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I’m a licensed pilot, and I once managed to land a small plane on the wrong strip at a small airport. I could have gotten in pretty big trouble for it, so you might have thought my best move would have been to keep my mouth shut and hope the FAA wouldn’t find out. But I couldn’t wait to report my screwup to the government. I wish I could say it was because I’m such a conscientious fellow. But the truth is, I fessed up fast because the U.S. government rewards pilots for quickly owning up to their mistakes, agreeing to waive punitive action if they report themselves. In fact, most pilots carry the self-reporting form with them in their flight kit, just in case. Why the free ride for confessors? Because the government wants pilots to learn from one another’s mistakes in an effort to keep accident rates low. Indeed, the flood of self-reports–nearly 3,000 a month on average, including confessions from air traffic controllers, aircraft mechanics, and flight attendants–are gathered by NASA and selectively published in a monthly newsletter, “Callback,” that’s a must-read for 150,000 pilots and other aviation personnel each month. In the August issue, for example, a commercial airline pilot admitted that he failed to position the flaps at the back of the wings correctly at takeoff, nearly causing the plane to plunge. The pilot of a business jet described how he didn’t hit the right buttons for the cabin pressurization system, which could have left crew and passengers starved for oxygen at 22,000 feet. Neither pilot was fined or punished. You can’t stamp out mistakes at your company, no matter how good a manager you are or how brilliantly you hone your processes. Essentially, you can do one of two things: create an environment in which mistakes are seen as shameful and counterproductive; or create one in which each mistake becomes a collective learning experience. To me, the choice seems obvious. Do employees at your company point out their own screwups–even the ones that might not otherwise have been discovered by management? Probably not. But let me suggest an easy way to fix the situation: Blog it. We’ve heard a lot about blogs over the past few years, and it’s clear that corporate America is in on them. Many corporate blogs are sanitized, public-relations-oriented affairs intended to create bonds with existing and potential customers. Others serve as internal message boards to keep employees up to date. But I’m proposing something else: a blog that encourages employees and managers to tell their peers what they themselves have done wrong. It’s an easy step that could quickly effect a large, positive change in your corporate culture. Such blogs are rare. But they do exist. The Mayo Clinic in Rochester, Minnesota, for example, has set up a system in which medical residents electronically log their mistakes or any other problems they see so the hospital can analyze the errors and look for fixes. It’s more of a database than a blog, but any resident can post to it without fear of recrimination. (The residents identify themselves on their reports, but are only publicly named if they’re getting credit for coming up with a solution to a problem.) “The residents are in the trenches seeing what’s going on, and they pick up on things we may not be aware of,” says Furman McDonald, a faculty member in internal medicine. “We’re trying to get across that people can present their mistakes in a forum that won’t leave them feeling chastised.” Because residents are promised that what they confess to the Mayo stays at the Mayo, the clinic wouldn’t share an example of a confessed mistake. (We may be better off not knowing.) But feedback from residents has led to some significant changes at the clinic. It’s improved the gathering of information about different drugs prescribed by different doctors to the same patient to avoid problematic drug interactions. It has also enabled doctors to do a better job of picking up on obesity-related complications and created a safer way to deliver some medicines to diabetic patients. The U.S. Department of Energy, meanwhile, is pushing its contractors to gather and share goof-ups via so-called “lessons learned” databases accessible to employees at all of its contractors. Fluor Hanford, an engineering firm that is tackling one of the world’s toughest environmental cleanup sites in Hanford, Washington, has been particularly enthusiastic about getting its employees to fess up. Tony Umek, Fluor Hanford’s vice president for safety and health, says that the database led to the discovery that a number of employees were going around standard company purchase procedures to buy their own electrical equipment–and that some of the equipment was flawed. Everyone involved was thanked for their honesty. “The best people make mistakes, and that’s a fact of life,” says Umek. “We want our people to see the mistakes coming and report them, so we don’t have to lament a debilitating injury after the fact.” Of course, the culture of hiding error to avoid blame and punishment is ingrained in most of us from an early age and perpetuated in companies because managers tend to whack employees who mess up. Managers themselves don’t go around blabbing about their own errors because they