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April may be the cruelest month, but December was the chattiest. Everyone felt compelled, it seems, to reconnect for the holidays. Readers responding to our December issue weighed in on everything from the feasibility of electronic head-hunting to the best way to inspire salespeople.

Hunters and gatherers
In December's cover story, " The Matchmaker," Jerry Useem profiled Career Central, Jeffrey Hyman's attempt to replace the traditional recruiting process with a hefty database and some software. Hyman's claims that old-fashioned headhunters are "gone. History. Toast. Stick a fork in 'em," drew the ire of several low-tech recruiters.

As a recruiter with 12 years' experience, I was shocked to discover that I will soon be extinct. I was surprised by a number of Hyman's comments, since he clearly knows nothing about our industry. The only thing that I found more appalling than his ignorance and arrogance was the stupidity of the venture-capital firms that invested millions in his company. Headhunters do what technology and apparently Hyman never will: effectively deal with people.

David Robinson
President
The Teton Group
Winchester, Mass.

The question to be asked is this: to whom should a CEO entrust the grave responsibility of locating, evaluating, and attracting critical talent for his or her company? Should that person be a seasoned search consultant with many years of experience in corporate America, or a one-year M.B.A. graduate with database-management skills and an office full of coding clerks?

Paul Dimarchi
CEO
Dimarchi Partners
Boulder, Colo.

But not everyone was so offended by Hyman's brandishing of the cutlery.

We recently used Career Central. I could not be more pleased with the results. Turnaround time was blindingly fast. Candidates were targeted and, most important, were interested in the position. The cost was incredibly low--less than $3,000 per search.

That does not mean we will stop using search firms. They have their place, especially for the most senior-level positions and for niche areas such as information technology. It does not mean we will stop casting our net widely with on-line postings and print advertising. It does mean we'll be a heavy user of what we believe to be Career Central's sweet spot: professionals in the $60,000-to-$130,000-per-year base-salary range, as well as recent M.B.A. graduates and interns.

Darrin Podeschi
Director of Staffing
Gateway
San Diego

Outside the norm
In his Street Smarts column " The First Salesperson," Norm Brodsky argued that it's better to pay salespeople by salary than by commission, since commissioned salespeople are more likely to go for the quick hit at the end of a selling cycle. Several readers disagreed.

How straight-commission salespeople react to "end of the pay period" situations depends on how they're paid their commission. As salespeople my father and I were paid this way: on the 15th of the month following payment from the customer. We were also paid on a "sliding scale": lower margins meant lower commissions. The method resulted in three things: First, straight commissions meant we had a darn good incentive to get out every day. Second, being paid after the customer had paid meant we had to be team players, ensuring that we didn't waste our time on known bad debtors and that everything went smoothly after the order. Third, a sliding scale meant we had the big-picture option of chasing high-volume, low-margin business as well as low-volume, high-margin business.

Paul R. Pease
Sales Trainer, Speaker, and Author
Paul R. Pease Inc.
Manhattan Beach, Calif.

Brodsky assumes that independent salespeople can't be team players. In fact, the best ones are usually leaders of the team. No man is an island, and the independent salesperson knows that production, customer service, and administration are what ensure his success. It is the salesperson's independence that makes him a better salesperson. Commissions feed the ego by quantifying success. To suggest that the independent salesperson is going to blow off a large account to make quota is shortsighted.

Philip A. Gerber
Consultant
ETC Management Systems
Torrington, Conn.

Wheels of fortune
Christopher Caggiano's feature article on the branding strategy of bicycle-wheel manufacturer Spinergy Inc., " Brand on the Run," was well received, but this reader quibbled over details:

As a branding specialist, I enjoyed reading the feature on branding a bicycle-wheel producer's identity. However, I found the term superbranding a superfluous and oddly loose-fitting term for a logical approach to a common corporate-identity problem. Forming the identity of a start-up company comes first, and that identity had better encompass the company's entire product line, or failure will soon follow.

Eric Shuster
President & Creative Director
Eric Shuster Inc. Great Neck, N.Y.

Update: Block and blue
Chutzpah was never in short supply at the day-trading company Block Trading, which Inc. profiled in its January 1997 cover story, "Bad Boys of Capitalism." Block's revenues had rocketed from $1 million in 1995 to $18 million in 1996, and the company was opening branch offices at the rate of one a month. As the bucks flowed in, partners Chris Block and Jeff Burke cut a Texas-wide swath through the local business community, driving twin Ferraris and sitting atop the list of the 100 fastest-growing companies in Houston.

But the story waved a caution flag, too, noting that Block Trading was a high-wire venture that could fail long before it became a household name.

And fail it did. Last November, Block Trading filed for Chapter 11 protection, with the bankruptcy overshadowed by a partner meltdown.

Chris Block ascribes the company's failure to disloyalty--branch managers defecting to competitors, taking customers with them. The defections dovetailed with a costly software project, he says, which bled the company and put its capital position out of compliance with securities regulations.

Burke scoffs at that explanation. Block Trading went under, he says, because "Chris, egotistically, went off the deep end." Chris Block, he claims, indiscriminately opened branch offices and hired unqualified people to run them. He notes that one major stockholder has sued Block and Block Trading, alleging what Burke describes as "a lot of accounting irregularities," including "fraudulent filings with the SEC" to make the company appear more profitable than it really was.

Block retorts, "Jeff doesn't understand accounting." He says that what the lawsuit describes as fraud is, in fact, the company's falling into violation of its net-capital requirements once business slowed. Block adds that the real problem was that "when things got difficult, he [Burke] just didn't want to deal with the situation." Block says that Burke was increasingly away from the business, overseeing the building of a new house. Burke replies that he ran the company's main trading office and that Block and other executive committee members eventually closed him out of the daily loop in the corporate office.

When Block Trading fell $900,000 in arrears to creditors, matters worsened. Chris Block sought debt financing, arguing that Block Trading, with $20 million in sales and no long-term debt, could easily afford it. Burke says that he wanted the partners to raise capital by selling some of their stock but that Block balked at further diluting his position.

In November the shareholders voted to remove Block as chairman and CEO (though Burke quickly reinstated him to the board), but he remains unbowed. He is now at work on a plan to bring the company out of bankruptcy, claiming that the software project still has value. Burke allows that if his nemesis produces a viable plan, the board will consider it, but he warns that graver issues will likely intercede: the stockholder lawsuit (which names Block and Block Trading, but not Burke), a reported NASD regulation investigation of the company, and a complaint filed by Massachusetts securities regulators charging the company with deceptive advertising and encouraging customers to trade with borrowed money.

When the bad boys of Wall Street are bad, it seems, they are very, very bad. --Edward O. Welles

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