura Lopera, a philosophy student from
Medellin, Colombia, who has been in the country for six months. It's hard to imagine that she's going to
be stuck behind the counter forever. Okay, her English is limited and dominated by doughnuts. But she's
reading Dostoyevsky to build her vocabulary, loves Rimbaud, Plato, and Ambrose Bierce, and is stunned
that I haven't read Kafka.
Some things don't change. Doughnuts and coffee are still the core items of the Cos Cob store, which
grosses about $1 million a year. People are still pathetically grateful for their coffee and passionate about
how it's made. They'll ask for something like "coffee with just a little milk and 3 1/2 sugars." And they'll
watch to make sure your hand doesn't shake in a quarter of a teaspoon more sugar or a squirt too much
milk. Early-morning coffee jokes are still unappreciated. Blue-collar men--particularly tree surgeons, for
some odd reason--are still the best tippers. The coffee is still excellent. And Cos Cob's biggest cat--of the
two-legged variety--is still on the prowl. She comes in, sees me behind the counter, and boggles. "Cait,
you're working here?"
"Yes. What can I get you?"
No doubt the news of my precipitous career collapse will be on the grapevine in a matter of minutes.
Happily, Cos Cob still has a fairly robust tolerance for the eccentric. Late one afternoon a battered station
wagon rolls in, appliqued with wings and a large shamrock. A big shambling wreck of a man enters,
orders three sugared crullers, and leaves without incident. "He was okay today," notes Lopera, "but he's
weird. Sometimes he comes in naked."
In my first Dunkin' Donuts tour, I learned a lot about Cos Cob and quite a bit about how to deal with
people. I learned that in the workplace, not wanting to do something--say, frosting chocolate doughnuts-just doesn't matter. You have to do it, so there's no use whining. I learned how much smoother the day
goes when people act with civility; a shift filled with pleases and thank-yous is better than one lacking in
such grace notes.
The second time around, all this is still true. But it also struck me more than ever just how wearying it is
to schlep doughnuts and coffee for hours at a stretch, how hard many people work for little reward, and
how urgent the American dream still is.
In 1998, Seymour Schlager responded to a classified ad for a medical director position at Becton
Dickinson, one of the nation's largest medical device companies. His resume said that he was a doctor and
a lawyer and held a Ph.D. in microbiology. He had spent time as a high-ranking AIDS researcher at
Abbott Laboratories and then at a small pharmaceutical. He was hired.
His resume didn't mention that in 1991 he had been convicted of attempted murder. Police entered his
house to find his wife--whom he had tried to smother with a pillow--holding him at bay with a knife. He
spent 1991 to 1997 in prison.
It just didn't occur to Becton Dickinson to check. A simple Googling would have turned up one of the 24
articles about Schlager's case--several of them front page--that had appeared in the Chicago Tribune.
(Becton Dickinson fired Schlager for misrepresenting himself.)
Most companies today--69%, according to the Society for Human Resource Management--do some kind
of background check on employees, and yet high-profile examples of failed screening keep popping up.
Sunbeam fired CEO Al Dunlap for dubious accounting; he'd done it before. Investors handed over $35
million to Michael Fenne, founder of Pixelon, evidently not knowing he had a previous life as "Dazzling
Dave" Stanley, one of Virginia's Most Wanted. When even Little Leaguers lie about their age, how do you
know who anybody is?
The best way, naturally, is to pay someone to find out. The significant players in the background check
industry are the Big Five consulting firms as well as investigators like Kroll. They don't come cheap: An
average check costs around $3,000; an extensive, high-level one costs up to $10,000.
In most major companies, incoming CEOs, CFOs, and other high-ranking officers are virtually
guaranteed a thorough review. Banks and venture capitalists wanting to know more about their
prospective partners or investments are also major clients. "You just never know," says Wendy Schmidt,
investigative specialist at Deloitte & Touche.
"You never know" might as well be the industry slogan. Thirty percent of resumes contain misstatements
of fact, according to industry experts. Investigators at Kroll turn up information sufficient to kill a deal in
15% of cases, according to a report put out last year by managing director Betsy Blumenthal. In the dotcom era, the number was above 30%. "Mostly it was the graybeards," says Blumenthal, "the older board
members brought in for their credibility and contacts."
