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A LETTER

FROM

ne of the contentious issues in international trade concerns protection of intellectual property rights (IPR). In simplest terms, this means protection of patents, copyrights, and trademarks. The United States Government believes, as does the World Trade Organization (WTO), that all nations should have IPR laws consistent with international standards because all nations will benefit. And yet one still hears arguments against IPR protection. One such argument is that IPR protection will lead to higher prices and will hurt consumers. The truth is more complex. Patented pharmaceuticals, for example, may sometimes be higher priced, but market competition-including competition from unpatented drugs-will keep their prices from going unreasonably high. When the price for a patented drug is higher, it normally traces to the company's seeking to recover the cost of developing the product. Patented drugs, nevertheless, offer a guarantee of quality against spurious drugs that could endanger the health of an individual-or even the community. This assurance of quality benefits the consumer. An IPR-infringer is far less likely to be

concerned about the quality of its product and more interested in making a quick buck; a company whose product is patented-cares about its "name" and hence about quality. On a nationwide scale, a reputation for "poor quality products" can damage exports. Effective IPR protection improves a country's global image as a supplier of quality products. Another argument is that IPR-protectipn inhibits the transfer of technology to developing countries. This is far from the truth. In fact, effective IPR laws promote technology transfer because they reduce the apprehension that a rights holder might have about marketing a patented, copyrighted, or trademarked product in foreign countries. This may actually allow for technology to be made available at a lower price. There are other reasons it is wise to have strong IPR- protection laws. Such laws stimulate creativity, invention and innovation by providing an environment in which scientists, writers, and artists are ensured that they will get the personal and material recognition they deserve. When a country doesn't ensure this, creative people often move to other countries (the "brain drain") where they can receive what they feel is rightfully theirs. The phrase "brain drain" inevitably brings to mind that there are many Indian scientists who have emigrated to America and other countries. Ironically, it was an Indian-American, Ananda

THE

PUBLISHER

Chakrabarty, who was the world's first scientist to receive a patent for a genetically engineered organism. This controversial case was eventually decided in Chakrabarty's favor by the 1980 U.S. Supreme Court decision of Diamond v. Chakrabarty. The article on page 52 of this issue ("Are Scientists Wrong to Patent Genes?") discusses this landmark case in the history of patenting. The author makes a persuasive case for IPR protection: ''A patent is more than a reward for ingenuity. It also represents a deliberate attempt to keep the process of discovery open." Turning to the field of copyrights, strong IPR laws on copyrights protect local artistic and cultural works. In a nation with weak copyright laws, cheap copies of foreign products often flood the country, making it difficult for local artistic and cultural works with their higher production costs to compete with the pirated products. Over time, the market for local works may erode. Creativity gets stifled. We're all aware of the pirated videocassettes of Indian movies readily available inside and outside India, and the consequent loss of revenues to the filmmakers and the country. Similarly, as this nation becomes a major creator and exporter of computer software, Indian manufacturers want stronger copyright protection in all countries where their software is currently being pirated. This is lucidly explained by the renowned economist Jagdish Bhagwati, professor of economics at New York's Columbia University. He says: "India, being a middle power that increasingly produces software and movies, is potentially a major exporter. Indian films are very popular in the Middle East but they're pirated there as much as An1erican movies are in India. India is a major exporter of software because Indian mathematicians are very cheap. Given all that, I said: 'Yes, India will have to pay more for pharmaceuticals but it's going to gain agreat deal in other areas.'" Professor Bhagwati succinctly sums up the whole problem of intellectual property rights: "If knowledge came like manna from heaven, then its rapid diffusion would produce the greatest good for everybody. If vaccines were free, without payment to the people who invented them, then more children would benefit immediately. But knowledge does not fall like manna from heaven. People invest in creating knowledge, and ifknowledge were constantly diffusing without paying those who created it, in the long run everybody would be worse off."

â&#x20AC;˘

â&#x20AC;˘ ers I

Moral Authority Jean Kvasnica (center) of Hewlett-Packard

does not supervise

anyone, yet pulls off big deals by the force of her character.

Winning companies are creating programs to help people grow.

Betting on Human Capital Says PepsiCo CEO Wayne Calloway:

"I'll bet ... companies

that

are in life-or-deathbattles got into that kind of trouble because they didn't pay enough attention to developing their leaders."

Mutual Mentoring

Society

Says McKinsey's Managing

Director Rajat Gupta of his company's

philosophy:

"People here are constantly observing each other."

everybody f thinks business needs better leadership-and apparently everybody does-then why is the corporate world's understanding of how to teach leadership still Stone Age primitive? Says MIT's Peter Senge, author of the management classic The Fifth Discipline: "We know how to invest in technology and machinery, but we're at a loss when it comes to investing in human capital." Part of the problem is that as markets evolve, the definition of leadership mutates almost as fast as a 12-year-old's fashion sense. Edward Lawler of the leadership program at the University of Southern California's business school recalls concluding many years ago that IBM was tops at developing executive talent. Wrong. "IBM probably invested the most money of any organization in this," Lawler says now, "but they taught people about a world that doesn't exist anymore. They shrank their gene pool down to people who were very good at managing for the 1970sso when the 1990s arrived, IBM had lots of people who were very good at the wrong thing." , Today's standard of leadership-influencing human behavior in an environment of uncertainty-is dauntingly difficult to teach. Ronald Heifetz, a 'professor at Harvard's Kennedy School of Government, argues that instead of telling people what to do, real leaders focus on helping people find their own way through "adaptive challenges"-problems without readily apparent solutions. Jim Collins, author of Built to Last, reports that companies that succeed long term stick passionately to a set of values and create systems that get employees to act in accord with those values. Says he: "Companies that take an architectural approach, putting in mechanisms to produce the right kind of behavior, don't need to look outside for leaders." Indeed, a small group of great companies, esteemed for producing terrific leaders, may have the answer to this management conundrum. Hewlett-Packard (H-P), Fuji Xerox of Japan, General Electric (GE), McKinsey, and PepsiCo have been experimenting with an idea powerful enough to transform leadership development-call it making the soft stuff hard. All are building quantifiable processes that command the attention of employees and bring discipline to the mysterious art of hum an development. GE's Jack Welch, for instance, built his reputation by melding the seemingly incompatible hard and soft sides of management. GE evaluates people on what it calls boundarylessness to weed outthose

who obstructthe free flow of ideas-a very unleaderlike thing to do. One unit of Hewlett-Packard has a checklist of26 leadership characteristics against which to gauge its employees. McKinsey has an elaborate mentoring program that makes sure the best people end up running this $1.5-billion-a-yearconsulting firm. Efforts to reduce subjective observations to hard numbers positively invite skepticism. And it's true that procedures like these rarely produce useful results at first. But by remaining committed year after year and learning from mistakes, companies have found they can improve their soft processes until they become wellsprings of competitive advantage. Serious attempts to get more out of individual human beings necessarily involve the weird, unpredictable, sometimes yucky stuff that has come to be labeled the "soft" side of management. The business world, however, tends to attract and promote hardheaded high jumpers-male MBAs, military veterans-who hate facing painful emotions, exploring their feminine side, or becoming more intuitive. These programs help bridge the gap. "The soft stuff is always harder than the hard stuff," says Roger Enrico, vice chairman of PepsiCo. He continues: "Human interactions are a lot tougher to manage than numbers and profits and losses. So the trick is to make the soft stuff hard, to operationalize it." Notice Enrico's masterful use of a really ugly six-syllable word that conveys an aura of no-nonsense engineering to sell a bunch of warm and fuzzy ideas. This is how you get people to buy into the fruitcake stuff. eaching leadership requires defining it. That's no easy task in an era of so much change that, as the old Firesign Theatre comedy troupe once put it, "Everything you know is wrong." Desperate for answers, corporations and consultants are drawing up lists of so-called leadership competencies, from "thinking outside of the box" to "musical listening," which means hearing the emotional content behind someone's words. . When you boil it all down, contemporary leadership seems to be a matter of aligning people toward common goals and empowering them to take the actions needed to reach them. Ultimately that means a leader must become worthy of respect. As you start to relinquish the command-and-control model ofleadership, your job is to get people to follow you voluntarily. You could do worse than heed the J Ching. a Chinese leadership guide used by Confucius: "Radical changes require adequate authority. A man must have inner strength as well as influential position. What he does must correspond with a highertruth .... lfa revolution is not founded on such inner truth, the results are bad, and it has no success. For in the end, men will support only those undertakings which they feel instinctively to be just." At Hewlett-Packard, one model of this new leadership is Jean Kvasnica. She signed on as a secretary 15 years ago, rising since to head a multifunctional sales team serving a major customer. Last autumn, Kvasnica's group prepared a complicated pitch to sell hundreds of millions of dollars' worth of computers, meters, and other equipment~a big deal even at a company with annual sales

of$25 billion. Yet Hewlett-Packard has given Kvasnica few of the traditional trappings of authority: Noone on the team reports to her, so she doesn't formally evaluate performance or give them raises. How, then, does she motivate them? "They have to believe I know what I'm doing and won't waste their time," says Kvasnica. Says Javier Castelblanco, a team member from the division that makes testing and measurement equipment: "Jean has vision and intense commitment to the successful outcome of a project, but the idea that makes it successful could come from anyone. She's not selfish about it." Forget managing by walking around, a technique that was invented years ago at Hewlett-Packard; this is management by getting out of the way. But ifleadership is character, it's reasonable to wonder whether it can be taught. Larry Bossidy, AlliedSignal's CEO, believes leadership is at least partly genetic. The consensus view is reflected by Morgan McCall, a professor of business at the University of Southern California (USC), who studies why high-potential careers sometimes derail. "I don't believe leadership can be taught," he says, "but it can be learned." Peter Senge objects to the very notion of teaching leadership. "'Teaching' suggests that you have certain concepts you want people to understand, and that's pretty useless in a domain like leadership. Leadership has to do with how people are. You don't teach people a different way of being, you create conditions so they can discover where their natural leadership comes from." Creating the right environment is a symphonic process, involving such disciplines as selection, appraisal, job assignment, and mentoring. Step one is hiring the right people. Asks Jim Collins rhetorically: "How do you get people to share y.our values? You don't. Youfind people who share them and eject those who don't." Just because someone shares your values doesn't mean he or she is leadership material. That's where leadership screening systems can come in. Companies like PepsiCo, McKinsey, and HewlettPackard have formal systems to identify tomorrow's leaders. Such systems can help companies avoid overlooking potential talent. Although they differ considerably in form, the screening systems at these companies all tend to be rigorous, ruthless in enforcing accountability, and deeply embedded in the culture. For instance, PepsiCo's annual human-resource (HR) planning process began more than 20 years ago when President Andr~ll Pearson, now a partner at Clayton Dubilier & Rice, institutionalized the up-or-out method he had learned as a consultant at McKinsey. Among other things, he required PepsiCo executives to rank their direct reports into quartiles and describe, in face-toface meetings, their plans for cull ing the worst performers. . Insistence on accountability gives backbone to the softer stuff. All the model companies routinely fire people who don't meet their tough standards. Pepsi's Calloway says, "Occasionally it's very important to have a public hanging." Only about 20 percent of McKinsey's entry-level professionals become partners. They are evaluated and selected through a process that relies heavily on informal networking and on evaluations by colleagues. Explains Rajat Gupta, who reigns as first

among equals in the McKinsey partnership: "People here are conabout 500 GE senior managers. Pairing people with job assignstantly observing each other." Special committees assigned to ments is part ofthe process. each of the firm's three tiers of consultants-associates, junior In the old days, when companies viewed executives as twopartners, and senior partners-collect anecdotal information, forlegged bundles of skills, each assignment was expected to teach a malize it, and then individually evaluate each employee. "I t's very new trick or two. Lawler of the University of Southern California subjective," says Gupta, "but I have a high level of confidence in says today's fuzzier, more holistic conception of leadership sugthe process. We may be a year late in promoting someone, but we gests that what people need most may be career experiences that for sure get it correct over time." give them a better understanding of themselves. When that doesn't Once you've identified your future stars, it's smart to invest happen, says Jeffrey Sonnenfeld of the Emory University busin_ess heavily in formal employee training and education-GE happily school, practices intended to teach leadership teach followership spends $500 million annually-but don't rely on course work to instead. magically produce leaders. Ultimately the purpose of GE's The personal histories of most of the successful executives inCrotonville school is to transmit GE's values to employees. As terviewed for this article are studded with consciousness-expandSteve Kerr, the school's director, explains: "I wish 1could tell you ing assignments. Gupta got to run McKinsey's Scandinavian that courses are the key, but they are not. When we ask our people office when he was just 32. Jack Welch started out at a plastics to write down the outstanding development experience of their skunkworks at GE, whichhe built into a $1 billion business. Roger Iives, only about ten percent cite formal,training;" The majority of Enrico learned to outwit bureaucracy as a Navy logistics officer peak learning experiences occur on the job~and through managing an aviation fuel supply operation in Vietnam. serendipity, not planning,. But Kerr says you're more likely to get Everybody agrees that failure is a great teacher-but best met lucky if you give people a carefully thought-out series of varied early in life. Says Calloway: "The higher up you get, the more exand challenging work assignments characterized by lots of repensive those failures get, so the company will put up some failsponsibility and real risk offailure. safe mechanisms. That's why we like to give people as much No matter how radically these model corporations delegate opdifferent experience as we can while they are young." As the erating authority, they tend to maintain extremely tight central Outward Bound schools have demonstrated so successfully, the control over key personnel decisions. Both the head of human reperception of risk helps people learn. But they need support syssources and the CEO often directly approve moves_within the tems too: Uncertainty can be scary. ranks of their top echelon of executives. The goal is to identify and A particularly helpful way to support future leaders is through nurture human potential long before maturity makes it obvious. mentoring. A close relationship with a senior executive of proven "Among the elements of teaching leadership," says Calloway, leadership skill is likely to keep a young manager open and stretching for growth. Mentoring is what the MBAs call it, but "80 percent is experience. Our first line of offense is just to put friendshi p-a soft val ue if there ever was one-ultimately may be them in thejob." Alongwith many others, Calloway believes in dithe reason it works.' Hewlett-Packard tries to nurture such relaversity of experience, so he shuttles promising managers from ditionships by assigning mentors to employees. Employees seem vision to division. CEO Bossidy of AlliedSignal agrees, but adds a caveat: The most fascinating assign~~ grateful, but mentoring doesn't always work. At a reunion lunch in ment in the world may not teach you Palo Alto recently, an Hewlettmuch unless your boss gives you a Packard executive discussed in long leash. (lÂˇtI E E~â&#x201A;ŹCU chilling terms a mentor who had no GE devotes enormous energy to ofFI rei' time for his protege: "We're on the matching key managers withjobs in verge of shutting that relationship a process called Session C that consumes nearly a month of Jack down." However, passively trustWelch's time each year. Starting in ing luck is no solution either: "One January, 80,000 GEers and their mentor is one more than most people get," says GE's Kerr. bosses fill out the front and back of McKinsey's approach may be the one-page "internal resume" forms, best balance of hard and soft. Its filling spaces for skills, career goals, consultants work on teams of and development needs. Between mixed rank, and senior people are March and May, Welch and a few other senior executives visit each of expected to help junior people along. Part of the development GE's 12 operating units to conduct process is quite formal: It is cusfiercely focused one-day personnel "I'm sorry, you've reached the wrong department-what tomary for young associates, not reviews. Meeting mainly with the you're asking for requires a decision. " partners, to make presentations to top leadership at each site, they end clients, for instance, and mentoring up considering the prospects of

is an important criterion in partners' appraisals. But long hours, hard work, and plenty of travel to places like West Moose Lung provide opportunities for teammates to forge personal relationships. "It's like the old craft apprenticeship system," says Joel Bleeke, a senior partner whose clients are mostly in financial services. "The relationship begins as an act of will, not affection, but it becomes much more of an emotional attachment over time. When you are mentoring for leadership, you have to convey much more than problem-solving skills and your personal net.work-you need to convey aspirations, instill values, excitement, a view that almost anything is possible. You need to instill positive energy." One ofBleeke's apprentices is David Friedman, ajunior partner. Friedman says the relationship has made him readier to take

Triumph of a Quiet Man n 1983, a small crisis enveloped the Scandinavian operations of McKinsey & Company, the giant management consulting firm. The head of the Copenhagen office had to leave his job for personal and health reasons. To fill the vacuum, Ronald Daniel, then McKinsey's managing director in New York, made a risky decision. Rather than pick a se-

nior McKinsey hand, he named Rajat Gupta, a 34-year-old junior partner in Copenhagen, to the job. Gupta had been in Europe for just two years and had never run a McKinsey office. But his colleagues in Scandinavia strongly supported him, which encouraged Daniel to pick the unassuming young man from New CopyrightÂŠ 1994 by The New York TimesCompany. Reprinted by permission.

risks and try new ideas: "If you know you have someone supporting you, you have much more confidence. You don't have to stay in your comfort zone. You can stay in your mentor's comfort zone, which is probably much bigger than your own." Yotaro Kobayashi, chairman of Fuji Xerox and successor to Akio Morita as Japan's most prominent international industrial ist, describes mentoring relationships that arise from a seemly mix of chance and intent. As a younger man, he was greatly influenced by time spent in what he calls "the presence of greatness." Among the leaders who have served as his personal benchmarks are the late Joe Wilson, grandson of a Xerox founder and the man who built the xerography business. "Only by meeting a person face to facenot once but several times-can you sense their qualities," says Kobayashi. "There are things you only feel. You ask yourself, 'Howcan I do this?'"

by MUKULPANDYA

Delhi. "The decision involved a leap of faith," remembers Michael Obermayer, who oversees McKinsey's operations in Eastern Europe and was then on the Scandinavian team. As it happened, the leap took the firm bounding forward. Gupta and his associates, eager to prove themselves, worked up a storm. In three years, the Scandinavian operation grew to 100 consultants, from about 25. On July 1,1994, Gupta was elevated again at McKinsey, all the way to the top. In the process, he became the first non- Westerner to lead the 70-year-old firm, the biggest general management consulting company in the world and arguably the most prestigious. But when the firm's 148 senior partners voted in late March 1994 to name Gupta, 47, the next managing director, it was less a leap of faith than an acknowledgment that he is the kind of leader the firm now needs: a global citizen and consensus bui Ider. Gupta now heads a firm that has become a global player, with 3,000 consultants working out of 62 offices in 31 countries, producing revenues of$1.3 billion in 1993. Since 1980, the firm has opened 33 offices, only six in the United States. In the process, the influence of senior partners based abroad, many of them non-American, has grown. More than hal f of the senior partners, 78 of 148, are now abroad, compared with

