Twitter is the canary in the coal mine of public opinion — for celebrities, politicians, and, of course, corporations. When European discount carrier Ryanair lashed out at “lunatic bloggers” after a Web designer reported a glitch on the airline’s site, its online reputation dipped as low as its fares. Conversely, Mars got a sweet treat when it posted Skittles-related tweets on its Web site, learning immediately how people felt about the candy.

Twitter’s explosion from microblogging curiosity to mass-media phenomenon [0] has awakened a lot of companies to just how fast memes spread on the Internet today. Make a mistake like Ryanair’s — or Johnson & Johnson’s offensive Motrin ads last winter — and the response is brutal. Get it right like shoe retailer Zappos and bask in the love. How can you know if your canary is singing or dead? These tools will help you monitor not just Twitter but everywhere the online conversation involves your brand.

TweetDeck [1]. To follow the raging tweetstream, you need a dashboard. This free download splits your Twitter feed into subgroups, letting you follow shout-outs (@replies) in one window and specific searches in other views. For instance, Pepsi could follow Mountain Dew, Gatorade, Tropicana, and Frito-Lay in four different search fields, receiving instant feedback on announcements and ad campaigns.

Scout Labs [2]. Need to monitor feedback on your new product? Scout Labs reads blog posts and social-networking comments from around the globe and judges them by their words and tone. The sentence “I love Amazon but the Kindle 2 is disappointing” gets properly parsed as a positive comment for Amazon but a negative one for its e-reader. This ultra-targeted approach allows clients such as Charles Schwab, HP, and Netflix to follow comments in real time and react quickly. Pricing starts at $99 a month for five searches.

BlogPulse [3]. This free feature from Nielsen Online searches the blogosphere for what’s happening with your brands. Type in a few keywords and track the number of mentions over the past six months, and view them in a handy fever chart. You can also trace the roots of a Web conversation and learn more about key Web influencers.

Vanno [4]. It’s Digg for reputation. Readers vote on news stories, opinion, and gossip about more than 5,800 companies, and Vanno mashes it up into a numerical score. The free site tracks these companies based on 25 topics, including job satisfaction, customer service, and social responsibility. At press time, Cisco was No. 1.

CoTweet [5]. This free service (currently in limited beta) allows multiple people to tweet from the same user name, using software to replicate the success of Zappos’s hundreds of staff bloggers, including CEO Tony Hsieh, within one account. Employees can delegate tasks, track conversations, schedule posts, and best of all, identify the people behind the brand.

TNS Cymfony [6]. If you need a more heavyweight tool (starting at $40,000 a year), TNS Cymfony goes beyond simple keyword analysis across the Web and analyzes grammar. It also includes crisis PR solutions that track key bloggers, journalists, and consumers. (Nielsen Online’s Buzzmetrics [7] service offers similar features.) During the past Super Bowl, TNS Cymfony reported that the teaser for the anticipated summer hit Transformers: Revenge of the Fallen earned seven times the buzz of the average ad during the big game.

Use these seven tools and you won’t have to worry about revenge; your brand will be transformed into an agile, respected member of the Web’s social swirl.

In 1988, three young guys in New York City — an acting student, a magazine researcher, and a software producer — were so happy to see the end of the 1980s, they held a funeral for the decade. They painted their faces blue and led a procession through Central Park; they burned a Rambo doll and a piece of the Berlin Wall. Although they couldn’t have known it, Chris Wink, Phil Stanton, and Matt Goldman had launched what would grow into an entertainment juggernaut. Since opening in New York City’s Astor Place Theatre in 1991, the Blue Man Group has played in 12 cities across the globe. More than 17 million people have seen its shows, and today, tickets go for $43 to $132. Goldman, the onetime computer geek turned impresario, tells the Blue Man Group’s unlikely story.

The Blue Man character is about universal human truths. When we got bald and blue for the first time, we knew instantly that we were on to something really special. It’s not like we sat down and came up with a business plan and followed it from Point A to Point B to Point C.

We played P.S. 122, La MaMa, all these hip, arty venues before we opened at the Astor Place Theatre. So some in the downtown art crowd thought we were selling out. But the work didn’t change. In the beginning, the house was half empty, and we were undercapitalized. We’d show up at the theater expecting a padlock on the door. I set up my office — a telephone, pen, and pad — directly opposite the box office. When I saw someone leave the box office without a ticket, I’d run out and start chatting him or her up. I wasn’t going to let him or her walk away without buying a ticket.

We made all the props ourselves. We found PVC pipe on Canal Street and turned it into musical instruments. But the Jell-O in the show cost $880 a show to make. So our producers said, “Lose the Jell-O.” Phil and Chris were working at the time for Jean-Claude Nédélec, who co-owns Glorious Food, the catering company. We told him our sad story, and he said, “We’ll make the Jell-O.” For three years, Chris and I would take a cab to the Upper East Side to pick up giant Jell-O molds and never paid a cent for it.

We went from six to eight shows a week and did 1,285 consecutive shows. We were sold out eight weeks in advance, but our producer got panicky at the thought of one of us getting sick, so we had one understudy. We never canceled a show. But then Phil cut his hand, and Chris Bowen, our extra, got bald and blue for the first time. It was fine. He’s now our senior performing director.

We realized that if we wanted to grow, we’d have to replicate ourselves. We cast three Blue Men, opened in Boston, and assumed it would go well. But there was no script, no musical score. It was a case study of the wrong way to grow. We realized we had to articulate our vision, so we locked ourselves in a room and spent several days writing the Blue Man manual.

The Blue Man is part innocent, hero, scientist, shaman, group member, and trickster. He doesn’t speak, but he communicates with vaudevillian slapstick humor. He drums and catches gumballs in his mouth that are filled with paint, which he spits onto a canvas to make art. It’s interactive, with music, lights, and lots of colorful liquids that get sprayed on the stage and into the audience.

The whole show is about connecting with the audience — to get to that heightened gestalt when someone scores a goal at a soccer game. That “AHHH!” There’s no intellect involved at all, just chemical secretions through one’s brain and body.

Three is the smallest unit where you can have an outsider; two guys win the third over, or the third guy wins the two guys in. It can go either way, and that tension makes for good theater. It also makes for good business partners — it takes the ego out of it. To this day, we’ve never made a decision based on the majority. All decisions are consensus. It takes longer, but we find if you keep talking things through, you reach a better choice.

We decided to open in Chicago. Before the show, we realized we had no idea how much money we needed. We called the general manager of the Boston show, who is now our CFO, and she did the numbers. To make payroll, we had to open three days early and do two shows a day. We figured, no one is going to know that the whole set could fall apart. They’ll just think, Oh, the Blue Men; they’re crazy. From Chicago we moved on to Las Vegas and later Orlando.

Vegas was a gamble. The theater had twelve hundred seats. We did 10 shows a week, but for the first six months, the theater was half empty. Lots of companies had come to us, wanting to do Blue Man ads. We turned them all down. But when Intel asked for the fourth time, we said, “Let’s talk.”

They said, “We want to get across that Intel is innovative, intelligent, and fun.” We liked that but said, “The ad agency is going to do lame storyboards.” So they gave us signing-off approval. Then we said, “The music is going to be really bad,” and they said, “You can make the music!”

That was in 2000. It was one of the biggest ad buys at the time: The ads were shown at the Grammy Awards, the basketball playoffs, the World Series. Every month, a new one aired. We went from 10 shows a week at 50 percent capacity to 14 shows at 100 percent.

Then we went international. Germany is the second-biggest entertainment market in the world for theater, so we started there. It felt appropriate, because when we did the funeral for the ’80s, we burned the Berlin Wall, and then it actually came down. So we felt personally responsible. We’ve had shows in Amsterdam and London. Today, we’re in Stuttgart and Tokyo.

We have about 70 Blue Men on the payroll. They’re hard to find. A lot of them trained in theater or are good drummers. We have a casting director and hold national auditions. Our Blue Men train in New York before we ship them out to our shows in other cities.

If you invent your own instrument, you’re automatically one of the top three musicians in the world on that instrument. We have made up more than 30 instruments, like the tubulum, the drumulum, and the piano smasher. I can barely hold my own musically, and yet I get to be a rock star. We made several albums; one was nominated for a Grammy.

We created a school in New York with an arts-based curriculum. It’s called the Blue Man Creativity Center. We have 2-, 3-, and 4-year-olds. Next year is our first kindergarten. We’re growing a grade a year. This year, we had 200 applications for 30 spaces.

Some people think that when we get bald and blue that we’re just hiding behind a mask. But we think it’s the opposite. When you get blue, you’re left with just the purest, most vulnerable humanity. And so, about halfway through the show, people start to go, “Whoa, I’m the Blue Man.” And once you get there, you wonder, Are there actually three different characters, or is it three aspects of one personality, so together they’re one character? Those are exactly the questions we want people to be asking.

[via Inc Magainze] by Matt Goldman

When times were good, the top executives from the largest U.S. banks made a mint. Below is the total compensation in 2007 for the 9 banks that received the first batch of government aid through TARP.

http://money.cnn.com/news/specials/storysupplement/ceopay/index.html

George Foreman has three fundamentals of business success: selling, integrity, and “the shotgun tactic.” Over a lifetime, Foreman has created the kind of well-rounded success that most people dream of. He is a profitable businessman, a community leader, a husband and a father. His life is full, but more importantly to Foreman, his life is meaningful.

With nearly 100 million George Foreman Grills sold since 1995, Foreman has had enormous influence in the wellness industry. He is also one of the highest-paid and most recognized celebrity endorsers in the world.

In 1999, Foreman signed a $137.5 million deal with Salton Inc. (recently merged with Applica Incorporated), entitling the grill manufacturer to global, unrestricted use of Foreman’s name in marketing the Lean, Mean, Fat-Reducing Grilling Machine and related products. The deal made Michael Jordan’s $40 million deal with Nike look small by comparison.

Before his endorsement of the grills, Foreman made business deals based primarily on a desire for income. “I was so successful,” he says. “All the ads I had done for sausages, you name it, [I was] mainly thinking about money. But then I went into the grill business.” He took the grills all over the country, making personal appearances and boosting sales. “I was meeting people who would say, ‘The doctor told me to get a George!’ I’m like, what are they talking about? Get a George?” He realized his product was making a difference in people’s health, and his perspective changed. “From that point on, you know, I can never go back to what I used to do where I just sell and sell,” he says. “Now everything I do has to be connected to something healthy.”

The Importance of Selling
Of course, Foreman’s business success started with his success as an athlete. Born in 1949 in Marshall, Texas, Foreman, nicknamed “Big George,” was one of seven children in a struggling home. By the time he was 15, he was a street thug and mugger in Houston’s dangerous 5th Ward. His life changed when he left for California to join the Job Corps and was introduced to the discipline of boxing. In 1968, Foreman won the Olympic Gold medal in Mexico City, in only his 25th amateur fight. A world champion was born.