Investigators are able to catch such types because of what former FBI agent Scott Moritz, now director of
investigative services at BDO Seidman, calls the criminal "footprint"--a pattern of behavior. "People don't
just wake up and become bad guys," he says. "They evolve over time. And bad guys don't leave a normal
footprint like we would."
The most common resume fudge is to expand the dates of employment. Al Dunlap did it in the bio he
submitted to the 1998 Who's Who--with dates well beyond those that the companies would have reported.
With minimal tracking, Dunlap's Bunyan-esque footprint--which led to the discovery that he had been
fired from Nitec Paper Corp. in 1978 for overstating profits--would have easily been exposed.
Once investigators exhaust the public documents available online, the hard part begins. Most criminal
records--though often reported in the media in cases like Seymour Schlager's--aren't actually available
online as public documents. Only government agencies like the FBI have complete access to them on a
national level. Private citizens in search of such information--as well as litigation and bankruptcy
records--have to manually check the files in the county courthouse in every place a subject has lived or
worked. That takes time and money. Discovering crimes committed under an alias (difficult) and getting
overseas information (virtually impossible) take even more time and money.
Ultimately, though, background checks have to be done at all in order to be effective. If 69% of
companies do some kind of check, 31% do none, often relying instead on the recommendations of
executive search firms. "At every level, it can become a cost issue," says Scott Moritz at BDO Seidman.
"But it's far less costly to do the prevention than to perform the triage. You never know."
-------------------------------------------------------------------------------1 If I had gone to England, I ______ missed Rachel's visit.
had
would have
-------------------------------------------------------------------------------3 I ______ gone to the cocktail party if I hadn't had too much work on.
had
would have
-------------------------------------------------------------------------------4 I ______ recognized you if somebody hadn't told me who you were.
hadn't
wouldn't have
-------------------------------------------------------------------------------5 I would have bought a Mercedes if I ______ been able to afford it.
had
would have
-------------------------------------------------------------------------------7 I wouldn't have told you if I ______ known that you would get upset.
had
would have
-------------------------------------------------------------------------------8 I'd have come in earlier if I ______ known how much urgent work there was.
had
would have
--------------------------------------------------------------------------------
-------------------------------------------------------------------------------11 If I'd left the house on time, I ______ missed the train.
hadn't
wouldn't have
-------------------------------------------------------------------------------13 If you ______ listened to what I said, none of this would have happened.
had
would have
-------------------------------------------------------------------------------14 I ______ taken the job if I'd known about the bad working atmosphere.
had
would have
-------------------------------------------------------------------------------15 If you ______ been out when I called, I would have told you yesterday.
hadn't
wouldn't have
-------------------------------------------------------------------------------16 I ______ come and seen you if I'd known you were ill.
had
would have
-------------------------------------------------------------------------------17 I wouldn't have bought this if I ______ known it only has a 3 month guarantee.
had
would have
-------------------------------------------------------------------------------18 If I'd taken that job, I don't think I ______ been very happy.
had
would have
-------------------------------------------------------------------------------19 If I ______ worked harder when I was at school, I could have had a better job.
had
would have
-------------------------------------------------------------------------------20 If you ______ told me sooner, I'd have kept you a ticket.
had
would have
would be
-------------------------------------------------------------------------------2 If motorists had to pay an extra tax to drive in cities, they ______ their cars a lot less.
use
used
will use
would use
-------------------------------------------------------------------------------3 If public transport ______ free, less people would use their cars.
is
were
will be
would be
-------------------------------------------------------------------------------4 If you ______ rich, what car would you have?
are
were
will be
would be
-------------------------------------------------------------------------------5 If your boss ______ you to work all week-end, what would you say?
asks
asked
will ask
would ask
-------------------------------------------------------------------------------6 If I ______ a Rolls Royce, I'd give it away to charity. I don't believe people should own big cars.
have
had
will have
would have
-------------------------------------------------------------------------------7 If I went to Russia, I ______ the Hermitage museum.
