BUILT FOR SPEED.

Getting results by linking human performance with speed is no easy feat. But it's the litmus test for your company's ability to succeed in a marketplace that's compromising the capabilities of your workforce.

A few years ago the rock star David Bowie securitized the royalties of his music hits by selling something called Bowie Bonds. Everyone thought it a madcap escapade at the time but the man who would be Ziggy Stardust pulled it off. It's true that only a handful of people have the name recognition or market power to attract investors to something so novel. Only a few can generate the cash flow that Bowie's material seems to provide. But in his recent book, Future Wealth, Stan Davis argues that in five years time we might see groups of highly paid professionals in music, sports, or other endeavors, bundle their talents to form similar future revenue streams.

After all, Davis argues, a hundred composers with the rights to an average of three hit songs might provide the same stream of predictable earnings as David Bowie's 300 songs. And if highly paid entertainers can do this, why not the best and brightest workers? The valuation of human capital changes with reputation and performance. So who is to say there couldn't be a market for the future earnings of a group of star surgeons, or stellar astrophysicists, just as there might be from top software engineers or biotechnicians? Doesn't Monster.com already feature an auction market for human skills and brainpower?

"In the venture community today," Davis writes, "money is everywhere, and brains are scarce. Capital markets value scarcity--they are our means of allocating scarce resources--so we expect them to learn to put a value on intellectual capital. As the financial markets begin to create a price for people, ways to trade human capital will develop and blend into the global risk market, just like gold futures. Someday soon, molecular biologists could indeed be up three points and economists, down one-fourth,"

USC business school professor Warren Bennis says that organizations generally have a group of gifted individuals and it's the leader's job to become "connoisseurs of talent." Skills are but one dimension, however.

As CEOs in the following roundtable sponsored by Andersen Consulting attest, speed is the other defining dimension on which companies will succeed or fail in the future. At various times both GE'S Jack Welch and Cisco Systems' John Chambers have emphasized their dedication to "talent connoisseurship," but when pressed, both CEOs remark that whenever they have made a mistake it's usually that the organization failed to act quickly enough. "Speed is everything," says Chambers. So it is. How then do business leaders connect speed with human performance to get superior results? In the following exchange CEOs share their percepts about how this might be best done.

The Culture of Change

Joe Forehand (Andersen Consulting): A large part of the culture of our organization to attract, develop, and then retain the brightest minds on the planet revolves around a vision of characteristics that we found are critical (inspiring leaders, interesting work, diversity, and competitive rewards. If you look at this issue of human performance, what once may have been thought of as an HR Department issue--is a CEO issue, and it's one that occupies most of my time.

The other big thrust that we're having is speed. Our clients are increasingly asking us to deliver results quicker, faster, make ready solutions, help us to move quicker than we ever have. So we're really aggressive at moving at the notion of speed--not only because it's important for internal purposes, but it's also important to our clients.

Robert Lauer (Andersen Consulting): We're in the midst of an age of capability. Workforce capability is at the heart of the ability to execute. There are a few major trends that are impacting capabilities and putting pressure on the workforce: global competition in the global economy bringing new demands, the expanding role of technology, and the ubiquitous network, in terms of the Internet driving and accelerating change.

One of the fundamental changes being driven by the Internet is the shift of power from the seller to the buyer, or the customer. As we look at capability we find that the complexity of work is increasing and a growing degree of interdependency of work.

So the sharing of knowledge and knowledge management is a key criteria and what's being created is a bridge to capabilities. There's some interesting evidence that we see in terms of the linkage between capability in this divide to bottom-line business performance. Over the last year we did some interesting research in a couple of our industry segments, to look at the correlation between key capabilities and key economic indicators. We found that up to 50 percent of the return on sales was attributed to customer relationship management skills and capabilities.

What's more impressive is the difference between an average performing company and an upper-quartile company could mean the difference of up to 13 basis points in bottom-line performance. For a billion-dollar business, that's a nifty $130 million. And people are beginning to understand that there is a direct correlation between capabilities and bottom-line performance.