17 of 47 in 1980. In part, Gupta's elevation reflects this shift-and a recognition that McKinsey's growth will continue to be overseas, particularly in emerging markets like Russia, Eastern Europe, China, and India. But rapid international expansion has created a problem for McKinsey that companies often call in management consWtants to help them solve: how to establish a common corporate vision. McKinsey, which has about 400 partners in all, cannot be run by diktat or by total consensus. The company's partners are convinCf~dthat Gupta's international background and management style-he has a reputation for listening calmly to colleagues and clients and presenting his own views without drawing blood from those he opposes-will keep McKinsey united and growing. "I know a number of people in McKinsey who have better records than me," Gupta said in an interview. "Unquestionably, their records of accomplishment far exceed mipe. The reason my partners picked me was because they trusted me." Indeed, McKinsey is known as a firm populated by talented people with big salaries and even bigger egos. Gupta has the talent and the salary (estimated between $2 million and $3 million), but he doesn't appearto have the ego. "Gupta gets more done by talking less than anyone I know," said Adil Zainulbhai, manager of McKinsey's Minneapolis office. Gupta's clients agree. "He's very low key," says Steve McMillan, a former McKinsey

Now 62, Kobayashi has become a mentor. He spends informal time with promising younger executives-not all Fuj i Xerox employees-on golf links and in karaoke bars. Although Kobayashi doesn't express it this way, the idea is to lift the veils that give leaders their aura of majesty and mystery; once young people can recognize their heroes as human, they can begin to find heroism in themselves. Roger Enrico says one of the most importantmentoring experiences in his life was a series of long discussions he had as a younger man with Don Kendall, then CEO of PepsiCo. For a couple of hours in the middle of the workday, Kendall would invite Enrico in, close the door, and stop answering the phone. The first time, Enrico showed up with a 300-page fact book and a flipbook of charts, but Kendall spent the meeting talking about opera. In subsequent chats they moved on to Soviet politics and a

colleague who is now executive vice president at Sara Lee. "He's less in your face than other consultants. He doesn't try to prove howsmarthe is." David Farrell, chief executive of May Department Stores, parent of Lord & Taylor, added: "Gupta is very skilled at keeping tension under control. He is an unbelievable facilitator. He was born for the job." Gupta, who became a United States citizen in 1981, was born in Calcutta, the second of four children. The family moved to New Delhi in 1954, when"Rajat was five. Before long, tragedy struck. Rajat's father, an editor who had been active in India's independence movement, died in 1964, and his mother, a Montessori teacher, died four years later. By then, Gupta had entered the Indian Institute of Technology in New Delhi to study mechanical engineering. When not poring over books, he took part in school theater productions, where he met his future wife, Anita; an electrical engineering student. After graduating in 1971, he won a scholarship to the Harvard Business School. Harvard classmates remember Gupta as being exceptionally bright. "He was the smartest person in my section of 80 students," recalls Sara Lee's McMillan. Adds Ruben Aragon, chief executive of Duralast Rubber Products in Tulsa, Oklahoma, who shared a dorm room with him for two years: "Things came easily to Rajat. He reviewed cases very easily. Bven if we had tests, he would study for a time and then sit down

wide range of other subjects but never viewed Enrico's slides. Instead, Kendall gradually infused Enrico with the broad perspective ofa leader. So you've busted your chops identifying potential leaders, set them up in the right jobs, and provided them with mentors. Now comes the next big challenge: establishing a very clear set of companywide guidelines, a systematic way to measure whether someone is behaving like a leader. In competitive matters~ GE's Welch can be brutally tough, yet he believes the way to win is by tapping the emotional energy of employees. Characteristically, he insists on evaluating GE executives according to how well they embody the corporate value of "boundarylessness," among other attributes. That value is about overcoming the barriers that inhibit a free market for ideas within GE-such as overbearing bosses, people unwill-

without fail every day to write a letter to his Murray said. "The single thing he will have to girlfriend." watch most is how he communicates with the firm." By 1973, Gupta was looking forajob. Like many immigrants, he discovered that few And then there is the way he decides companies would interview him because he things. "He makes a decision, then he sleeps had a student visa. Consulting firms like on it and then sleeps on it some more," said McKinsey were an exception, and Gupta ap- Christian Caspar, who succeeded him as head plied there. Initially rejected because of his of the Scandinavian office and who calls lack of experience, Gupta was accepted after Gupta's style virtually a Tao approach to Walter Salmon, a Harvard professor, wrote to leading. "If it feels right, he concludes it is the Daniel in New York. correct decision. Ifit doesn't, he reverses the decision and sleeps on it again." By 1980, Gupta had become ajunior partner and a year later, McKinsey's managers Gupta himself acknowledges that he is a asked ifhe wanted to go to Europe. Gupta's . "great procrastinator." He said: "I tend to let wife was then w.orking for Bell Labs and things sort themselves out. Nine problems completing her PhD in electrical engineerout often go away if you don't address them. ing. "I was sure she would say no, but she You have to deal with the tenth. I often don't agreed" to go, Gupta said. address things until I have to." After nearly six years in Scandinavia, Tom Peters, the management guru and a former McKinseyite, has worked with Gupta. Gupta decided to return to the United States. R. Michael Murray, a senior partner, strongly Saying that he responds to his election with urged him to come to Chicago. With no "absolute unbridled enthusiasm," Peters clients, Gupta had to build a base from adds, "Rajat has a good shot at taking McKinsey where it needs to go. What I hope scratch. for is a quiet revolutionary." Lunch with his Harvard buddy, McMillan, who by then hadjoined Sara Lee, led to an asPeters, however, says Gupta has "one masignment. "Rajat helped Sara Lee layout a jor weakness-he is too much of a nice guy. Rajat has a decent streak a mile long. strategy to enter the European meat market," McMillan said. "He's very different from McKinsey's partners are a tough bunch. I envy and don't envy him his task." most consultants I've seen. I have sat through 0 meetings with Rajat where he didn't say a word. But when he does, he instills a lot of About the Author: Mukul Pandya is the confidence. " managing editor of Central New Jersey Still, Gupta does have his limitations. Business, a regional business publication in "He's not the greatest of public speakers," New Brunswick.

ing to work with others outside their function, or timidity about speaking openly with customers and suppliers. GE makes its inevitably subjective judgments about peopl.e's boundarylessness on a rigid one-to-five scale-and sometimes fires those with the worst scores, even if they produce superior financial results. Concedes GE human resources senior vice president William Conaty, one of the few human-resources chiefs with real impact and plenty of access to the CEO: "Ranking boundarylessness on a one-to-fivescale is pretty tough. But values are the core ingredient here. The people we are putting in key leadershi p slots are those we deem to be terrific role models. That means embracing the values, being able to motivate and energize others, and having that infectious enthusiasm to tap people's potential and generate the capacity of the organization beyond what it otherwise would do." But how does a company know for sure whether its best people are on the right path to leader~hip? They may think they are living up to a company's values, but are they really? That's where so-called 360-degree evaluations come in. This useful tool has spread well beyond the top-executive ranks where it initially took hold. The 360 process begins with human resources devising a detailed questionnaire pegged to the behaviors the corporate culture values most. The questionnaire usually asks employees whether their manager "keeps me informed," "does not interfere with my job," and so forth. Everyone who works with the manager-boss, peers, and subordinates-contributes to the evaluation. At GE, which uses 360s for more-senior people, the output is a bluntly worded report that the manager discusses behind closed doors with a human-resources pro and then with his boss. "Development needs"-the euphemism for problems-get plenty of attention. classic example of making the soft stuff hard, the 360-degree evaluation can provide great benefits. First, it provides a means of systematically making subjective yet apparently unbiased judgments about people. Is Harry a bully? Well, if six of his ten direct reports say he is, that starts to look,like hard data. Second, the 360 process is designed to force supervisors into the sort of candid, face-to-face discussions that most supervisors would prefer to avoid. Most important for leadership, feedback from 360s can signal opportunities to learn. Growth begins when individuals reach a more objective understanding of their strengths and weaknesses, enabling them to take responsibility for their own development. McCall, the professor who studied derailed careers, cites unwillingness to accept feedback as one of the reasons talented executives fail. That danger increases wi th rank, says Ellen Hart, head of Gemini Consulting's leadership practice: "The higher executives get in an organization, the less direct feedback they get about their behavior." Be careful, though: 360s can be harmful if misused. In the wrong hands-say, a person with a grudge-they can become instruments of coercion or enforced conformity. And one human resources person can corrupt the whole process, simply by reveal ing

• • •

Don't push soft values without enforcing tough standards of accountability on hard stufflike profits. "Operational ize" the soft stuff through measurements and by integrating it into annual reviews. Start by measuring the time the CEO spends on people issues. Use schools to transmit skills and values; people learn leadership from on-the-job experience. Give promising people lots of one-on-one contact with proven leaders in your organization. Focus on designing appraisal and other processes that align the whole organization's behavior with core values. Understand that leadership is character, requiring growth and personal change.

who made which anonymous comment about whom. Put all these various methods into a pot and letthem simmer, and eventually the result will be a corporate culture that encourages the right kind of leadership. Probably nothing more affects an employee's on-the-job development than the subtle messages that radiate from any company's culture and ambience. Hewlett-Packard is an example of the potentially overwhelming power of corporate culture. From its founding in 1939 by William Hewlett and David Packard, it has been ruled by a system of values that have come to be known, rather mystically, as the H-P Way. The basic premise, in Hewlett's words, is "the beliefthat men and women want to do a goodjob, a creative job, and that if they are provided the proper environment, they will do so." Values don't get much softer than that, but these seem to work: Since 1961, when H-P's stock was publicly listed, it has risen 7,885 percent. Perhaps the simplest, hardest, and most telling measure of any company's leadership development program is the allocation of its CEO's time. Calloway and Gupta say they spend roughly half their professional lives on personnel matters such as appraisals, assigning jobs, coaching, and mentoring. If, as everyone says, people are a company's most precious competitive resource, bosses at all levels have a personal obligation to be role models, visibly investing their own time in tomorrow's leaders. The companies that are mos't successful at developing leaders seem to be those that are most successful in general. Does thiS mean that investing in leadership development is a luxury that only the elite can afford? After all, how can the head of a small, struggling enterprise be expected to fire high-performing~ managers who happen to be bullies, orto spend afternoons in meandering conversations about opera? What if you're battling for survival? Here's Wayne Calloway's answer: "I'll bet most of the companies that are in life-or-death battles got into that kind of trouble because they didn't pay enough attention to developing their leaders." 0 About the Author: Stratford editors of Fortune magazine.

Sherman

is a member of the board of

by MUKULPANDYA

HARSH GOENI<A ON JOINT VENTURES "As markets become increasingly global, alliances are going to be the rule for doing business in the future."

One of the most prominent businessmen in India, Harsh Vardhan Goenka, 38, is chairman of RPG Enterprises, a leading industrial group. RPG is involved in tires, agribusiness, power, telecommunications, chemicals, arid many other businesses. The group has had joint ventures and technical collaborations with several of the FORTUNE500 companies. Firms they have collaborated with include Goodyear, Sprint, Du Pont (all US.), Bayer (Germany), Sulzer (Switzerland), Ricoh, Fujitsu (both Japan), BICC, ICL, Rolls-

Royce and BTP (all UK.). The RPG group of companies employ 60,000 people. Harsh Goenka, who has an MBA degree from IMD in Switzerland, is the immediate past president of the Indian Merchants' Chamber and a committee member of the Federation of Indian Chambers of Commerce and Industry (FICCl) and of the Associated Chambers of Commerce and Industry (ASSOCHAM). Recently, SPAN interviewed Goenka for his views onjoint business ventures, a subject on which he has vast experience and expertise.

SPAN: What is the essential ingredient of a successfuljoint venture between an Indian company and a foreign company? What is it that makes it work? GOENKA: The success of a joint venture is founded on a strong commitment and true complimentarity between partners. It is easier said than done. One has to spend a lot of time in understanding each other so that you do not clash in your work. Let me give you the example of our tie-up with Goodyear. Goodyear is a giant international tire company. Ceat is also a big tire company, at least by Indian standards. We came together for a strategic objective. We formed a joint venture specifically for manufacturing. We had the best manufacturing processes in Ceat; Goodyear had the best technology. So we formed a joint venture to produce the best quality tires. Each partner is entitled to 50 percent of the output to distribute under his own brand name. We compete in the marketplace but we've taken our respective competitive strengths and combined them to our mutual advantage.

"The most important element in determining the success of a joint venture is a shared value system. We believe that a joint venture has the sanctity ofa marriage."

SPAN: How should a joint vellture be structured? How do you ensure that both partners have control? GOENKA: I feel that joint ventures need to function on a "balance of power." The ideal arrangement would be for 5050 equity split. It would assure both partners of equal control and equal commitment. But even if it's 51-49 or whatever, I don't think percentages should really matter. Irrespective of the shareholding, the joint venture should be so structured as to ensure a balance of power between partners. That will ensure cordial relations between them. In our experience, once the goals of the joint venture have been set, you must find a person to head the operation. He can be from either of the parent companies or from outside, but the joint venture must have an effective CEO. While meetings of the board are a formal affair, real supervision rests with a management committee which operates only by consensus. Every two

months the management committee meets to iron out all issues relating to the partnership and also meets with the CEO to review operations. An effective dispute resolution mechanism is also a critical component. SPAN: What are common causes of conflict in a joint venture? GOENKA: If I were to generalize, I would identify three causes of conflict. The first is the inability ofthe foreign partner to adapt to the local methods or work practices, the local culture. For example, the foreign partner often lacks the patience to work in a highly regulated economy. He can't understand why the government has to be involved in so many minor decisions. The second potential conflict area is a lack of communications between the partners. You must ensure that both partners identify a person from each organization who will be in constant touch with each other. Through this you achieve real integration because this is individual-driven. For example, my relation with my counterpart in Ou Pont is more important than anything else for getting things done. Also, problems get nipped in the bud. We in India expect the foreign partner to come visit us. He makes more trips here than we do there. This is something we should correct because it has an adverse psychological impact. We must make a point of meeting in each other's territories. This helps to integrate culturally. The third potential conflict area arises when you have divergent strategic objectives. In the shareholders' agreement you can create the instrument that defines how the company will be managed, the exit mechanism, the pricing formula, protection oftechnology, whatever. That's the easy part. But once the ration'ale for either partner's participation changes, the joint venture could be injeopardy. SPAN: Why go in for a joint venture when there are easier alternatives like technology transfer or licensing agreements? GOENKA: The reasons for setting up joint ventures are numerous but are primarily strategic, focusing mainly on access to new markets and acquisition of new technologies. Financial and regulatory reasons are less important although there's a misconception that they're the main considerations. You can always find a solution to a financial or regulatory problem. As a development vehicle, joint ventures are preferred over setting up a subsidiary or through acquisition. For the simple reason that in the latter cases, the foreign company will have to confront the whole gamut of regulatory and operational problems on "its own. Why not instead align with someone who already has a presence in the local market, who knows the ropes and learn along the way? I personally believe that as markets become increasingly global, it's going to be impossible for any organization to operate everywhere just by itself. Alliances are

going to be the rule for doing business in the future. They allow for sharing of risks and the benefit from the knowledge of the market that the local partner already possesses. Thus, partner selection assumes vital importance. It is one of the most delicate stages in the creation ofajoint venture. The best way to do this is to employ an independent agency to locate a good partner in the local market depending on the areas that you want to get into. Identify the criteria you're looking for, whether reputation, ethical practices, or commitment to retain people, whatever. Most joint ventures are long term and successful-although the failures are the ones that tend to get noticed. They are rarely dissolved. When the partners' strategic objectives change, they usually amicably agree to end their collaboration and one ofthe partners takes over. SPAN: Has the nature o/joint ventures changed much over the years? GOENKA: In the seventies and eighties, the value provided by the Indian partner was the help he could provide in navigating the corridors of power, to get the necessary government permissions, and to help with the acquisition ofland, etc. But today the role of an escort agency is much less than it was. A lot of joint ventures find that the value provided by the Indian partner is not enough. What value he could add has already come in. And that is why some of the joint ventures have already started having differences between foreign and Indian partners. I don't think there's a formula as to the right way to work. But we as a group believe that a 50-50 joint venture is the best way to work. For the reason that both the partners think of it as "their" company. And the foreign company doesn't think in terms of extracting the maximum profits by way of royalties, transfer pricing, or dividends. Earlier foreign companies wanting to set up operations in India tended to look for a single partner to work with regardless of which areas of business they intended to enter. Today they have become far more demanding of their Indian partners. They look to see who can bring the most to the table. This is mostly in terms of marketing and distribution. So in the joint venture agreement itself, the foreign partner spells out which lines of business are to be operated through the joint venture and reserves the right to tie up with anybody else who might be better suited for other lines of business. In general, an Indian company that has global ambitions of leadership in any particular line of business will have to seek joint ventures in all the different markets it wants to enter and secure a dominant position in that relationship. A joint venture with a foreign company which is dominant in the same field might accommodate the Indian company's regional ambitions but not its global ambitions. SPAN: Let's return to something you said earlier when we asked about the key to ajoint venture's success. You

mentioned commitment and complimentarity 0/ interests. Could you elaborate on that? GOENKA: The most important element in determining the success of a joint venture is a shared value system. As a group we've had many alliances and all but one has been successful. We believe that a joint venture has the sanctity ofa marriage. It's for keeps. But I find that many multinationals coming into India in the new era have a different approach altogether. When the rules were different they felt they needed an Indian partner. Now they can operate on their own, they have changed their strategy. In India companies are still looked upon as heirlooms. So a foreign company who overnight decides it needs greater control and seeks to buyout its joint-venture partner naturally creates some apprehensions. So either the foreign companies will have to change their approach or we will have to become more cautious.

"A foreign company who overnight decides it needs greater control and seeks to buyout its joint-venture partner naturally creates some apprehensions."

SPAN: In your experience, who make the best joint venture partners? GOENKA: I have come to the conclusion that Americans probably make the best partners because of the values that American corporations have built into their operations. Because of the way these companies are managed, they are so much exposed to public scrutiny that they take a very long time to take a decision. The bigger the organization the slower the decision-making process. I mean if you go to a company like Du Pont, you can easily spend three or four years before they commit to a relationship. But once the decision is taken, I find Americans to be most honest about their interest in the joint venture. They are upfront and don't have a hidden agenda. They mean what they say and I think they are in for the long haul. 0 They're not here to make a quick buck.