visit
visited
will visit
would visit
-------------------------------------------------------------------------------8 If you lend me some money, I ______ you back tomorrow.
pay
paid
will pay
would pay
-------------------------------------------------------------------------------9 I ______ more exercise if I were you. You're getting fat.
take
took
will take
would take
-------------------------------------------------------------------------------10 I ______ to him if I were you.
don't listen
didn't listen
won't listen
wouldn't listen
-------------------------------------------------------------------------------11 I ______ by tomorrow, if I have time.
come
came
will come
would come
-------------------------------------------------------------------------------12 If my company asked me to move to another country, I ______
refuse
refused
will refuse
would refuse
wouldn't be
-------------------------------------------------------------------------------19 If I have time, I ______ you.
call
called
will call
would call
-------------------------------------------------------------------------------20 I ______ do that, if I were in your shoes.
don't do
didn't do
won't do
wouldn't do
-------------------------------------------------------------------------------1 You ______ tired tomorrow if you don't go to bed soon.
are
were
will be
would be
had been
-------------------------------------------------------------------------------2 Butter ______ if you leave it out in the sun.
melts
melted
will melt
would melt
had melted
-------------------------------------------------------------------------------3 I ______ it very much if they gave the job to Mark.
don't like
didn't like
won't like
wouldn't like
hadn't liked
-------------------------------------------------------------------------------4 I never get here on time if I ______ the train.
take
took
will take
would take
had taken
-------------------------------------------------------------------------------5 I wouldn't have met up with John if I ______ at home.
stay
stayed
will stay
would stay
had stayed
-------------------------------------------------------------------------------6 You ______ work hard if you want to pass your English exam.
have to
had to
will have to
would have to
had had to
-------------------------------------------------------------------------------7 I'd have helped you if you ______ me there was a problem.
tell
told
will tell
would tell
had told
-------------------------------------------------------------------------------8 I wouldn't get so angry with you if you ______ more work done.
get
got
will get
would get
had got
-------------------------------------------------------------------------------9 You______ better English if you did more homework.
speak
spoke
will speak
would speak
had spoken
-------------------------------------------------------------------------------10 I'd have bought the bigger model if I ______ afford it.
can
could
will be able to
would be able to
had been able to
-------------------------------------------------------------------------------11 I ______ you at the cinema if you can make it.
see
saw
will see
would see
had seen
-------------------------------------------------------------------------------12 I would never have believed it was possible if I ______ it with my own eyes.
don't see
didn't see
won't see
wouldn't see
hadn't seen
-------------------------------------------------------------------------------13 You can't be good at sports if you ______ a lot.
smoke
smoked
will smoke
would smoke
had smoked
-------------------------------------------------------------------------------14 You ______ more work done if you planned your day better.
get
got
will get
would get
had got
-------------------------------------------------------------------------------15 I ______ you all about it if you have the time.
tell
told
will tell
would tell
had told
-------------------------------------------------------------------------------16 I'll be very pleased if you ______ books from my site.
buy
bought
will buy
would buy
had bought
-------------------------------------------------------------------------------17 Michael never ______ a round of drinks if he can avoid it.
buys
bought
will buy
would buy
had bought
-------------------------------------------------------------------------------18 Sammy gets angry if you ______ he is fat.
say
said
will say
would say
had said
-------------------------------------------------------------------------------19 I'd have told you the news sooner if I ______ you.
see
saw
will see
would see
had seen
-------------------------------------------------------------------------------20 I ______ so keen on employing him if I didn't think he was the best person for the job.
am not
was not
will not be
would not be
had not been
-------------------------------------------------------------------------------1 Michael never buys a round of drinks
Following the 0.25% cut in interest rates made by the Bank of England on 18 September,
Abbey National has announced it will only cut its savings rates by a maximum of 0.10%.
