Letters, page 15

House of Corrections

For information on the annual business-plan competition sponsored by the Entrepreneurial Management Center at San Diego State University, E-mail Marsha Gear at marsha.gear@sdsu.edu or call her at 619-594-4501.

Accounting and Financial Fundamentals for Nonfinancial Executives, by Robert Rachlin and Allen Sweeny, is available from AMACOM (800-262-9699) for $18.95.

Field Notes, pages 17 to 27

Hot Starts: Can Big Business Be Built on Breakthrough Product?

The Consumer Electronics Manufacturers Association operates the Consumer Electronics Show; call 703-907-7600 for show dates. Twice (800-662-7776) is a biweekly magazine that covers consumer electronics. Parks Associates, a Dallas market-research firm, publishes Pathfinder, a monthly guide that profiles new markets, new companies, and new products in the world of residential electronics. (An annual subscription is $395; call 800-727-5711.) Electronic House magazine (800-375-8015) is a resource guide for consumer electronics.

Fast Money: Young M.B.A. Seeks Attractive Company

The Stanford Business School case study "Kirk Riedinger and Jamie Turner," by David Dodson and search-fund advocate Irv Grousbeck, is an informative account of the experiences of the first two M.B.A.'s to raise a search fund. It's available through Harvard Business School Publishing for $5 plus shipping. Call 800-545-7685 and ask for case number SB102.

Keynotes: Forget the Organization, Says Management Guru

Transitions: Making Sense of Life's Changes, by William Bridges (Addison Wesley, 800-822-6339, 1980, $13), is one of the earliest and best books to address coping with change in the workplace, says Nancy Austin. William Bridges & Associates (415-381-9663) publishes a quarterly newsletter called Organizations in Transition, which you can subscribe to for $35 a year. The price is right, but the newsletter is thin; you're better off picking up Bridges's JobShift: How to Prosper in a Workplace Without Jobs (also from Addison Wesley, 1995, $13).

Keynotes: Take My Village...Please

Grassroots Leaders for a New Economy: How Civic Entrepreneurs Are Building Prosperous Communities, by Doug Henton, John Melville, and Kim Walesh--three key people at Collaborative Economics, a consulting firm in Palo Alto, Calif.--is due out in March 1997 at $25.95 from Jossey-Bass (800-956-7739).

Red Tape: Minimum-Wage Poster Child

The Department of Labor's Web site has a ton of information on the new minimum-wage increase, and not all of it is a political advertisement for the Clinton reelection campaign. Both employers and employees will find help there. You can even download and print out a poster outlining the requirements of the new law.

On the Road: CBS Drops Small Businesses from Letterman Lineup

Rupert Jee's Hello Deli features two celebrity sandwiches that are easily replicated at home. Try the Letterman Hoagie (turkey, ham, cheese, and sweet peppers) and the Shaffer (chicken cutlet, American cheese, and mayo on a hero).

Face to Face: Playing by the Rules, page 38

"Mrs. Fields' Secret Ingredient," (Inc., October 1987) provides a more thorough explanation and illustration of how Randy and Debbi Fields began to apply rules-based technology to the management of Mrs. Fields Cookies--and by extension, how such technology can be applied to other companies. Download the story from our archives using the keyword Mrs. Fields.

Discussing his forthcoming book, Randy Fields argues that hour-by-hour management is not just the next best thing to cloning a company's founder or chief executive. "In fact, it's better," he says, "because it goes beyond simple conformity to high-service standards, beyond mere consistency of product to high product quality. These are the basics of any serious business enterprise today and are best ensured by iterative command and control. But once ensured, the basics can and must serve as a platform for distinctively creative and individual performances. I mean, of course, the activities that people can do only with each other--selling, establishing relationships with customers, and providing moral support. In the end, hour- by-hour management is about freeing human beings to be human." The book, tentatively titled Hour-by-Hour Management and the Power of Consistency, will be published by Knowledge Exchange (310-394-5995) next fall.

Inc. Cover Story: Corporate Culture, page 42

Corporate Cultures: The Rites and Rituals of Corporate Life, by Terrence E. Deal and Allan A. Kennedy (Addison Wesley, 800-822-6339, 1982, $14), is the book that started the 1980s culture craze. The examples are dated by now, but the message--that powerful cultures really do make a huge difference to business success, even in the upper echelons of corporate America--is as timely as ever. Deal and Kennedy tease apart the elements of corporate culture and give you tools to analyze (and reshape) your own company's culture.