FACE TO FACE WITH

,"AVTI~ S[()VSfSf An Interview by KRISHAN GABRANI and ARUN BHANOT Photographs by AVINASH PASRICHA

One of America's most passionate and inventive filmmakers, Martin Scorsese has often based his work in his own experience, exploring his Italian-American Catholic heritage and confronting the themes of sin and redemption in afiercely contemporary yet universally resonantfashion. In March 1996, Scorsese visited India in connection with his new film, Kundan, about the life of the Dalai Lama, and gave thefollowing exclusive interview to SPAN's managing editor and associate editor.

You are in India, we understand, in connection with your new film project on the life of the Dalai Lama, called Kundan. How did you come to have this title, which is a Hindi word? Martin Scorsese: Kundan means "the Precious One." That's the title Melissa Mathison, who wrote the script, gave it. We've kept the title. And they do call him Kundan at times in the story. She gave me this script about four years ago, and since then we've been working on it, to get the film made. You say it's a Hindi word. Yes. It means the Pure. Scorsese: That's interesting. It's the precious jewel. That's the idea. I'm going to talk to Melissa about that. Several of your films deal with violence, mobsters, and Majla. Scorsese: Three of them do-Mean Streets, GoodFellas, and Casino. How did you change gears and optfor this apostle of peace and nonviolence? Scorsese: I've always been very interested

in religion, and I really wanted to do a film that was further away from the world that I grew up in, which was the world of urban New York, Lower East Side-"Little Italy"~an area where there were organized crime figures. As a child I didn't know that. They were human beings to me then. You know I'm a Sicilian-American. My grandparents come from Sicily. So crime was very much part of our culture, for better or for worse. In the past 24 years that I've been making films-I think I've made about 16 filmsonly three ofthem deal with organized crime figures. But, violence ... Scorsese: ...yes, violence's been a strong part of my movies. Taxi Driver, Raging Bull, of course. In Raging Bull the man's job is to go and hit people and be hit. It's like a very primal basic exploration. And we were able to use it as a metaphor, I'm afraid, for life. But, I've done a number of pictures that are not violent. Even the Color of Money is not a violent film. Then I've made After Hours and The Age of Innocence, which is a story

about the New York aristocracy. And Kundan was another one that I wanted to make-the story about the Dalai Lama~to take me into another world. When did you come to know of the Dalai Lama as a person with a larger-than-life persona? Scorsese: A good question. I remember his escape from Tibet. I remember that as a young person. I remember a photograph of him on the front page of a newspaper. But I became aware of the loss, the physical loss, of the culture of Tibet in about 1986-87. I saw a number of programs on television in America, and the shock of the tragedy affected me strongly. What it also meant to me was that the Dalai Lama had left Tibet but he had "taken" Tibet with him. And that would be an interesting story because, if anything, what the world needs is more of a society where people could look in rather than look out. That 50 what our Indian scriptures teach us. Scorsese: That's what's so fascinating about India. It's fantastic. And it took me all these years to get here. Is this your first visit to India? Scorsese: Yes. What are your first impressions-of the people, of the country? Scorsese: Overwhelming. I was up in Dharamshala, also Jammu. I'm' amazed by the varieties of people-the different ways, the different languages, the look of the country, which is something I never had known. I was eight years old when I saw the first movie about India, Jean Renoir's The River,

FACE TO FACE WITH

,"AVTI~~tf)V~(~( continued raised-and about my grandmother. It was a very simple documentary, less than an hour. It was called ItalianAmerican. I learned a great deal about them. I learned they had a life before me [laughs]. They'd been married 42 years at that time. Managing Editor Krishan Gabrani interviewing Martin Scorsese at the TajMahal hotel, New Delhi.

which was so beautiful, full of the sense of color and smell. From that film you could smell the different spices and the incense. I think Satyajit Ray also worked on that film. Yes.He assisted Renoir during the filming. Scorsese: So, all these years I wanted to get to India, to have an excuse to come here. I don't travel very often. Talking of Satya)it Ray, you've recently been involved in the restoration of eight of his films. But even in the early 1960s you made a statement that the Apu Trilogy was "one of the greatest cinematic experiences of my life. "How come at thattime, whenyou were )ust a young boy in New York, you got interested in this filmmaker? Scorsese: I was about 15. Experiencing the Apu Trilogy together-to see all three films as I did, five-and-a-half hours straight-was really like reaching over to the other side of the world and becoming totally understanding of people in different cultures and different points of view but still seeing them as'human beings. It was so different from us, so different from our cultural setup in New York. But at that age, tofeel so intensely about.,. Scorsese: ...very intensely, especially the first one, Pather Panchali, and the last one, The World of Apu. The middle one, Apara)ito, was also good, but the first and the last were overwhelming. You can't deny the power of these stories. And it seems very simple, but it's very hard to shoot.

How would you rate Satya)it Ray? Scorsese: He's certainly one of the alltime greats. There is no doubt. I think one reason why I reacted to his films the way I did was that when I was a child in New York I saw Italian films on television-Open City, The Bicycle Thief, and many others-and when I saw the Apu Trilogy it reminded me of those. Even to think about this film now is so moving. Interestingly, Ray was deeply influenced by The Bicycle Thief. Scorsese: In fact, I feel so strongly about the Itillian cinema that we're going to do a documentary on the Italian cinema, starting from The Bicycle Thief and taking it all the way up to Federico Fellini and Bernardo Bertolucci and a few of the other filmmakers now. I have just completed a three-hour-and45-minute documentary on American cinema to work as a guide. A personal view. It's not a view of the Academy Award winning films but of different movies that I experienced and enjoyed as a child and as a young filmmaker. You've made some of the most memorable films. Which of your films would you rate as your best and why? Scorsese: I have a very strong personal connection to Mean Streets which I did in 1973. Then I made a film on my mother and father, a documentary. Very simple story. No story, actually. Just having dinner with mY' mother and father on a Sunday afternoon and asking them questions about how they were

Coming back to Ray. When you first experienced him, you couldn't have, at that young age, been thinking of becoming a filmmaker or... Scorsese: ...1 was thinking about it. Well, also at that time I was at the preparatory seminary, training to be a priest. I didn't make it to the priesthood because I was veering toward films. And the humanist approach of Ray was what affected me. I wanted to make films like that, films that reached across cultural barriers and national barriers, to humanity, to everybody. That is what I think is the danger now in America. Americans don't look at foreign films anymore. And that is why I'm trying to change them. I tried to release some old French films. I re-re'leased Rocco and His Brothers by Luchino Visconti. That's also why I helped Ismail Merchant in the restoration of the Ray films. It's very important how he supported the showings of the Ray films in America. One interesting parallel in your films and Ray s is that for most of his films Ray had Soumitra Chatterjee as the common male protagonist and you've Robert De Niro in almost all your films. Is it because a director looks for the ideal actor who can express what the director wants to say? Scorsese: Basically, we had such a tight relationship that I had to say very little. He doesn't even act, he sort of behaves. He becomes this person, the film's character, and, like a joke, we usually say: "Is Jake ip. this morning?" [Jake LaMotta is the character De Niro plays in Raging Bull.] "Is he on time?" "Yes, he's on time." "Okay, we'll go see Jake now." We usually call him by the character's name. Is it also because you're both from the same background? Scorsese: Yes, we have a similar background, although, interestingly, I grew up in the Lower East Side with different groups of young boys, some of whom went to college, some went to organized crime, and some

became lawyers. That's just the way it was, yuu really relate this to your cinematic and still is, I think, in Little Italy. And Bob De themes? Scorsese: The key thing is music. For me, Niro was also down there, although he lived four blocks away. We knew each other and he . when I hear music-it could be rock and roll, blues, Indian music, or it could be classical would come and visit me and we would hang music-I imagine images and I imagine out together. sequences. I usually play music whether I'm Bob came from a very different background. His father was a famous painter and working on a script or drawing pictures. I his mother was a writer. I came to know of play the music for the film. Take Casino. that only after we had known each other for There is maybe three hours of music there. That's enormous. And for that I played some two years. And my people were just working class people. There were no books, no liter- old 1950s rock and roll and I played Bachtwo contrasts, because that is the story for ature in our house. They could read and write me. It's like a tragedy, only it is a tragedy of but they were hardworking Italiangangsters. Americans trying to stay away from "the mob" and make a decent living. Bob's father Have you ever been exposed to any Indian died in 1993-three months before my filmmakers other than Ray? father. He would visit his father in the hospiScorsese: Shyam Benegal. I was with him tal and then cross the street to visit my father. in China in 1983 or 1984. We did a symposium along with a number of other directors. Whom would you rate as the greatest filmSome of the Mrinal Sen films, and some new maker in the world of cinema? Scorsese: I like many types of films, so it's films also. difficult to say. But among Hollywood filmmakers I like Orson Welles and John Ford. Welles, because he made me understand what a director does. I could see the camera moves, I could see the angle, the surprise of the editing. But most of all I liked the way he told a story. The story wasn't straightforward. In America now the studios always say Act I, Act II, Act III of the script or the film. But I say: "Why do you want to do that? That's theater. This is film. A film is like music. It has to flow. There can be five sequences, there can be 25." I found that Welles didn't tell stories that way. He told a story visually. Ford told stories visually, too, but he is simple. The same thing with Ray: the poetry. It's just like John Ford. The characters in your films are always on the edge, or-to put it another way-you depict them in extreme situations. But at the same time you have made some of the beautiful documentaries on music like The Last Waltz and Woodstock (as coeditOl), and last year you produced a documentary on blues guitarist Eric Clapton. Scorsese: I was executive producer of the Clapton film and what I worked on there was to ensure that there weren't too many cuts in the music. I wanted to keep intact the power of his performance. What attracts you to rock music? How do

Adoor Gopalakrishnan? Scorsese: No, but I'd like to see some if! can get to watch them on video with subtitles. Have you seen any commercial Hindi movies? Scorsese: Yes, I watch the Indian news on Sunday morning at home in New York. I see cuts from Hindi movies. I don't understand. them because they don't have subtitles. But I do understand that cinema is a fantasy, the way Hollywood cinema was in the 1930s during the Depression when everyone wanted to see musicals.

When TV came to America it was predicted that it'll be the demise of cinema. But that didn ~happen. And now TV has come to India in a big way. You think it will have either a good or bad influence on Indian cinema? Scorsese: I think it'll certainly change the way films are made here. Because many of the films will be made directly for television. There's a danger it may hurt the cinematic quality, the way of telling a story in pictures. Because when you make a film for TVsome of them, of course, are brilliant-it's not being made for experiencing by a big audience. There's a danger in this, and that's what is happening in America. If you look at some of these films made in the past, many of them are very popular and are well-made films, excellently acted and well directed, but basically television films. A number of Americans are attempting to make real cinema-films-where they utilize the visual image or trying to tell a story with pictures. It's very dangerous because the budgets are getting higher and we've got to take less chances then. Brian De Palma, for example, is doing a mission impossible, going back to the TV show but which is really a big movie. I think he is one of the great directors, the way he tells a story visually. It's extraordinary. Coming back to Kundan, are you going to Âˇbe filming it here? Scorsese: I hope to, shooting up in the north in Ladakh or places like that. I hope to shoot some of it here anyway. That's the reason we're here. The movie is, of course, about the Dalai Lama. But is there a central theme to it? Scorsese: Well, it is the story of the boy. They find the boy at the age of three, and the film takes him all the way to the age of 17 or 18 when he escapes into India. And when he moves into India, he just says that one day he hopes to return to Tibet. That's the end. That's all. Basically, what we're trying to do is to show the personal story-the spiritual side-of the boy as he grows into a young man. A personal film. There would be some spectacles in the sense of ritual processions, things like that. But not the destruction of Lhasa. We don't have a big budget. Also, (Continued

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Gold Rush in Cyberspace Lured by the promise of big bucks, businesses are jostling for room on the Net, an expanding universe of networks that now spans 150 nations.

usinesses and entrepreneurs are rushing into cyberspace like those prospectors driven mad by the 1849 California gold fever. Just recently, the smell of money pervaded Boston's World Trade Center as 30,000 people representing multinationals, mÂˇom and pop shops, fortune hunters, saints and sinners spent four days wandering through Internet World's city-size landscape of exhibits, booths, and marquees touting avenues to riches on the Net. The attraction for business is obvious: For an investment of as little as $30 a month, almost anybody with a personal computer and a modem can set up a base of operations on the World Wide Web, a global network of computers that is part of the Internet. Web "pages" can be seen by millions of users on the Net, an expanding universe of networks that has doubled in size annually for a decade and now spans 150 nations. It's that huge body of potential consumers that has business scrambling to get onto the Web, to which 6.64 million computers are already hooked up. There are more than 100,000 Web sites already, and the number doubles every two-and-a-halfmonths. The popular Yahoo guide to the Web lists more than 23,540 companies. The Shopper, a Web directory, currently lists over 370 Internet shopping malls selling everything from peonies to pythons.

InsWeb, which launched itselfin late 1995 as "a consumercentric information and purchasing site," expects to list more than 50 insurance services by the end of 1996, possibly turning the often tedious and confusing purchase of auto and life insurance into a point-andclick experience. And a few months ago, Security First Network Bank became the first financial institution to offer full-service banking on the Net. It's no wonder that Vinton Cerf, a pioneer of the Internet, exults: "This is the year that business discovered the Internet." To many, this is the dawn ofa radical new commercial era in which a single medium combines elements that used to be conveyed separately: text, voice, video, graphics. Countless firms will be transformed in the process, including publishing, banking, retailing and deliverers of health care, insurance, and legal services. Predicts the newsletter ComputerLetter: "The Web will become the transparent fluid in which all of our personal, corporate, and public data are miraculously suspended." Still, a question nags: Is there a market for this commercial zeal? Answer: There is a fairly small one now and probably a large one to come in the next decade. But many things must happen technologically and creatively to draw more paying customers.

For starters, there is some encouraging news for sellers on the Web. In November 1995, a major survey by Nielsen Media Research (famed for its TV-market analysis) found that 24 million people in the United States and Canada used the Internet in the preceding three months-more than 18 million of whom used the Web. The survey, commissioned by CommerceNet, a consortium of more than 130 companies doing business on the Web, found that 37 million in North America have access to the N et-a figure three times higher than that measured in other surveys. Nearly two-thirds of Web users surveyed have a college education, and half are in professional and managerial occupations. Respondents spend about five-and-a-half hours a week using the Net for everything from E-mail to Web browsing. About a third are female-a number that surprised many who thought cyberspace was almost exclusively amale domain. Given the growth and increasing commercialism of the Web, it is easy to forget that the system was created only in 1989 to help scientists share information. (The Internet itself was set up in 1969.) Graphical browsers, software programs that help users mouse-click their way around the Web, were first developed in 1993, and the popularity of Nets cape Communications' Navigator browser caused an

explosion of activity in 1994. Overall, about 2.5 million North Americans have bought something via the Internet, says Tom Masotto of Commerce Net. As enticing as those findings are, though, there are major obstacles for firms trying to sell on the Web. First, most information on the Internet is already free, as is much software. Experienced Internauts, not used to paying for things they download, may be reluctant to pay as they go. Second, as spectacular as the Web technology is, it still has a considerable way to go to become attractive to the great numbers of consumers who are used to the amenities of mall and catalog culture. ommerce will begin in earnest on the Web when the computer becomes as easy to use as a telephone or a microwave oven. It can be daunting to boot (turn on) a computer, phone a helpline consultant to learn howto use the software, and seek help often to figure out how to negotiate cyberspace. The computer is evolving into an information appliance. But that day won't truly arrive until computers get easier to use and conveyors-telephone companies and cable television companies-hook up homes with high-speed data lines and end those annoying delays when folks try to download a picture or a sound bite from a Web site. Third, consumers have to feel a lot safer transacting business on the Web than they do now. The Internet was never built to be a tight ship, yet it is already as secure as many of the services people use daily and probably more secure than telephones and faxes. "Even the banking systems are penetrated, but we don't stop using banks," says David Farber, professor of telecommunications at the University of Pennsylvania. Still, Internet security could be vastly improved if the governme~t loosened its hermetic controls over civilian uses of powerful cryptography, which could be used to encrypt credit card and other vital sales information. But experts like Robert Seidman, publisher of Seidman s Online Insider, warn that consumers should not be fooled into thinking that electronic commerce will ever achieve total security, an impossibility whenever computers are involved. Fourth, even if transactions become more secure, there are many other unresolved privacy implications of the Web that might bother many consumers. "Companies can already track trails of ' mouse droppings' over the Internet, finding out which Web sites you go to and for how long," says Larry Irving, head of the National Telecommunications and Information Administration. He has recommended that all communications providers, including broadcasters, cable TV companies, telephone companies, wireless operators, and those who provide Internet services, voluntarily "inform their customers about what information they intend to collect and how it will be used." There is no law, says Irving, that stops providers from gathering information that identifies "a person's entertainment-viewing habits, telephone-calling patterns, shopping preferences, and even voting behavior." Still, overcoming these concerns is only the beginning of the challenge to entice consumers. The other ingredients of doing business on the Web: â&#x20AC;˘ Understand the medium. Conducting business on the Web, a phenomenon with no parallel in communications history, will demand new strategies in advertising and marketing. Unlike broadcasting and print, which are one-to-many entities with a passive audience, the Internet is a

many-to-many medium in which everyone with a computer and modem is a potential publisher. Web surfers, for example, tend to be selfdirected. They typically have little patience for "brochureware," advertisements that are thrown up Iike so many bill boards. The Web gives commerce a unique opportunity to communicate directly with employees and customers around the world. "The Web can be a powerful tool for fostering connections, building associations, delivering information, and creating online communities," says John December, coauthor of The World Wide Web Unleashed. "These activities are much more subtle than home shopping." The Web levels the playing field, so that small businesses and entrepreneurs can battle bigger foes on a more evenhanded basis. Advertising on major media like TV involves major cash. But establishing a Web site is inexpensive, and a site is relatively easy to update daily. It has been a cheap, effective marketing mechanism for the likes of Jeff Smith, guitarist for a suburban Washington, D.C., pop band, who uses his Web site to play song samples and offer the band's CDs through the mail. The downside is that attracting people to your site relies largely on word of mouth. If you build it, they might not come. â&#x20AC;˘ Make it interactive. The best way to lure people back for repeat visits to Web sites is to make them dynamic and intellectually challenging. For instance, the Nando Times, an electronic newspaper created by the News and Observer Publishing Co., updates its content every five minutes. Donna Hoffman, an Internet marketing expert at Vanderbilt's Owen Graduate School of Management's Project 2000, says the best sites are those that invite playfulness, inducing what psychologist Mihaly Csikszentmihalyi has dubbed a "flow" state, totally absorbing the user's time and attention. Flow is akin to the reverie experienced when playing chess, for example, or while focusing on the challenge of rock cl imbing. Some sites jump out as exceptional examples of how different the Web is from old consumer models. At CDnow, a Penllyn, Pennsylvania, business founded in 1994 by 26-year-old twins Jason and Matthew Olim, customers can order from a catalog of over 165,000 compact disks, cassettes, vinyl records, and music videos or plunge into 300,000 reviews from the well-respected All-Music Guide and 12,000 artists' biographies. A powerful program built into the site allows a search for recordings by artist, title, and key words. The program also tells about an artist's musical influences and lists other performers in the same genre. Each name is "hot linked," so a mouse click connects the customer to even more information. CDnow's seemingly endless layers of subdirectories make it easy and fun to get lost in a world of information, education, and entertainment-precise~y the ingredients crucial for inducing flow. Another surprisingly popular site is the Federal Express page. Customers can track their FedEx shipments traveling through the system by typing in the package receipt number. Although tracking a parcel sounds like geeky fun at best, FedEx exerts a curious pull precisely because it is free, utilitarian, dynamic in a gamelike way, and consumer self-directed. It is also a lifesaver for someone worried about a package gone astray. In September 1995, 168,000 customers tracked packages on the site, whose activity increases by about 30 percent monthly, says Federal Express Electronic Commerce Marketing Manager Robert Hamilton. The Web, says Hamilton, is

GLOSSARY Many people feel daunted about cruising the Net, in part because of all the techie terms in cyberspace. Here are answers to the most-asked questions; highlighted words are in the glossary. 1. What is the Internet? The Internet is a global network of computers linked by high-speed data lines and wireless systems. Established in 1969 as a military communications system, it now allows individuals to link with corporations, educational institutions, and other groups. 2. What is the World Wide Web? The Web is a hypermedia information storage system linking resources around the world. Browsers allow highlighted words or icons, called hyperlinks, to display text, video, graphics, and sound on a local computer screen, no matter where the resource is actually located. 3. Who uses the Web? The Web has grown because its point-and-click interface is easy to use. Many millions use it; more than 100,000 businesses and individuals have Web sites, or home pages. Users can span the world with a few clicks after making a local phone call. 4. How do you get on the Web? Online services like America Online, CompuServe, NETCOM, the Microsoft Network, Prodigy, and others offer users the easiest way to get onto the Web with almost any computer and modem. 5. What does the future hold? In time, everything from home appliances to automobiles could be linked to the Net. As it grows, so will applications such as telemedicine, in which rural doctors will share diagnostic tools like MRls with specialists around the world. Or a car mig'ht plug into a network in which engineers at a manufacturing plant could comment on the car's condition. Perhaps refrigerators will report to grocery store computers that they are running low on supplies and requires a home delivery-billed to the customer's account.

