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In all too many companies, reengineering has been not only a great success but also a great failure. After months, even years, of careful redesign, these companies achieve dramatic improvements in individual processes only to watch overall results decline. By now, paradoxical outcomes of this kind have become almost commonplace. Too many companies are squandering management attention and other resources on projects that look like winners but fail to produce widespread bottom-line results. The authors' research into reengineering projects in over 100 companies reveals how difficult these projects actually are to plan and implement and, more important, how often they fail to achieve real business-unit impact. The study identified two factors--breadth and depth--that are critical in translating short-term, narrow-focus process improvements into long-term profits.

A new organization man has emerged, one who wants to be an involved father with no loss of income, prestige, and corporate support - and no diminished sense of manhood. But since many companies still deem dedication to career the sole marker of professional success, this new man may believe he has to hide his participation at home. Not surprisingly, the compromises made by the new organization man bear a striking resemblance to those of the new organization women. And just as many senior managers now recognize that they'll lose their most ambitious women if they don't develop strategies to accommodate family needs, corporations may also lose their best and brightest men if they don't address the needs of the 1990s man.

Big companies in crisis get there by doing the things that once made them big. The experience of troubled companies is a syndrome with four stages. First the founders articulate their vision. Then the company develops steering mechanisms to operationalize the vision and guide the company through change. Unfortunately, these steering mechanisms tend to become rigid over time, with much stronger ties to the founding vision than to the changing economic environment. So in the third stage, feedback deteriorates. And the useful signals that do get through run into organizational defensive routines--the fourth stage--that prevent information from being put to proper use. The key to getting out of this syndrome is to abandon blame and focus instead on what the company did right to get into the crisis it now faces. To answer that question, managers must examine the differences between the strategy the company espouses and the strategy it enacts.

It is difficult to overstate the extent to which most managers and the people who advise them believe in the redemptive power of rewards, argues Alfie Kohn in "Why Incentive Plans Cannot Work," reprint #93506. The assumption that people will do a better job if they are promised an incentive is pervasive, but a growing collection of evidence supports an opposing view. In fact, research suggests that, by and large, rewards succeed at securing one thing only: temporary compliance. According to Kohn, incentives (or bribes) simply can't work. Kohn's views elicited a lively debate on the role of incentives in the workplace. In this Perspectives column, nine experts consider Kohn's argument. Kohn then offers a general response.

Updates General Dynamics: Compensation and Strategy (A).

William Anders became CEO of defense giant General Dynamics in 1991 as the Cold War was ending and as the industry became saddled with excess capacity. Observing that the company was underserving shareholders and required a massive change in its culture, Anders brought in a new management team and introduced a new compensation system that better aligned the interests of managers and shareholders. Particularly controversial was the Gain/Sharing system, which paid large cash bonuses for each $10 increase in the stock price. The plan was widely criticized for rewarding top executives for manipulating stock prices through public announcements of layoffs and divestitures. Still, by the end of 1991, the stock price had climbed 113%, representing a $1.2 billion increase in shareholder wealth during the year. Teching Purpose: This case can serve several purposes. First, it provides an introduction to executive compensation. Second, it highlights the importance of linking incentives and corporate strategy in the context of a declining industry. Finally, the case can motivate discussions of downsizing and unemployment and the merits of rewarding top executives for cutting excess capacity.

Discusses the management practices of William Aramony at the United Way of America (UWA). First, the case describes the United Way movement, focusing on both the local chapters and the national organization. Second, it sets forth the Washington Post reports that lead to the UWA scandal. Third, it shows how the board of governors, the local chapters, Aramony, and donors responded to the scandal.

Analyzes the measures taken by the United Way of America (UWA) and its board of governors in response to the 1992 Washington Post reports that lead to the UWA scandal.

Deals with an employee who contracts AIDS. The employer, a food-service proprietor, is threatened by an old and valued client with the loss of the account if they do not fire him.

Describes the resolution to the dilemma raised in the (A) case.

Provides a short summary of John Reed's succession at City Bank from Executive Vice President in 1976 to CEO in 1984.

