Rapidly changing companies can't afford to hire employees whose skills go no further than today's job description. "When we hire, we want to make sure people have the potential to grow," says Kathryn Peters, president of Putumayo, a specialty-clothing retailer and wholesaler in New York City. In the past two years the $9.9-million company has expanded and diversified its business by adding two divisions -- crafts and music production. "The company is growing by leaps and bounds," says Peters, "so when we bring someone into the company, we buy into the person as much as the position."

Peters herself was hired by CEO Dan Storper seven years ago as an account executive in the company's showroom. Since then, she says, "I've created nearly every job I've had." She and Storper have continued to hire employees who are similarly ambitious. Last year Lynn Grossman came in to handle sales and licensing for Putumayo's fledgling Los Angeles-based music-production venture. Her assignment -- to do whatever it took to get the operation up to speed -- included answering the phone and building office furniture, as well as negotiating international distribution deals. "I've never worn so many hats in my life," says Grossman. It paid off, though. The company moved her to New York and gave her responsibility for Putumayo World Music, now a formal music division, which Grossman had helped grow to $1 million in sales. She also has a mandate to develop a marketing department to serve the entire company. "We promote from within not just to positions that exist," says Peters, "but to jobs that people create."