BROWSER.A program that allows users to access the Web with the click of a mouse. Graphicalbrowserssuch asNCSA'sMosaic and Netscape's Navigator enable consumersto bypass plaintext for slick sounds and graphics.

on a Web page that, when clicked on by a mouse, can connectthe userto a new location.lfthe word Mars was a hyperlink,for example, clicking on it would cause an image of Mars,an article about the planet, or both to appearon screen.

DOMAIN NAME. A method of identifying computer addresses. In the White House's E-mail address (president@whitehouse. gov), "gov" stands for government,and it's the domain. Other top-level domains include educational institutions (.edu), companies (.com), networks (.net), and organizations(.org).

HYPERMEDIA.Sometimes called multimedia, this describes the Web's integration of audio,video, graphics, andtext.

E-MAIL.Shortfor ..electronicmail•..it.slike a letter: a messagethat one person can send to-and have received almost instantaneously by-others anywhere in the world via computersand modems. HOMEPAGE.A Web screen that acts as a starting point. A user can go from a home page's hyperlinks to multiple sites across the world's computernetworks. HTTP. Hypertext transport protocol is the Internet standard that enables information to be distributed across the Web. HTIP allows programmers to embed hyperlinks (using HTML, or hypertext markup language)in documents. HYPERLINK.A highlighted word or image

"one ofthe best customer relatjonship tools ever." •

Try new marketing

MODEM.A devicethat connects computers to one anothervia a phone line. NEWBIE.A neophyte incyberspace. TCP/IP. Transmission control protocol/ Internetprotocol is a universalstandardthat allows different operating systems like Macintosh, Windows, UNIX, and others to talkto one another. URL. A universalresource[ocateris a computer address that identifies the location and type of resources on the Web. Broken down, for example, the URL http://www. usnews.com/repub/gingrich.html indicatesa Webdocument (http://) onacomputeratU.S. News (www.usnews.com) with a file (repub) on Republicans that contains a document concerningNewtGingrich(gingrich.htm~.

Sun has also developed an "intranet"-that

strategies. The Web is still so mysterious as

a sales medium that some entrepreneurs are thinking

KILLERAPP.A popular term that describes applications, like Web browsers,that attract people because they're effective and easy touse.

about giving

the company uses to communicate relying

is, a Web site that

with its employees.

on the haphazard distribution

of electronic

Instead of

memos, em-

away free Internet access and browsers to lure people onto it. "Once I

ployees can visit their company's

can get people to my home page," says one businessman, "then I'll figure out what to do with them." And, presumably, what to sell them. Recently, AT&T announced that it was giving away that free access

to search through archived information about company projects, personnel matters, and policies. This can be a boon forthe growing ranks of telecommuters.

to 110,000 schools-a

Eventually, the Internet could replace or supplement everything from television to telephones. Intel Corp. has announced the

$150 million

grant that officials

say will pay

offin later years when those kids become paying consumers of in formation services. • Use it in-house.

development Businesses that think

only about making

money, however, may be missing one of the Web's uses: saving money. [t can streamline an organization's information distribution

ofIntercast,

Web pages at their convenience

which will link the Internet and televi-

sion to personal computers. Consumers could be using their computers to view Web pages combined with television by late 1996.

to customers and workers. Sun Microsystems, which operates a Web-

"PC sales are exploding, and sooner or later, just about all those users are going to wind up on the Internet. What other marketing

based program called SunSolve, says it saves $250,000 every three months just by eliminating toll-free calls. Customers log directly

medium offers that kind of potential growth?" says Richard Notebaert, chief executive officer of Ameritech. The message for

onto Sun's Web site for current information, documentation, and software updates, says Sun spokesman George Paolini. Sun also uses

businesspeople contemplating their place in cyberspace is simple and direct: Get linked or get lost. 0

the Internet to distribute Java, its new software program, a further savings of$50,000 per month over what it would have cost to distribute the program on CD-ROMs.

About the Authors: Vic Sussman is a senior editor and Kenan Pollack is a reporter-researcher with U.S. News & World Report.

Cashing in on the Internet F

Steve Case, chiefof America Online

"We want to lead the charge into the Internet access market, not be lost in the rush."

William Schrader, head of Performance

Systems International

"Companies that are willing to become engaged [on the Web] should find big opportunities."

ormany companies, the explosive popularity of tl\e Internet frightens even as it attracts. History shows that revolutionary technologies-television and the personal computer, to take two recent examples-not only spark entire new industries, they also can topple seemingly entrenched enterprises. "There's not a business in the world that shouldn't feel threatened by the Internet," says William Schrader, head of Performance Systems International (PSI), a leading supplier of Internet services to businesses and consumers. "But companies that are willing to become engaged should also find big opportunities." It's too early in the game to know who the winners and the losers will be. "The whole World Wide Web is still operating on training wheels," notes Michael Parekh, who scopes out Internet investment plays for Goldman Sachs, the Wall Street brokerage. But this cornucopia of globally linked computers has been catching on so quickly and developing so rapidly, he is convinced that it is already well on its way to becoming "a highly personalized, combination multimedia printing press, mailbox, and telephone for consumers and business." Some trends are already discernible. "Most

Gerald Taylor, president of Mel

"We will offer a range of products and services ... down to providing individuals with their own Web site ifthey want. Jl

Building the Web is good/or business of the real profits now are going to manufacturers because the Internet's infrastructure is being built so much faster than anyone had predicted," observes Mark Cordover, a Washington, D.C., investment banker specializing in information technology. • Essential components. Cashing in already are firms producing the hardware that makes the Internet work. For example, the demand for Cascade Communications' high-speed switches that route data around the Web is so strong that the company's . earnings and revenues tripled last year. Meanwhile, its stock is up 170 percent. The ascent of Ascend, which produces sophisticated communications add-ons for computers, is even more spectacular: The company's stock has had a sevenfold increase in 1995 to $67 a share. Heretofore unglamorous Sun Microsystems has also seen sales boom for its Internet "servers," essential computers used to store and transmit information. The stock has climbed 160 percent. • Navigation aids. Shares of companies exploiting the Net have been hot, and among the hottest are those for firms that help users find their way around. Netscape Communications' browser-software for navigating the Web-has become the Internet's first brand name. Netscape stock, which attracted worldwide demand when it went public in August 1995 at $28 a share, was up 10 percent for the week as it closed in on the $100 spare price of archrival Microsoft. The total market value of Netscape stock is now an astonishing $3.8 billion. • Microsoft. The world's dominant software company, whose operating systems run 85 percent of personal computers, is taking a different approach to the Web. Microsoft's latest system, Windows 95, provides easy access to Microsoft's new online service, which liberally exploits the Web. In effect, Microsoft wants to steer consumers through its doorto getto the Web while paying for the privilege. But that's also true of other commercial services like America Online and CompuServe. AOL, with 3.5 million subscribers, is now the most popular way to get on the Web. AOL recently launched another pay service, called GNN (Global Network Navigator), aimed at helping experienced Web users cruise around. "We want to lead the charge into the Internet access market, not be lost in the rush," says AOL chief Steve Case. • Access provid~rs. Firms like UUNET and PSI, which primarily connect people to the Web, are themselves fast-growing companies that are also investing heavily in building the Internet's infrastructure. The bulk of their future profits could come from business customers who want to use the Internet as a kind of private phone, fax, and video-conferencing system. PSI's Schrader says that while only about one percent of the

world's companies are on the Web, those firms already account for 90 percent of the data that travel it. If business fully embraces the Internet, the growth potential is colossal. PSI and UUNET are considering creating secure private communications systems for companies over the Internet. They would offer lower-cost versions ofthe expensive global dedicated networks available from AT &1' and MCI. Butdon 'tcountthe phone companies out. The next big step in the Internet revolution could be the introduction of affordable high-speed telephone service, which will not only cut the time it takes to navigate the Web but also enhance audio and video features. MCI, for one, is preparing to offer such a service soon. The entrepreneurial telecommunications company is also creating a portfolio of Internet-related businesses. In combination with Rupert Murdoch's News Corp., MCI has already started a Web-based online service. "Whereas we used to simply transport voice and data from point A to point S, we will offer a range of products and services that combine high-speed delivery with content, down to providing individuals with their own Web site if they want," says MCI President Gerald Taylor. The high-tlyingprospects of companies that are helping create the Net are not yet shared by firms trying to sell things there. "Despite the large number of people on the Internet, its economic activity is nascent," a report from Forrester Research declares. Revenues generated by Web-related firms this year will be around $700 million, with an additional $1.5 billion paid to commercial services. But within five years, Web-related revenues will top $45 billion, the Cambridge, Massachusetts, firm estimates. The money will come from spending on the Web's infrastructure, charges for access and online services, advertisers paying to reach the highincome consumers who browse the Web, and direct sales. Forrester also predicts consumers will manage about $30 billion of mutual fund money and $16 billion in savings deposits online. The Internet may pose the biggest moneymaking challenge for news organizations, publishers, and other content providers who try to profit in an arena where information is ubiquitous. "It's easier to compete on context rather than content," observes Harvard Business School Assistant Professor Jeffrey Rayport. "Large publishers underestimate the desire of people to simply congregate and socialize in cyberspace, which is one of the attractions of AOL." In an information age, simply providing information 0 may not be enough. About the Authon: Jack Egan is an assistant managing editor and Kenan Pollack is a reporter-researcher with U.S. News & World Report.

BILL GATE

PAU

ALLEN

li&ILl[ The multibillionaire cofounders of Micros oft perhaps personify the ultimate buddy act in business history. Late last year they satfor an entire afternoon to tell Brent Schlender, Fortune's senior editor, their story and speculate about thefuture of personal computing and telecommunications. SPAN reprints their conversation. They're just a couple of slightly geeky middle-aged guys sitting on a patio overlooking Seattle s Lake Washington on a balmy Sunday afternoon. Jet skis and speedboats drone like cicadas as the old pals reminisce, chuckling over escapades from their adolescence. The skinny one, age 39, tells what it was like to incorporate their first company while still students at a prestigious Seattle private school. The burly bearded one, who is the son of librarians and has a demeanor to match, marvels at how much pizza they ate. They may have been teenage computer prodigies, but flamboyant and rebellious they were not. They're so nonchalant as they sip their Cokes that it s hard to believe, even though you know exactly who they are-that this pair had the will and drive to create more wealth than any business partners in the histOfY of American capitalism, or that they are, today, the undisputed masters of the digital universe. But then, this isn't the way Microsoft founders Bill Gates and Paul Allen usually spend their Sunday afternoons. More likely, Gates would be hunched infront of a screen, scrutinizing the latest computer code from one of Microsoft s dozens of development teams, or making notes for a public appearance somewhere in the world to promote personal computing, Windows-style. (Besides, Gates s idea of relaxation is to race his wife, fellow Microsoftie Melinda French, at identicaljigsaw puzzles.)

Allen, 42, who left the hurly-burly of Microsoft in 1983 after an illness, is a little more laid back. But not much: He juggles investments in more than two dozen high-tech companies and runs a pro basketball team and four charitable foundations. if he had a couple of free hours, he might crank up his Stratocaster guitar to jam with his rock band, The Threads, in his recording studio in downtown Seattle. It was for a special reason that the buddy billionaires-at last count, Gates s 25 percent stake in Microsoft was worth $13.4 billion and Allen s 9.6 percent was worth $5.3 billion-invited Fortune magazine to sit in on a three-hour chat. The reason was to commemorate the 20th anniversary of Microsoft founding in' October 1975, and the worlds most notorious college dropouts wanted to mark the occasion with a wide-ranging bull session. The meeting at Paul Allen s rambling estate was a one-of-akind encounter between fellows so fixated on the fi/ture that they'd really rather not look in the rearview mirror, even for a minute. Once they got rolling, they described both the inside history of a company that has become an American entrepreneurial icon, and the symbiotic relationship of two brilliant friends with similar professional interests and dramatically different personalities, whose diverging paths are already the stuff of business legend.

BILL GATES: Our friendship started after the mothers' club paid to put a computer terminal in the school in 1968. The notion was that, of course, the teachers would figure out this computer thing and then teach it to the students. But that didn't happen. It was the other way around. There was a group of students who kind of went nuts. PAUL ALLEN: The teletype room was full of rolled-up paper-tape programs and manuals and everything else. Between classes, or whenever any of us hard-core computer types had a spare period, we would congregate there. GATES: It was easy to spend a lot of money on computer time. One of the smarter teachers accidentally created an infinite loop and spent something like $60 in one shot. He was so shocked that he didn't want to go near the thing after that. We ran through the mothers' club money pretty fast. ALLEN: When that happened, the computer service would bill the school, and then the school would charge us or our parents. It wasn't always easy to tell your parents how much you had racked up, so we paid it ourselves when we could. GATES: At the end of the year, Paul massively overdrew his checking account. On graduation day he was with his mother, and the school officials came up and said before he could get his diploma they would have to pay $200 for all this excess computer time. We were always scrounging for free computer time. One year a student's mother arranged for us to go downtown to a new, commercial computer center. We didn't have to pay for the time as long as we could find bugs in their system and report them. They brought us in like monkeys, but it was a godsend. ALLEN: At the end of every school day, a bunch of us would take our little leather satchel briefcases and ride the bus downtown to the computer center. Bill and I were the guys that stayed the latest, and afterward we'd go eat pizza at this hippie place across the street. GATES: Some of the professional programmers who worked at the center hated us and would shut us out. But there were guys who actually liked us. One was this supernice guy who would give us the manuals. Another guy was kind of quiet, but if we bugged him,

he would answer questions. Paul and I always wanted to understand machine code [the fundamental level of programming on a machine]. We were confused about the difference between various operations. ALLEN: That's because they'd parcel out the manuals and only give us one at a time. It was like a game with them. They'd give us the manual for the assembler and not the manual for the operating system or the manual for the instruction set. Then they'd wait to see how long it took us to figure out that we only had part of the picture. And then we'd come back and ask for the next manual. GATES: Paul and I got bonded together trying to figure out thatmachine. ALLEN: The computer center was having financial problems, though. It's where we first learned about bankruptcy. Bill and I were working on our programs one day when somebody came to repossess the furniture. They took the chairs out from underneath us. GATES: Yeah, and we were still typing away, trying to save our programs on these little tapes before all the lights were turned off.

GATES: The event that started everything for us businesswise was when Paul found an article in 1971 in an electronics magazine, on page 73 or something, about Intel's 4004 chip, which was the world's first microprocessor. Paul comes up and says, "Whoa," and explains that this microprocessor thing's only going to get better and better. Sure enough, a year later Intel came out with the 8008 and it was lots better. ALLEN: That's when it hit us how Moore's Law really worked-that each generation of microprocessor chip was basically twice as fast as the previous one and that they got cheaper too. So Bill and I went out and bought our own 8008 for 360 bucks. The chip was all wrapped up in aluminum foil, and we were almost afraid to touch it. GATES: We thought we could use the 8008 as the heart of a special computer to do traffic-volume-count analysis. We were going to make the machines and sell them to traffic departments. So we set up our first company, which we called Traf-O-Data. ALLEN: Even though Traf-O-Data

wasn't a roaring success, it was seminal in preparing us to make Microsoft's first product a couple of years later. We taught ourselves to simulate how microprocessors work using DEC [Digital Equipment Corporation] computers, so we could develop software even before our machine was built. We were always interested in business. We'd go over to Bill's house and read Fortune and other business magazines his parents got. Bill would say, "Gee, what does it mean to be No.1 in the FORTUNE 500? Can you imagine what a company that size does? What do all those statistics really mean?" We talked about being entrepreneurs. Obviously it was on a smaller scale because we were kids. Microprocessors were instantly attractive to us because you could build something for a fraction of the cost of conventional electronics. That's essentially what we did with the Traf-O-Data computer-only it was too narrow and challenging an area to try to build a service business in. GATES: I remember, from the very beginning, we wondered, "What would it mean for DEC once microcomputers were powerful and cheap enough? What would it mean for IBM?" To us it seemed that they were screwed. We thought maybe they'd even be screwed tomorrow. We were saying, "God, how come these guys aren't stunned? How come they're not just amazed and scared?" By the time we got to Albuquerque to start Microsoft in 1975, the notion was fairly clear to us that computers were going to be a big, big personal tool. ALLEN: I remember having pizza at Shakey's in Vancouver, Washington, in 1973, and talking about the fact that eventually everyone is going to be online and' have access to newspapers and stuff and wouldn't people be willing to pay for information on a computer terminal. GATES: Yeah, we were also fascinated by dedicated word processors from Wang, because we believed that general-purpose machines could do that just as well. That's why, when it came time to design the keyboard for the IBM PC, we put the funny Wang character set into the machine~you know, smiley faces and boxes and triangles and stuff. We were thinking we'd like

to do a clone of Wang word-processing software someday. Most personal computers back then didn't even have upper- and lower-case chÂˇaracters.

