INVESTOR'S BUSINESS DAILY MONDAY, JUNE 6, 2005 A9

TOP DOWN Among firms citing rising oil prices as: Barrier to growth Not a barrier Oil Prices Slow Multinationals’ Growth Optimism New hiring Margins Q1 Executives at U.S.-based multinational firms expect a 20% decline in revenue growth for U.S. 71% Up 31% economy 48% the next 12 months, says a new survey. They 80% Number 40% see rising oil prices as the leading cause of adding 69% 40% slipping momentum. Forty-seven percent of World employees 61% Down executives said costs rose in Q1. economy 67% 16% Source: PricewaterhouseCoopers Management Barometer MANAGING FOR SUCCESS EXECUTIVE BRIEFING

LEARNING FROM THE PAST Alexander The Great As A CEO? If Alexander the Great were alive today,he could tell CEOs a thing or two about supply-chain management. The Macedonian king,who ruled in the fourth century B.C.,made sure his army never ran short of supplies. He always made sure his soldiers marched along rivers so they could get food and equipment by boat rather than rely on pack animals that carried small loads. His army also marched faster because Alexander banned ser- vants and spouses from traveling with his men. Bases and supplies were set up ahead of the line so his men could carry less baggage. Timothy Van Mieghem,a logistics expert,says Alexander’s approach to supply and other management issues are still applicable. His analysis is based on ancient historians who wrote about Alexander. Van Mieghem noted in an issue of Quality Progress,a publication of the American Society for Quality back in January 1998,that if Alexander were a CEO today,he would: “West Side Story,” which opened on Broadway in 1957, benefited from collaboration among newcomers and more experienced team members. AP00 Include logistics in strategic planning. 00 Consistently make changes in his organization that were demonstrated to provide specific benefits. 00 Develop a working knowledge and detailed understanding of custom- ers and products. What’s A Dream Team’s DNA? 00 Do the same analyzing his industry,rivals,technologies and logistics requirements. 00 Appoint a single person to lead all logistics functions and participate in Businesses could learn some team dynamics from Broadway, scientists strategic planning sessions. 00 Develop alliances with key suppliers and service providers,accessin g new blood came in. their infrastructure by letting them entrench themselves in his company. BY PATRICK SEITZ Teamsmade up of the same people 00 Utilize technology and other business tools only to the extent that they INVESTOR'S BUSINESS DAILY fromoneproject to the next hurtcre- furthered profitability and competitive advantage. The business world could learn a lot ativity,Uzzi says. They share the “In fact,if Alexander the Great were a CEO today,he would strike fear from successful Broadway musi- same experiences and ways of view- into the hearts of his competition,” Van Mieghem wrote. Doug Tsuruoka cals. ing the world and become more in- Not song and dance,mind you,but sular. They also become less likely the composition of successful to be sensitive to negative feedback. GLOBAL BUSINESS teams. It’s a natural tendency for people Researchers from Northwestern to want to surround themselves Japan Employment University say they’ve divined the with people they’re familiar with Pacts Changing DNA of successful teams by study- and have worked with before. ing critical and financial hits on the And organizations don’t want to Many Americans might be sur- Great White Way. They’ve deter- break up a team that’s worked well prised to learn that Japan’s once- mined that the teams with the best for them in the past. vaunted system of lifetime employ- odds for success are ones that com- Butcompanies and otherorganiza- ment was a U.S. invention. bine old blood and new. tions need to have the courage to Akio Morita,the late founder of Creative teams with veterans and mix up their teams to keep them Japan’s Sony,once told a writer newcomers perform better than fresh,Uzzi says. that the system was imposed on those with mostly one or the other. Some organizations try to break Japan by the U.S. after the end of Why is this a recipe for success? Brian Uzzi, a professor at Northwestern University’s Kellogg School of down teams every five years to get a World War II. The reasons go beyond just combin- Management, says business teams benefit from their members’ networks. clean start. HalliburtonHAL,the engi- New labor laws were enacted ing experiencewith youthful enthu- neering,construction and oil field during the U.S. Occupation that Tokyo Office workers are no longer siasm and new ideas. Newcomers to Consider “West Side Story.” Its That’s because the unsuccessful services company,takes such an ap- made Japanese firms employ all assured of lifetime employment. AP a team are often seasoned profes- creative team had a balance of both teams repeated the same collabora- proach with its teams,Uzzi says. workers in good standing for life, sionals who bring their own net- variables. tions over and over. “A lot of companies use task rota- with full