Within a few years of turning professional, Foreman’s record was 37 wins—most by knockout—and no losses. In 1973, he defeated Joe Frazier to become heavyweight champion of the world. Despite his fame, he maintained a cold distance from the public, and his surly demeanor earned him occasional boos in the ring. He defended his title twice before losing it to Muhammad Ali in the “Rumble in the Jungle” in 1974.

A few years later, Foreman announced what he thought was his retirement. A religious awakening led him to pursue a life in the church. He didn’t know at the time that the seeds of his business success lay in these days of personal transformation.

“It started because I left boxing in 1977 and worked in evangelism at a church in Marshall,” he says. Foreman had made a fortune in boxing, but now turned his attention fully to his faith. “I spent all my time preaching with lots of money. Lots of money.” But he didn’t preach like a rich man. He spent countless nights out on the streets of Houston, in all weather. Just as in his boxing career, he was relentless.

He also made good on a personal pledge to help at-risk youth, just as he had been helped during his early days as a teenage thug. After he joined the Job Corps, a counselor saw young George’s potential and got him involved in boxing, possibly saving him from a life of crime or jail or worse. Foreman wanted to provide the same kind of opportunities for young people and in 1984 founded The George Foreman Youth & Community Center, which offers scholastic and athletic activities including, of course, boxing.

But 10 years after he left boxing, he says he looked up and was on the verge of bankruptcy. “I had to go back into boxing for our survival, to feed my family.” Fortunately, his years spent preaching on the streets of Houston had taught him valuable lessons that would carry him into a second career as a businessman. “What I found was the 10 years I was out of boxing, I was preaching on the street corner and I’d make people stop. They didn’t know me,” he says, “the old George with an afro and all that. So I realized I could stop these people, who are always headed somewhere, for a second and sell my message. That’s what I learned to do on the street corner.”

He tried applying his newfound skills in the boxing world. “So I went back to boxing trying to sell the old George Foreman heavyweight champion of the world,” he says. “Nobody wanted to buy it, though.” Foreman was 38 when he returned to the ring, a tough sell for any athletic comeback. But the man in front of the camera this time wasn’t cool or removed. He had a gentleness about him that contrasted his toughness in the ring, and that appealed to the public.

“In time, I learned the importance of selling,” he says. Foreman realized he had power outside the ring to influence how people viewed him. In 1994, at the age of 44, Foreman reclaimed the heavyweight title. “That’s when people started to say, ‘This guy can sell himself. Let’s let him sell Doritos or Kentucky Fried or McDonald’s.’ ” And sell, he did. In addition to promoting these companies, Foreman became the spokesman for Meineke Car Care Centers. The boxer and preacher was now an advertiser’s dream come true.

But he says his athletic ability was less a factor in his business success than his selling skills. “If you learn to sell, it’s worth more than a degree,” he says.” It’s worth more than the heavyweight championship of the world. It’s even more important than having a million dollars in the bank. Learn to sell and you’ll never starve.”

Integrity: His Greatest Asset
“The greatest asset, even in this country, is not oil and gas,” Foreman says. “It’s integrity. Everyone is searching for it, asking, ‘Who can I do business with that I can trust?’ ”

By 1994, Foreman’s life was again on the upswing. When he took the opportunity to endorse what is now the George Foreman Lean, Mean, Fat-Reducing Grilling Machine, he found a new drive to help people improve their lives by improving their health. Now he won’t settle for anything less when it comes to endorsements. “One of the biggest things is to fight,” he says. “Just don’t go absolutely for the buck.”

Foreman learned after his fi rst retirement that to go back into boxing he had to protect the brand of George Foreman. “So now I understand you must preserve the quality of your name, your integrity,” he says. “You don’t want to lie about anything. And it’s something that people will be happy about once they get to know you. Because people count on you. You know, a contract you can easily break. I’ve found in business, everyone signs a contract to make a business deal, and they always leave a loophole so they can break them.

Foreman says people with integrity are in high demand. “There are a lot of guys who are successful, they make a lot of big money, I mean millions overnight with a contract, and they don’t understand the evaporation. It evaporates. You’re always back to square one. I found that out, so integrity is how I do business. That’s my main asset.”

This attitude is one he intends to impart to his kids. He has 10 children—five with his current wife, Mary “Joan” Martelly. George III, nicknamed “Monk,” is Foreman’s business manager. “Your children are looking at exactly what you do,” he says. “You’ve got to believe in something. And you’ve got a line that you can’t cross. I point this out.

“I’ll give you an example. I had the opportunity to go into the restaurant business. A chain of restaurants, the George Foreman restaurants. And it was an opportunity right out to make lots of money.” But Foreman is opposed to selling liquor in his establishments, in accordance with his religious beliefs. “And they said, ‘Well, this is what will make more profi ts. You can just donate them to charity.’ I said, ‘No, I can’t do that.’ And my sons, who were in business with me, watching me put this deal together, they could not understand it. They just couldn’t understand. Not to say that they have to have the same feelings I have about things. But at least have something you believe in and you cannot be talked out of by dollars and cents. And that’s what I try to pass on.”

The Old Shotgun Tactic
Foreman is approached by hundreds of potential business partners every year. He reviews offers daily with George III, and asks for input from his wife and children before he signs a deal. So how does he choose from all the opportunities he sees? “I call it the old shotgun tactic,” he says. “My grandfather used to go out hunting during the days of the Depression. The good shooters, the marksmen, shot with one shell.” But during the Great Depression, you couldn’t put all your bets on one bullet because those bullets were expensive. “If you missed the squirrel, so to speak, you don’t have anything but an excuse on the table,” Foreman says. “But if you buy these cheap shots, which are buckshots, they scatter. You come back in with a squirrel. Although you got a lot of buckshot in it, you got a decent meal on the table.

“So now I use the same thing, although you’ve got to be selective because you have a name to protect.” Foreman believes that one of the many opportunities he investigates will hit it big. “You know you put out a lot of buckshot, you’re going to strike one,” he says. “You’ve got to start out early in the morning and look at hundreds, literally hundreds of things, looking for that quality. And it may take a year, it may take three or four years, but you’re going to hit something so you have something to put on the table for your family.”

Foreman’s company, George Foreman Enterprises, consistently strikes new deals for products and services that meet Foreman’s requirements of being high-quality and beneficial to the consumer. He has lent his name to a line of clothing for big and t a l l men sold by Casual Male and endorsed a new brand of shoes for diabetics by InStride as well as a health-food restaurant chain called UFood Grill.

“And then we have the green cleaning products, which I’ve been working on for a couple years,” he says. “We finally got it absolutely, totally biodegradable.” He hopes that using biodegradable products, like George Foreman’s Knock-Out Household Cleaning System, will help preserve the land for his grandchildren. His other hope is that the established cleaning-product manufacturers will follow suit. “This is going to be so good it’s going to make the big companies jealous, and they’re going to outdo me. And I still win,” he says. “I still win. Because it makes the planet much better.”

But it doesn’t end there. Through Foreman’s Web site, visitors can purchase cookbooks, memoirs and autographed boxing gloves. His 10 books, three of which were published by Thomas Nelson in the last two years, offer inspirational insights into life, comebacks and fatherhood. And then there are the grills. The newest version, the 360 Grill, is selling well and is one of several George Foreman brand small kitchen appliances, including the Lean Mean Fryer for reduced-fat frying and the Grill & Roast for convection cooking.

He’s also become a star of the small screen; his reality series Family Foreman starring him and his family debuted in 2008 on the cable channel TV Land, and an ABC sitcom starring Foreman ran for nine episodes in 1993-94.

Foreman has succeeded in creating more than a brand. He has created a relationship with consumers based on integrity and a gift for making the sale. This relationship allows him to transfer his brand to a wide range of products and succeed in staying diversified. “The bottom line is, you make a decision you’ll be able to sleep with, wake up the next day, look in the mirror and feel good about yourself,” Foreman says.

“You want to leave something, you really do,” he says. “I mean, in the end, statues and all those things, that doesn’t mean anything. Leave something that we’re all going to benefit from. I think that’s what I’d like to do.

Apply Foreman’s philosophies for success in your life:

1. Belief: “You have to have something you believe in. It could be someone you believe in, too. But at least have something you believe in and you cannot be talked out of by dollars and cents.”
2. Integrity: “You must preserve the quality of your name, your integrity. You don’t want to lie about anything. And it’s something that people will be happy about once they get to know you. Because people count on you.”
3. Sales: “Learn to sell and you’ll never starve.”
4. Resilience: “You’re going to fail if you do enough business. But you can always come back because you’ve got some integrity, and people need that.”
5. Persistence: “It may take a year, it may take three or four years, but you’re going to hit something so you have something to put on the table for your family.”
6. Legacy: “You want to leave something, you really do. I mean, in the end, statues and all those things, they don’t mean anything. Leave something that we’re all going to benefit from.”

[via Sta.rtup.biz] by Amy Anderson

Tony Hawk is rich and chief executive of his own company, but that doesn’t mean he’s changed all that much from the skateboarding kid with a junk food diet. In fact, it’s something he says makes him a better C.E.O.

For Hawk, it’s always been about being true to one’s self, or at least his constituency—the skaters.

“You have to be approachable and identify with your audience,” Hawk said. “I never forgot where I came from. I still continue to skate with the kids and see what they’re up to. I still eat at McDonald’s.”

Sky High

Tony Hawk on Authenticity

Watch more interviews with Tony Hawk

Hawk has never lost touch with that audience and doesn’t want to. And that may be the key to the success of his Tony Hawk Inc., a privately held business with 30 employees working from an office park 40 miles north of San Diego.

“(I want to) actually experience it and not hire a marketing group to do it for you and then you’re out of touch and you’re relying on whatever their vision is,” Hawks said.

Hawk started skating at the age of nine and three years later he gained his first sponsor.

Two years later at 14, he turned professional and in the following two years, he was considered the best skateboarder in the world. Over the next 17 years, he won enough contests–enough to think he was set for life.

He launched a skateboarding company, Birdhouse Projects, but it struggled as pubic interest slumped. Hawk slumped, too, financially. But when skateboarding and extreme sports began to grab the spotlight, he seized the opportunity.

His defining moment could be deemed when he went to the 1999 X-Games in San Francisco and completed the first “900″ in skateboarding competition. (A 900 is a jump of two-and-one-half rotations, 360 degrees + 360 degrees + 180 degrees = 900).

“I didn’t really anticipate making (the 900) that night,” Hawk said. “I told myself that night that I was going to make that trick or get taken to the hospital.”