In summer 1973 thefriends landed their first real jobs, helping TRW in Vancouver, Washington, use minicomputers to manage and distribute power from hydroelectric dams. Allen, who was getting bored at Washington State University, wanted to drop everything and start a company, but Gates 50 parents pushed Bill, who hadjust graduatedfrom high school, to enroll at Harvard. A year later Gates persuaded Allen to move to the Boston area to take a programming job with Honeywell. That winter Allen ran across a magazine article that would change their lives and, ultimately, just about everybody else s: a cover story in Popular Electronics describingthe MITS Altair 8800, ,.World s First Minicomputer Kit to Rival Commercial Models. " Within weeks Gates and Allen convinced each other this was their big chance. The Altair was practically useless to hobbyists without an easy programming language. In designing the Traf-O-Data machine, the two had written a version of BASIC-a popular and compact language that, with afew tweaks, might work on the Altail: In weeks they cobbled together a version for the MITS machine,finishing it up on the plane, and by April 1975 had persuaded MITS to sell it. MITS offered Allen a job and provided the two with office space ill its ramshackle headquarters ill all Albuquerque strip mall. Soon after, Microsoft was borll. GATES: Whenwe signed that first contract with MITS, we referred to ourselves as "Paul Allen and Bill Gates doing business as Micro-Soft." I don't remember why we spelled it with a hyphen and a capital "S." We put a credit line in the source code of our first product that said, "Micro-Soft BASIC: Bill Gates wrote a lot of stuff; Paul Allen wrote some other stuff." We never offi-

cially incorporated until 1981. ALLEN: We had talked about a lot of different names back in Boston, and at some point I said, "Well, the totally obvious name would be Microsoft." GATES: We also had mentioned names like Outcorporated Inc. and Unlimited Ltd., but we were, you know, joking around. We talked a lot about whether we should call it Allen & Gates, but decided that was not a good idea. ALLEN: Yeah. Because companies like DEC and IBM weren't named after personalities, they would have a longevity and identity way beyond the founders ... GATES: ...and it seemed like a law firm or like a consulting company to call it Allen & Gates. So we picked Microsoft even before we had a company to name. ALLEN: The building where we first worked in Albuquerque was pretty low rent. GATES: Next door was a vacuumcleaner place, then a massage parlor. To get to our offices, you had to walk past the vacuum-cleaner guy. We stayed in this motel down the road called the Sand and Sage. We're talking real sage, not some hypothetical thing. Every morning all the cars in the parking lot had all this sagebrush and tumbleweed that blew underneath them. ALLEN: Our management style was a little loose in the beginning. We both took part in every decision, and it's hard to remember who did what. If there was a difference between our roles, I was probably the one always pushing a little bit in terms of new technology and new products, and Bill was more interested in doing negotiations and contracts and business deals. GATES: We learned a lot of things as we went: Okay, we have to hire people; so what do we do? Okay, we're going to rent space; how do we do that? Okay, we're going to do contracts with people now; I'd get advice from my dad [a prominent Seattle attorney]. Paul and I would talk through every decision, for six or eight hours sometimes. We didn't have many major disagreements, but there was one tiny source of tension: I would always be calling Paul in the morning to tell him it was time to come work on this stuff. He slept even later than me. ALLEN: We used to work really late into the night. You used to sleep under your desk.

GATES: Yeah, life for us was working and maybe going to a movie and then working some more. Sometimes customers would come in, and we were so tired we'd fall asleep in front of them. Or at an internal meeting I'd lie down on the floor, because I like to do that to brainstorm. And then I'd just fall asleep.

GATES: Our basic business strategy was to charge a price so low that microcomputer makers couldn't do the software internally for that cheap. One of the bigger early contracts was Texas Instruments, where we bid $99,000 to provide programming languages for a home computer they were planning. We picked that price because we were too shy to make a bid in the six figures. Afterward we realized they would have paid a lot more, and we thought, "I guess this is what the big shots do: They bid big numbers." ALLEN: We would almost always overestimate our competitors' ability to compete. GATES: Or we'd assume that they were going to execute competently. ALLEN: There were so many times when I'd find an article about a competing product and we'd get depressed for three days. Then we'd find out it wasn't as good as ours ... GATES: ...or didn't even exist. We were in such a flaky business. Our biggest problem was that we talked about so many different ideas, but we never really added up all the people we'd need. When we started sellingto Japanese companies, we were so overpromised it was ridiculous. Ricoh licensed every language we had and paid us $180,000 up-front, which was incredible. And then they came back a few months later and said: "Okay, we have another budget this year, so we'd like to buy some more." Well, we'd already sold them everything we had. So we asked, "What can we develop for you?" We agreed to do our first database, a word processor, and a couple of other things. Then we had to figure out how we were going to deliver them, and had to go buy some of them from somebody else. ALLEN: We were so late that Ricoh finally flew a guy over whose whole job was to sit in our office day and night until we de-

livered. He couldn't help out at all; he was just there to sit and explain to us that his career was going to be over if we didn't get this work done soon. I don't know if that was really true or not... GATES: It could get scary. In our very first contract with MlTS, we set them up to sell our BASIC to their customers, rather than us selling to computer buyers directly. We thought it was a good deal because they agreed to make "best efforts" to sell it. But later they decided not to sell to anybody at all because there were so many illegal, free copies of our BASIC floating around, so why try to charge people for it? That really made us mad because we thought it encouraged piracy. We eventually went into arbitration to determine if they were in compliance with the contract. In the meantime we were totally out of money . ALLEN: because MITS was withholding payments from us while the arbitration was going on. GATES: They were trying to starve us to death. We couldn't even pay our lawyer. They tried to get us to settle, and we almost did, it was that bad. The arbitrator took nine months to issue his damn opinion. But when it was all over, the arbitrator ripped them apart for what they had done. ALLEN: That case really, really scared us. [fwe had lost, we would have had to start over. Bill would call up his dad for advice. We were on pins and needles the whole time. GATES: But, you know, through it all, we never borrowed money. I always felt like if we had to, we could have. But we never did.

By the end of 1978, a wave of impressive personal computers, including Apple Computer s landmark Apple Il, had left MITS in the dust. There was no longer any reason for Microsoft-now a dozen employees strong-to hang around Albuquerque. On January 1, 1979, Gates and A llen transplanted the business to the lush and soggy Seattle suburb of Bellevue, where it took root. Within a year the head count had swelled to more than 35 people, and Gates and Allen hired their first professional manager-Gates sold

Harvard buddy, a Procter & Gamble marketing man named Steve Ballma (They lured Ballmer with a stake in Microsoft. He now owns five percent worth $2.7 billion.) Ballmer sarrival marked a turning point. "We knew we had to systematize things, " Gates recalls. "Once we had more than 30 people, it was impossiblefor Paul alld me to review or be involved with every line of code we produced." To this day, based on that early insight, Microsoft often limits work teams to 35 people. But 1980 will be remembered for another series of events. It was the year IBM came to call, looking for programming languages for its secret PC project; also the year Paul Allen negotiated the purchase of an obscure operating system called Q-DOS from a nearby company, Seattle Computer. In a transaction that could well be called the deal of the decade, Gates and Allen would turn around and license Q-DOS to IBM, thus opening the way for Microsoft s domination of the PC software industry. GATES: When IBM came to us in 1980, we thought they were just talking about buying our BASIC for their new PC project. The two guys who came said, "We're just the planning guys, and most of the thingsÂˇ we plan don't get done, so don't get too excited." But then we had this really cool discussion about where the technology was going, and how personal computers were about to make a great leap forward. Then they said they'd also like to buy our FORTRAN and COBOL languages, and maybe even more from us. ALLEN: It was like they were bringing up a menu and checking off "all of the above." GATES: So we had this meeting between Paul, Steve Ballmer, me, and Kay Nishi, our partner in Japan. It seemed just like Ricoh all over again. We had told IBM, "Okay, you can have everything we make," even though we hadn't even made it yet. This was one of those marathon meetings. The question was: Should we also commit to doing an operating system for IBM? It was unusual because I was the one being a tiny bit conservative. Nishi was actually the one saying, "Got to do it, got to do it."

ALLEN: Nishi was egging us on because he knew I had been dealing with Seattle Computer and that I thought we could probablymaketheirQ-DOS work for IBM. GATES: We also knew Digital Research [maker of CP/M, the then-dominantoperating system for personal computers] wasn't taking IBM seriously enough. So we decided, Why not? It got kind of tense, because there was about a 48-hour period after Ballmer and I had officially offered to license Q-DOS to IBM that we didn't really own it. Paul hadn't yet closed the deal with Seattle Computer, and I was really giving him a really hard time. ALLEN: We were afraid they were going to find out the reason we wanted to buy it was because IBM was our primary customer. If they found that out, the price for Q-DOS would go way up. [Microsoft succeeded in buying the software for only $50,000.] GATES: See, the contract with IBM called for us to do all this work on the design of the machine and all this software. We didn't get paid that much-the total was something like $186,000-but we knew there were going to be clones of the IBM Pc. We structured that original contract to allow them. It was a key point in our negotiations. ALLEN: We already had seen the clone phenomenon in the MITS Altair days. Other companies made machines that succeeded because they were very similar to the Altair. For us it had been easy to modify our software so it worked on those machines too. GATES: It seemed like a really great opportunity. IBM was talking about having Sears and ComputerLand sell their machines. They'd been talking with Intel about getting a really good price on the microprocessor. IBM was so hard-core about it, we knew their PC might even ... ALLEN: ... leapfrog the Apple II, which was the coolest computer at the time. GATES: We worked day and night with this IBM machine in a back room. There were a lot of ups and downs. The one tiff Paul and I had was when he wanted to go see a space shuttle launch and I didn't, because we were late. Still, these guys went to the launch and I was just ... ALLEN: It was the first one, Bill. And

we flew back the same day. We weren't gone even 36 hours. GATES: Anyway, by the end, Paul and I decided every stupid little thing about the PC: the Leyboard layout, how the cassette port worked, how the sound port worked, how the graphics port worked. Between us and a few IBM engineers, we did all that stuff. We felt very intimately involved. The weirdest thing of all, though, was when we asked to come to the big official launch of the PC in New York, IBM denied us. About four days later we got this form letter that IBM probably sent to every vendor, even the guy who had the capacitors in the machine. It said something like "Dear vendor, thank you for your help, blah, blah, blah." They eventually apologized to us for that.

It s hard to believe now, but the acceptance of Microsoft s DOS as the operating system for the IBM PC lVasn 't a foregone conclusion when the machine was introduced in 1981. IBM also offered a version of the CP/M operating system. Produced by Digital Research of Monterey, California, CP/M had the advantage of being established on other brands of personal computa Or was that an advantage? Initially, since IBM was Microsoft:S· only operating system customel; Gates and Allen went all-out to make DOS the operating system of choice, urging other software companies to write applications jar DOS jirst and otherwise promoting and cajoling. Within a year the battle was over, DOS ruled the marketfor the IBM PC, and the first of what would become a tsunami of PC clones were trickling into the marketplace. Gates and Allen turned their attention to the nascent PC market in Europe, hoping to repeat the feat. Then the unthinkable happened.

u.s.

ALLEN: We were on a trip promoting some Microsoft products in Europe in 1982, and I had this little bump on my neck. I'd had little bumps before that weren't anything.

But I kept feeling stranger and stranger. Then one day in Paris, I just felt really bad and decided I had to go back to the States. The doctor here in Seattle put me in the hospital that night. At first they told me that it looked like I had lymphoma-an often incurable cancer-and they were really glum. But after the biopsy the doctors came in smiling and said, "You've got Hodgkin's disease and you're going to be fine," which was a little hard to believe, since they also said I was going to need about two-and-ahalfmonths of radiation therapy. During my treatment I tried to continue working at Microsoft. Not full-time, but I'd drop in at meetings and so forth. It was hard because cancer therapy takes a lot out of you. But it was more than that. To be 30 years old and have that kind of shock-to face your mortality-really makes you feel like you should do some of the things that you haven't done. With Hodgkin's disease or any cancer like it, there's basically a twoyear window: If you can pass that period without a relapse, then it's probably not going to come back. GATES: It was terrible when Paul got sick. Nobody talked about work or anything; it was just a matter of wondering, Was Paul going to be okay? We had always worked so closely together-I mean, you know, planned stuff together, strategized together. That's why it's always hard when people ask who did what. So it was a real change for me and a huge disappointment that Paul wasn't there. It was really sad to go by his office, because all the memos and magazines would be stacked in there. ALLEN: I took that time to step away from Microsoft and be closer to my family, and do some traveling and other things I'd always wanted to do. After that two-year period, well, 1j Listdidn't want to go back to work. I went to Bill and said, "I want to just do something different." I know Bill wished I hadn't decided that. GATES: It was great that Paul got better, and we wanted him back more than anything. But there wasjust no part-time way to come back to Microsoft. If you were going to be there, you were really going to work hard. We all knew that. It's still that way. ALLEN: After that experience I wasjust in a different place.

"Get a life." That:~ the derisive expression often hurled at computer jocks and other obsessive workers. Jt s also a pretty good summation of what Paul Allen has tried ·to do since recovering from as his old pal Hodgkin s disease-even continues to eat, drink, and sleep Microsoft· Having a $6 billion nest egg helps. Such unimaginable wealth may not buy happiness, but it has allowed Allen to amass collections of authentic Roman statuary and oil paintings by French impressionist masters; to build a massive estate on the shore of Seattle sLake Washington complete with three houses, a full-size gym, an indoor pool and waterslide, and more garages than most people have kitchen cabinets. He owns the National Basketball Association s Portland Trail Blazers and is building them a $262 million sports and entertainment complex called the Rose Quartet: He owns a jet, so he can take friends to a game and have them back in Seattle by bedtime. He a good guy too. His charities dispensed more than $6 million in 1995 to support libraries, hospitals, AIDS programs, prostate cancer research, and cultural programs including the Oregon Shakespeare Festival. An avid guitarist. he is the main benefactor of the Experience Music Project, a planned museum dedicated to the late Seattle rock great Jimi Hendrix and other Pacific Northwest musicians. Then theres business. Allen was an early investor in America Online. He owns 80 percent of TicketMastel; the national computerized ticketing service; six percent of an animal-supply retailer called Petsmart; a piece of a children s educational-products retail chain called Zany Brainy. With Gates he has invested in Darwin Molecular, a genetics research start-up. Not surprisingly, though, the bulk of Allen s investments involve software. He has positions in nearly 20 high-tech companies engaged in multimedia CDROMs and software tools, satellite

broadcasting, online financial and sportsdata services, TV programming, wireless paging and ·telephony, and electronic commerce. Last year he doled out $500 million for an 18 percent stake in Hollywood's newest studio, Dream Works. And, of course, Allen remains a director of Microsoft· Although he claims not to pay much attention to day-to-day affairs, you can tell his buddy Bill still listens when Allen talks about what lies over the technological horizon and the strategies behind his investments. ALLEN: For years now, I've been interested in the information superhighway or whatever you want to call it. The approach I've chosen is to start companies or make strategic investments in companies I think are positioned to take advantage of that huge opportunity. I try to add value as an investor by building synergy between those companies. Some have no immediate commercial potential, but others are solid businesses in conventional markets: TicketMaster is a consumer service business that sold 55 million tickets in 1994, and there are ways to broaden the service and deliver it on the Internet. Bill and I are investors in biotechnology too, and I have other investments for fun like Petsmart and the sports team stuff. But most of them are software related. The incredible thing about the software business is, you can create something compelling and exciting out of thin air. GATES: Paul has gone his own way, but we still see this stuff the same way, and we debate about it and share ideas quite a bit. The thing that's totally amazing is that looking at the next 20 years, we both believe there's actually more opportunity to have a broad impact than in the past 20 years. ALLEN: Our industry is still driven by incredible improvements in semiconductor technology that now are removing constraints on communications. You have the very real prospect of continuous highbandwidth, two-way digital communications to people's homes and places of business coming in five years. God, what can you do with that? A lot of the constraints on our imaginations have gone away. It's like, wow, there's this fertile

field; what kind of seeds am I going to plant? What are they going to grow into? GATES: The Internet is the seed com of a lot of things that are going to happen, and there are so many parallels to when Paul and I were involved in the beginnings of the Pc. We said back then, "Don't DEC and IBM know they're in deep trouble?" Here we are, staring at the same kind of situation. In the computer industry, there's never been a company that's led the way in two successive eras. So really; what Microsoft as a company, or Paul and I as individuals,· are trying to do is to defy history and actually take our leadership from the PC era into this new communications era. The odds are against us, and that's what makes it so much fun and so challenging. ALLEN: The Internet is exciting to me as an investor because the barrier to entry is very low. Anybody can put a product out, so success depends more than anything on the quality of the product. GATES: For Microsoft, the Internet is an incredible new platform. Just like cheap microprocessors, cheap communications drives the demand for more great software. How dowe keep up with it all? You have to remember it's all relative-you don't really, in an absolute sense, have to keep up with all the new technologies; you just have to keep up with them better than everybody else. Some of Paul's companies are classic start-ups that are getting in very early and are focused on specific content areas.

Inc.

Eventually you won't think of "the Internet business," You'll think of it more like news, weather, sports, but even that taxonomy isn't clear. ALLEN: When you take sports or music and start adding video and audio to a computer database service on the Internet, and you deliver it with enough bandwidth, and make it interactive, what's the difference between that and an interactive television channel? GATES: None. ALLEN: All these things are being served up on the Internet and will be, in effect, a click away.

So much for reminiscing; so much for looking forward. What was it, after all? To what quality, trait, or circumstance do these young billionaires-already historical figures-attribute their success? Was it greed, brains, obsession, paranoia, luck? Are Gates and Allen humbled by the enormousness of their success? Do they ever pause to gloat about the revolution they helped incite?