Nine years ago, the author bought a small manufacturing company with marginal profits, poor union relations, nit-picking work rules, and high labor costs. Today he has flexible work rules, lower relative labor costs, fewer benefits, excellent union relations, and superior profitability. How did he do it? The simple answer is profit sharing and empowerment. The process began when Frey cut wages, vacations, and holidays. The ensuing strike failed, leaving him with lower costs but an angry, embittered work force. After a year of bickering, Frey decided he wanted to implement profit sharing. To get his employees to grasp the cause-and-effect relationship between the way they worked and the profits they shared, he used every means he could muster. He refused contract wage hikes but shared 30% of pretax profits. He opened his books to the union. He offered training in new skills. He hired new managers. He learned to listen. For workers, profit sharing is now a 36% increment to income, while productivity has risen by almost a third. Best of all, the workers themselves now push for ongoing change and increasing responsibility.

It is difficult to overstate the extent to which most managers and the people who advise them believe in the redemptive power of rewards. But more striking is the rarely examined belief that people will do a better job if they have been promised some sort of incentive. According to numerous studies in laboratories, workplaces, classrooms, and other settings, rewards typically undermine the very processes they are intended to enhance. The findings suggest that the failure of a given incentive program is due less to a glitch in that program than to the inadequacy of the psychological assumptions that ground all such plans. Research suggests that, by and large, rewards succeed at securing one thing only: temporary compliance. Kohn explains why rewards fail in a six-point framework: rewards do not motivate; they punish; they rupture relationships; they ignore reasons; they discourage risk taking; and finally, they undermine interest. Any manager thinking about a new incentive program--or attached to an old one--would do well to consider Kohn's argument. According to Kohn, incentives (or bribes) simply can't work in the workplace.

Continuous improvement programs are proliferating as corporations seek to better themselves and gain an edge. Unfortunately, however, failed programs far outnumber successes, and improvement rates remain low. That's because most companies have failed to grasp a basic truth. Before people and companies can improve, they must first learn. And to do this, they need to look beyond rhetoric and high philosophy and focus on the fundamentals. Three critical issues must be addressed before a company can truly become a learning organization: meaning, management, and measurement.

The authors believe that defining the difference between star performers and average workers is the way to increase the productivity of knowledge professionals. The authors' research at the Bell Laboratories Switching Systems Business Unit (SSBU) has revealed that the difference between stars and average workers is not IQ but the ways top performers do their jobs. Their study has led to a training program based on the strategies of star performers. Once the SSBU training program, known as the Productivity Enhancement Group, got underway, respected engineers ran the training session, which included case studies, work-related exercises, and frank discussion. Participants and managers reported substantial productivity increases in both star and average performers.

A formal organizational chart won't reveal which people confer on technical matters or discuss office politics over lunch. Much of the real work in any company gets done through an informal organization, with complex networks of relationships that cross functions and divisions. According to the authors, managers can harness the power in their companies by diagramming the advice network, which reveals the people to whom others turn to get work done; the trust network, which uncovers who shares delicate information; and the communication network, which shows who talks about work-related matters.

In this fictional case study, Adam Lawson is a promising young associate at Kirkham McDowell Securities, a St. Louis underwriting and financial advisory firm. Recently, Adam helped to bring in an extremely lucrative deal, and soon he and a few other associates will be honored for their efforts at the firm's silver anniversary dinner. George Campbell, vice president in mergers and acquisitions, is caught unprepared when Adam tells him that, after serious reflection, he has decided to bring his partner, Robert Collins, to the banquet. George is one of Adam's biggest supporters at the firm, and he personally has no problem with Adam being gay. But it is one thing for Adam to come out of the closet at the office. It is quite another to do so at a public company-client event. George is concerned with how Adam's decision will play with the firm's more conservative clients and senior management. Adam has not come to George for permission to bring Robert to the dinner. But clearly Adam wants some sort of response. Six experts comment on George's dilemma and discuss issues of diversity in the workplace.

Supplements the (A) case.

Discusses the Lukens board's involvement in strategic planning.

In this fictional case study, Vision Software was an interesting and exciting company--on the cutting edge of computer technology and a leader in its field. CEO John Clark was proud of its enlightened human resource policies, including efforts to hire and promote women. Yet something was wrong. In just two years, four top women had resigned after working at Vision for many years. Liz Ames, Director of Consumer Marketing, blamed sexism at Vision, and she had drafted a memo to Clark about it. She described a workplace where women felt undervalued. In the midst of this discouraging atmosphere, Vision's best women were just giving up. Liz turned to a trusted male friend at Vision for advice, and step by step as he read the memo, he had to agree with what she had said. But how should he counsel her? Would Clark be open to the criticism, or would he use it against her? Would she harm her relationships with other men in the company? If he advised against sending it, would he be condoning sexist behavior? A broad range of experts comment on Liz's memo and discuss issues women face in the workplace.