Creating Corporate Culture: From Discord to Harmony, by Charles Hampden-Turner (Addison Wesley, 1992), analyzes how several corporations (most, but not all, are large) transformed their cultures. The book is out of print but worth seeking out at the library.

American Steel, by Richard Preston (Avon Books, 800-223-0690, 1991, $19.95), answers the question, How does an upstart minimill outcompete nearly every steelmaker in the world? An award-winning journalist takes you inside Nucor and shows, through page-turning examples and anecdotes, what a difference a truly distinctive culture can make.

Nuts: Southwest Airlines' Crazy Recipe for Business and Personal Success, by Kevin and Jackie Freiberg (Bard Books, 800-945-3132, 1996, $24.95), has a predictably rah-rah tone (the authors are longtime consultants to the airline), but the company's 25-year history still makes interesting reading.

Culture Day at Southwest Airlines is open to the public. The quarterly event is free and covers employee training and benefits, marketing, and human resources. The company also solicits ideas for topics from attendees. The most recent Culture Day was expected to draw an estimated 200 people. For more information, call Linda Jones at 214-792-4645.

The Deadbeat Diaries, page 55

Our search for resources for this story gave us a taste of what Allen Shatto experienced trying to collect his money from Uncle Sam. After being shuttled from one government office to the next, we located more than a few starting points that could save you from collection hell, should you take on government contracts.

A summary of "Status Report on Federal Agency Prompt Payment" is available from the Treasury Department's office of Financial Management Service (202-874-6749). The four-page summary reveals that the Department of Defense has one of the worst payment records, but nearly half the 25 reporting agencies contributed to an increase in late payments in 1995.

Procurement Opportunities: A Small Business Guide to Procurement Reform, available free from the Small Business Administration (800-827-5722, or call your local SBA office), contains a wealth of information, in particular on resource organizations that can help small businesses working with the government. It can also be downloaded from the SBA's Web site; look under "Special Interests."

The Prompt Payment Act of 1982 was designed to encourage speedier payments to certified small businesses and nonprofits. It enables them to collect penalties from state agencies if their claim is not paid in 30 days. To get paid, though, your invoice must follow all the rules. Download a summary of the act from the Office of Small and Minority Business's Web site.

The Debt Collection Improvement Act of 1996 mandates the use of electronic fund transfer for federal payments. You can get a copy of the act on-line at the Financial Management Service's Web site.

Prompt Pay Laws in the 50 States (The Foundation of the American Subcontractors Associations, 301-645-3574, $42 plus $9.25 shipping for nonmembers) summarizes for the construction industry the rights and obligations concerning payment of contractors, subcontractors, and suppliers on public and private projects in the 50 states and the District of Columbia.

The National Institute of Federal Procurement offers a variety of resources for dealing with the federal government, plus a 500-page guide that is updated monthly. A subscription costs $219 a year; call 800-929-4824, ext. 347, for information.

General Services Administration (GSA) Business Service Centers around the country counsel small companies on how to obtain government contracts. For Atlanta, call 404-331-5103; Boston, 617-565-8100; Los Angeles, 213-894-3210; Washington, D.C., 202-708-5961; Chicago, 312-353-5383; and Denver, 303-236-7408.

Procurement Technical Assistance Centers help local businesses market and sell products and services to federal, state, and local governments. For the centers' locations and contacts, call 409-886-0125 or 703-767-1650.

If all else fails, Judy McCauley, a federal-contracts specialist for the SBA in Clarksburg, W. Va., can help you pin down local resources. Call her at 304-623-5631.

Anatomy of a Start-up: Errand Boy, page 60

"Virtual Shopping: Breakthrough in Marketing Research" (Harvard Business Review, March-April, 1996) explains how three-dimensional computer modeling is currently helping companies roll out new products, test brand equity, and try out new packaging. Author Raymond R. Burke, a professor at Indiana University and a consumer-behavior expert, says manufacturers and retailers can create computerized stores with virtual shelves and then watch as test shoppers "pick up" packages using a mouse or a trackball. Burke contends that 3-D computer simulations offer an inexpensive and effective way to collect market research. And it's practically impossible for the competition to get a whiff of what you're up to. Contact Harvard Business School Publishing at 800-545-7685, and ask for reprint number 96204; it's $5.