That kind of determination served Hawk in business, too.

“I go with my gut feeling,” Hawk said. “Is this is something that is truly connected with what I do.”

He trusts his instinct because “I do live in this world. I didn’t learn about it through videos or books. I actually did it and struggled with it.”As a businessman, Hawk now has racked up unusual success.

His video game series with Activision has sold more than 30 million copies and the newest releases are frequently among the top 10 sellers in the business. He’s done a direct-to-DVD movie, a clothing brand that’s sold at Kohl’s and last year, the Tony Hawk Big Spin roller coasters made their debut at Six Flags’ Amusement Parks.

That’s all in addition to his skateboarding business and an extreme sports tour called Tony Hawk’s Boom Boom HuckJam, which he started in 2002.

Hawk also founded the Tony Hawk Foundation, which is designed to promote and help finance public skate parks in low-income areas.

The foundation has distributed more than $2.3 million to non-profit groups building skate parks everywhere from Homer, Alaska to Needles, Calif., to Greencastle, Ind., to Livermore Falls, Maine.

[via Conde Nast Portfolio] by Phillip Lee

In November, not two weeks after winning the election and still two months from becoming commander in chief, Barack Obama brought the government into the 21st century. Or at least that was what we were told when he released his first Web video address as president-elect. The clip, billed by some as a modern fireside chat, was embedded as a YouTube video on Change.gov, the incoming administration’s Web site. Sitting in a leather chair, framed slightly off center from his chest up, Obama delivered a three-minute talk on the economic crisis, vlog style.

The video quickly racked up hundreds of thousands of views, and within a few days hundreds of blogs were linking to it. Obama’s foray into viral video, the story went, heralded the beginning of a new era in government communication and transparency—”Franklin Roosevelt 2.0,” in the words of The Huffington Post. The Washington Post proclaimed the advent of the “YouTube presidency.”

1 million:
The number of views received by Obama’s first YouTube address as president-elect.

It wasn’t long, however, before savvy observers noted what was missing from this and other Obama videos: the chance for ordinary citizens to talk back. The campaign initially disabled the comment function on YouTube and prevented response videos from appearing alongside. A YouTube video without comments, some pundits groused, is more like a monologue than a chat, fireside or not. “I don’t see how one-way messages provide any more transparency for the work of the White House or government than the current old-style radio addresses,” blogged Ellen Miller, director of the Sunlight Foundation, a government-transparency watchdog group. “Is Obama ready,” challenged TechCrunch, “to be a two-way president?”

Of course, Obama’s transition team had good reasons for disabling responses. For starters, YouTube comments are typically the intellectual equivalent of truck-stop graffiti. (When the team belatedly allowed comments a couple of weeks later, the site was flooded with insights like “USA susks.”) Also, his team would have zero control over the potentially critical or embarrassing response videos that users would post next to the address. The real reason, however, was that Obama wasn’t actually trying to have a conversation with Americans via YouTube. Like every president before him, he was simply harnessing the latest tools to talk to them, one-way.

Technophiles who watched the campaign closely expected more, and now they are putting pressure on the White House to govern with unparalleled transparency and citizen interaction. Dan Froomkin of the Niemen Watchdog Journalism Project and The Washington Post summed up expectations in a blog post calling for Obama to embrace “wiki culture” in which “major policy proposals have public collaborative workspaces.”

150,000+ subscribers
follow Obama’s Twitter feed.

0 tweets
have been posted by Obama staffers since the election.

Obama has himself to blame for raising such expectations. During the campaign, he embraced every form of social media. At My.BarackObama.com, supporters could create profiles, talk to each other, and—by election day—plan some 200,000 offline dinners and living room fund-raisers. Users could log in from home to get lists of swing-state voters to telephone; this generated 3 million calls in the final four days of the race. Those efforts were combined with massive database-crunching to identify potential voters who could be approached door-to-door by last-minute canvassers, myself included.

As for John McCain’s efforts, well, he didn’t really have any. According to Andrew Rasiej and Micah Sifry, cofounders of the Personal Democracy Forum and the blog TechPresident, Obama had four times the number of Facebook supporters, 24 times the Twitter devotees, and three times the visitors to his site in the final campaign week. The public watched about 15 million hours of Obama campaign videos on YouTube. Along the way, Obama collected 13 million email addresses, more than a million cell phone numbers, and a half-billion dollars in online donations.

There’s also another reason to expect a tech-driven presidency: Obama promised it. He said he would expand government transparency by putting more data up on the Web, streaming meetings live, and letting the public comment on most legislation for five days before he signs it. He said he would bring blogs, wikis, and social networking tools with him into the executive branch—all overseen by a new national chief technology officer. Indeed, Obama’s transition site, Change.gov, offers glimmers of a potential digital presidency with its YouTube addresses, issue-based discussion forums, and inside-the-transition videos featuring future cabinet members responding to comments.

But turning his innovative campaign and transition into Government 2.0 won’t be easy. The nimble Obama startup is about to be absorbed into a stodgy, technologically backward behemoth: the federal government. Ahead are bureaucratic obstacles the campaign never imagined, along with the political land mines that transparency brings. Obama will have to preserve the enthusiasm of his supporters while engaging the larger group of people who either didn’t vote for him or didn’t vote at all. His task is to rebuild the personal connection that supporters felt they had with Obama the candidate, assuring them that he is listening to them—without being deafened by the cacophony. If he can do that, Obama can alter how the government engages its citizenry and accomplish what he really cares about: his own policy goals.

Building that intimacy from the Oval Office will be a delicate and complex task, and just letting “AcidTrout” respond to a YouTube address with “Who’s the black guy?!?” isn’t going to do it. “One of the things that gives me ulcers is that there are a lot of high expectations,” says an Obama aide. “But we’re going to have to change how government thinks about the Internet before we can do the things we want to do.”

500+ PDFs
submitted by third parties for viewing and public comment are available on Change.gov.

Still, Macon Phillips, the campaign’s deputy director of new media, who has served in a similar role for the transition, warns: “Day one is going to be a lot different than perhaps day 100.”

The basement of the General Services Administration building in Washington, with its maze of identical hallways and frosted glass doors, reeks of generic federal bureaucracy. But if the new administration plans to reboot the system, it will find a pair of guides here in Bev Godwin and Sheila Campbell, cheerful doyens of the executive branch’s Web strategy. Godwin, director of USA.gov, the federal government’s all-purpose information Web portal, and Campbell, head of the government’s Web Best Practices Team, know every manacle and chain shackling the government to the 20th century. In a drab conference room one afternoon in late November, they discussed their optimism—and detailed their concerns.

For starters, the federal government operates more than 24,000 separate sites, many of them years out of date. “Nobody stepped back and asked strategically, how do we do this?” Godwin says. “Whenever there is a new initiative or program, they put up a new Web site.” And the first thing they usually do on that site, she says, is post a bandwidth-hogging picture of the bureaucrat in charge.

3,701 comments
on health care were submitted online to secretary of health and human services designate Tom Daschle.

Godwin and Campbell have been pushing government agencies to treat citizens more like customers, rebuilding their sites to help visitors do things like find loans or obtain passports—rather than serve as static repositories for press releases and personnel photos. “At Housing and Urban Development, for example, one of the missions is to reduce homelessness,” Godwin says. “If you go to HUD.gov, can you find shelter? The answer is no.” If the government can improve itself in these little ways, they say, great. Don’t worry about trying wild stuff, like setting up federal social networks. Many agencies bar employees from even looking at sites like Facebook at work, much less building their own versions.

Progress has been achingly slow. There have been some notable exceptions—like a blog on the Transportation Security Administration Web site, open to comments and manned by five agency staffers, and NASA.gov’s numerous social media initiatives, including Twitter feeds from 20 missions and projects. But the successes are rare and isolated. “We know that there are a lot of people advocating for more open government,” Godwin says. “We’re saying, absolutely, put the data out there. But I think we have to be realistic.”

For example, many of Obama’s online campaign techniques would be impeded by a collection of obscure and well-intentioned rules. Amendments to the 1973 Rehabilitation Act, for example, require that all government Web content be made reasonably accessible—in real time—to disabled users. Also, six months of negotiations between the General Services Administration and Google to establish a federal YouTube channel have stalled over similarly intricate legal issues. Meanwhile, a Clinton-era law called the Paperwork Reduction Act requires that an agency undergo a laborious approval process any time it “surveys” more than 10 people. The result: “Agencies tend to avoid doing these kind of surveys,” Godwin says. Would having users submit information to a social network or wiki count as a survey? Nobody knows.

20.3 million:
The number of visits to Obama’s YouTube channel since its September 2006 launch.

Even triumphs like Obama’s 2006 Google for Government bill, cosponsored with Republican senator Tom Coburn, have been caught up in red tape. The bill led to the creation of FedSpending.org, a site allowing the public to track federal contracts and grants. Instead of building it in-house, the Office of Management and Budget decided to license something similar from a nonprofit watchdog group, OMB Watch—for just 4 percent of what the government had expected to spend. It was a striking victory for government efficiency, but the process behind the scenes “was extremely difficult,” says Gary Bass, executive director of OMB Watch. After floating the idea of donating the system to OMB (“the government can’t take things for free,” Bass quickly learned), the nonprofit had to sign on as a subcontractor and undergo three rounds, and six wasted months, of bidding before the deal was complete.

Changes to what is effectively the president’s homepage, WhiteHouse.gov, will encounter similar obstacles. David Almacy, a PR executive and new media consultant at Waggener Edstrom who served as the Bush administration’s White House Internet director from 2005 to 2007, recalls that following Hurricane Katrina, he posted the transcript of a speech to the site. In the text, where Bush had directed people to Redcross.org, Almacy helpfully inserted a hyperlink. “Within a few hours,” Almacy says, “I got a call from the White House general counsel’s office saying I needed to take out the link.” Some federal government Web pages, it turns out, are virtually barred from linking to nongovernmental sites to avoid the appearance of endorsing one product or organization over another.

The incoming administration is still working to assess the implications of the Presidential Records Act, the post-Nixon legislation requiring the preservation of all White House written communications. But that means that once any page goes up on the White House site, it can’t be altered, only archived and replaced, greatly slowing down the process of modifying and enhancing pages.

The Obama team was able to sidestep these kinds of troublesome rules on Change.gov, in part because, as a quasi-governmental site, it’s not subject to executive-branch restrictions. They were able to post videos on YouTube, link to outside sites, and even publish content under a Creative Commons license, allowing it to be freely shared.

24,000 Web sites
are operated by the US government.

When he does arrive at the White House, Obama or his CTO can lift some of the Internet restrictions with the stroke of a pen. Others will require congressional action or clever technology.