want to be seen as role models for the highly effective. Some organizations, including the U.S. Marines and aerospace maverick Burt Rutan’s Scaled Composites, have created cultures that celebrate honest mistakes and confession, but they are exceptions and are not easily replicated. Deep down, people want to confess their mistakes. And that’s more true than ever in the Internet age. And this is where the specific appeal of piggybacking on new blogging technology comes in. It’s fine to include an error-confession session in meetings, on databases, and on suggestion slips. But blogs are tailor-made for sharing screwups because they’re conversational, intimate, low key, and usually easy to read or post to. It’s also a perfect format for small companies. A blog with, say, three or four posts a day is a lot easier to maintain than one with 60 posts a day. Blogs are cheap–many blogging tools are free–and can be set up in a few hours. A confessional blog can provide real benefits in a matter of weeks, if not days. As great as we are at learning from our own mistakes, you can learn almost as much from the mistakes of others. Don’t take my word for it. Research recently published in Nature Neuroscience by a team of Dutch scientists indicates that “similar neural mechanisms are involved in monitoring one’s own actions and the actions of others.” In other words, watching your colleague blow a sale has much the same effect on your brain as hearing yourself do it. Afraid someone will leak the contents of your confessional blog to the public? As the saying goes, just hope the blogger spells your company’s name right. Any customer of yours that stops doing business with you because it is shocked–shocked!–to learn your employees make mistakes on occasion probably was pretty precarious to begin with. More likely, your customers will admire you for your candor. (I’m assuming here that your employees do not regularly make mistakes of the criminal variety.) I also believe that deep down, people want to confess their mistakes. And that’s more true than ever in the Internet age. Sure, much of what you see in online forums is whining and blaming, but increasingly, personal bloggers are coming forward to talk about how they screwed up–and often in business situations. These what-I-did-wrong tales so far are disproportionately focused on software projects, Web businesses, and, fittingly, blog development because that’s where you find people who are most comfortable sharing information online. But why wouldn’t it work just as well for an insurance company or building contractor? My only specific recommendation: Encourage everyone to keep it breezy, even fun. Believe it or not, the NASA aviation reports are almost always framed in a humorous light, and they’re a blast to read. The hardest part, of course, will be sticking to your promise to not bring down the hammer on those who confess to good-faith mistakes. That’s not to say you need to let everything slide. Make it clear that confessions of malfeasance, real damage, and repeated offenses don’t merit get-out-of-jail-free cards. (The FAA gives pilots one freebie every five years, and there’s no amnesty if a crime is committed or something gets smashed up.) Not everyone will be happy about where you draw the line, but it’s easy enough to draw it and to make clear that anyone who doesn’t cross it will truly be appreciated for sharing. By the way, my flying mistake apparently wasn’t deemed instructive enough to make the newsletter. However, a warning was added a bit later to the aviation map for that airport to alert pilots to the very mistake I had made. I like to think of it as my contribution to aviation. Contributing editor David H. Freedman (firstname.lastname@example.org) is a Boston-based author of several books about business and technology. His latest, A Perfect Mess, co-authored with Eric Abrahamson, will be published by Little, Brown in January.
Best of the Web New Web sites offer to ease shoppers’ search for telephone and related services. Ten CEOs check out six popular sites A hassle. That’s what business owners like Paul Frick expect to find when they shop for a telecommunications service by themselves. There’s that dizzying maze of possibilities. Providers with names like Startec Global, OneStar, and Qwest offer everything from basic long-distance service to T1 Internet access and Web hosting. Plus, what about crunching the numbers for all those varying rates that presuppose different usage scenarios? And who’s to say which service is reliable? “All you get is the high-pressure sales pitch to change carriers,” says Frick, alluding to some telecom solicitations. No wonder TeleBright.com caught Frick’s eye. TeleBright is one of several Web sites offering interactive one-stop service to businesspeople shopping for a telecom carrier. “Long distance is a big chunk of our budget,” says Frick, who is a partner in Home Front Communications, a public-relations firm based in Washington, D.C. In an E-mail message he sent this past summer, Frick asked TeleBright about the savings he might achieve by switching his long-distance provider. A TeleBright representative analyzed Home Front’s long-distance bill and shot back the names of a dozen carriers that could beat the firm’s average monthly