In addition, this rate cut will come into effect on 1st November, meaning that Abbey
National's savers will have one month more earning a higher rate of interest. This move
follows a recent statement by Abbey National that it would seek to protect savers if the
base rate was cut, thereby balancing the needs of savers and mortgage holders. Abbey
National announced recently that it would cut its SVR by 0.10% to 6.65%. "This latest
move follows our recent statement outlining our commitment to savers, who outnumber
borrowers seven to one," said Janet Connor, Director of Retail Marketing at Abbey
National. This ensures that savers, and in particular those who rely on their interest as
income are protected from some of the impact of this latest reduction in the Bank of
England base rate." "Should a further base rate cut be announced this coming Thursday,
we will continue with our commitment to protect savers from the full extent of the cuts."
E-Commerce
E-Commerce Muddles Through
Penelope Patsuris, Forbes.com, 10.23.01, 1:14 PM ET
NEW YORK - With many Internet companies having recently reported earnings, we
know where the industry stands. The question is, of course, where is it headed. Here is a
look at what we've learned so far about two large e-commerce sectors--online shopping
and online travel.
Online Shopping
Lessons learned: Yes, the attacks of Sept. 11 made a weak economy even worse, but don't
write online shopping off completely.
On Oct. 18 eBay (nasdaq: EBAY - news - people) beat consensus estimates, despite a
post-Sept. 11 sales slowdown that management said cost it at least $5 million in sales.
The auction giant can hardly be considered representative of the electronic-commerce
sector, since eBay acts only as a service matching buyers and sellers, rather than stocking
and selling its own inventory. Still, the fact that eBay's sales activity returned to nearly
pre-attack levels in just a few weeks indicates that other Web retailers, namely
Amazon.com (nasdaq: AMZN - news - people), may not be as hard hit by the war on
terrorism as originally anticipated.
In fact, despite the fact that e-commerce spending fell 25% in the week after the attack,
Nielsen/NetRatings recently reported that total September online spending jumped 54%
above last year's figure, for a total of $4.7 billion.
When the company reports later today, analysts will be listening closely for any clues as
to how the dot-com expects to fare in the fourth quarter. The holidays are the site's most
important sales season, and also when Amazon has repeatedly promised to deliver proforma operating profitability.
The fact is that Amazon's most promising business segment is its services division, which
has deals to sell on behalf of Target, Toys "R" Us and travel sites Hotwire and Orbitz.
These arrangements require far less capital expenditure for Amazon than selling its own
inventory, and not coincidentally happen to resemble eBay's high-margin business model.
Finally, the fact that the online shopping drop-off isn't as steep as feared could also be a
boon to portal Yahoo! (nasdaq: YHOO - news - people), perhaps improving the odds of
its efforts to get users to do more shopping and less reading on its site. While there is no
question that right now Yahoo! remains mired with an ad-dependent business model amid
an ever-crashing ad market, the site's program to lease storefronts to merchants is on the
right track: Yahoo takes a cut of the sales and doesn't have to touch inventory. The
question is whether the portal can shift its business model quickly enough to stay afloat.
The bottom line: Despite a weak economy and a misguided start for the industry, online
shopping sites are evolving into a business model that works.
"We're just hoping to hear progress on damage control," says SoundView Technology
analyst Kevin Slocum. "It wouldn't surprise me if the numbers come in weaker than
current expectations."
Consensus estimates say Lucent (nyse: LU - news - people) will report about $5.7 billion
in revenue (down from $5.8 billion last quarter), but Wall Street is looking for some
progress in curbing bottom-line losses. Considering Lucent laid off 19,000 employees
since January in an effort to cut annual costs by $2 billion, one hopes it has accomplished
that mission. Lucent said it will lay off an additional 15,000 to 20,000, although the
company was actively recruiting at the Twin Towers Job Expo in New York last week.
First Call consensus expects Lucent to report a loss per share of 23 cents, compared with
a loss per share of 35 cents last year. Analysts insist the numbers aren't very relevant, and
management's discussion of the turnaround is more important.
That sounds suspiciously like Internet bubble talk. If the numbers aren't relevant, then
what is? It will be a year since Lucent announced the departure of Chairman Richard
McGinn and the "temporary" appointment of Henry Schacht in the job. But Schacht has
been working against a sluggish market, and a particularly sluggish telecom-equipment
market. The best investors can hope for is signs that Lucent is managing its operational
costs, improving its cash flow, and making progress on its long-term "turnaround" plan,
plus any evidence the company can cut costs without hurting its ability to generate
revenue.