Even if Obama’s tech team gets a free hand to rework the federal webosphere, things can still go awry. Take the 2006 race of Massachusetts governor Deval Patrick. Both David Axelrod, Obama’s top campaign strategist, and David Plouffe, his campaign manager, worked for Patrick, a little-known candidate who used Internet-driven grassroots support to win. In a precursor to My.BarackObama .com, the Patrick campaign placed the state’s voter list on its Web site, allowing its supporters to download phone numbers and call neighbors. “We believed in people’s ability to organize themselves and get involved,” says Charles SteelFisher, who ran the campaign’s Web operation.

No We Can’t

Barack Obama wants to transform the way the White House connects with the public. But there are plenty of obstacles standing in his way. After the election, the governor’s team launched DevalPatrick.com to keep supporters engaged. On a MyIssue page, registered commenters could propose, comment on, and vote for legislative ideas.

But the administration was immediately blasted when a database feature designed to verify Massachusetts residency was alleged (incorrectly) to reveal unlisted phone numbers. The privacy flap lured a collection of trolls and conspiracy theorists to the site, crowding out earnest discussion on gambling bills and income taxes with 9/11 chatter and religious debates. Critics, meanwhile, said that Patrick’s efforts were less about engaging the public than about running a permanent online campaign.

Eventually Patrick’s Web site recovered, developing a more sophisticated way of moderating comments and creating forums around the governor’s plans to reduce property taxes and add public kindergarten programs. The site also allowed people to create grassroots communities to work on issues they cared about. Still, the public isn’t exactly burning up the site: The leading vote-getter, a bill to promote fathers’ custody rights in divorce cases, had just 1,100 tallies as of mid-December. Offshore wind power, meanwhile, was losing, 16 votes to 15.

Obama’s team has moved carefully as it transitions from campaigning to governing. Between two wars and an economy in shambles, building an Oval Office social network has not topped the priority list. “Day one, do we need a White House My.BarackObama? I don’t think so,” says the Obama aide, who was required by the transition press office to speak anonymously. “It’s more important to step back and ask, what are the goals for the White House? And I think that making the government more accountable and transparent is more important than getting people to act.”

To that end, the transition team served up small accountability stuff first. Change .gov supplemented Obama’s weekly YouTube addresses with periodic videos from inside the transition process, everything from staff meetings to vlog-type updates from advisers. In early December, Obama’s public director of liaison and intergovernmental affairs announced—via video—a Change.gov feature called Your Seat at the Table, through which the transition would post every document received from every interest group and outside person throwing it advice. Users were allowed to comment next to the documents, while the Open for Questions feature let them submit and vote on questions for the transition team. The latter experiment illustrated the double-edged nature of feedback when the Senate-seat-selling scandal involving Illinois governor Rod Blagojevich broke. Supporters began flagging related questions “inappropriate,” and then Obama staffers buried the queries. ABCNews.com jumped on the story and the apparent hypocrisy. Obama Transition Web Site ‘Open for Questions’—Except on Blagojevich read the headline.

Change.gov does feature some Slashdot-like issue forums where user rankings send the most popular comments to the top. The first forum, in which two staffers appeared in a short video on health care policy and asked for comments, garnered thousands of horror stories and policy prescriptions. A week later, one of the staffers reappeared with future health and human services secretary Tom Daschle in a rehearsed-looking YouTube video response. “We are just so pleased that so many of you have written in,” Daschle said, appearing extra-pleased. “I spent a lot of the weekend actually reading the comments … We want to make sure that you understand how important those comments and your contributions are.” The comments the pair selected to discuss, however, seemed serendipitously aligned with Obama’s proposed initiatives.

550,000 responses
came in from supporters after Obama adviser David Plouffe requested feedback about the campaign.

In other words, with everything he’s done so far, Obama has been acknowledging feedback but not necessarily heeding it. And that’s what we can expect from Obama’s plan to post all pending nonemergency legislation online and allow the public to comment for five days before he acts on it. By mid-December, technology advisers were still struggling to determine the best way to implement the idea. The bigger question is, what will it accomplish? Even the system’s own architects concede that it’s unlikely that online comments and voting will sway the decision to sign or veto.

Nor should it. The Obama team, for all its Web enthusiasm, recognizes that an online community—no matter how vibrant—doesn’t represent all of the American public. “A lot of people consider online interactions and communications as representative of Americans. But we have a lot more high-speed Internet lines to drop before that’s true,” the Obama aide says. And even with ubiquitous broadband, online voting would remain the ultimate in self-selected polling. There’s no reason to believe that commenters would reflect Americans as a whole or even that they’d be Americans at all. Citizens also may not be as interested in the daily machinery of Obama’s workaday government as they were in his novel campaign. Case in point: By mid-December, views of Obama’s weekly YouTube address had dropped by half.

Still, the new administration wants to be able to marshal its supporters to act. Obama himself suggested as much last April. “Our database has a couple million people on there who are activated and inspired,” he told a small group in Indianapolis. “And so what I want to do is to continue that after the election.” In mid-November, Plouffe sent out a series of emails to supporters. The first directed them to a detailed survey of their campaign experience and policy interests and told them, “It’s up to you to decide how we move forward.” Later, a Plouffe missive declared that “you’ll be instrumental in generating support to pass legislation that puts America on the road to recovery.” At a closed-door meeting with its leading activists in Chicago in December, the Obama team took it a step further and told activists to be ready to pressure Congress on economic stimulus, health care, and energy legislation. A couple of weeks later, the campaign encouraged its supporters to organize “change is coming” get-togethers to discuss the future of the Obama movement, online and off.

Obama doesn’t want his 13 million-name email list to serve as just another political interest group. He needs it to be a tool to keep people engaged with his politics and policies. “Even if you push through the best government programs,” says Michael Cornfield, a political-science professor at George Washington University, “it’s hard to solve the actual problems” without effort from regular people. A national health care plan, for example, will work a whole lot better if former precinct captains are willing to explain it to their neighbors, just as they explained how to get to the polls. And a presidential Twitter feed, Flickr photos, or WhiteHouse.gov video Q&A sessions may not vastly increase transparency or deeply inform policy, but they create a valuable intimacy with citizens. “People who think they are being listened to tend to respect more the person talking,” says Rasiej.

That may not sound like a big deal. But contrary to what Web evangelists and the incoming administration would like to believe, Obama’s campaign was never a bottom-up endeavor. The incoming president didn’t crowdsource his view on the Iraq war or use Digg to determine how to allocate campaign dollars. He ran one of the most tightly controlled, top-down campaigns in modern history, to the point of pressuring outside advocacy groups not to advertise on his behalf. Rather, he asked his supporters for money and inspired them to get involved, giving them the tools to organize themselves and a message to sign on to.

Instead of turning WhiteHouse.gov into a governmental synthesis of Facebook and Wikipedia, or running a permanent campaign off the White House email list, Obama’s best shot at rebooting the government is to remember how he got there: making people feel that they were part of the solution and then enabling them to talk to one another and take action. “There is a relationship between Barack Obama and each individual, and that’s multiplied tens of millions of times over,” says Joe Rospars, the campaign’s director of new media. “But there are also millions and millions of relationships between our supporters. Both of those kinds of relationships didn’t end on Election Day.”

[via WIRED] by Evan Ratliff

When he won the gold medal in snowboarding at the 2006 Olympics in Torino, everyone knew how Shaun White’s story would end. The corporate advertising complex would line up to capitalize, just as it has with every gold medalist since decathlete Bruce Jenner. And White, with his strange equine beauty and crazy pile of long red hair, would assume the position, allowing his action-sports cred and new America’s-darling status to be sucked out of him and slapped on every can, box, and cookie bag in the nation. All the elements for cashing in and selling out were in place: Take a kid with working-class roots (his mom was a waitress, his dad worked for the water utility in San Clemente, California); add Olympic gold and huge endorsement checks; run the cliché. Heinz would offer six figures to put White on everything from ketchup bottles to stewed tomatoes (White’s then-nickname: the Flying Tomato). Maybe a toothpaste company would come pushing tubes of new Shaun Extreme Whitening. Throw in some potential heavy-rotation spots for Schick Xtreme Shaving and Doritos Extreme Nacho Cheesiness and the caricature is close to complete. As a final inspired bit of packaging, someone would lay down the big bucks to insert Mr. White in a straight-to-DVD production of Faster Times After Ridgemont High, where he would be cast as a snowboarding Spicoli attending a junior college somewhere near Banff. White would then spontaneously combust into the most awesome! bitchin’! rad! gnarly! D-list spokes-celeb ever.

But Shaun White took a pass on becoming the Crown Fool of Gnarnia. “I was so fortunate to have had some success before the Olympics,” he says. “So when the time came for everyone to come at me, I was able to step back and say, ‘Do I really want to do that? Do I want to be known for airing over some dude who is going aaaahhh! with his teeth gleaming?’ ”

Considering the risks involved in his day jobs — in 2003 he added pro skateboarder to his résumé and took gold at the 2007 Summer X Games — control is a survival instinct. (At 11, a midair collision with another skateboarder left him with a cracked skull, a broken arm, and a fractured foot.) Even as a teenager, White understood the power of his image — his pre-Olympic sponsor list included Mountain Dew and T-Mobile — and felt compelled to protect it. “A photo would go out that I didn’t approve, and a kid would come up and have me sign it,” says White, now 22. “And it’s an awful photo, and I know because I’m signing it he’s going to put it up on his wall. Now he’s got this awful photo on his wall. That stuff would get to me.” So much so that at 15, he made sure his agent wrote a right of approval into all his contracts to control the use of his name or likeness. “A lot of people will just put their name on anything, and you can tell,” he says. “I just can’t do that.”

Unlike gymnast Shawn Johnson with McDonald’s, or human fish Michael Phelps with Subway, White has sought out companies he truly connects with. Working with a tight team of advisers that include his 29-year-old brother, Jesse, and his agent, Mark Ervin of IMG, White sees these deals as a long-term investment portfolio, something that will outlast his knees. Each corporation meshes with a discrete slice of his actual life, and with each one, White dives in and takes a central role, from the design of specific products to pulling deals together among his various partners. Last fall, his street-wear line appeared in Target stores across the country. This year, he expanded his best-selling Burton collection of snowboarding gear to include a stand-alone extension for women. There are marketing deals with HP, Oakley, and Red Bull. He collaborated on a snowboarding video game with Ubisoft that went on sale just before the holidays. And whether it’s the quirky commercials for Target, the reality-style video shorts in the back-to-school Web campaign for HP, or the high-energy ads for Ubisoft, the ecstatic look and feel of the White DNA comes through. “Every week, we get presented with a big opportunity from someone,” says Ervin. “Shaun turns down a lot of money. And I couldn’t be more proud of him.”