outlay of $1,000. “It was a no-brainer,” says Frick, who chose a long-distance telephone company that he predicts will save him $500 a month. Frick is in the vanguard of executives who are going online to shop for telecom services. But if the projections of Forrester Research, a high-tech-research company based in Cambridge, Mass., prove right, he’ll soon be part of a new majority. Some 65% of U.S. businesses plan to buy some of their telecom services online by 2002, predicts a recent Forrester report, Buying into Telecom Online. Online sales of telecom services to businesses will amount to $47 billion in 2004, compared with $900 million this year, according to the report. TeleBright, based in Rockville, Md., and Web sites like it serve as funnels that direct customers to telecom-service providers with which they’ve formed partnerships. Some sites invite customers to browse online databases that comprise packages of telecom services. (TeleBright falls into that category.) Others, such as Demandline.com, enable buyers to pool their requests with like-minded businesses and obtain customized bids at lower rates. The sites earn fees from the providers when they land customers. If the sites have a bright future, not all their customers are as pleased as Frick with the results so far. “Only 15% of interviewees purchase telecom services online today … and those who have tried it, pan it,” notes the Forrester report. To find out which sites were most worthwhile, Inc. asked 10 small-business CEOs to assess six of the most popular ones. The CEOs shopped for long-distance, 800-number, and Internet-access services, basing their evaluations on eight criteria, including such factors as ease of use, variety, and price. The CEOs also indicated which sites they would consider using to help select their own telecom carriers. The tone of the feedback we got was often skeptical. Many of the CEOs weren’t happy with the sites’ design. Up-front requests for personal data tended to annoy them, making them wary of proceeding further. “Simplexity’s first page requires a Ph.D. to figure out,” complained panelist Ron Zemke, president of Performance Research Associates, a training and leadership consulting firm based in Minneapolis. However, once they overcame their initial displeasure with the sites’ architecture, most of the CEOs said they had obtained some useful information. The sites’ offerings apparently vary in quality, depending on region. At least that’s what the panelists’ feedback would suggest. The CEOs who were based on the West Coast had a higher level of satisfaction with what they found for their region, compared with what their counterparts from other regions said about the sites’ offerings for their areas. “I very easily got quotes for cell-phone rates and long-distance rates,” said Christopher Butler, president of the Performance Engineering Group Inc., a management-consulting business based in Santa Barbara, Calif., referring to Demandline’s coverage of western providers. In contrast, Leslie M. Fox, president and CEO of Fox & Associates, a public-relations company based in Chicago, looked at the site’s offerings for her region and reported that it had “very limited products to offer.” The following is a site-by-site summary of what caused the 10 CEOs to turn their thumbs up or down. www.telebright.com What it’s good for: Learning something more about vendors and their services and getting an idea about the range of rates. In other words, the panelists agreed that the site was a good place to do research. Don’t waste your time if: You live in the Midwest. The site doesn’t yet have a broad selection of packages for that market. What our CEOs had to say: The service didn’t offer the complete range of products and providers they needed to make an informed buying decision. “It’s appropriate for residential users and very small businesses that don’t have ready access to strategic communications-services planning,” said one panelist. What you should know: TeleBright doesn’t collect fees for booking business for carriers but takes a percentage of the users’ monthly payments. So the company doesn’t make a dime till you start paying your bills. www.simplexity.com What it’s good for: General information about the kinds of services available in a region. None of the CEOs found the selection to be comprehensive enough, but they all thought the site had educational value. Don’t waste your time if: You don’t have a lot of patience. The site challenged all the panelists with what they described as a cryptic registration process and unreliable technology. What our CEOs had to say: They wouldn’t go back. The site didn’t offer enough options to allow them to make an educated choice, and its design was cumbersome. “Using this site feels like you are signing up for a 10-year hitch with the Marine Corps,” said one CEO. What you should know: Simplexity is a request-for-proposal site that lets you submit anonymous requests for customized bids to a variety of carriers. At the time of the evaluations, the site bundled only long-distance service with calling-card and toll-free services, although it has since introduced wireless, Internet, and data services. www.telezoo.com What it’s good for: Companies buying large amounts of services. The reviewers agreed