Hal Rosenbluth (Rosenbluth international): It's a world of free agents, and people choose to work for our companies. Some companies are deemed more exciting than others, and so you have to take your company and make it as exciting and attractive a place to work as possible. That starts from really believing that your people come first. We made a provocative statement in 1991 that the customer comes second and everybody thought we were crazy. But in the end, it's the only way to attract and retain people. It comes first in recognizing that we lead human beings and we're no smarter than they are when it comes to reality. So like in farming, you can't say 'look at my beautiful crop' when there's nothing there. It's the same thing in business. You can't say you have culture when you don't because it's the people who tell you what it is.

Bob Berenson (Grey Global Group): I would take that a step further. One of the great advantages Andersen Consulting has, or even Grey Global Group, is that we get a view of a lot of different companies, and we find that culture is everything in determining how fast that company can react and how well it can retain its people. If the culture is based on the "knowledge is power," siloed, typical American large company, then you're dead in today's economy. Because knowledge isn't power--it's shared knowledge that leads to business results. Until you can recognize that the knowledge needs to be shared ideally with some kind of an Internet capability, you won't be able to compete as effectively.

Al Zollar (Lotus Development): The problem is the rate of change that your employees and your employees as members of organizational units within your firm are dealing with has just completely outstripped the rate of learning improvement that you're able to sustain over time. That's one of the real fundamental challenges that CEOs have to come to grips with: how can I systematically attack problems that close this gap between the rate of change and the rate of learning? It's not going to close completely, since, as we know, the rate of change, whether it's globalization or technology trends, is unending.

At Lotus, there's a real opportunity to bring practical solutions, such as expertise location. For example, how do you find the 20 top experts in your organization within two minutes? There are solutions for that. We believe breakthroughs can be achieved on a small basis and you turn it into big things. These can be the drivers of culture change.

J.P. Donlon (CE): Since we've been talking so much about culture, I'd like to ask our two international CEOs, one from France and one more recently from Silicon Valley, how do you perceive all this conversation about the importance of company culture in making this change?

Bernard Couillaud (Coherent): I'm in a company that is about 34 years old now. Our turnover rate is about 12 percent, which is about half of the turnover in the Valley. And I would share with you that the reason for this is the culture of the company, which has been acquired over the last three to four years. It's a permissive culture that has a flat organization, where people can make mistakes and are not going to be killed for their mistakes. They're not allowed to make the same mistake 10 times, but they can make a mistake one time.

They have access to me because my door is always open. To give you an example, 46 percent of our employees are more than five years with the company, 32 more than 10, and eight more than 20 years. That shows that this culture is ingrained in a company. When new people come in, they don't have to invent a new culture. They are soaked into the culture, which is theirs. If they like it, they're going to stay. And this culture has been built along values, which I would say most of the employees like and they stay with the company.

Bernard Parisot (JCDecaux): Company culture is essential to our company. And the company culture in general in France tends to be bigger in the sense that there is more employee loyalty to the company and conversely. I am in a startup position, even though I'm a subsidiary of a very large and well-established group in Europe. Here no one knows our company. There's no name recognition that would allow me to attract people, and there is no knowledge of the culture.

At the same time, being a subsidiary of a privately held company, I don't have what those IPO companies have: the ability to promise fantastic stock options for the future. So, how do I attract people? I think we've been fairly successful. We've hired about 200 people in 18 months, and we have had less than an eight-person turnover. I think the important thing is that we have tried to give pride to our people by making them adhere to the company project. They are in a startup, but there is a goal, which I always pay attention to and communicate to everyone at every level in the company. That's about the only thing I can give to them, and tell them, 'Yes, tomorrow the future will be beautiful, but also you will be proud of what you do.'

Getting to Know You

Forehand: Part of what I'm sure most every company does is to try to create an environment where people feel like its their company that they're building. I know that's the challenge for all of us every day.

David Wright (Amdahl): One of the things that becomes very important is how do I take an individual and be sensitive to that individual, yet also give him the corporate values that he can personalize himself? That's a very, very difficult thing today. And I think it is leadership.

Donlon: Do you mean you personally as a CEO or the organization?

Wright: The organization. We only have about 11,000 people, but there's no way in the world I can run this company by keeping all the cards. Yet in the past, every CEO kept the cards. And the guys I worked for, they used to sit there all the time, they knew all the cards to play. And now I try to pass them out as much as I can, because if I don't pass out the cards we don't move in the right direction.