The companies that do make the cut look to White as a tractor beam to the $150 billion youth market. “Shaun White has this ability to juggle his authentic world and the corporate world and be that third platform between the two,” says DeeDee Gordon, a trend expert whose L.A.-based company, Look-Look, focuses on youth culture. “He is living by his own code, and young people admire that. He has definitely stayed true.”

White’s most valuable asset of all, the key to that $150 billion, may be an eccentric charisma that is an irresistible draw for kids — and, more important, their parents. In a post-Olympics interview on CNN, White marveled at the attention flight attendants lavished on him after seeing his gold medal: “I had unlimited service after that. I was gettin’ drinks. I was gettin’ snacks. I was taking photos in the back… .” The anchor interrupts, “Wait a minute, drinks? You’re 19 years old!” Without missing a beat, White drawls: “I’m talking about Mountain Dews, baby.” And with that, a little backstage bragging was transformed into boy-next-door wholesomeness. A little sass to impress the kids, an apple-cheeked smile to win over parents everywhere, and for his sponsor at the time, Mountain Dew, a plug money can’t buy.

“Blood wicking.”

White has just returned from a surf trip in Bali and the Maldives, and he looks tan and fit, though his rolling SoCal twang is hoarse from a previous night’s karaoke party in Los Angeles. He and Jesse are tucked into a booth at Freemans, a restaurant on Manhattan’s Lower East Side with a vintage zinc bar and a taxidermy collection that ranges from a white goose in a landing approach to a wall of jackelope skulls.

White is describing the properties of the fabrics in the clothes he designs with brother Jesse, noodling an inside joke about the amount of blood snowboarders and skateboarders tend to spill. “With snowboarding, there are only a certain number of fabrics that are waterproof. It’s a lot of function with the fashion,” he says. “For Target, it’d be nice, but my cotton doesn’t need to be blood wicking.”

The Whites have been building their professional partnership since 2002, around the time when Burton Snowboards offered Shaun a chance to design his own pro boot. He had been riding for Burton since he was 7, when the company expanded into kids’ gear, but after several years on the pro circuit, he was looking to throw his leash. “I was getting older and didn’t think I could roll with Mom and Dad anymore,” he says. “So what’s the next best thing? Older brother.”

In his new role as quasi-adult supervision for a 15-year-old, Jesse handled the travel schedule, shot promo photos, and explained to the occasional New Zealand rental company how the car got wrecked. “I was 22 and just learning how to be an adult myself,” he says. “It was way too much responsibility.” Adding to it, Shaun asked him to take on the design work: “I’ve always loved Jesse’s art, so he designed the boot. It sold out in the first hour of a trade show, and we had to do a re-release. That’s where it all began.”

For four seasons now, the Whites have created boards, boots, bindings, jackets, pants, and underwear for Burton. Together, they brought a radical reinterpretation to the boxy, baggy snowboard style by incorporating splashy colors and menswear elements: lapels, asymmetrical zippers, motorcycle-jacket cuts. “When I first started, I didn’t have a clue about the difference between houndstooth and herringbone,” Shaun says. But he had ideas that Jesse was able to translate into patterns.

“I’d say, ‘Why don’t we do a jacket like this?’ ” says Shaun.

“And then I’d draw it and say, ‘Like this?’ ” says Jesse.

“And I’d say, ‘Yeah, but with a pinstripe lining,’ ” says Shaun. “We wanted it to fit well and be different. It worked.”

Already in touch with their inner marketers, they even titled the pieces: Puff the Magic Jacket, Jacket of the Gods, the Most Unholy Jacket Ever. “I wanted parents to have to call and ask, ‘Do you have the Most Unholy Jacket Ever?’ ” laughs Shaun. It’s a classic White touch, a way for rebellious kids to feel like they’re buying from a peer. But since the rebellion stopped well short of Satanic cults or Columbine jokes, parents could laugh along. And drop the $200.

Despite the immediate success of the Whites’ early gear, it took some convincing to get Burton to produce the women’s line. “At first we were like, yeah … no,” says Greg Dacyshyn, Burton’s creative director. “But then they came at me with full creative boards, showed me the presentation, and it wasn’t about Shaun. It was about this design aesthetic Shaun saw. He was like, ‘You’re not making clothes for the girls I want to hook up with.’ ” The line tapped a market no one had targeted. “We always kept a smaller size of my pro model board because a lot of girls rode it,” says Shaun. “There was this void. The clothes were all built for men, and in my experience, I think chicks … ladies … er … they know what we call them … special lady friends … they want to look hot.”

His instinct for pushing sponsors into new ideas and new territory is becoming part of White’s value. He worked with Oakley to create its first signature goggle, which quickly became a best seller, and today, the company’s top athletes all have goggle and sunglass models. Similarly, when HP decided it wanted to connect to the youth market, it saw White as a logical choice to star in the first of what it hoped would be a series of commercials. “This first ad was very difficult because we had to explain what this thing was going to be,” says HP marketing VP David Roman, describing what became the “Hands” campaign. “We were saying, ‘We’re going to show who you are by what’s on your computer and have all these graphics and animations, and you’re just going to stand there and move your hands and it will all come together.’ It was an act of faith. Shaun got it immediately.”

The campaign eventually featured Jerry Seinfeld, Serena Williams, Jay-Z, and Pharrell Williams. “We’ve done 10 of those commercials and Shaun White got the biggest pickup of all,” says Roman. When asked about the experience, White just laughs. “They had this hand stunt double for me in case I couldn’t do it,” says the first person to pull a 1260 (three-and-a-half rotations) at the Winter X Games. “It was hilarious.”

As a mogul in training, the White mantra is to keep it light. But as his medals pile up — and as his various ventures post big numbers — getting him to sign on has become an increasingly high-stakes moment for his pursuers. In the run-up to NBC’s new Winter Dew Tour last December, for example, the mood at 30 Rock was tense. “It was really important to get a commitment from Shaun,” says Kevin Monaghan, a senior vice president at NBC Sports. “I remember telling Dick Ebersol [NBC Sports' legendary chairman] when White had signed on and was going to appear. Dick said, ‘He has to appear. It can’t be called the best winter tour if you don’t have the best athlete.’ ”

But the easiest way to calculate White’s commercial draw may be to listen to video-game maker Ubisoft. “We wanted to move our portfolio to include sports and create a snowboarding product,” says Tony Key, SVP of sales and marketing. “Our only condition was to get Shaun White attached to the project. If he signed on, our plan was to build a billion-dollar franchise. If not, we wouldn’t pursue it.”

During our long lunch, Jesse and Shaun finish each other’s sentences and follow random thoughts to illogical conclusions. Blood wicking evolves into an imaginary album title and often ends their sentences as a kind of exclamation point. “I would not have gotten where I am if it wasn’t for Jesse,” says Shaun in a serious moment. “There are so many people who want to pull you in the wrong direction. Jesse keeps me straight.”

******The red neon sign of Hollywood’s Roosevelt Hotel casts a monochrome glow over a rooftop party after the X Games last August. Mark Ervin, White’s agent, is wearing jeans and a dress shirt, tails out, and sipping a Budweiser. Even though his client didn’t win the vert skateboarding competition earlier that day, he’s in a fine mood. He should be.

Seven years ago, while primarily representing skiers at IMG, Ervin was advising Target on how to gain access to the action-sports world. His recommendation was simple: sponsor Shaun White. On this night, that part of White’s life is coming full circle and expanding in a widening gyre. Throughout the packed crowd of attractive Southern California skate groupies, pieces from the Shaun White 4 Target collection can be seen on various members of the White inner circle. “When Shaun and his mom approached me to represent him, my only hesitation was whether I could devote the time it would take to do it properly,” Ervin recalls. “Even back then, I believed what was possible for him.”

The two met for lunch at an Italian restaurant on Pacific Coast Highway to discuss working together. Was it weird to be a 31-year-old man talking to a kid about managing his career? “Shaun makes that part of the equation easier,” he responds. “He’s spent so much time with adults that he was more articulate than half the people my age.” Ervin was surprised to find a 15-year-old who could make him laugh. He also saw how driven White is. “I knew Shaun well enough and what his expectations were going to be. He was the perfect storm: a prodigy in two sports, plus a magnetic personality in front of the camera. I also knew that he would hold up his word.” Bemused at how easily it all went down, Ervin laughs, “He and I shook hands, and I never looked back.”

There’s a calm about Ervin that must appeal to White. He’s no Ari Gold. And he refuses to slag any of the proposals he has received for Shaun, including the Flying Tomato routine from Heinz: “Look, it’s fun to see corporate America embrace a kid like Shaun, and I appreciate that these people are willing to step up, even if the idea is totally wrong for him.

“We look at everything through a long-term lens,” he continues, “and ask, How does this affect us in three years? Five years? Ten years? I look at my job as allowing Shaun to make informed decisions. I give my opinion, but never tell him what to do.”

As evidence of White’s expanding ambition, Ervin points to White’s decision to leave his sponsor Volcom, a $216 million action-sports cult brand, to design the Target line. “The Volcom-to-Target transition is an example of how Shaun had to choose between two long-term relationships,” he says. “It was tough, but he saw that Target was a better platform to pursue an entrepreneurial drive and also fulfill a dream of creating cool, affordable clothes.” That move also highlights White’s understanding of brand balance: Target’s line focuses on street wear and skateboarding for a mass market, and is therefore completely differentiated from the more sophisticated and expensive technical winter outerwear he produces with Burton. Instead of creating a situation where one deal could cannibalize another, White cranks up his exposure in a new market without diluting his presence in the first. Even his former boss reluctantly understands. “I looked at it and said, ‘I can see it from his perspective,’ ” says Volcom CEO Richard Woolcott. “We had a great run with Shaun. He has an extraordinary opportunity to pioneer a name and a brand and to connect with a lot of customers. It’s like when Nike and Michael Jordan took it to another level. I would rather have him, but he’ll always be family.”

As the party ramps up, Joe Prebich, a team manager at Red Bull, is goofing with White and some special lady friends. Prebich, 25, looks like Jesus if the Son of Man had a stylist; for White, he’s a kind of work-life-balance guru — packing a lifetime supply of caffeine. “Joe is like a guy from the hippie days,” says White. “I just look at him and think, What would it be like to live back then? Then I realize he is from back then, just somehow transported here.”

Prebich, who wears gold-rimmed aviators and blond hair down to the middle of his back, often helps White choreograph his runs in both snowboarding and skateboarding. “Unlike other riders who just wing it or have a vague idea of what tricks they’re going to pull,” Prebich says, “whether it’s in snow or skating, Shaun has three runs worked out in his head that build from serious to crushing.”