GATES: There's one thing I have to ask if you remember, Paul. Back in Vancouver, you once said that if you made a million dollars someday, that maybe that would be (Continued

on page 39)

Portrait of an Artist as a Computer Man and machine join hands to create art that is good enough to adorn some ofthe world's major museums. "In a museum, it's important to show things of lasting quality, such as Aaron's work. Aaron has developed from early images that look like cave drawings to much more sophisticated drawings, and now paintings," said Gwen Bell, founding president and director of Boston's Computer Museum, as she introduced the artist's work, which made its debut at the museum recently. That's the biggest accolade Aaron has received as ofnow'--except perhaps when an art collector wanted to buy the artist's painting. A few years ago, a man spent most of an afternoon observing Aaron at work at the Brooklyn Museum. As the artist began working on the last painting of the day, the man asked to buy that. When suggested he should first see how the drawing comes out, the prospective buyer said: "The Medicis couldn't wait to see how Michelangelo did before commissioning him." But Aaron, unlike most artists; is unfazed by these accolades; he's not human. Aaron is a machine that has been endowed by its creator with artificial intelligence capable of generating drawings and paintings so sophisticated they seem to be the work of a human hand. More precisely, Aaron is a computer program, and it is the handiwork of Harold Cohen, director of the Center for Research in Computers and the Arts and professor emeritus in the department of visual arts at

the University of California in San Diego (UCSD). Cohen is not a computer expert by training. He is an artist, trained at London's famous Slade School of Fine Art. In 1966, he represented England at the Venice Biennale, then the leading international art exhibit, and his work is in the collection of such prestigious galleries as the Tate in London and the San Francisco Museum of Modern Art. The year 1968 marked a turning point "in Cohen's life when he was invited by the UCSD as a visiting faculty member in the art department. There a friend introduced him to computers and the art of programmingand his life has never been the same since. As he puts it: "I came to San Diego for a year's visit, met my first computer and my second wife, and stayed." The world of computers intrigued him; if art could be taught, Cohen reasoned, it could be taught to a computer as well. To test his theory, he began writing a program that he called Aaron-simply because he liked the name. However, to write a program like this, he needed to know more about what art is. In particular, he needed to find out what gives meaning to a drawing or painting. To do that, Cohen studied prehistoric art, trying to decipher what man had learned about two-dimensional representation since he lived in caves. He studied petroglyphs-drawings on rocks-in the desert.

He also studied children's art. Cohen found similarities between prehistoric and preschool art that were appealing and important. For example, neither early man nor child put one figure in front of another. From such observations came Cohen's theories about art, and from theories came Aaron. At the simplest level, he made it possible for Aaron to mimic a line that looked like a man-made line, with all its subtle imperfections. Cohen recognized that people use a complex feedback system so that, as their hands move a pen, they monitor their immediate position to correct subsequent movements. He later programmed Aaron to mimic such activity by tethering a minicomputer to a 15centimeter wheeled drawing device he called "turtle," which travels the paper, raising and lowering its pen as directed. But Aaron's ability was still limited to drawing a set of primitive shapes; it still had the two~ dimensional look of children's art, or of prehistoric graffiti. Observing children, Cohen recognized that as they develop an understanding of the real world they begin to organize abstract marks into objects and people. So he embodied within Aaron details about proportions of the human figure when seen at different angles and also devised complex methods for drawing overlapping images that provide depth and a dash of realism.

Harold Cohen (left in photo 5) is an artist known for his abstract work such as the 1966 painting shown in photo 2. Cohen developed a computer program called Aaron which could draw abstract shapes. He later upgraded Aaron to create representational images (1). In the early 19905, he further refined his program to make color paintings (3 and 4).

Aaron did not need to know anything about the real world, only how to do drawings that look as though they represent the real world.

Examples of Aaron early work (l and 2). Black-and-white drawings of Aaron that were colored by Cohen (3 and 4). An Aaron painting in which he himself did the coloring (5).

Aaron is a theory in action. Like most human arti~ts, ithas a "personal" style. The system is not computer art as we normally understand it, where the artist uses the computer as a tool. Cohen's computer is the artist. Cohen doesn't know what Aaron will draw, and it doesn't ever repeat itself. During a recent six-month exhibition in Tsukuba, Japan, it created more than 7,000 different drawings-while Cohen was in California. Aaron paints a background, "knowing" what trees and bushes look like in general; no element is precisely specified. Then Aaron adds one or more human beings: Again,"it "knows" in general what people look like. Also, Aaron is "aware" of the fact that what is in front obscures what is behind. And, it "remembers" what it has drawn, so that each subsequent movement is based on what it has done so far, which means that a drawing it makes is deliberate, not random. In this gradual progression of Aaron, Cohen overcame the last major hurdle in the early 1990s when he programmed Aaron with instructions about colors for different objects-say, plant leaves, clothes, and people's skin-and how to combine the colors. (Until then, Aaron made images only in black and white which Cohen would later color.) He has also developed a robotic arm that can move over a table with a handful of brushes attached on one side and more than 20 bottles of color dyes connected on the other. Software instructs the arm to pick up a brush, fill a cup with a dye, dip the brush into the cup, and begin painting. To create this complex program wasn't easy. Says Cohen: "I had no way of knowing how much the program needed to know, or indeed what kinds of things it needed to know." As Cohen progressed, however, he discovered that "Aaron did not need to know anything about the real world, only how to do drawings that look as though they represent the real world." Aaron's images may look deceptively simple to viewers not familiar with the c~mplex drawing and coloring instructions Cohen has devised. But experts have deemed the work so sophisticated and novel that they are displaying it in such prestigious museums as the Tate Gallery and the San Francisco Museum of Modern Art. Cohen attributes his creation to a typical

Like human beings, Aaron "knows" that what is infront obscures what is behind, as depicted in this drawing which was later painted by Cohen.

Tony Osman wrote in The Spectator sometime back: "As [Cohen] worked more deeply into programming, he recognized that the instructions 'If (something true) ...then (take this course) ... else (take an alternative course). .. ' that are commonly used in programs were 'quite like thinking' ...that a computer is a general-purpose manipulator of symbols and therefore functionally equr~alent to a brain." As a result of his work, Cohen believes he has come to understand better the nature of art, and his work has improved because of that understanding. "Aaron drew the pictures," he says, "but I consider myself the artist, because -K.G. it is me that does the growing."

artist's drive to create new techniques in making art. "Art to some degree has always been a commentary on the nature of art itself," he says. "In that sense, what I've been doing over the past 25 years or so with computing is a very orthodox procedure." What Cohen has done is perhaps unique-and it may remain so for a long time. Aaron is as much a story of the development of a theory of art as it is man's first creative attempt to endow a machine with the cognitive process of the mind.

THE JURY ON TRIAL by HILLER B. ZOBEL

group of 12 strangers who come by compulhe distinguished lawyer could not restrain himself. In the sion to a bitter dispute, unprepared and lacksomber pages of the American ing experience in evaluating evidence, let alone in applying legal principles. The Bar Association's Tort & Insuproblems of the jury hearing the evidence ranee Law Journal, his rage blazed and fulagainst (and for) OJ. Simpson in the recent minated. Juries, he thundered, were more Is trial by jury the world-famous case, The State of California and more willing to accept scanty, insuffiessential cornerstone of v. 0.1. Simpson, are but the most recent, cient evidence en route to awarding unmerjustice or a relic most widely publicized example. ited damages to undeserving plaintiffs. England, the jury's birthplace, has largely This regrettable trend he attributed to "a so flawed it should be abandoned the institution, except in crimidecline in personal responsibility or acabolished? An experienced nal matters and libel suits. The abolitionist countability" and "the apparent inability of judge examines pressure is mounting equally on this side of jurors in general to separate their feelings the Atlantic. Besides the apparent foolishof sympathy for an injured person from the the historical evidence ness inherent in asking the ignorant to use facts of the case." in the case. the incomprehensible to decide the unHis ire took ignition from a recent notoknowable, recognition seems to be growing rious case in the United States. An 81-yearthat jury justice is delayed, inefficient, and old woman based her suit on a fast-food tinged with unfairness. outlet's filling a container with excessively Jury trials last twice as long as evidentiary hearings before a hot coffee. Mixing drinking (the coffee) and driving, she allowed judge. Moreover, because judges have to give written reasons for the coffee to slop over into her lap and suffered burns that under their decisions, irrational conclusions are less likely to come from the circumstances the jury found serious enough to merit a $2.9 bench "findings" than from ajury's terse, anonymous verdict. million verdict, including punitive damages. In the old days-the really old days of A.D. 1300 or so~jurors' Although the lawyer bemoaned the change from 30 years ago, duties encompassed giving evidence themselves as much as hearwhen such a case would never even have been filed, and from 20 ing the testimony of others. At the dawn of the common-law court years ago, when most juries wouldn't have found the restaurant lisystem, jurors took their places as residents of the neighborhood able, in fact the issue is hardly novel. where the pertinent events had occurred, who were assumed to Trial by jury as a procedure is, or so we like to think, a cornerpossess special knowledge of the facts and, more important, of stone of America's temple of Justice. The very concept of the jury every witness's credibility. pervades the national mind-set, covering even matters far reNow, seven centuries on, that old model has vanished, leaving a moved from the legal system. "The jury's still out," we say about successor so transformed that it bears only occasional marks of its everything undecided or uncertain, from the quality of a new distant origin, giving even those who best know it and most respect movie to the performance of a recently elected official. Devoted to the jury we may be, but we also percei ve the di fficulit an uncomfortable feeling about its defects. Listen to what a great advocate, Moorfield Storey, told Yale Law School students. He was ties inherent in expecting rational, fair decisions from a random speaking in 1911, but 85 years have not changed the issue: "Today, actions to recover damages for personal injuries choke the courts. CopyrighlÂŠ 1995 American Heritage, Inc. All rights reserved. Reprinted by permission from American Heritage, July/August 1995. They have increased, and are increasing, at a rate entirely out of pro-

portion to the increase of population ....This litigation, from every point of view, is wasteful and injurious to the community ....Leading lawyers ...agreed that they had never known a case where the damages had really done anything but harm." Moorfield Storey was what we would today call an establishment lawyer (he was president of the American Bar Association in 1896). Experienced and adroit, Storey was anything but reactionary. He perceived nonetheless the inescapable difficulties that trial by jury presented. Jurors, he noted, "are required, after a long trial and moving appeals to their passions and prejudices, upon evidence which must be remembered imperfectly, and under [the judge's] instructions on complicated questions oflaw at best imperfectly understood, to decide whether on the whole the plaintiff or the defendant should prevail. The real issues are obscured or forgotten, and a jury must often agree upon a verdict without really considering the vital questions upon which the rights of the parties depend." At the end of the 1890s, Justice Oliver Wendell Holmes, while still on the Massachusetts Supreme Judicial Court, expressed a similar awareness of the problem. "I think," he wrote an English friend, "there is a growing disbeliefin the jury as an instrument for the discovery of truth. " Today we call this phenomenon "jury nullification" and regard it as either laudable or deplorable, depending on our sympathy with the particular result. Whatever toleration we confer on the practice rests upon an understanding that it allows juries, as Holmes put it, "to let a little popular prej udice into the administration oflaw-in violation of their oath." When deciding such necessarily cloudy issues as a defendant's intent, negl igence, or even abil ity to control his or her actions, a jury can reflect not only the community but that community's quality of mercy. The jury can do this because it is for all practical purposes anonymous. It materializes from the public, hears the evidence, returns a verdict, and then (except in the rarest of cases) slips back into the general run of humanity. Jurors are in fact not accountable. It they convict improperly, the judge may allow a new trial; if a new trial is not allowed, an appellate court may think the judge committed a legal error during the trial and set aside the conviction. But if the jurors, for whatever reason, or for no reason, decide to acquit, no judge or panel of judges can change the outcome. This right of the jurors to decide absolutely as they please became a part of English law a century before the American Declaration of Independence. It was put there by the man who founded one of the original 13 American colonies, William Penn. In 1670 Penn and William Mead, both members of the Society of Friends-that is, Quakers-were addressing an open-air gathering in Gracechurch Street, London, their meetinghouse having been closed by the authorities because a statute criminalized holding services anywhere but in a church of the established religion. Arrested for preaching to an unlawful assembly, Penn and Mead found themselves facing prosecution in the Court of Sessions at the Old Bailey before the Recorder of London, the Lord Mayor, several aldermen and sheriffs, and a jury. (Until well into the 19th

The 1957 movie drama, revolved the man in hat), hasty conviction

Twelve Angry Men, a gripping and intense courtroom around one man, Henry Fonda (0/1 the left of tlying to convince his fellow jurors to reconsider their of a boy charged with the murder of his fathel:

century jury trials both in the United States and in England often took place with a multijudge bench.) Rex v. Penn and Mead hardly stands as a monument to due process. Harsh and vindictive, the Recorder and the Lord Mayor openly declared their belief in the defendants' guilt and at one point virtually banished them from the courtroom. After the evidence ended-the defendants, in accordance with then current practice, not having been allowed to testify-the judges submitted the case to the jury with clear directions to convict. Then as now, when rendering a verdict in a case like this, where the only issue was whether or not the defendants had committed a proscribed act, the jury was limited to three choices: guilty (of the offense alleged), not guilty of the charge but guilty of some lesser offense, or simply not guilty. The directions are explicit. "Ifhe is guilty, you will say so. If he is not guilty, you will say so. And no more." The Penn-Mead jurors, however, speaking through the foreman, sought to return a different verdict: "Guilty of speaking in Gracechurch Street." This, of course, evaded the essential question, which was simply whether the defendants had taken part in a public Quaker meeting and therefore been engaged in an unlawful' assembly. Despite verbal eructation from the bench and a repeated insistence that they reconsider the verdict, the jurors resisted, even after the judges had threatened to imprison them without food and indeed had them locked up "without any accommodation." Finally, after two days, the jury capitulated, but only to return a straight not-guilty verdict for both defendants. Furious, the judges took the unusual step of polling the jury (i.e., asking them individually to confirm the verdict), a procedure normally used only after a conviction. When the result remained the same, the irate Recorder fined them for acquitting against the judges' direction (essentially for contempt of court) and ordered

them sent to Newgate Prison until they paid. Eight did so, but four refused. Instead they obtained a habeas corpus, the great writ, which was then and is now the strongest procedure for determining the legality of an incarceration. In a decision that three centuries later still remains the charter of jury independence, Chief Justice John Vaughan, speaking for the II-judge Court of Common Pleas, freed the hungry, thirsty, and angry jurymen. Modern lawyers regard Bushell s case, named for one of the recalcitrant quartet, as the source ofthe rule that jurors need never explain their verdict, that they may in fact disregard the evidence, especially in a criminal trial, and (although it was not an issue in the Penn trial) that an acquittal is final, subject to no appeal by the unsuccessful prosecutor. Bushell s case thus has come to stand for the jury's untrammeled right to return whatever verdict it pleases. In Bushell's case, Vaughan, affirming the jury's nonaccountability, relied on a narrow rationale that reflected the very origins of the jury system: Because jurors, summoned to the service as they are from the vicinity, can very well possess information about the case di fferent from the evidence adduced in court; by drawing on their own special knowledge of the witnesses' credibility or even of the pertinent facts, they may arrive at a verdict that in light of the testimony the judge might consider inexplicable. We have of course entirely abandoned this concept. Nowadays we are not content merely to know that ajury candidate has formed no opinion about the case or its underlying facts; we want our jurors' minds to be even purer. Our desire to ensure the jury's absolute impartiality causes us to hunt for and to enlist only those citizens who, as in the trial of Oliver North, do not read newspapers, watch television, or even discuss the events of the day. Claiming to pursue the ideal impartial juror, we actually seek the impartiality of complete ignorance. Despite pious protestations to the contrary, modern lawyers and their clients (including, in a criminal case, the government) do not want impartial jurors; they want jurors who will return a favorable verdict. Yet as anyone who spends working days around a courthouse knows, knowledge before the trial of the purported facts and even admitted prejudice do notnecessarily equate with unfairness or a decisional bias, as an experience of my own sharply demonstrates. The defendant had been charged with unarmed robbery. Because he was African-American and the complainant white, Massachusetts law required individual questioning of every prospective juror specifically to explore the possibility of racial bias. Accordingly I asked each one, "Would the defendant's being of a different race from the complaining witness in any way affect your decision?" One woman replied: ''I'm a middle-aged white woman, with a background that includes [and she mentioned where and how she was brought up]. 1fyou are asking whether I have any bias against blacks, I have to say yes. But if the question is whether my bias would prevent me from deciding this case entirely on the evidence, the answer is no." Both sides immediately declared complete satisfaction, and the juror took her place in the box. (The outcome, however, had nothing to do with the jury selection: In

mid-trial the defendant pleaded guilty.) Unlike many states, Massachusetts does not ordinarily permit jury voir dire, the process of allowing counsel to question potential jurors, ostensibly to ferret out prejudice, but in reality to get a head start on the process of persuasion. The secondary object is to identify jurors the lawyer does not wish seated and then to bring each one to make a self-disqualifying admission. Ifthis technique fails, the attorney can use a peremptory challenge, which requires no stated reason or justification, but of which each side has only a limited number. It used to be that lawyers sizing up ajury panel relied on experience, intuition, and common sense. Over the past 20 years, however, science, or rather quasi-science, has taken a seat at the counsel table, with psychologists and pollsters supplying precise data that purport to assure a sympathetic jury for whichever side retained the experts. With some justification, lawyers and judges like to believe that legal procedure has evolved and improved so much that trials are no longer like games. We ought nonetheless to admit that the execrated "sporting theory of justice" has merely given way to a different form of extrajudicial competition, a contest to produce the jury group most likely to bring in the right verdict. Sometimes, in a criminal case, which requires a unanimous verdict, the defendant aims for ajury that will deadlock, supposing that his defense will be sharper the second time around and the prosecutor duller, even hoping that after the first failure the government will quit or trusting, that by the second trial something (or someone) will turn up or, better, vanish. Despite the guidance for which eager litigants and their lawyers annually pay jury-selection experts $200 million, the whole process is only a high-stakes game of chance taking, as the Simpson case has shown, an inordinate amount of time. Indeed, sometimes an apparent disqualification turns out to be a badge of hidden worthiness. In a Massachusetts prosecution some years ago for assault with intent to murder, one seat remained to be filled after the defense had expended its final challenge. The man called to occupy it was, ashis informational questionnaire disclosed, a police lieutenant. In the "Remarks" section he had written: "1 once investigated and prosecuted a case of assault with intent to murder." Before the Iieutenant,could enter the jury box, defense counsel was, understandably, asking the judge to excuse the juror "for cause." However, because during the usual pre-empanelment routine, the juror had sworn to his impartiality, the judge denied the req uest. As the trial went on, the evidence seemed to the judge exceptionally strong, and he silently anticipated a conviction. At the end he did not pick the foreperson (as many judges do) but instead left that choice to the jurors. They selected the Iieutenant and returned after only an hour's deliberat~on. "What say you, Mr. Foreman?" the clerk intoned in language unchanged since John Adams's day. "Is the defendant guilty or not guilty?" Promptly and loudly the lieutenant replied, "Not guilty."