Leigh Abrams (Drew Industries): I was at a luncheon similar to this with Chase Bank, and we were speaking about what the problems were, and a gentleman said that one of his really bright, young kids was leaving. And he called him into his office, and he said, 'I don't understand why you're leaving.' He said, 'I don't feel like I'm needed.' He said, 'Well, just two months ago we gave you a big raise at Christmas and told you you were doing a great job.' He said, 'Yeah, but that was two months ago.' And the CEO said, 'How often do you think we should compliment you? How often should we tell you you're doing a good job?' After the kid thought for a while, he said, 'Every day.' And this guy did a real study in this company and found out that a lot of his young people were dissatisfied because nobody talked to them. And he said, 'These kids need to be talked to regularly.'

Rosenbluth: I send out crayons and white paper to a couple hundred of our people at random every year and ask them to draw a picture of what the company means to them. And you get back in drawings what you'll never find in the survey. That begins to personalize things and people pour their hearts out in pictures. You can find things out and people know you really care. We also have a hotline that goes right to me and our president. They can contact us either in voicemail or e-mail, and then we get back to this person. And it is personalized. You're absolutely right, it comes down to personalization.

Peter Rust (Con Edison Communications): You have to have a flexible enough culture so that it can address different people's needs--wherever they are. And you can't say that all the young people want to have more time off because in some cases young people just want to work around the clock, if they can get rewarded for that work around the clock. So, we try to create as flexible a culture as possible that can address individual needs. Something that's very difficult to do when you get into a larger corporation, but it's easier to do when you have a smaller group. If you can drive that through the organization, then people are happier. Just being open and sensitive to each individual employee really helps retain folks.

Jim Donald (Pathmark Stores): Two months before Sam Walton died he came to me and said, "I want you to go to this meeting with me. We're going to talk to the warehouse guys and gals in a meeting in the morning and in the afternoon."

So Sam's in the middle of his speech and he goes to reach for his pencil, and out comes his pencil, name badge, reading glasses, and all these index cards all over the floor. I wanted to go up there and just grab and help him get all this stuff straightened away. But he got himself together, put it back in, and finished his speech.

At lunch I said, "Mr. Sam, you okay?" He says, "Yeah, yeah, yeah, I'm just a little weak, but I think I'll be okay. I'll go ahead and do the second presentation." In the second presentation, at exactly the same moment, Sam goes for his pencil, and out comes everything again, all over the place. I said, this guy is a genius. When the presentation was over he said to me, "You get it?" I said, "You bet." He said, "Never, ever, ever, ever be bigger than the front-line selling associate. When I'm talking to truck drivers I've got to be bumbling, stumbling, mumbling, stuttering--all of these things."

Pride in Ownership

Ron DeFeo (Terex): I always have the belief that you get what you expect. If you expect a little, you'll get a little, but if you expect a lot you're bound to get great results. If you give people the chance to succeed and give them ownership, there's a good chance that they will perform up to their expectations. But I think you have to set the right standard for an organization. You have to walk the talk.

If you have a customer complaint, don't shuffle it off. If you have any tough issue, inject yourself, be personal, and relate to the issue. Ask for employee attention from the neck up as well as the neck down. So often we expect workers to work because we expect them to work. I always tell our people in our company there are really only two activities in an organization that make sense: making and selling things. Everything else should support those activities.

Frank DeMartino (Parsons Infrastructure & Technology Group): The issue of ownership is interesting for me because we're an ESOP company. All our employees are owners from the day they walk in. But it doesn't solve the problem of either retention or speed, and it's different, I think as I alluded to earlier, depending on where you are in the age of your career. We get very bright people. We're very selective, I think very much like Andersen Consulting, with the people coming out of the engineering schools and science--and most of them are very motivated from the standpoint of wanting to do and work in the industries and in the sciences they were trained in.

But the 15 or 18 percent over and above what they get each year in ESOP stock is not a motivator for anyone under 40. Because they can't buy cars, they can't buy houses, and they can't put their kids through colleges with it. But for the 40-45 year olds, it becomes a motivator because now their goals and objectives in life are completely different.

John Humphrey (The Forum): We're also an ESOP company, and we just stopped our ESOP. That broke my heart, absolutely broke my heart. But the data's very clear that the younger people we're trying to hire really don't care about it. It's not the kind of compensation they want, and you've got to go to something else.