In contrast to other beverage brands, Red Bull likes to think of itself as a cultural company that encourages creativity in its athletes. “We try to identify where Shaun hasn’t been and make it happen for him,” Prebich says. As on a recent trip to Japan: “He’s been, like, 27 times, but he’d never gone just to shred powder. So we took him to this remote island, stayed in a traditional ryokan and just lived it.” Of course, Red Bull also brought along a small film crew and shot the whole experience, releasing it on MTV as Shaun White Big in Japan — and later reselling it as a DVD, The Ultimate Ride: Shaun White.

******A look at the structure of White’s network reveals a pattern: He sits at the epicenter of a multipronged onslaught. After the party, Target’s head of lifestyle marketing, Troy Michels, recounts a trip he took to Costa Rica with White in 2006. They were on a boat in the Pacific, he says, sore from the previous day’s surf session, hot and salty from a morning of chasing dorado and bigeye tuna. Taking a break from their labors, he and White hung their legs over the side of the boat and had an informal meeting. White had just signed his deal with Ubisoft and mentioned the Target chalet in Aspen, where the company puts up White and other riders and clients during the annual Winter X Games. “Shaun was just riffing on how he thought the chalet would be a good virtual meeting place in the game,” says Michels, remembering how White looked out on the sun on the water and said, “You guys sell a lot of video games, right? I think it would be a good fit.” Michels shakes his head and laughs. “It was so casual, but at that moment, I knew it was going to happen.”

Weeks later, during the Dew Tour skateboarding final in Portland, Oregon, the announcers heckle Jesse White for getting married that weekend and preventing Shaun from competing (White played Led Zeppelin’s “Over the Hills and Far Away” on guitar as Jesse’s bride walked down the aisle). “There is a Shaun factor,” says NBC’s Monaghan. “When he competes, not only do the events seem much more important, but the crowd gets into them much more, and there are more people.”

As the sports of snowboarding and skateboarding have grown, so too has the power of Shaun White and his impact on the action-sports industry. It’s now hard to tell where one begins and the other ends. Shaun has drawn in outside players who have helped expand once-fringe pursuits into multibillion-dollar endeavors. And charting his gravitational field has become akin to the Kevin Bacon game: Shaun White meets Mark Ervin through IMG and connects with Target. Target sponsors White, spends millions on advertising, raising awareness of skateboarding (and, because it’s Shaun, snowboarding), and eventually produces his clothing line. White’s Target connection eventually leads to a limited-edition Ubisoft game in which players not only meet in the Target Chalet but also outfit themselves in gear from Burton and Oakley. Meanwhile, White sponsor Red Bull produces a documentary that appears on MTV, which has a partnership with NBC to produce the Dew Tour that NBC is broadcasting live in multiple cities for both summer and winter events. And here come the 2010 Olympics in Vancouver, which could just crank the whole cycle up another notch.

On hearing these connections laid out, White responds, “Impactatious!”

He is sharing his admiration for Don King’s facility with the language. “That’s the way he described a boxer’s punch. Impactatious. You can just see him making a fist and holding it there way too long,” White says, holding up one of his own.

White is aware of the double-edged nature of exponential growth. He knows he has critics, those who see size as the enemy of cool. But he’s okay with it. “I’m still pretty young and just winging it, but on a different level. I’m not really worried about the haters, the Buzz Killingtons,” White says. “I had a friend come up to me, an older guy whose wife is in the industry. I’d tell you his name, but he’d love it too much. He’d be like, ‘Yeah, that’s right!’ But he’ll know who he is. Anyway, he came up to me after all the Olympic interviews and he said, ‘Thanks for making it look legit.’ I didn’t get it at first, but it was respect. He said I was ‘solid’ as the voice of this group. It was wild. I have friends who are pro photographers who have shot snowboarders for years and years, and their moms would call them and say, ‘I saw that Shaun guy. That’s what you do?’ It was just a weird take on it. It made me nervous. I thought I could have blown it so hard so many times. I could have said anything. Blood wicking!”

White knows that size can be the enemy of cool. “I’m still pretty young and just winging it, but on a different level,” he says. “I’m not really worried about the haters.”

******Before Shaun White was a year old, he had open-heart surgery three times to correct a congenital defect known as tetralogy of Fallot. Surgeons had to open a ventricular tract, repair valves that were leaking blood, and suture a number of holes to increase blood flow through the cardiac circuit. “Obviously, I don’t remember any of it,” says White. “And maybe one day, I’ll be more interested in the details, but I haven’t been that curious.” It could be argued that what didn’t kill him has made him stronger.

After lunch in New York, White heads next door to Freemans Sporting Club, a menswear shop heavy on tweeds and boiled wool, operated by the restaurant’s owners. In the back is a traditional barbershop where customers can get a straight razor shave or a haircut. Before doing anything, White asks about retail protocol, adding with a laugh that he’s only just begun buying clothes. “In the past, nearly everything I wore came from sponsors,” he says.

White picks out a fitted flannel shirt and a peacoat made from the same fabric used in British Royal military jackets. He emerges from the dressing room wearing the flannel unbuttoned, rocker style. If you look closely, you can faintly see the beginning of a scar that as an infant must have run the length of his torso.

Earlier, a question had come up about that scar, whether it had any special, mystical powers, like Harry Potter’s lightning bolt. Did it tingle or burn when he was approached by companies that are the wrong fit for him? At the time, he just laughed and said, “That’s funny. I definitely understand tingles …” and then artfully changed the subject.

As he tries on the peacoat, the salesman explains that the buttons are made from ox horn and are basically unbreakable. (Jesse laughs, “If anyone can break them …”) White flips up the collar and checks himself out in the mirror. The coat fits like it was custom-made; he looks at Jesse, who confirms its coolness. Shaun breaks into a broad, confident smile — the same smile he flashes when he eventually comes back to the question he seemed to be trying to avoid. “Actually,” he says, “my scar starts to tingle when I connect with companies I want to work with.”

[via Fast Company] by Mark Borden

Would you like power with those fries?

A new garage-engineered generator burns the waste oil from restaurants’ deep fryers to generate electricity and hot water. Put 80 gallons of grease into the Vegawatt each week, and its creators promise it will generate about 5 kilowatts of power.

That’s about 10 percent of the total energy needs of Finz, a seafood restaurant in Dedham, Massachusetts, where the first Vegawatt is being tested. At New England electricity rates, the system offsets about $2.50 worth of electricity with each gallon of waste oil poured into it.

Vegawatt’s founder and inventor, James Peret, estimates that restaurants purchasing the $22,000 machine will save about $1,000 per month in electricity costs, for a payback time of two years.

“You take this waste resource and make it a profit center,” said Peret, who spent four long years cooking up the project in his garage. “When I started telling people, they said, ‘Someone’s gotta have done this.’ I’d run into more people. They’d say, ‘Why hasn’t anyone done this?’ My only response was, ‘I don’t know; it seems like a good idea.’”

While Vegawatt is a small solution, Peret’s invention is a very clever embodiment of several long-cherished alternative-energy ideas: capturing both the heat and power from fuel combustion, making energy where it’s used, and recycling used resources. Big industrial plants that make paper, for example, have long taken advantage of these concepts to save on their utility bills, but the Vegawatt will be the first product that could turn thousands of fast food restaurants into mini power plants.

“Now the restaurant owners are going to be motivated to put every single drop of waste oil into this thing, because it will pay for itself,” Peret said.

And importantly, it provides convenience for restaurateurs or Burger King managers, instead of subtracting it, like so many green solutions seem to.

Restaurants that fry delicious things like chicken and french fries generate dozens of gallons of waste oil that have to be stored in barrels out back. Because used cooking oil is considered a low-grade hazardous material, they haven’t been allowed to just throw it away; they generally had to pay rendering-plant operators to come. But it is now a sellers’ market for grease.

Higher crude prices have made other types of oil more expensive. Biodiesel makers and renderers have become increasingly willing to pay up to 40 cents a gallon for the stuff. There have even been reports of “biodiesel pirates” stealing fryer grease.

In fact, Vegawatt is derived from the home-brew fuel movement that many trace back to Dr. Thomas Reed, who popularized a recipe to convert waste cooking oil into biodiesel more than 20 years ago. Peret converted his truck to run on straight vegetable oil, or SVO to home brewers. But he was troubled by the inefficiency of the process.

“If you want to run waste vegetable oil in your car, it’s not as simple as going behind a restaurant and filling up,” Peret said. “People that do this spend the majority of their free time collecting fuel from restaurants.”

Peret realized he could use the same engine technology to power an on-site generator and defray a restaurant’s electricity costs.

“It’s not difficult to go from spinning tires to spinning magnets,” he said

So he created a test unit — which you can see at the back of his garage in the top photo — that’s basically a diesel generator hacked to run waste cooking oil. It feeds power directly into the restaurant’s electrical system through a 30 amp hook-in.

Vegawatt is more efficient than a typical coal or natural gas plant. Peret said it can capture 70 percent of the fuel’s caloric value. That’s because the generator captures and uses the waste heat it generates.

“All the water [the restaurant] would send to its boiler, instead of sending it straight there from the city, we run it through our heat exchanger first,” Peret said. “Depending on the flow, [the water] can go into the hot water heater at 120 degrees.” (This non-electrical energy savings is included in the 5-kilowatt rating cited above.)

The big power plants, though technically very efficient, waste most of the fuel they burn. After accounting for all the sources of energy waste “what you are left with … is just 27.6 units of usable energy out of every 100 units you started with,” energy researcher Benjamin Sovacool explained in his recent book, The Dirty Energy Dilemma. “In terms of making toast, it would have been nearly four times more efficient just to burn a lump of coal and place your bread over the flame.”

Biomass energy sources — like waste wood, switchgrass or cooking oil — are best when used right near the source of their creation. Dragging the stuff creates more emissions and raises the cost of the fuel. Vegawatt doesn’t have that problem. By company estimates, the Vegawatt generates 50 percent less carbon dioxide than a comparable amount of electricity from a coal power plant.

“In terms of the amount of energy that it takes to transport this waste, it’s a french fry,” Peret said. “You just feed the guy who is picking up the bucket and pouring it into the system.”

Forest Gregg, an alternative-fuels expert and author of last year’s SVO: Powering Your Vehicle with Straight Vegetble Oil, called it a “nifty application and a great business idea.”

Gregg also drew attention to a strong part of Vegawatt’s pitch: that it won’t require “intervention or maintenance by restaurant staff.” That’s because when users buy a system — or lease it for $450 a month — they get a service contract with the company for cleaning and maintenance.

The owner of the very first Vegawatt, George Carey (pictured above), seems pleased with the unit, too. He heartily endorses the company on its website, saying, “The Vegawatt system enables me to significantly reduce my energy costs, generate clean energy on-site, and very importantly, reduce the heavy energy footprint of my restaurant.”