that the site doesn’t cater to the small-business owner. Don’t waste your time if: You are buying on a small scale, want prices instantly, or want to remain anonymous. Before the site will provide pricing options, it requires shoppers to submit requests for proposals and divulge personal information about themselves. What our CEOs had to say: Most liked it. Some were intrigued enough to consider investigating the site further. “Even though I didn’t actually provide a request for proposal, there are services my company will need in the future, and I will use this site to comparison shop for them,” one of the evaluators said. What you should know: It requires some technical sophistication to negotiate the site, but it can work smoothly for those in the know. www.demandline.com What it’s good for: An easy way to shop for telecom services, according to most of our CEOs. However, they also felt the selection wasn’t as comprehensive as it could have been. Don’t waste your time if: You don’t have the patience to submit requests and wait for responses, or you are buying services on a small scale. What our CEOs had to say: Opinions were mixed. One of the panelists was intrigued and said that he “will definitely go back and shop for additional services.” But another saw no value to the site’s offerings and said she was “more comfortable with the traditional way of buying things.” Even those who were impressed with the site thought it could improve. “They need to add more services and a wider array of current vendors,” said one CEO. “If it stays the same, I don’t think it can compete against the more comprehensive sites like Telezoo.” What you should know: This is the only site among those reviewed that offered a host of business-support tools. Demandline markets end-user and network software support, payroll and credit-card processing, equipment leasing, temp staffing, and retirement services — along with telecom services. www.telecomsmart.com What it’s good for: Comparison shopping. Despite the logistical hurdles they encountered, all the CEOs thought the site offered a useful gateway to a variety of packages and carriers being offered in their area. Don’t waste your time if: You’re short on patience. Before you can gain access to any packages of information at TelecomSmart.com, you have to go through a rigorous registration process. The technology and length of the questionnaire irked one CEO, who said if he hadn’t been doing a site review, he would have quickly moved on. What our CEOs had to say: Some thought shopping at this site was a better way to buy telecom services than calling the phone company, but one evaluator thought the site’s design made it more trouble than it was worth. What you should know: You can fax a copy of your phone bill to the company, and it promises to E-mail you within 48 hours a list of carriers and packages in your area — -with pricing suited to your needs. www.essential.com What it’s good for: Buying small telecom packages for home use. Most of our CEOs agreed that this site catered primarily to residential and home-office buyers, and they found little value in it for their own companies. The consensus was that Essential.com was of limited value. When asked what he would skip at the site, one CEO quipped, “Everything.” Yet it received a B- grade overall. Don’t waste your time if: You’re buying services for a large business. Although some of the CEOs thought the site was a good way to do quick research, others dismissed it as lacking in options. What our CEOs had to say: The consensus was that the site was of limited value. “I was unable to find a useful side-by-side comparison as the information was very basic,” said one reviewer, who reported being further stymied by a lack of online customer-service response. When asked what he would skip at this site, one CEO quipped, “Everything.” What you should know: Not only can you buy phone and Internet services at the site, but it also offers electricity, natural-gas, propane, and heating-oil services. The bottom line TelecomSmart won kudos from our panelists on the grounds that it offered the widest variety of service options and carriers. Demandline and Essential ranked high in accessibility. Telezoo received high marks for its user-friendly format, too, but lost points for inattention to small-business needs. TeleBright scored well in usability but got mostly fair marks in other categories. Simplexity rated low, in part because of its limited selection in certain areas. Sarah Fister Gale is a freelance writer based in Minneapolis. The savvy entrepreneur’s guide to buying telecom services on the Web Comments Would our CEOs go back? What is the site good for? Biggest weaknesses www.telebright.com “No” Getting an idea about the range of rates No criteria for sorting what you are learning www.simplexity.com “No” General information on services available The whole thing www.telezoo.com “No, but I would have my MIS person look at it” People who are tech savvy Not good for small businesses www.demandline.com “Yes. It offers an easy way to shop” The nuts and bolts of telecommunications shopping Lacking in sophistication www.telecomsmart.com “Yes, it was helpful” Side-by-side comparisons Long service questionnaire www.essential.com “No” Wireless-plan shopping