Peapod's Web site allows you to download and try out the software.

The Web site for Shopping Alternatives offers little more than public-relations propaganda, but it has links to sites of major consumer-goods companies such as Coca-Cola and Frito-Lay.

The Food Marketing Institute (FMI) can provide you with just about any statistic on the food industry. Each year, FMI publishes reports on consumer trends and habits. Go to FMI's home page or call 202-452-8444.

The U.S. Department of Agriculture's Web site contains a treasure trove of market data and a powerful search engine for mining it. For example, you can download the Agriculture Fact Book 1996 to find out which foods Americans are buying.

The Problem with Profit Sharing, page 67

The Reward Plan Advantage, by Jerry McAdams (Jossey-Bass, 800-956-7739, 1996, $29.95), shows busy managers how to craft reward systems that promote initiative, productivity, and old-fashioned hard work. If you would like your employees to think and act like business owners, this book will help you design and implement incentives to get them to.

McAdams, the national practice leader for reward and recognition systems at Watson Wyatt Worldwide, in St. Louis, urges readers to skip around in the book. Starting from scratch? Don't miss the early chapters that explain how to meld incentive plans with business-plan objectives. Planning to reevaluate an existing plan's raison d'être and return on investment? Use chapter 4 as a diagnostic checklist to gauge whether it still serves its intended purpose. There's no lack of tips on eliciting feedback from employees, because, as McAdams points out, the goal is to involve them in the process.

If you're clear on the fundamentals, skip to the chapters on design and implementation. Here you'll learn why and when to use process-driven and outcome-based incentives and how you can structure them to get the biggest bang for your buck. "Poorly designed plans well implemented do better than well-designed plans poorly implemented," writes McAdams. "However, there is never a reason to settle for bad design." This book should save you from that fate.

Hands On, pages 84 to 97

Manager's Notebook: Noteworthy

The National Workforce Assistance Collaborative (NWAC) promotes workforce training at small and midsize businesses. Check out NWAC's resource guide on the Internet for information on state training grants. Or contact Kathy Stuart at the National Alliance of Business at 202-289-2915.

Collections: Get Paid Promptly

Accounts Receivable: How to Tame the Beast packs an incredible amount of useful suggestions into a free five-page brochure, published by Dun & Bradstreet Information Services (800-333-6497). Ignore D&B's sales pitch for its receivables-management division and focus on the guide's usable strategies, such as "do something every 20 days." (It even gives you some ideas.) The brochure should motivate even those CEOs who are afraid they'll lose customers by focusing too hard on collections.

Championship Collections: How to Squeeze Blood from a Turnip, by David and Martin Sher (Paradigm Press, 212-879-6486, 1995, $25), is written by brothers who are experts in the collection field. Their advice can be painfully obvious, but the 190-page book is chatty and full of good ideas on matters such as how to respond when problem payers cry poor. The first chapter, "Why You Have Bad Debts," is eye-opening.

Marketing Strategy: Focus, Focus, Focus

Many books have been written about finding a niche or segmenting a market. But too many of those how-to tomes are forgettable (like the recent Nichecraft) or hopelessly academic (witness such titles as Gerontographics: Life-Stage Segmentation for Marketing Strategy Development). The best way to learn about this topic (aside from experience) is to study the successes and failures of others.

Focus: The Future of Your Company Depends on It, by Al Ries (HarperCollins, 800-242-7737, 1996, $25), does a good job of covering the foibles of IBM, Sony, and other huge companies that have struggled to expand beyond their expertise. How do you know you're not following in their footsteps? Chapter 15, "Fifteen Keys to a Long-Term Focus," provides a handy checklist. Unfortunately, Ries doesn't focus on how growing companies have gone astray. Main Street Muffins, which ran aground trying to expand its retail and wholesale operations, is one of the few small companies profiled--briefly.

" Say When" (Inc., February 1995) goes into more depth on Main Street Muffins.