viction of Leo Frank had not offended due process. Frank, a New After the defendant's discharge several jurors, including the York Jew who had gone south to manage an Atlanta factory, had lieutenant, asked to speak to the judge. been indicted for the murder of a young girl. His religion and ori"We were wondering," said a woman, "why the government brought this case; it seemed pretty weak to us." gin together with the nature of the killing had raised violent local "I'll second that," said the lieutenant. "It's the worst, sloppiest prejudice. Holmes's statement of the facts, sparse and unemotional, imparts with chilling effect the terror and violence that perinvestigation I've seen in 17 years as a police officer. They should be meated the courtroom and the jury deliberations. Unhappily, other ashamed at having wasted everyone's time." "Well," said thejudge, "cases aren't always predictable." And, trials, in all parts of the United States, have been similarly injurors. he might have added, neither arejuries-or fected; none, however, has been so starkly detailed by such a detached master of prose: Other factors besides counsel's use of challenges affect the "The trial began on July 28, 1913, at Atlanta, and was carried on jury's ultimate composition. For one, many valuable citizensthe intelligent, solid-thinking sort most desirable as triers of in a court packed with spectators and surrounded by a crowd outfact-have learned that excuses are not difficult to obtain. Even side, all strongly hostile to [Frank]. On Saturday, August 23, this hostility was sufficient to lead the judge to confer in the presence before the sternest judge, ajuror's coy protestation of inability to of the jury with the Chief of Police in Atlanta and the Colonel of decide fairly will always gain release. Sometimes a jury candidate will allege a moral aversion to the Fifth Georgia Regiment stationed in that city, both of whom were known to the jury. "judging another human being." Judges usually honor that "On the same day, the evidence seemingly having been closed, ground, at least to the extent of excusing the juror from criminal the public press, apprehending danger, united in a request to the matters. I am not sure we are right; after all, in many civi Icases the Court that the proceedings should not continue on that evening. jury must determine if the defendant was negligent-that is, Thereupon the Court adjourned until Monday morning. whether he failed to act with reasonable care under the circum"On that morning when the Solicitor General entered the court stances. Deciding whether or not someone was careless seems pretty close to passingjudgment on a fellow mortal. he was greeted with applause, stamping of feet and clapping of hands, and the judge before beginning his charge had a private A more legitimate ground for exemption comes from the extraconversation with [Frank's] counsel in which he expressed the ordinary length of time that modern lawyers require for even ordiopinion that there would be 'probable danger of violence' ifthere nary litigation. When the case has attracted serious media should be an acquittal or disagreement [i.e., a hungjury], and that attention, the problem increases because judges fear-with good it would be safer for not only [Frank] but his counsel to be absent reason-that reading lurid newspaper accounts of the evidence from Court when the verdict was brought in. (especially evidence the judge has for whatever good reason ex"At the judge's request they agreed that [Frank] and they should cluded) or seeing slanted television snippets may taint a juror's be absent, and they kept their word. When the verdict was renperception of the case as a whole. The remedy of necessity, ifnot dered, and before more than one of the jurymen had been polled of choice, is jury sequestration, popularly known as "locking up there was such a roar of applause that the polling could not go on the jurors." The description does not exaggerate. Sequestered jutill order was restored. The noise outside was such that it was diffirors are, in everything but exposure to brutality, inmates of a cult for the judge to hear the answers of the jurors although he was medium-security prison. They wake and retire on command, they only ten feet from them." eat their meals at specified times, they The facts led Holmes to a severe conmay make and receive telephone calls clusion: "Mob law does not become only in limited situations, their access due process of law by securing the asto visitors is tightly restricted, they sent of a terrorized jury. We are not can watch only approved television speaking of mere disorder, or mere irprograms, and their newspapers have regularities in procedure, but of a case large gaps where the court officers where the processes of justice are actuhave clipped out stories about the trial. ally subverted .... Any judge who has The risks that locking up a jury can sat with juries [as Holmes had] knows pose to the orderly administration that in spite of forms they are exof justice (to say nothing of a fair tremely likely to be impregnated by trial) have come vividly to national the environing atmosphere." attention during California's 0.1. The rest of the justices disagreed Simpson case. with Holmes and Hughes, in effect In 1915, U.S. Supreme Court affirming the conviction. Governor Justices Oliver Wendell Holmes and John Slaton courageously commuted Charles Evans Hughes dissented from a Drawingby Eric & Bill ÂŤJ 1996 Tribune Media Services, Inc. Frank's sentence to life imprisonment, refusal to second-guess the Georgia All Rights Reserved. but within weeks a mob seized Frank, Supreme Court's decision that the con-

took him across the state, and lynched His legacy, however,

as expressed

Holmes,

him. did,

triumph.

In 1923 the U.S. Supreme Court, with Holmes writing the opinion, reviewed the by conviction of five African-Americans "a white jury-blacks being systematically excluded from both grand and petit [i.e., trial] juries"-in a trial that lasted

Whatever may be the flaws in trial by jury, most judges consider a multiheaded determining body superior to a lone referee.

"No juryman could have voted for an acquittal and continued to live county]."

This

time

the

Court

agreed that federal reliefwas available: "If the case is that the whole proceeding is a mask-that

counsel,

jury,

machinery

for correction

nor the possibility

perfection

in the

that the trial court and

counsel saw no other way of avoiding an immediate outbreak of the mob can prevent this court from securing to the [defendants] their constitutional rights." "The administration of justice,"

the Boston

atto\ney

and lega I

ph ilosopher Charles P. Curtis once wrote, "is no more d~signed to elicit the truth than the scientific approach is designed to extract justice

from the atom."

mitted ourselves

Maybe

so, but as a society

to the principle

that justice

we have com-

operates

more effec-

tively, and achieves more acceptance, in direct proportion to its reliance on truth. Furthermore, we have taken the view, constitu-

perhaps

the jury's

capac-

member and the role that suggestibility plays in courtroom testimony. Modern researchers, notably Elizabeth Loftus, have carried on that work, although courts have shown themselves most reluctant to let jurors hear evidence on the subject. As Justice Herbert P. Wilkins of the Massachusetts written: "State that the matter

and judge

were swept to the fatal end by an irresistible wave of public passion, and that the state courts failed to correct the wrong-neither

thought,

1900s, the great experi mental psychologist Hugo MLinsterberg was noting the discrepancy between what people see and what they re-

----~~_._-

about 45 minutes. in [the

On second

ity to determine truth is indeed a cause for concern and even doubt. As far back as the early

Supreme

Judicial

Court has

court opinions generally note is within the jury's knowledge

and that the defendants' rights can be proand appropriate tected by cross-examinatIon jury instructions." As a result, science now places considerably less confidence in the human memory than does the court systhat tem, which assumes, and encourages jurors to assume, although a witness may be mistaken. forgetful, or even dishonest, the recollective po,,:,er is the principal source oftrial-decisive materials. Other research

has begun to demonstrate

ing process itselfproceeds believe. opening

that the decision-mak-

much less logically

thanwe

would like to

One recent study, for example, shows that by the end of statements-which come of course before the jury has

heard any evidence

at all-jurors

have already

begun to make up

tionally and otherwise, that in general trial by jury maximizes the truth available for administeringjustice. We trust the jury system, yet in many respects we distrust the ju-

taken a position, they typitheir minds. And having unconsciously cally begin to "filter" the evidence to fit the version of the case to which they have already attached themselves. Does this mean that we should eliminate the jury's role as pri-

rors. The entire body of principles we call the rules of evidence rests on the assumption that ordinary people are too unsophisti-

mary fact finder in our system of justice? The answer, I suppose, depends on what might replace jurors in administering justice.

cated (or too foolish) and too naive

to sort out the probable

to appreciate

from the improbable

that an out-of-court

statement

not

made under oath is less worthy of belief than a witness's testimony in open court. Unti I the late 19th century lack of confidence in the jury's common sense even led to excluding from the witness box the defendant in a criminal case and all parties in civil litigation. The stated reason was that their desire for a favorable outcome

Short of some ehance-acti have to depend

vated machine,

on one-person

a juryless

arbiters--that

society

is,judges.

would

Speaking

from experience and from numerous conversations with siblings of the robe, state and federal, from all across the United States, J have some doubt that the trade-off would be advantageous, andl am certain that the judges themselves would not recolllmend it. Whatever

may be the Oaws in trial by jury, and however

iII adapted

would irresistibly produce perjury, as if jurors would be less likely to detect false testimony from a party's lips than from those of an

it may be for resolving consider a multiheaded

ordinary witness. Perhaps our anxiety is misplaced. Maybe we should worry less aboutajury's inability to spot liars and pay more attention to the way

eree. Perhaps the jury, to paraphrase what Winston Churchill once said of democracy, is the worst mechanism for trying cases except

a juror must necessarily

acquire

information.

We expect

average

drawn-out, technical matters. most judges . determining body superior to a lone ref-

for any alternative. When

you reduce

the problem

to its basics,

an unideological

untrained people to absorb evidence for days and weeks on subjects entirely foreign to them without explanation, clarification, or even

and astute nonlawyer seems to have had it just right when in the course of analyzing and bemoaning the vagaries of trial by jury re-

the opportunity to take notes or ask questions. Thus we imagine that on the law," often read they can understand ajudge's "instructions

cently he said, "Do youthink is that they're human?"

to them in a monotone

and containing

take a teml to master

and whose

have palpable

di fficulty establishing.

principles

meaning

maybe the only thing wrong withjuries

that law students

appellate

judges

often

About

the Author:

Superior Court.

Hiller B. Zobel is a judge

011 tiLe

Massachusetts

ON THE LIGHTER SIDE

Fo(~ yoU(~ CDNVENIENCE Wf'F~f OPfN SArUkPAY AIJP SUIJ6AY_. j-t0WEVfR. CLOSED MONMY 1Hl<000H FRIPAy.

Wfkf)

:;7~

~l~

"Let me remind you that past peiformance guarantee offuture results. "

13.:ee is no

"And you'll be happy to know, that seeking re-election is not a parole violation. "

enough money for anybody. Do you remember talking about that at the apartment? ALLEN: Sounds vaguely familiar. GATES: Really, though, all along we were never motivated in business just because there was something we wanted to buy. Paul and I paid ourselves $36,000 a year until we incorporated, and then we took this huge boost to $60,000. It was enough because there was nothing material we really wanted. ALLEN: That's not quite true. When I showed up in Albuquerque, I had to take an advance from MITS because I had no money to pay for a hotel room. The plane ticket took all my money. And when you got there, we used to go window shopping for fast cars. GATES: You're right. I did buy a used Porsche 911 in Albuquerque; that was my one big desire. Paul bought a big-screen TV, which I think was a seminal event, because watching all those basketball games on it may have gotten to you. .. ALLEN: We never really thought about counting our pennies in terms of "this is all the money we could squirrel away for ourselves." Success to us was just plowing it right back in and building the business more. At any time there were lots of software markets we weren't doing that well in-products like word processors and spreadsheets that we've only lately come to lead. There was always some part of the business where we felt like we were the underdog. GATES: The outside perception and inside perception of Microsoft are so different. The view of Microsoft inside Microsoft is always kind of art underdog thing. Today the worry would be: Oh, God, what can we do in the world of the Internet? In the early years that underdog, almost paranoid attitude was a matter of survival. ALLEN: Yeah. We were always worried that IBM would put a thousand guys on word processors or spreadsheets or BASIC or something like that.

GATES: Even though if you look back and see that our sales and profits grew by basically 50 percent a year for all these years, what I really remember is worrying all the time. If you ask about a specific year, I'd tell you, oh, that was the awful year we had 'to get Multiplan [a financial spreadsheet] out and establish it, or that was the terrible year we brought out the Microsoft mouse and it didn't sell so we had a warehouse full ofthem, or it was the miserable yearwe hired a guy to be president who didn't work out. ALLEN: We were always worried. Sure, we could see the upside, but we could always see the downside. We're both pretty good at being devil's advocates. If Bill would start getting too optimistic, I would say, "Well, wait a moment, aren't you worried about A, B, and C?" I kind of wonder if that doesn't go back to our experiences at that computer center in Seattle where we had the chairs repossessed from under us. Or because Traf-O-Data never succeeded like we thought it would. GATES: We've seen so many failures. This is an industry scattered with failure. But despite that, I still believe in our vision-a computer on every desk and in every home, all running Microsoft software. And I still believe in the importance of soft- . ware. We said 20 years ago that eventually people will pay more for their software than they do for their hardware. That isn't yettrue. ALLEN: It will be true, though. GATES: I promise it will. We just have to raise our prices ....No, I'm just kidding. But if you had asked me at any point how big Microsoft could be, Paul and I once thought we could write all the software in the world with 100 people. If you had told us that someday we would have more than 5,000 people writing software, we would have just-shaken our heads. I remember coming to work in the morning when our sales were $20 million, and I'd tell myself: "This means we have to sell $100,000 of software before I go home." And I'd think: "How can I possibly do that?" So if in the morning I closed a big deal, I'd think, "Wow, today I did it." I don't do that so much now because Microsoft is more of an institution. The

numbers are so big now, it's crazy. Just to keep the thing running at breakeven we have to sell $15 million a day. ALLEN: Remember that day back in 1980 or so, when we figured we'd shipped a million copies of BASIC? Wereally felt a sense of accomplishment. And we were marveling that, wow, a million people are using our code to do God-knows-whatnumber of interesting things. That was such a gratifying thing to realize, that you have been able to affect other people's lives in a positive way. GATES: Then we did something kind of funny. Paul and I were in such a different world that we had always stayed away from the normal mainframe software industry. They had a big trade organization-it doesn't exist anymore-and an annual trade show where they gave out a special award if you sold 10,000 copies of a program. Just for the heck of it, we filled out one ofthese forms and said we shipped a million copies. They didn't even have a category for selling that many. But they sent us this fancy plaque anyway, saying yes, indeed, Microsoft had shipped 10,000 copies of BASIC. It was our first big award. ALLEN: Generally, we don't look in the rearview mirror much. GATES: Right. Because it's a waste of time, basically. The irony of sitting down like this on our 20th anniversary is that we hardly ever do this. On those rare moments when we do look back, we kind of go, "Whoa." We've been climbing a steep mountain here, and you know, there's still lots there ahead ofus. H really is pretty amazing. ALLEN: Geez, it was only 20 years ago that we were sitting there, eating pizza, talking about what we thought a PC would be like, and what we could do. GATES: Still, we're only about halfway to achieving our original dream of a computer in every home and on every desk. I believe that 20 years from now, before we're too old, the industry will have fulfilled that promIse. ALLEN: I would hope so before then. GATES: Yeah, but who knows whether we'll be able to maintain our leadership role in it until then. 0

The Conference Board Comes to India In his inaugural address at the Conference Board's first meetingin Mumbai, Ambassador Frank Wisner (right) said thatthe United States is eager to playa constructive role in India's economic growth and that it will continue to provide the largest share of external direct investment into India.

For India to a cess the capital necessary to position itself as a world-class economy, it should expand and accelerate linkages to the largest capital market in the world-the United States. This was the message Ambassador Frank G. Wisner had forthe gathering of chief executives in Mumbai last February. They had gathered for the first meeting of the Senior Executive Forum of the Conference Board in India. Known around the world as one of America's premier business-research organizations, the Conference Board has about 3 ,000members worldwide, predominantly from the U.S., but with 400-odd European companies and another ISO-odd Asian firms. About 30 top Indian firms, including Reliance and the Tata group of companies, are among its members. "Though our membership list has FORTUNE 500-type companies, the aim is not necessarily to help only big companies," says Leon Martel, senior vice president, International Programs, of the Conference Board. Apart from business firms, the Board also has number oflabor unions, universities, and government agencies as members. In his address, Ambassador Wisner said that the Conference Board's first meeting in India is an acknowledgment of the country's increasing importance in glohal trade and investment-India is slated to be the fourth-largest economy in the world by the year 2025. Such meetings, he said, were opportunities for India to heighten its profile in the international business and investment community, and ensure that its message of economic engagement reached the international markets loud and clear. The Ambassador said he believed that the Board's summit was the beginning of an important partnership between the business community of a nation destined to become a global economic power and an organization that can provide a wealth of experience and insight into the opportunities and challenges