benefits after retirement. boom years of the Japanese econo- works ofcolleagues thatthey use for Producer and director Harold The key element for success is the tion and job rotation to make this U.S. officials had been influenced my in the 1970s and 1980s. advice and feedback. This gives an Prince and lyricist Stephen Sond- addition of newcomers who bring happen,” he said. by the pro-labor policies of Presi- “Those companies that are most organization more resources than heim had worked together on “The different viewpoints and access to a Bringing in new blood is just as im- dent Roosevelt’s New Deal. They successful in Japan are those that just the team members themselves. Pajama Game.” Choreographer Jer- fresh network of industry col- portant,says David Sanderson, wanted to make it impossible for have managed to create a shared Researchersat Northwestern stud- ome Robbins was experienced in leagues,Uzzi says. head of recruiting for global busi- Japanese managers to fire workers. sense of fate among all employees,” ied data on Broadway musicals the industry,but hadn’t worked “Imagine that you’re at Procter & ness consulting firm Bain & Co. They also wanted to redistribute Morita wrote. since 1877 to determine characteris- with Prince or Sondheim. Gamble and you’ve put together a IBMIBM used to have a practice of wealth that had been in the hands But a prolonged downturn in tics of a great team. They also stud- Classical composer Leonard Bern- team with five people in it,” Uzzi hiring only entry-level workers. of a few powerful families. Japan since the 1990s has sounded ied publications in four fields of sci- stein was a newcomer on Broad- said. “Those five people have The firm found itself having an in- Japanese companies complied a death-knell for lifetime employ- ence to look for common traits way. “West Side Story,” which de- worked some time previously in side-out perspective and realized it with the order. In the process,they ment. Huge numbers of middle among co-authored papers that had buted in 1957,became a smash hit. other teams. And the people that waspotentially missing bigopportu- adapted it so it fit more closely managers and other workers have the most impact on academia. Uzzi co-authored the research they worked with in those other nities,Sanderson says. with Japanese cultural values. It’s been laid off. Performance-based The results were the same: Teams paper on dream teams. He shares teams worked in other teams as After Lou Gerstner joined as chief an example of how being open to pay systems are in vogue. Lifetime with a mix of incumbents and new- credit with Luis Amaral,associate well. You can take each of those executive in 1993,he changed that. new ideas can lead to successful employment is no longer an iron- comers were more likely to find professor of chemical and biological teams and you could build a large He saw the need to hire experi- new management approaches. clad pact. Instead,Japanese busi- great success than those with too engineering at Northwestern; network of the relationships.” enced outsiders for key positions to Morita noted in his autobiogra- nesses are learning to operate more many of one or the other. Roger Guimera,a postdoctoral fel- It takes more than talent to create keep the organization fresh. phy “Made In Japan” that Japa- like companies anywhere else. The findings were published April low in Amaral’s lab; and Jarrett a successful team,Uzzi says. His vision helped transform IBM nese firms were able to transfer old This isn’t a management failure 29 in the journal Science. Spiro,who was Uzzi’s undergradu- The show failure rate on Broad- from a computer products company concepts of loyalty to a clan or na- per se. It only shows all companies A successful team requires the ate research assistant. wayfrom1919 to1930 was90% com- to a tech services company. tion-state to the companies that led must adapt to changing situations right balance of diversity and cohe- In addition to Broadway teams,the pared with 75% today. Many successful techs brought in Japan’s postwar resurgence. and go back to the drawing board. sion,says Brian Uzzi,associate pro- researchers studied scientific teams Yet that 1919-30 period had tre- experienced executives to take their This was similar to the way a “Companies cannot take care of fessor ofmanagement andorganiza- inthe fieldsof social psychology,eco- mendousmusical-writing talent,in- businesses to the next level. Often samurai warrior served feudal their employees for life,” said Japa- tions at Northwestern’s Kellogg nomics,ecology and astronomy. cluding Cole Porter,Richard Rodg- these executives are from industries rulers. In return,the ruler cared for nese business leader Hideo Ishiha- School of Management. Their report should serve as a ers and Lorenz Hart,and Jerome other than technology. DellDELL, the warrior and his family for life. ra in a speech several years ago. Diversity isreflected in new collab- wake-upcall to businessesand orga- Kern and Oscar Hammerstein. eBayEBAY and YahooYHOO are exam- Fusing such loyalties to modern “The system has to be changed to a orations while cohesion comes nizations that don’t encourage the The problem was: Production ples of firms run by outsider CEOs companies resulted in the gung-ho more fluid market-based employ- from repeat collaborations,he says. formation of new teams. teams stayed intact too long and no withnontechbackgrounds. auto workers that marked the ment relationship.” Doug Tsuruoka