Jon Boscia (Lincoln National): One of the things we have come to realize here is how much people want to work with highly successful, highly motivated people. We are specifically targeting what we call 'A' players, which we define as the top 10 percent of anybody who's available for any job in the location for the compensation we can pay.

It started at the top of the organization and, cascading down, it has made such a tremendous difference in people wanting to join the organization and has improved our business results. What the dot-coms have going for them is a sense of entrepreneurism and excitement, and that "we can take on the world"--that a lot of us old economy stock companies have a hard time replicating. And we have found that this top 10 percent is a way of being able to do that.

It doesn't come without cost, in that at each level we've had close to 50 percent turnover as we've been rolling this down. But it really tells the employees that we're serious about being a terrific place to work and a terrific company, in general. Turnover doesn't mean people leave the organization; it has often meant they're placed in a job where they too can be in the top 10 percent.

David Ellett (Docent): Just to give you a dot-com perspective on the world of what we deal with, it's standard fare in Silicon Valley that every employee gets stock options. And, in fact, it's nor uncommon for us to have a sales rep or an individual performer come in and want to know what percentage of the company their options represent. That's the issue. I know I'm going to get 50,000 options, but how many do you have outstanding and what's the pool?

So that's beyond table stakes. If they're 25 years old, they're assuming that by 30 they're going to be multimillionaires, and it's just a question of whether you can get them there faster than the next guy. I think No.1 is convincing them that they can really make a difference in the world and that they're a part of something bigger to give them that sense that they're going to change things.

A Test of Leadership

Tom Corcoran (Allegheny Technologies): I personally think the job of leadership is getting more complex all the time. A leader now has to be a coach, motivator, but yet also has to get things done. And the more time I spend personally on developing our leadership team, the better payback we will get. And it's important that in my mind I have a leadership ream that has the same set of values as we all believe this company should have.

Berenson: Finding a leader or a group of leaders, who have the ability to motivate people to operate as a team, and at the same time motivate them to believe that they're proud of what they're doing as individuals is a tough thing to do.

Jim Rohr (PNC Financial Services): It's fascinating to me to listen to people at this level with this much sensitivity about the HR piece and how important it really is to all of us, permeating from the leadership at the top all the way to the bottom.

George Lorch (Armstrong World Industries): I'll just come back to something that we talked about very early on and that's the commitment from the top. One of the things we tried to do seven years ago was to say there are four business values, in addition to being legal and ethical in everything we're going to do: to gain market share; to be a low cost provider; to increase the flow of successful new products; and to have a world class organization that's going to benchmark its performance to the outside.

So, what we're trying to drive now is learning. And learning on the job with real-time business problems. What we've done is to take the best people--not the laggards--we're not trying to get the laggards to be superstars because they can't get there anyway. We take the really cream of the crop, and try to teach them to be complete businessmen, blow up the silos that you referred to, because this is the biggest single problem our company's had. We didn't have business people. We had manufacturing people and all of a sudden a sales guy became CEO.

And what's great is that it is a process, it's institutionalized. You know, I'm no Sam Walton, and most of the people around this table aren't either. What you want to leave, I think, is a process that's institutionalized, that our successors can come in and build on. And it's amazing how it opens up the organization to talk about issues and problems. And there's a much greater feeling that the company does care about you.

Forehand: I think leadership has to set high aspirations of what you are, what you're going to be, and what you stand for. The next generation of leadership will be how do you set or stretch targets? How do you set aspirations for an organization to really achieve what is not humanly thought possible? How do you create the heart and soul of an organization that drives momentum, where people every day wake up and feel like they've got some passion about building the organization for the future? And that type of leadership is hard to build. It takes just personal sheer energy of all of us, and bringing people along in a coaching way.

The Need for Speed

Donlon: After hearing all the different points of view, which would most be applicable to you and your organization in helping you really achieve the best link to human performance and speed to results?

Richard Friedman (MIM): To me, its motivation and communication. And communication to your staff and making sure your staff communicates down--you should be spending time out there.

Arnie Pollard (CE): I think it's about defining the clarity of purpose of the organization. If you don't measure how you've gotten through on that, I suspect that you can't take any of the next steps we've all talked about.