The Discipline of Market Leaders, by Michael Treacy and Fred Wiersema (Addison Wesley, 800-822-6339, 1995, $25), also draws on big-company case histories to illustrate how to narrow your focus. The book is now available on audiotape, read by the authors, from Soundelux/The Mind's Eye Audio Publishing (800-227-2020) for $19.95.

"Know Your Place," by Michael Porter (Inc., September 1991), includes a rundown of the "Five Fatal Flaws" small-company owners make in trying to find their competitive advantage.

Computer Networks: Intranets Explained

The Corporate Intranet, by Ryan Bernard (Wiley Computer Publishing, 800-225-5945, 1996, $29.95), explains more than most managers will want to know--including excruciating details on how to program and administer a site--but by flipping around the book, you can find the answer to any question you have about intranets. For a quick lunchtime read at the bookstore, turn to the section on page 333, which starts, "Yeah, but what's it going to cost me?"

Face-off: Why Open the Books?

The Power of Open-Book Management, by John P. Schuster, Jill Carpenter, and M. Patricia Kane (John Wiley & Sons, 800-225-5945, 1996, $24.95), provides case studies and tips on how to launch an open-book program. The classic on open-book management, The Great Game of Business, is now available in paperback for $15 or audiocassette for $17 from Springfield Remanufacturing Corp. (800-386-2752).

A list of other open-book-management books, videos, software, seminars, and financial-literacy training games is available free from Open-Book Management Inc. Fax your request on letterhead to 617-666-3385.

Personal Portfolio: Smart Bonus Strategies

"What CEOs Make" (Inc., September 1995) reveals how a handful of company builders answer the trickiest of managerial questions: What constitutes "fair and reasonable" compensation? The nine executives featured in the story paid themselves salaries ranging from a low of $42,000 to a high of more than $500,000. (A former Catholic priest was one of the highest paid.)

"The ABCs of Paying Yourself" (Inc., September 1995) details where CEOs turn for compensation advice, what influences their compensation decisions, and which noncash perks they prefer. It provides estimates of how CEOs apportion salary, annual bonus, benefits, and perks at different stages of company development; there's also a rundown of the five cardinal sins of CEO compensation.

Further Reading: The Seven Traps of Strategic Planning, page 99

Mission Critical: The 7 Strategic Traps that Derail Even the Smartest Companies, by Joseph C. Picken and Gregory G. Dess (Irwin Professional Publishing, 800-634-3966, 1996, $29.95), comes out this month.

For even further reading, Dess and Picken recommend Competing for the Future, by Gary Hamel and C.K. Prahalad (Harvard Business School Press, 800-545-7685, 1994, $24.95), which talks about how to anticipate new markets.

The Inc. guide to more information on subjects in this issue

How to contact companies, organizations, and individuals mentioned prominently in this issue (some listings have been omitted by request)

Editorial Contributors

Ichak Adizes is the founder of the Adizes Institute and the Adizes Graduate School, in Bel Air, Calif.

Norm Brodsky is the CEO of CitiStorage, in Brooklyn, N.Y.

Bo Burlingham is the editor of Street Smarts and Critical Numbers.

John Case is a senior writer at Inc.

Gregory G. Dess holds the Carol Martin Gatton Chair at the University of Kentucky.

Tom Ehrenfeld is a freelance writer based in Boston.

Jay Finegan is a senior writer at Inc.

Jill Andresky Fraser is Inc.'s finance editor.

George Gendron is Inc.'s editor-in-chief.

Susan Greco is Inc.'s articles editor.

Stephanie Gruner is a staff writer at Inc.

Phaedra Hise is a staff writer at Inc.

Mike Hofman is a researcher at Inc.

Joshua Macht is a staff writer for Inc. Technology.

Joseph C. Picken is president of Joseph C. Picken and Associates, a management-consulting firm.

Hal Plotkin is a contributing writer at Inc.

Al Ries is the chairman of Ries & Ries, in Great Neck, N.Y.

Jeffrey L. Seglin is an editor-at-large at Inc.

Allen Shatto is president of A&L Shatto Inc., in Bel Air, Md.

Jack Stack is CEO of Springfield Remanufacturing Corp., in Springfield, Mo.

Jerry Useem is a staff writer at Inc.