REAL SOLUTIONS When Your Workspace And Your Living Space Are The Same Thing Small business owners piles of work-related papers on her to save on overhead. There’s no of- whose house can’t accommodate all in Wake Forest,N.C.,moved the started in the basement with a card bed as she slept. fice rent or utility bill to pay,so reve- hisor her activities: renting space by company from her home to an office table and folding chair” working as learn to juggle demands Twelve years ago,Zucker bought a nue can be used to keep expanding the hour or day from companies in 2001 after taking on an employee. food brokers,Wally Blume said. of running a home office two-bedroomapartment in Manhat- the business. A home-based busi- that provide support services to The worker stayed about two years By the mid-1990s,they were in the tan,with one of the bedrooms ness is also appealing to parents of small businesses. and left,and by then the economy flavors business,developing flavors turned into an office for three peo- school-age children. Another alternative is the office of had taken a downturn. — including the best-selling ice BY THE ASSOCIATED PRESS ple,including desks,filing cabinets Often,compromises or adjust- a friend,or perhaps your lawyer or “I still had my same clients,but cream Moose Tracks — and licens- Many people who start home-based andcomputers. That’samazing,con- ments must be made. accountant,who’s willing to lend an they really weren’t doing quite as ing them to dairies. companies find after a few years sidering the cramped confines of Jeff Zbar,a writer in Coral empty conference room. much with me,and I was as nervous The business got too big for the that it’s time to move out. The busi- most Manhattan apartments. Springs,Fla.,has a business easily Abig benefit of a home-based com- as anyone else about whatwas going Blume home,so in 1998 the couple ness has grown too big for the When Zucker has a big project,she run out of his home. pany is the income tax deduction to happen,” Jamison said. built a house near Grand Rapids, house. expands temporarily into the living He and his wife moved from one available to people who dedicate a She decided to move the company Mich.,designing it to hold the busi- Many others are still operating out room. She recently had six people house to another as their family room or larger part of the house to a back home after her office building ness and their family. It has office of their homes years later,finding working there on a folding table. grew,and he always used one of the business.An owner candeduct a per- was sold. space,a conference room,a mail ways to adapt as the business ex- Having the business in her apart- bedrooms as his office. centage of the mortgage,utilities In the meantime,Jamison and her room anda kitchen for theeight peo- pands. For some entrepreneurs,it ment gives Zucker the flexibility to But,Zbar notes,some work cannot and other expenses attributable to husband had built a new house. ple who work there. means buying or even building a work whenever she wants,a plus be done at home. the home office. Wally Blume took the idea of in- If the firm gets even bigger? new house to accommodate the en- that appeals to many home-based “By (zoning) code,I cannot have Many owners follow a typical cluding a home office in building Blume is aware of the possibility terprise. entrepreneurs. It also means she client visits and I could nothave non- route of starting a company at home plans evenfurther — most of the bot- that someday they might need com- Robin Zuckerstarted her public re- has to set limits. resident employees,” said Zbar. and moving to an office a few years tom floor of his house is where he mercial space. lations firm in her studio apartment “We go away on most weekends. When he needs to meet with a client later. But late last year,Angela Ben- and his wife,June,operate Denali “We are about at maximum,” in Manhattan’s Greenwich Village That way I can’t work,” she said of or other business associate,it’s usu- dorf Jamison turned her marketing Flavors,a company with about $70 Blume said. “I’m not absolutely op- 25 years ago. herself and her husband. ally at a diner or the client’s office. communications firm back into a million in sales at the retail level. posed to moving to another location As the business grew,it did indeed The primary reason many entre- Zbar pointed out another option home-based concern. The Blumes first began running a — but I just don’t see the need to do take over. Zucker recalled having preneurs work out of their homes is for the home-based entrepreneur Jamison,owner of Communicopia business in the late 1980s,when “we that.” Copyright 2005 Investor's Business Daily Inc.