Lucent's restructuring hasn't excluded Bell Labs, described by Schacht as the "heart and
soul" of Lucent Technologies. Last week the company appointed a new president of Bell
Labs, Bill O'Shea, as well as recently appointing a new vice president of research, Jeff
Jaffe. But it may not be until the spring when it becomes clear exactly what Bell Labs has
up its sleeve. Payroll reductions can only get Lucent so far. The company needs new
products and services more than ever.
"They haven't debuted new technologies very much. I would expect in the next six
months to see what new products they're hatching," Slocum says.
Although Lucent has several customers that lost offices in the World Trade Center,
analysts don't expect the company to generate much in replacement-equipment revenue.
According to a note issued by Morgan Stanley research analyst Alkesh Shah, "The
amount of telecommunications equipment destroyed during [Sept. 11's] attacks represents
a very small portion of the worldwide equipment deployed. The same fundamental issues
of capacity and gluts and lack of user demand still exist after [Sept. 11's] tragedy," Shah
wrote.
Slocum, for one, believes there could be some upside in equipment sales as a result of the
attacks, but adds, "I wouldn't expect that to be part of the discussion. They were probably
helped as much as they were hurt, but [management probably] won't talk about it in that
context."
OMPANIES & FINANCE EUROPE: ABN Amro pledge on investment bank BANKING
SCALED-BACK ARM WILL STAY A CORE ACTIVITY, SAYS CHAIRMAN:
ABN Amro, the Dutch bank, moved yesterday to quell speculation that it might quit
investment banking after unveiling plans to scale back its activities in that area and
announcing that the executive charged with leading the unit was stepping down.
Rijkman Groenink, ABN Amro chairman, said: "You can't conclude from current
decisions that wholesale banking is less of a core activity, and we aren't planning at all on
disposing of these activities."
The bank will reduce the capital allocated to the wholesale banking unit by 20 per cent by
2004 and divert that money into retail and asset-gathering franchises, which will form the
bank's core strategic foundation. Retail banking activities make up 70-80 per cent of
business.
Rijnhard van Tets, chairman of the wholesale banking division, will leave the
management board in December to take up a new post as the bank's representative on a
number of corporate boards and committees. He will be succeeded by Wilco Jiskoot,
another board member.
Fellow board members Jan Maarten de Jong and Dolf van den Brink are also stepping
down to take up other jobs in the group. Mr Groenink said the company did not need a
10-strong board given the success of the restructuring initiatives he launched in May
2000.
Marc Rubenstein, analyst at Credit Suisse First Boston, said: "The three members of the
old guard are gone, and that gives Mr Groenink a lot more power to push through his
restructuring plans."
He accepted the logic of scaling back investment banking. "Rather than running uphill,
they've decided to be more realistic." Investors agreed, with shares gaining 2.7 per cent to
Euros 19.99.
Net first-half profits in wholesale banking fell 64 per cent to Euros 182m (Dollars
166.5m) from Euros 507m in the same period a year ago.
The bank will shed unprofitable client relationships to focus on 2,000 key clients - mainly
European financial institutions and large corporations. "It has become increasingly clear
that the opportunities for above market revenue growth lie in these client segments," said
Mr Groenink.
ABN dropped the wholesale banking arm's revenue target of 19 per cent growth, saying it
now expected zero market growth in 2002 but that the unit would outperform the average
by at least 2 per cent. Lex, Page 12 www.ft.com/financialservices
--------------------------------------------------------------------------------
Justine Shih, banking analyst at Commerzbank, said: "The market had expected some
deterioration in its loan book and for the second half profits not to match the first half."
Other analysts, while also prepared for a profit shortfall, had been expecting a lot worse.
ABN Amro said it had reviewed its performance in the third quarter and the expected
performance in the fourth quarter. It said that overall revenues and operating performance
have held up well, reflecting the broad mix of products and clients.
The bank will publish its third quarter results in detail on November 12.