David Whitford is a senior writer at Inc.

The Inc. DirectoryACADEMY TUXEDO, Bart Dadon, 1703 Broadway, New York, NY 10019; 212-765-1440

ACE PERSONNEL, Shane Jones, 6400 Glenwood St., Suite 309, Overland Park, KS 66202; 913-362-0090

AES, 1001 N. 19th St., Arlington, VA 22209; 703-522-1315

AGI, 1950 N. Ruby St., Melrose Park, IL 60160; 708-344-9100

ALEX. BROWN & SONS, H. Perry Boyle Jr., 135 E. Baltimore St., Baltimore, MD 21202; 800-638-2596

AMERICA'S RESEARCH GROUP, Chris Cooper, 1941 Savage Rd., Charleston, SC 29407; 803-571-0225 or 800-723-3253; ccooper@scnet.com

AMY'S ICE CREAMS, 3500 Guadalupe, Austin, TX 78705; 512-458-6149

ANDERSEN CONSULTING (SMART STORE), 600 W. Fulton St., 4th Floor, Chicago, IL 60661; 312-507-0600; fax, 312-507-9730; http://www.ac.com

NANCY K. AUSTIN, 1840 41st Ave., Suite 102-138, Capitola, CA 95010; nkaustin@aol.com

BAGEL CAFE, Nicholas Glendis, 1707 Broadway, New York, NY 10019; 212-245-5400

TIM BAYE, University of Wisconsin-Extension, PO Box 514, Lancaster, WI 53813 ; 608-723-6460; tbaye@facstaff.wisc.edu

DOUGLAS BENAD, MRI Ltd., 9701 Dessau Rd., Suite 800, Austin, TX 78753; 512-339-1223

BLACK DIAMOND EQUIPMENT, 2084 E. 3900 South, Salt Lake City, UT 84124; 801-278-5533

BORN INFORMATION SERVICES GROUP, 445 E. Lake St., Suite 120, Wayzata, MN 55391; 612-404-4000; http://www.born.com

BOULAY, HEUTMAKER, ZIBELL & CO., Rick Burrock, 500 Sentinel Bldg., 5151 Edina Industrial Blvd., Minneapolis, MN 55439; 612-893-9320

RAYMOND BURKE, Indiana University, 1309 10th St., Bloomington, IN 47408; 812-855-1066; rayburke@indiana.edu

CBS, Ken Cooper, 51 W. 52nd St., New York, NY 10019

RICHARD COLOMBIK, Richard M. Columbik & Associates, 1111 Plaza Dr., Suite 430, Schaumburg, IL 60173; 847-619-5700; rcolom29@starnetinc.com

DIRECT TIRE AND AUTO SERVICES, 126 Galen St., Watertown, MA 02172; 800-847-3776

DUN & BRADSTREET RECEIVABLE MANAGEMENT SERVICES, Michael Flock, 3 Sylvan Way, Parsippany, NJ 07054; 201-605-6000

ELCOM TECHNOLOGIES, Myr Jones and Rob Vito, 78 Great Valley Pkwy., Malvern, PA 19355; 610-408-0130; http://www.elcomtech.com

FOOD MARKETING INSTITUTE, 800 Connecticut Ave. NW, Washington, DC 20006; 202-452-8444; fmi@fmi.org

FORSYTH DENTAL CENTER, Doug Hanson, 140 Fenway, Boston MA 02115; 617-262-5200

GARDENER'S SUPPLY, Will Raap, 128 Intervale Rd., Burlington, VT 05401; 802-660-3500

GIORDANO ART LTD., George Valentino, 45-22 Zion St., Little Neck, NY 11362; 718-631-9660

G. NEIL COS., Diana Tilley, 720 International Pkwy., PO Box 450939, Sunrise, FL 33325-1179; 954-846-8899

GOOD CATALOG CO., Barb Todd, 5456 SE International Way, Portland, OR 97222; 503-654-7464; http://www.goodcatalog.com

GSD&M, Roy Spence, One Cielo Center, 1250 Capital of Texas Highway, Austin, TX 78746; 512-327-8810

HELLO DELI, Rupert Jee, 213 W. 53rd St., New York, NY 10010; 212-489-7832

HEMOPHILIA HEALTH SERVICES, Dianne Martz, 6820 Charlotte Pike, Nashville, TN 37209; 615-352-2500