See Also:

• Tapping the Vortex for Green Energy
• Global Energy Network Depends on a Few Vulnerable Nodes
• How A Google Engineer Hacks His Energy Usage
• Biofuel Startup Strives to Meet Obama’s Green Ambitions
• Obama Voices Biofuel Doubts
• Biofuel Solution at Sea, not on Land
• DOE Invests $125 Million in Synthetic Life to Develop Biofuels …
• Food vs. Fuel: Saltwater Crops May Be Key to Solving Earth’s Land …

[via WIRED] by Alexis Madrigal

When Vestas, the world’s largest wind-turbine manufacturer, announced plans for a new U.S. research center, 42 states lined up to make sales pitches. The winning location would be rewarded with hundreds of jobs, millions in tax revenue, and green-business cachet. Finn Strøm Madsen, president of the Danish firm’s tech division, wanted a site near big-name universities, so Massachusetts (MIT) and California (Caltech, Berkeley) seemed obvious choices. Portland, Oregon, was already home to Vestas Americas’ headquarters. But in June, Vestas picked Houston.

Twelve years ago, Jeff Koeze surprised his wife, his parents, and himself by agreeing to give up a comfortable life teaching law to take over the then-86-year-old family business. At 36, the professor was going to become a nut man.

His father, Scott Koeze (pronounced KOO-zee), was sick of running Koeze Co., which was doing about $7 million a year, mostly in mail order, primarily in cashews. That worried Jeff enough that he insisted that his father not stick around any longer than two years. If the elder Koeze ended up refusing to leave, Jeff had a golden parachute: two years of salary. Moving from the University of North Carolina at Chapel Hill, Jeff and his wife, Kate, even chose a house in Grand Rapids, Michigan, where Koeze Co. is based, that they figured would be easy to resell. “I wanted a risk-free out if it didn’t work,” Jeff says.

Instead, a few months after Jeff showed up, his father went on vacation and didn’t come back. Didn’t return phone calls, either. “I know your dad — he’s retired,” a longtime worker told Jeff.

Koeze was in disbelief. “That just can’t be,” he replied. But it was.

Thus began the education of an educated CEO, a lawyer and tenured professor steeped in book learning but lacking any business experience; given to endless research, at a company that had been built and run by his shoot-from-the-hip father; accustomed to debating with colleagues and letting the best argument prevail, at a company where workers had no expectation of knowing why a decision had been made.

In his early years at the company, Koeze despaired — not about going bankrupt but over the fear that he would never turn the place into anything resembling his view of himself: intellectually curious, blunt and transparent in speech, and able to shift rapidly from one challenging task to another.

He didn’t want to be a smart guy running a dumb business, even if it did make money. And, anyway, he suspected profits wouldn’t last long unless the whole place got smarter.

It did. Here’s how, one lesson at a time.

IT DOESN’T MATTER HOW YOU LEARN — JUST LEARN

Before leaving, Koeze’s father managed to throw him this piece of advice: “You can’t learn to run a business by reading a book.”

But the younger Koeze, so unlike his intuitive and impetuous father, had always turned to books for guidance. Besides, the old man wasn’t around to show him the ropes. Workers at Koeze weren’t going to be much help; they knew only the old ways, and that wasn’t at all what Jeff Koeze had in mind. “I attacked it like I attack every problem,” he says, “with a stack of books 18 feet high.” (For a sampling of Koeze’s influences, see “The Well-Read Entrepreneur“.)

Among the workers he inherited, he says, he saw “intellectual passivity.” People weren’t interested in learning new skills. “My employees were extremely good in the narrow base they’d built up over time. But that narrow base gets outdated pretty fast.”

Koeze’s wide smile often turns down, into a faint grimace. And his eyes widen and his brows lift frequently to suggest a shared secret. But his voice is steady in volume and pace, almost never excited. “I am neither a firer nor a screamer,” he told himself. “If I can’t get better at this, I am going to have to sell this company.”

Koeze, 48, went to remarkable lengths — hauling in consultants, a shrink, a philosophy professor; reading a library full of organizational behavior books; trotting off to pricey seminars — to challenge both the workers and himself to adapt to one another and perhaps forge a better way of working together.

Is selling nuts really so complicated? Koeze packages them as business gifts in fancy glass jars, priced to compete with a nice necktie. Send out a million catalogs. Roast and pack. Take orders and ship. But extreme seasonality, with 96.5 percent of sales coming in the fourth quarter, requires rapid expansion and sudden shrinkage. It’s jarring. Year-round employment of about 40 swells to some 130 before Christmas. Koeze needed to launch new products and sell through new channels to expand. And doing a good job at even mundane stuff — buying packaging, running retail outlets, hiring people — seemed to a business newcomer to invite endless reading and research.

Koeze’s eventual success — he has boosted sales to $12 million, improved profit margins, introduced new products, and modernized manufacturing and order taking, and many workers have ultimately embraced the boss’s rigorous data-driven decision making — isn’t an argument for or against business by book learning. Rather, it’s an argument for learning, by whatever means an entrepreneur and his or her company can manage it.

Koeze is now a seasoned entrepreneur, with lessons also learned on the shop floor. But still, his first reference in discussing business is almost always a book. Why, I ask him, is his desk organized so meticulously — 80-some file folders, labeled and displayed in an amphitheater of to-dos?

“David Allen’s Getting Things Done,” he replies and gives a faithful and succinct synopsis of the book. Having laid out the concept, he then talks about how he applies it to Koeze Co. He operates with a calendar of meetings but no to-do list. A quick scan of his desk, however, can remind him what’s hot on his agenda.

EVEN IF YOU’RE GREEN, TRUST YOUR INSTINCTS

Jeff Koeze’s first full year in charge, 1997, Koeze Co. ended the holiday season with $600,000 in unsold merchandise. A lot of it was mixed nuts.

Koeze had to heavily discount the stuff. “A one-time, half-million-dollar working capital reduction” was the result, he says.

Should he have been worried? The company was still profitable. Many of his workers didn’t seem surprised or troubled. The financial statements — they made no distinction between finished and unfinished inventory and thus gave no clue about unsold nuts in prior years — were no help. Still, it didn’t seem right to Koeze to have missed the sales plan by such a wide margin. “I was certainly shocked,” he says.

The old method was to estimate the coming year’s sales — essentially tweaking last year’s results — and schedule the plant in long, uninterrupted runs to produce the necessary inventory: cashews, mixed nuts, candies. Even if orders came in that didn’t match expectations. It was convenient for production workers but ultimately costly to the company.

Koeze got the production, sales, and shipping people together and told them to fix the problem. “A huge improvement came by just saying this really matters,” he says. In 1998, unsold merchandise was $200,000. “A number I can live with,” he says. Also a glimmer of hope that his workers, if asked to, could actually help solve a problem. Radical change, including twice-daily meetings to adjust production to sales results as the holiday season heats up, has now brought unsold merchandise down to less than $150,000, even as sales have almost doubled.

IF YOU’RE NOT CAREFUL, YOUR BUSINESS’S HISTORY WILL BE YOUR DESTINY

Scott Koeze had been forced at age 28 to take over the business when his father died suddenly, and he had had a love-hate relationship with Koeze Co. ever since. He had always made sure Jeff felt absolute freedom in choosing a career. Though the two were vastly different in temperament, they sought each other’s company. When he was a kid, Jeff recalls, his father left for work at 5:45 most mornings. “But if I could hold him up until 6, Looney Tunes would come on, and he would watch with me for an hour.”

As a youth, Jeff sometimes went to the plant with his father, shoveling peanut skins away from the roaster and into burlap bags, and wedging his slender body into tight spots to inspect for rodent droppings. But Jeff never saw himself running Koeze Co.

And it was peculiarly his father’s company. Scott Koeze had made some smart moves. He had sold his biggest product line, private-label peanut butter (a $10 million operation), when he realized the business was about to get squeezed by supermarket consolidation. He had built a business selling Koeze’s nuts and candies through community groups doing fundraising. And he had built up the catalog business to spread sales nationally.

But he had a touch of the crazy boss in him. Weeks after being hired as Scott Koeze’s assistant 26 years ago, Deborah Owsinski introduced her new boss to her husband. ” ‘I’m so happy to meet you. I love your wife,’ ” she recalls Scott saying. “And he turned and planted a big wet kiss on my mouth. That sort of set the tone. He was hilarious. I loved working for Scott. He was not predictable.”

Not everyone was laughing. Tom Lakos, who runs Koeze’s two retail outlets, both in Grand Rapids, recalls Scott Koeze sneaking up on him “just to catch me not working.” More than once, the boss yelled at Lakos so thoroughly, over a variety of matters, that a co-worker dissolved into tears.

Inconsistency led to dysfunction. Scott Koeze was known for asking employees to look into his latest whim. Then he would forget about it and express surprise or lack of interest when workers reported back to him with proposals. So people began ignoring his requests.

Jeff Koeze, unaware of this little drama, was perplexed when, as the new boss, “I’d ask people to do stuff — and they wouldn’t do it.” He only later found out why. “As it turns out, it was entirely logical behavior,” he says.

Indeed, it took Jeff some time to realize he was having a personality clash — not with any individual but with the established rituals at Koeze Co. It’s a problem that blindsides many who enter a new business at the top. Hyperrational, by his own description, and accustomed to university colleagues who were also wired that way, Jeff expected workers at Koeze Co. to behave similarly.

But they had learned from Scott Koeze. “I never had a plan,” Scott says. “I got up in the morning, and I ran like hell.” It’s easy to believe him. These days, he dresses like a cowboy, a lanky man in hat, boots, and a snap shirt. And he can’t seem to sit still in his own house, which perches on a hill overlooking Lake Michigan on the Leelanau Peninsula. When I visit, he drags me out for a buggy ride behind a duo of big Frisian horses across his sprawling property.

Coaxing the horses at every turn, he pleads guilty to micro-managing. “I’d say, ‘Move aside and let me do it,’ ” he says. When he discovered that his workers had compiled a guide to handling customer complaints, he told them, “Burn that file. I want to handle every complaint.

“I had people problems, and I knew it,” Scott Koeze says. “And I could not take my business one step further. I’d had a bellyful of that business.”

Jeff Koeze initially bought a minority stake from his father, financed over 10 years. About five years into running the company, convinced he wanted to stay on, he persuaded his father to sell his voting control. “You know as well as I do, people have done odd things as they get older,” he explained to his father. The note for that part of the sale has five more years to run. Jeff now owns two-thirds of the company, and his parents own the remainder.