Unwieldy comparison button Grades Ease of navigation Ease of use Variety of services Flexibility Help options Ease of comparison Pricing Security Overall grade www.telebright.com B- B B- D B C+ C C- C+ www.simplexity.com B- C D- F B C- C F C- www.telezoo.com B B+ B C- C B+ C B B- www.demandline.com B+ A- C+ D B B+ B B B- www.telecomsmart.com B C+ A- B+ B A B B+ B www.essential.com A- B C C+ B+ C C C B- Our panelists Michael W. Allen, chairman and CEO, Allen Interactions Inc. Jennifer Alstad, president, B-Swing Inc. Bill Belgard, chairman and CEO, Light-Speed Learning Inc. John Biancini, president and CEO, CIO Partners Christopher Butler, president, the Performance Engineering Group Inc. Kevin Daum, CEO, BYDH Inc. Leslie M. Fox, president and CEO, Fox & Associates Inc. Alisa Lippincott, owner and president, Brew Ha Ha Inc. Stu Tanquist, president, Express Learning Inc. Ron Zemke, president, Performance Research Associates Please e-mail your comments to email@example.com.
FYI I’ve known Rick Inatome for almost 15 years, and I can’t recall ever seeing him dressed in anything other than a suit and tie — at least not until he stopped by my office a couple of months ago. He was wearing chinos and a short-sleeved shirt open at the collar. OK, the chinos had creases so sharp that you could have sliced your finger on them. I haven’t seen anything like them since boot camp. But still, they were chinos, and Inatome was doing a pretty fair imitation of a guy trying to look casual. I knew immediately that something was up. It was. Longtime readers of Inc. may recall that Inatome is the cofounder of Inacomp Computer Centers, a two-time Inc. 500 company that he and his father later built into Inacom, a $7 billion Fortune 500 company. That day, however, he was in our offices to talk with a group of editors and writers about ZapMe Corp., an educational Internet company he’d recently taken over. Hence, the new look. Whatever sartorial changes he has gone through, Inatome is still as sharp as his creases. Those who attended the meeting were fascinated to hear him talk about making the transition from the old new economy to the new new economy. I suspect you’ll be equally fascinated by senior writer D.M. Osborne’s vivid snapshot of that transition in this month’s cover story, ” Getting It.” The Microbusiness Challenge Contributor David H. Freedman has written an article for this issue that also sheds light on the challenges of adapting to a digital world. In ” Can You Survive the eBay Economy?” Freedman shows how on-line auctions are creating a new class of microenterprises that are providing increasingly stiff competition for traditional small companies. Small businesses were once expected to be major beneficiaries of the Internet, which was supposed to level the playing field between them and large companies. As it turns out, the Internet not only has failed to deliver on that promise but is now breeding new guerrilla competitors to traditional small businesses. If you’re looking for ways to respond to that challenge, you might want to check out Freedman’s new book, Corps Business: The 30 Management Principles of the U.S. Marines, which HarperBusiness published in January. The book grew out of his April 1998 Inc. cover story, ” Corps Values.” Both depict a 225-year-old organization that has all the qualities required to compete in the 21st century: speed, adaptability, decentralization, and an absolutely relentless dedication to excellence. Shades of Black and White Editor-at-large Jeffrey L. Seglin has a new book out as well, The Good, the Bad, and Your Business: Choosing Right When Ethical Dilemmas Pull You Apart (John Wiley & Sons). The book traces its genealogy back to a series of features Seglin wrote for Inc. under the rubric Black and White in 1998 and 1999. Like the articles, the book offers compelling case studies, which Seglin illuminates with commentary from some of the country’s leading ethical theorists. In this issue Seglin responds to ethical issues and questions posed by readers. If you have a subject you’d like him to address in the future, you can reach him at firstname.lastname@example.org. Money and Fun Fun is the secret ingredient of a lot of great companies, but 10 years of economic prosperity, a resurgent stock market, and the dawning of the dot-com have created other business priorities. These days, people often seem too preoccupied with making money to think about having fun. A noteworthy exception is the two brothers who’ve built one of the finest furniture retailers in the country, Jordan’s Furniture, which Warren Buffett bought recently for more than $200 million. Forget about the company’s $250 million in sales last year. Here is a business with sales per square foot of approximately $1,000 in an industry that averages between $150 and $200 per square foot — a differential of five to one. But what truly distinguishes the people at Jordan’s Furniture is their seemingly infinite capacity for having fun, as you’ll see from the wonderful portrait of the company by Arthur Lubow, a freelancer whose work has appeared frequently in The New York Times Magazine, The New Yorker, and other publications. “Wowing Warren” provides a much-needed reminder that it’s still possible to make money and have fun at the same time.