JOINT VENTURE: SILICON VALLEY NETWORK, 99 Almaden Blvd., Suite 700, San Jose, CA 95113-2002; 408-271-0442; jvsoffice@aol.com

JPL PRODUCTIONS, Michael Horgan, 3901 Derry St., Harrisburg, PA 17111; 717-558-8048; fax, 717-558-8349; jpl@jplprod.com

KACEY FINE FURNITURE, Leslie Fishbein, 900 S. Santa Fe Dr., Denver, CO 80223; 303-778-0574, ext. 250

K&L'S ROCK AMERICA, Mujibur Rahman and Sirajul Islam, 1705 Broadway, New York, NY 10019; 212-757-3926

ROBERT LIEB, Northeastern Business School, 214 Hayden Hall, Boston, MA 02115; 617-373-4813

LONGACRE COPY CENTER, Fern Chapnick, 235 W. 56th St., New York, NY 10019; 212-581-7077

MARTINI'S RESTAURANT, Richard Krause, 810 Seventh Ave., New York, NY 10019; 212-767-1717

MCGEE'S PUB, 240 W. 55th St., New York, NY 10019; 212-957-3536

OPTICS 1, Milton Lee, 3050 Hillcrest Dr., Suite 100, Westlake Village, CA 91362; mlee@optics1.com

PARK CITY GROUP, Randy Fields, 333 Main St., PO Box 5000, Park City, UT 84060; 801-645-2105; randy@parkcity.com

PDQ PERSONNEL SERVICES, Patty DeDominic, 5900 Wilshire Blvd., Los Angeles, CA 90036-9702; 213-938-3933

PEAPOD, 1033 University Pl., Evanston, IL 60201; 847-492-8900 or 800-573-2763

PENTAGRAM DESIGN, 204 Fifth Ave., New York, NY 10010; 212-683-7000

PERFORMARK, Joe Lethert Sr., 10701 Hampshire Ave. S., Minneapolis, MN 55438; 800-455-8238

PETERSON TOOL, Nancy Sanders Peterson, 739 Fesslers Ln., Nashville, TN 37210; 615-242-7341

PHYSICIAN SALES & SERVICE, 7800 Belfort Pkwy., Suite 250, Jacksonville, FL 32256; 904-281-0011

RAMUSEVIC & CASCIO, CPAS, Michael Cascio, 91-31 Queens Blvd., Suite 308, Elmhurst, NY 11373; 718-803-0900

REDWOOD PARTNERS, John Moran, 220 Montgomery St., Suite 944, San Francisco CA 94104; 415-956-8388; jpmoran@sprynet.com

RENAISSANCE CAPITAL, William Smith, 15 E. Putnam Ave., Suite 222, Greenwich, CT 06830; 203-622-2978; ipofund@netaxis.com

WILLIAM SAHLMAN, Harvard Business School, Soldiers Field Rd., Boston, MA 02163

SHEFSKY, FROELICH & DEVINE, Lloyd Shefsky, 444 N. Michigan Ave., Chicago, IL 60611; 312-836-4001; lesltd@msn.com

SHOPPING ALTERNATIVES, 5110 Ridgefield Rd., Suite 413, Bethesda, MD 20816; 301-215-7272; shopalt@intr.net; http://www.shopat.com/login.cfm

STEVE DUSCHA ADVISORIES, Steve Duscha, PO Box 22650, Sacramento, CA 95822; 916-442-4854

STREAMLINE, 27 Dartmouth St., Westwood, MA 02090; 617-320-1900; fax 617-320-1946

VISUAL IN-SEITZ, 225 Oak St., Rochester, NY 14608; 716-454-4350; http://www.inseitz.com

DOUG WELLS, Nexus Management, 4430 Arapahoe Rd., Boulder, CO 80303; 303-938-9663; dougwells@aol.com

WINKLER MCMANUS ADVERTISING, Agnieszka Winkler, 150 Spear St., 16th Floor, San Francisco, CA 94105; 415-957-0242

ZINGERMAN'S DELICATESSEN, 422 Detroit St., Ann Arbor, MI 48104; 313-930-1919