William Shaw (Volt Information Sciences): One of the problems we haven't discussed is motivating and training people who are unemployable. How do you train them, what do you do for them, and how do you keep them interested? That is a bigger challenge than keeping the brilliant ones motivated.

And then there's a middle group--a middle group of very bright people, who go home at five o'clock. And you say, "If you stayed here and did a little more, you could really be the best in the company." And they say, "I don't want to do more because at five o'clock I want to go home and see my family. And that's more important than being the head of this or the head of that," It's a challenge of what to do and how to motivate them more.

Carol Evans (CE): It seems like an appropriate time to remind everybody about his or her own employees. How are you encouraging women to take jobs that they're not as comfortable with that have P&L responsibility, and that really create that whole pipeline of women and minorities that can move into the top jobs that are represented here around the table.

Rohr: How do you make the person who comes in day one 50 percent more productive? I started thinking about that all the way up the line, and I think it's a very interesting question. Somebody once told me that if you look at your calendar and the people who are on it are only the people who want to see you, then you have a bad calendar. The people on your calendar ought to be the people you want to see. And that question is one that I think all of us probably need to ask more often than we do.

Who's WHO 

* Leigh J. Abrams is president and chief executive of White Plains, NY-based Drew Industries, a $330 million manufacturer of aluminum/vinyl windows and doors.

* Robert L. Berenson is vice chairman of NY-based Grey Global Group, a $9 billion communications company.

* Jon A. Boscia is president and chief executive of Philadelphia, PA-based Lincoln National, a $6.8 billion financial planning advisory corporation.

* Thomas Corcoran is chairman, president, and chief executive of Pittsburgh, PA-based Allegheny Technologies, a $3.9 billion producer of specialty materials.

* Bernard Couillaud is president and chief executive of Santa Clara, CA-based Coherent, a $468 million developer and producer of lasers for scientific, technical, and medical applications.

* Ronald M. DeFeo is chairman, president, and chief executive of Westport, CT-based Terex, a $2 billion manufacturer of construction and mining equipment and other heavy machinery.

* Frank A. DeMartino is president of Pasadena, CA-based Parsons Infrastructure & Technology Group, a $1.6 billion provider of design, planning, and construction management services.

* James L. Donald is chairman, president, and chief executive of Carteret, NJ-based Pathmark Stores, a $4.8 billion full-service retail supermarket chain.

* David R. Ellett is chairman, president and chief executive of Mountain View, CA-based Docent, a provider of an Internet-based knowledge platform.

* Joe W. Forehand is managing partner and chief executive of Andersen Consulting, an $8.9 billion global management and technology consulting organization.

* Richard H. Friedman is chairman and chief executive of Elmsford, NY-based MIM Corp., a $377 million provider of pharmacy benefits management and prescription mail service.

* John W. Humphrey is chairman and chief executive of Boston, MA-based The Forum Corp., a global leader in workplace learning.

* Robert A. Lauer is managing partner global eHuman performance of Andersen Consulting, an $8.9 billion global management and technology consulting organization.

* George A. Lorch is chairman and chief executive of Lancaster, PA-based Armstrong World Industries, a $3.4 billion global leader in interior finishing solutions.

* Bernard Parisot is chief executive of NY-based JCDecaux, a $1.2 billion out-of-home advertising company.

* James E. Rohr is president and chief executive of Pittsburgh, PA-based The PNC Financial Services Group, a $7.6 billion provider of diversified financial services.

* Hal F. Rosenbluth is chairman and chief executive of Philadelphia, PA-based Rosenbluth International, a $3.5 billion travel management firm.

* Peter Rust is president and chief executive of NY-based Con Edison Communications, a wholly owned subsidiary of Con Edison that constructs and operates fiber optics networks.

* William Shaw is chairman, president and chief executive of NY-based Volt Information Sciences, a $2 billion temporary and permanent staffing firm.

* David B. Wright is president and chief executive of Sunnyvale, CA-based Amdahl Corp., a $2 billion supplier of information technology.

* Al Zollar is president and chief executive of Cambridge, MA-based Lotus Development Corporation, a $1.4 billion provider of messaging, collaboration, and knowledge management products.