PEOPLE RESIST CHANGE

If something sounds like a smart idea to Jeff Koeze, he will generally try it. He has always been that way. He opted to switch high schools his junior year, moving to Cranbrook, a private boarding school in the Detroit suburbs, where he knew he would get more challenging studies. He wasn’t afraid of being the new kid. “It’s every high schooler’s dream, right?” he says. “You get to start over.”

Shown the wisdom of change, surely Koeze Co. workers would embrace it. Koeze needed the company to be a place where criticism was shared and accepted. He brought in a North Carolina colleague, organizational psychologist Roger Schwarz, who now runs his own consulting firm. Schwarz advocates a particularly open form of communication between businesspeople. No hidden agendas. No sneak attacks in meetings. His theories can be particularly annoying to powerful people, because he argues that leaders, by communicating poorly (sandwiching criticism between dollops of insincere praise or asking questions about a touchy subject without first explaining why), often cause the very behavior in underlings (failure to hear criticism, refusal to volunteer bad news) that most irks them.

When Schwarz asked Koeze’s managers to write up accounts of conflicts they had had with one another, an exercise in dissecting unproductive speech habits, some resisted. They viewed Schwarz’s methods as BS and weren’t wild about opening old wounds. One refused to participate. Koeze didn’t see what the big deal was. “The only risk was someone would start to cry,” he says.

And though Schwarz regards Jeff Koeze as one of his clients most devoted to the methods — “Jeff is easily a nine or a 10″ on a 10-point scale — Koeze to this day feels his crew tiptoes around difficult topics. “Notwithstanding all of our training,” Koeze wrote as part of a case study for one of Schwarz’s handbooks, “I recently described the avoidance of delivering negative information concerning the performance of others as a core feature of Koeze’s culture.” Without a freewheeling discussion, how could he get the staff to embrace different ways of doing business?

Koeze brought in a local philosophy professor, Michael De-Wilde, who uses literature to get varied groups, including prisoners, to discuss their situations. At Koeze, DeWilde assigned Steinbeck’s Of Mice and Men. The workers were soon comparing one another to its characters. “You’re like Lennie” (the mentally dim worker who doesn’t know his own strength), one Koeze employee bluntly told another. DeWilde says the exercise helped two workers realize they wanted to leave Koeze, and that eased problems in the production shop.

In 2004, DeWilde helped Koeze face up to a service problem at his retail stores. Workers were too passive in service — they camped behind the counter rather than prowling the store to engage indecisive customers. And they were too aggressive when it came to handling complaints; they were reluctant to simply give an unhappy customer a new jar of nuts. Neither problem was huge, but Koeze knew any failure to resolve a complaint in the customer’s favor would risk losing that person for good. And sales weren’t going to rise on their own — his retail workers needed to sell.

Koeze asked DeWilde to fix the service problem, and in a way that would keep him from being surprised by problems a second time. For 10 months, the retail workers met every other week — in two-hour sessions, fully paid — and shared their ideas and frustrations. Marcia Huber, who has worked nearly a decade at Koeze stores, says her initial training was “next to nothing.” She knew whom to call with a problem but hadn’t been told how to solve problems. The occasional upset customer, then, was a source of great worry for her and others.

With DeWilde’s help, the salespeople decided that it’s OK, when a customer knocks on the door after closing time, to let him or her in; customers could sample anything in the store; and if a customer was unhappy with something, staff should replace it free of charge and without question. “That did take a lot of anxiety out of seeing someone walk through the door with a Koeze bag,” Huber says.

Upon meeting DeWilde, she says, “At first we were intimidated by his education.” But over time, she adds, “I felt very pleased that the company would put forth that much effort. It built our confidence.”

Still, change was often coming too slowly to suit Jeff Koeze.

SOMETIMES, THE BOSS NEEDS TO CHANGE

By his sixth or seventh year at Koeze Co., Jeff says, he felt “a great deal of personal frustration.” Being a boss, he realized, often meant delegating to people with skills inferior to your own. It also meant much of your own company is hidden to you, because workers don’t share a lot of what they know. Those problems, of course, no boss can fix. He wondered if he should sell.

“I was not well suited to this or any business,” Koeze remembers thinking. “There were things that had to be fixed about me. I was probably rational to a fault.” As an undergrad at North Carolina, he had flourished at Chi Psi, the school’s nerdiest fraternity. For his blunt debating style, his brothers voted him “most obnoxious Yankee” seven semesters in a row.

“He relished earning that distinction,” says Donald Beeson, a Chi Psi brother. “He was very direct.”

As a professor, among colleagues, Koeze operated under the assumption that the best argument wins any given point. “Formal authority is rarely used,” he says. Inherent in that approach is the belief that people shouldn’t be told what to do. Rather, they should be taught to decide what to do.

But the approach was foreign to the workers at Koeze Co. It took the help of Schwarz, DeWilde, and others, but Koeze eventually came to see “how unlikely it was that I was going to be able to argue people into doing things my way. The other piece of it is my own reluctance to use authority.”

Indeed, he sometimes had to simply give orders. He had to stop researching and just make a decision. “He’ll get so anal on numbers, he’ll overanalyze it,” says Paul Bernhard, an accountant who advised Scott and Jeff Koeze on succession issues.

So, Koeze did change. He took some of the Roger Schwarz medicine he had been prescribing for others: He began to share his thoughts, and that put people at ease. At DeWilde’s urging, he also became more patient. And Koeze listened to and changed his own speech. He realized he confused people by verbally debating with himself the very issue on which he was about to give an order. “It’s made worse by a habit I have of thinking out loud,” he says. “Somewhere in here, there’s an order. That’s all they’re listening for. ‘When are you going to tell me what to do?’ ”

And Koeze stopped yearning for workers he couldn’t afford and instead invested in the ones he had. “We can’t afford to hire fancy folks,” he says. “But we need them.” He learned to spot traits in his existing workers — compulsiveness, curiosity — that translate into business skills. His dissatisfaction, he decided, “was mainly just me getting snippy with people.”

HOW YOU RUN YOUR LIFE AFFECTS HOW YOU RUN YOUR BUSINESS

As he settled into Koeze Co., Jeff Koeze got heavily involved in outside activities, some that too closely resembled running a business. He was serving on the board of an antitobacco group, and he was on his church’s vestry. His creative director, Martin Andree, convinced Koeze he was overextending himself. “People’s livelihoods and families are depending on you,” Andree told him. “You’ve got to take care of yourself.”

Mike Redman, a former Steelcase executive who met Koeze on the church vestry and then came to work at Koeze Co., also warned his new boss, “If you want to grow this thing, you’re going to have to give up some of these outside things.”

Koeze listened. He relinquished his board seat with the antitobacco group in 2002 and scaled back other commitments. He took up mind-clearing hobbies such as skeet shooting and beekeeping (still allowing himself a stack of books on such topics). The change gave him more energy to tackle projects that had seemed too difficult. He relaunched the peanut butter business, but as a premium brand, Cream-Nut, sold at high-end retailers. He finally got a strategic plan written, in 2007.

APPLIED OVER TIME, CRITICAL THINKING SKILLS SUCCEED

As he became more patient, he realized that some workers had in fact grown. Debbie Stokes, a longtime employee, remembers wondering, upon Jeff’s arrival, “Who’s the geek with the bow tie?” But as the years went by, she saw a kindred spirit, and she understood that her own compulsive urges to organize could now be unleashed at the office. “It was fun to set up all these new processes,” she says.

Koeze Co. became smarter. A lot of running a business is project-based stuff few entrepreneurs do frequently enough to truly master. Reading up helped Koeze and his employees pull off a series of big improvements.

The mail-order catalog, 30 to 40 items on 12 pages when Jeff arrived, is up to 100 items this year, on 28 pages. The million copies are sent out bearing about 70 key codes, which allow the company to track sales by cover art, days the catalogs are mailed, and which rented mailing list was used.

A new phone system is being installed. Before the company signed a contract, Deborah Owsinski, now an executive, read up on the topic and then produced a 10-page request for proposal. It resembled something that a far larger company would issue, says Mike Borowka, director of business development at Quantum Leap Communications, the vendor that won the contract. “They had it all storyboarded out, this whole process. It’s a little intimidating,” Borowka says.

Koeze asked Owsinski to research incentive pay. She had done so several times for Scott Koeze, only to see her work ignored. But she read up again and became enamored of a book, Punished by Rewards, by Alfie Kohn, that argues against individual incentives for children, students, and workers. She persuaded Koeze to implement a profit-sharing plan without individual bonuses. It rewards collective performance. “I wouldn’t run an investment bank this way,” Koeze says. “But it works for us.”

Fixing the call center in 2007 may have been Jeff Koeze’s finest hour. A sample of orders taken showed that a disturbing 35 percent contained errors: the name Whithead typed in as Shithead; the gift greeting with our love rendered as with out love. Those were caught before they went out. Who knows what wasn’t caught?

Koeze Co. has a 550-page training manual for the dozens of temporary workers it hires every fall to staff the call center, and some get as much as seven weeks of paid training for their 10 weeks of productive work. But there was a history of bad blood between the auditors and supervisors who correct order mistakes and those who take the orders.

All the measuring in the world wasn’t going to fix that. So Jeff Koeze hired Marybeth Atwell, a clinical social worker with minimal business experience, to counsel the opposing groups. As Schwarz had, she examined speech patterns. Auditors and supervisors stood over the order takers, and she suggested sitting down next to them to discuss errors. The auditors and supervisors tended to command (“I need to talk to you”) rather than ask (“Do you have a minute?”). And they voiced exasperation (“You made the same mistake you made yesterday. What’s the deal here?”) instead of constructive suggestions (“I notice you made this mistake on a number of occasions. Can you go back and examine how you did this?”).

Order takers, many returning from previous years at Koeze, needed a fresh outlook, too. “If you start a dynamic in the group of hating the supervisor, then nobody benefits,” Atwell told them. “A lot of these people are unemployed and really wanting work,” she says. “So they bring a lot of their own frustrations.”

Order-taking errors declined to as low as 10 percent, and nearly all mistakes are caught before shipping.

A SMART BUSINESS IS MORE THAN JUST PROFITABLE

The cashew company, after a dozen years, bears a strong resemblance to its owner. Numbers-obsessed but compassionate. And smart. In long conversations, DeWilde, the philosophy professor, and Koeze, the cashew man, talked about Aristotle’s notion of friendship: surrounding yourself with people who challenge you to be your best. For Jeff Koeze, the business is that friend — or, in DeWilde’s words, “an avenue for him to be who he wants to be.” Koeze, he adds, “wants to go to work in the morning. That wasn’t always the case when I met him.”

And Koeze says he remembers his father’s advice — that you can’t learn to run a business by reading books. “I guess I’d say you can, by reading lots and lots of books, and then running it.”

[Via Inc. Magazine, December 2008] by: Jeff Bailey