Iikely to be encountered along the v ay. Indeed in its 80 years of existence, the Conference Board has established a tradition of providing business with sound counsel and useful information. The Board's efforts to improve public understanding of economics and business have made it a much sought-after partner. It has always been among the first to spot new opportunities for its members. The Board's first conference in Asia, for instance, was held in Hong Kong. A wellattended meeting-about 150 senior executives from Asian and transnational companics were pres nt--it covered the crucial area of human resources. According to Martel, the Board is talking to several organizations in Asia and Australia to explore the possibility of holding more meetings. In fact, laterthis year, it wi II hold another conference in HongKong on Total Quality Managemcnt in collaborati0n with the I-long Kong Productivity Council. Inlndia, the Board has signed a memorandum of understanding with the Confederation of Indian Industry, the premier busines;; association in the country. The conference in Mumbai was cohosted by the Indian Merchants' Chamber, one of the oldest bodies of its kind in the business capital ofIndia. Ambassador Wisner said that India would now have to compete forcapital. "Gone are the days when any country could sit back and wait for capital to arrive on its terms. There are simply too many investment opportunities competing for the same dollar," he said. The successful bidder for investors' attention, according to the Ambassador, will establish early on a strong and formal presence in international markets, and it will familiarize itself with the norms and practices of doing business in these markets. In a sense, Indian businesses would be required to make some adjustments, such as a standardization of practices with those from the invest-

ing country. "But'this adjustment process," Wisner said, "will yield great benefits in terms of efficient business practice~ and, in the long run, will make India competitive with others seeking to attract the same international investment dollar." Wisner told his audience at the conference that India's message that it is a nation prepared to do business has been heard the world over, and taken seriously. U.S. investors have responded to India's message. U.S. foreign direct investment grew fivefold in the five years starting 1989-from a cumulative total of a $186 million in 1989 to $950 million in 1994. A recent survey of American businesses suggested that U.S. investment by the turn of the century could grow another fivefold-almosttouching$5 billion. American companies constitute India's largest investor block. They account for about 40 percent of direct foreign investment in electronics manufacturing, software development, power, telecommunications, and consumer products. More than 200 U.S. firms have equity investments in India, and they provide employment to over 80,000 Indians. Ambassador Wisner said that the magic word for foreign investors is infrastructure, and the massive infusion of capital that this area would require in order to support the country's growing industrial base was not possible for the government to raise through taxes. This industrial base is needed to ensure that India has a competitive position in the world economy. Without efficient power generation, modern telecommunications networks, and good transportation facilities,

the country would find it difficult to compete. The Ambassador said that technology has now made competition and private sector involvement in what was traditionally a preserve of governments, not only feasible but also imperative. He said that hundreds of billions of dollars from international markets would flow into India as long as the country offered an environment that is attractive to investors. A level playing field and rules that are transparent and equally applied are two important factors in the creation of such an atmosphere. As important sectors of the Indian economy have opened to private investment, decisions have been made about the conditions under which business will enter and operate in this country. India has recognized that the day of the centrally planned economy is over. It has committed itself to a future with a market-based economy. It is now allowing the consumer to decide for himself and cutting down on unwelcome bureaucratic interference. But even as government control is fast disappearing, the need for regulation is imperative. A carefully conceived independent system of regulatory bodies is required to be put in place. This will assure both-those who are eager to take part in a market-based economy and those who are apprehensive about its implications. The Ambassador said that the stakes are enormous. For instance, ifinvestors do not believe that a stock market is regulated fairly, they will take their money elsewhere. He said that this regulation will serve the purpose of encouraging fair competition that would protect the consumer's health and safety. It would also

minimize abuse of market forces and ensure confidence in the integrity of public institutions. he New York-based Conference Board was U.S. and Indian corporate representatives to What needs to be done is to initiate set up in 1916 with the twin objective "to address specific issues of concern to business. some positive signals that will reinforce improve the business enterprise system and to As an extension of its core function of the message India wishes to send to interenhance the contribution of business to society." networking with business executives, the Board national capital markets. Among the chalToday, it is the world's largest corporate provides a wide range of authoritative research lenges that India confronts are controlling networking organization, offering an exclusive publications on global management issues and its budget deficit, its high rate of inflation, forum for CEOs and senior executives the business environment. Among its recent worldwide to explore and exchange ideas on titles are: TQM and Environmental Manageand a credit squeeze that threaten to take business policy and practices. ment, Organizing for Global Competitiveness: the steam out of the nation's economic Since early last year, the Conference Board The Asia-Pacific Design, and Managing R&D growth. To ensure contin\,led momentum, has enhanced its focus on India in the light of and Technology: Competition and CollaboIndia must continue its program of fiscal emerging opportunities from the economic ration. The Board also publishes several reform. "No one who understands the poreform process that has placed the Indian periodicals such as Across the Board, Consumer litical imperatives of an election year in a corporate sector on the international business Confidence Survey, International Economic democracy will underestimate the diffimap. In addition to a Senior Executive Forum it Scoreboard (all monthly), Business Executives' culty this would entai I," he remarked. But, recently organized in partnership with the Indian Expectations and World Economic Monitor he said that this was the strength oflndia's Merchants' Chamber in Mumbai, the Board has (both quarterly). democratic discourse: issues surface, they signed an MOU with the Confederation of Membership to the Conference Board is by are debated intensely and, eventually, Indian Industry. It already counts among its invitation only. International Associates some 30 leading Indian consensus is reached. For more information, please con/aCI the India corporate groups. Issues like opening up India's insurrepresema/ive of/he Conference Board: Over the coming months, the Board has plans ance industry, relaxing import controls Ms. Poonam Sethi Banta, to develop alliances and collaborations with and capital-market restrictions need to be Public Affairs Management, Indian institutions and the corporate sector, for D-3/3492, Vasant Kunj, New Delhi 110070. addressed. Another problem that needs arranging top-management conferences, senior Tel (011) 689 9930, 6133027 to be addressed is intellectual property executive forums, and an "India Council" of Fax: (011) 689 9930. rights, not so much as to ensure the flow of foreign investment, technology, and capital, but to encourage and protect India's own research and develgram. Jt has provided a $20 million package to strengthen the credentials of the Indian stock market. opment activities. Ambassador Wisner was confident that the United States Ambassador Wisner said that programs such as the Conference will continue to provide the largest share of external direct infavorable global dispoBoard's meeting are clear evidence'ofthe vestment into India. "The position has been made clear," he sitiontoward India and that American investors, in particular, are said. "The United States is impressed with the growth in the eager to do business with countries like India because they offer Indian economy." He called upon American companies to take the reassurance of a democratic form of government and the advantage of the substantial trade and investment opportuniopportunity to work with a world-class business community. ties in India. In a statement of faith, the Ambassador assured Indian busiTo facilitate and further cement bi lateral economic partnership, nessmen at the conference that "the United States is present in India today, and we want to be here tomorrow, and next year, and the two countries have focused their efforts on the creation of inthe next century." He said that his country is keen to playa constitutions that enable businesses to identify and take advantage of opportunities with the least amount of bureaucratic interference. structive role in the exciting economic growth that India promise~. One such organization is the U.S.-India Commercial Alliance, The Ambassador said that these are exciting and important times for India. Its emergence as an economic power is a story which brings together private-sector representatives from both everybody wants to take part in.He said that historians would look countries to facilitate trade in key infrastructure areas and in the equally important agribusiness sector. Similarly, the Indoback on the Indian experiment and confirm American beliefthat.a U.S. Economic/Commercial Subcommission, which is a governmarket-based democratic system provides the best guarantee of prosperity and stabi lity. body, has begun the process of examining ment-to-government methods and policies that will strengthen the climate for investAlready, said Ambassador Wisner, representatives of ment and deve lopment of India's infrastructure. American businesses in India have told him that their experience In addition, two American credit agencics--Overseas in this country has confirmed the wisdom of their initial decision Private 0 to entcrthe Indian maÂˇrket. Investment Corporation and the Exim Bank-arc actively encouraging U.S. private-sector partici pation in India's economy. Then there is the U.S. Agency for Internation,d Development, About the Author: Sonia Purohit is a Bombay-based college teacher andfree/ance writer with a keen interest in Indo-US. economicafJairs. which is supporting key elements oflndia's eCOIlOI1lic reform pro-

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Bangalore Takes on the High-Tech World

~~TEIA8 ST!LI~~ In ten years since it set up shop in India, Texas Instruments has become one of the biggest players in the country's burgeoning electronic revolution, accounting for almost $600 million in product value in 1995. Mention any word linked to computers and watch as the eyes glaze over and roll northward. "Oh, no, not another unintelligible piece written in high-tech talk." To paraphrase a cliche, our computer wizards have been able to land men on the moon and bounce the sound of a pin drop off an unsighted satellite. But in this Age of Communications they are hard-pressed to explain to the rest of us in simple English what they do fora living. At his spacious office on leafy Infantry Road in Bangalore, Srini Rajam (left) tries to bridge this gap with a music video, which really only succeeds in educating. the viewer that the job has a lotto do with teamwork and camaraderie. Yet, Rajam-with a bounce in his step, oversized glasses, and a sharp mustache etched on a youthful face that has high-tech written all over it-bubbles with infectious enthusiasm and a sense of achievement. It's understandable, considering the managing director of Texas Instruments (India) Limited (TI) is spearheading the phenomenal growth and enhancing the capabilities of Dallas-based Texas Instruments, the $13billion-a-year global high-tech enterprise. At 11 on a weekday morning, the clamor

1. Large Texas Instruments' posters like this caricature of Einstein adorn TI's offices in Bangalore to inspire the computer scientists working on the digital signal processing (DSP) and other projects. 2. Team leader Ravi Shanker and his group are involved in developing embedded software for applications like digital telephone answering devices. 3. A.N. Bharath and Pramod Acharya hold afull chip plot in the test center of the memory products development division ofTI Bangalore. The plot is then sent to the United Statesfor fabrication of a silicon wafer which is then returned to the designers in Bangalore for testing and correction of any faults before re-releasing it for production.

4. Manager Sham Banerji and Peter Ehlig, a senior member of the technical staff, are involved in a silicon chip and software design project. 5. Vivek Kumar Thakur and his team pose in front of Videsh Sanchar Nigam Limited's full-time dedicated satellite dish antenna that links TI Bangalore with TIfacilities worldwide. 6. Thakur is currently busy using TI's digital light processing technology and digital micromirror devices for digital imaging applications.

of organized chaos is reaching its peak at most offices around India. But at TI in Bangalore, all is calm as Srini Rajam"Srini" to everyone in the building-trots a visitor through the facility. One floor looks like the next: Halfpartitions upholstered in gray fabric demarcate the semi-private functional workstations, each with a computer or two, a phone, some complicated calculations and circuitry scrawled on wall boards, and nothing more. Some cubicles are vacant. At others, young design and software engineers peck keypads, or huddle over computer screens in hushed discussion. What we're seeing is the cream of the crop at work. "Recently we received 3,500 resumes for seven positions," says Rajam, about the only Texas Instruments employee around who wears a tie. "As you can see we're all pretty informal here"-in attire, first-name basis, and in work schedule. Ironically, for an exacting, detail-oriented field producing products with regimented accuracy, the employees come and go as they please 24 hours a day, or don't show up for days on end. It is, above all, a creative profession in which the human brain creates part of an electronic superbrain. The e!1gineers are allowed the luxury of solitude, and meet with the rest of the "team" of 10 to 12 others as the project they are assigned to progresses toward a definite deadline. Texas Instruments started its India operations in Bangalore in August 1986 to develop computer aided design (CAD) software systems. Its first "product" was a CAD system to layout computer circuits. Ten years later, TI occupies two modem buildings in downtown Bangalore where its staff 0000 accounted for close to $600 million in product value last year. If that's not progress enough, TI India is in the process of moving into a swank, new 11,000-square-meter facility overlooking the ninth hole of the Karnataka Golf Association course. With its health and social club, running track, elegant dining room with golf course views and landscaped garden, TI's Software Technology Park resembles a resort even before you set foot in its cavernous five-star lobby re-

splendent with marble, chandeliers, and wainscoting in white cedar. By this time next year, the place is expected to be humming along with 500 software engineers-and double that number two years hence. Texas Instruments was the first electronics multinational to blaze the trail into India, and it has raced ahead ever since. However, it hasn't been a cakewalk. Despite all the talk of welcoming multinationals to set up plants to produce and export high-tech and other "IQ goods," when Texas Instruments wanted to set up shop in Bangalore it first had to obtain more than 20 clearances from various government departments. Of course that was before the days ofliberalization. Ironically, when the going was tough in the pre-liberalization days, several major Indian software companies skipped town. They found it easier to bend U.S. immigration laws by hiring Indian talent and sending them to "body shop" in the United States at Indian wages. At about the same time, TI was struggling through the web of red tape toward India. Today, almost half of Texas Instruments' 58,000 employees worldwide work and network at its plants in more than 30 countries. This allows the Dallas-based giant to tap the best talent around the world as well as be competitive wherever it is. With global chip sales expected to rocket from $100 billion in 1995 to $273 billion by the year 2000-and with the economic growth in the Asia/Pacific Rim region growing by 7.5 percent a year against 2.5 percent in the developed countries-even the company's competitors now agree that Texas Instruments (India) has built a new modern office complex in Bangalore.

TI's bold and unconventional move to the East makes eminent sense. Inaugurating TI's new facility in Bangalore, then Electronics Secretary N. Vittal said that while there has been a quantum leap in software exports from Indiafrom $100 million in 1990 to $500 million in 1994-the potential is many times greater, a whopping $10 billion. TI India has gone far beyond being a limited CAD-designing outpost and has emerged as a vital chip in Texas Instruments' global operations in various fields. All the software, databases, and designs produced by TI India are "exported" by its Earth station in Bangalore to TI in America, via a dedicated satellite link to Bedford, England, for use and distribution by TI's customers worldwide. According to senior Texas Instruments officials, the Bangalore operation has emerged as a vital design center and is contributing as much as one in every six integrated circuits being used by its companies worldwide. With more than 40 percent ofTI's $8 billion Semiconductor Group working outside the United States, the global giant has established several cutting-edge fabrication plants-known as "fabs"-in several countries. The next such fab could well be in Bangalore. In Bangalore recently, Tom Engibous, president of TI's Semiconductor Group, said he was willing to set up a fab in India if a suitable Indian promoter came forward to support the joint venture. Meanwhile, Engibous announced the setting up of an all-important digital signal processing (DSP) design center in Bangalore. In a nutshell, DSP is the fusion of time and function. And whether or not we're computer literate, DSP has become a part of our daily lives. To illustrate: Before a cellular phone can transmit a voice, before the fax machine can deliver a message, or before an automobile airbag or anti lock brakes can save your life, a key event must first occur. It must be triggered by a particular set of signals. For that to happen, different types of information-voice, text, video, motion, temperature-must be translated into digital code. This code has to be processed, ma-

Subbu Venkat (center) heads the software development systems team that is developing digital signal processors used in cellular phones and hard disk drive applications.

nipulated, and then retranslated into signals to accomplish a result. To complicate matters, the result must be precise and the entire process, from initial signal to result, must be instantaneous (in terms of time as we know it). This means that literally millions of calculations must be accurately completed in less time than the blink of an eye-a miracle made possible by digital signal processing. "DSP is a critical building block of the digital revolution and TI India is one ofa select few centers in the world that will augment the company's leadership in the DSP market," says Rajam. "A large team of designers and software engineers will focus on the design on new DSP devices for high growth equipment application." Eventually, he adds, "TI India's memory product development team will be working with some ofthe most advanced wafer production facilities in the world, designing and testing chips with 0.35 micron feature sizes and beyond." Think of it as designing, creating, and circuiting an electronic brain on the tip ofa grain of rice. The designing will be managed directly by the Indian team and much of the actual design will be executed at TI in Bangalore. Says Engibous: "Our products are continuing to transform the workplace and we have had to transform the way we conceive these products-by working in teams and directly with our customers." Today, innovation, performance, and a quick conceptto-market turnaround time are crucial in

what is expected to become a fiercely competitive $7 -trillion-a-year global market within the next ten years. Where India fits perfectly into this circuitry is the country's ready availability of highly skilled and motivated software engineers and designers who are formally educated in the Western medium. Add to that the traditional Indian analytical mind-set attuned to math and sciences, and cost-effective salaries (which, at TI India, are high by Indian standards-the average wage for a young software engineer at Texas Instruments India is around half of the' American wage of $40,000 to $50,000 a year). To cap it all, Bangalore is a natural high-tech setting, given that over the decades it has been in the forefront ofscientific research and development. But when it comes to today's high-tech age, a decade is a millennium in terms of development in electronics. After all, it was only as recently as 1967 that Texas Instruments introduced the world to a marvel known as the hand-held electronic calculator. Since then, TI has gone on to become one of the world's largest suppliers of semiconductor (read, "computer") products, avionics and infrared weapons guidance systems, notebook computers, calculators, laser printers, precision engineered materials, sensors, and control products used in just about everything from electronic banking to fax machines and video conferencing. Gone forever are the days when the elec-

tronic pocket calculator spelled the height of human development. Today, TI's voice technology allows you to program your VCR, play computer games, or dial your phone using only spoken commands. While developments are racing ahead, it's putting more pressure on the seemingly laid-back software engineers at Texas Instruments in Bangalore. "Today, it's highly competitive and time is a critical factor," says Rajam. On any given day, the staff at TI India is working against time in clusters of 25 "teams," while the company's engineers are working its worldwide clients, constantly coming up with revolutionary ways that will allow, say, a cellular phone to network with its mobile computer. With more than $18 million in equipment invested in India, and impressive growth on the horizon, 100 percent export-oriented TI India isn't about to ignore its social responsibilities as a good corporate citizen. Frequent barbecues and family tours of TI facilities help create a feeling offamily among the staff. Rajam adds that TI India has instituted fellowships and technical seminars at several Indian universities. TI is also working on plans to help clean up and maintain the potholed, garbagefringed city street that leads to its Technology Park. With technological developments rocketing ahead faster than an ordinary mortal can comprehend, exactly what TI's engineers do on the job may well remain hightech hash. But the next time your child sits down to an enhanced learning program on a computer, while you reach for a cellular phone to call your stockbroker, or sit back in a Boeing 777 and choose from 129 channels of audio and video entertainment on the Sony at your seat, you can rest assured that the folks in Bangalore are usefully employed, making our lives a lot more enjoyable. 0 About the Author: Vinod Chhabra has won several journalism awards and was nominated for a Pulitzer in 1984 and 1987 during his 23 years with Hearst Newspapers in Albany, New York. He now divides his time as copublisher of Today Magazines Group in Florida and as president of Asia America Marketing in Bangalore.

THE fREEDOMS

OF THE PAST

hat is today more boring than the up-to-date? Our sculpture, D1Usic, painting, poetry, performance art, and fiction all tread the same postmodem circle. The formula goes as follows: First, the subversion of the traditional means of representation, which are held to serve the interests of the power elite; next, what poststructuralist critics call "the play of signifiers," designed to undermine the expectations of the public; finally, the reminder that the sucker who buys the thing is complicit in the fraud described by the fashion magazines as the late capitalist commodification of desire. The joke always turns in upon itself, and those who pay attention to our current artistic and humanistic avantgarde find themselves trapped in the present, in a narrow little moving box of power struggle and injured self-esteem. Butwe can escape from the box at any time. For if we only heed it, all the past is open to us, with its perilous seas and faerie lands forlorn, and we are free to set sail anytime we want. Our cultural myth is one of liberation, of the present breaking the shackles of the past. But what ifit is the past that breaks the shackles of the present? What must the explorer of the past give in return for his or her liberation? The doorway, like the one that leads into the garden in Copyright

ÂŠ 1995 by Harper's magazine.

Reprinted

from the April 1995 issue of Harper's with permission.

All righls reserved.

Alice in Wonderland, or like the entrance to a Japanese teahouse, is low and requires certain sacrifices: One must make oneself small and leave one's sword outside. A poet or artist who makes the journey must abandon the claim to originality and the hope of political vindication. Whatever is brought back must be attributed to its proper source, and the artist can demand payment only for the trouble of making the journey, not forthe gift itself. One must acknowledge oneself to be a latecomer, a follower, a singer of tales composed by the dead. When one teaches an ancient art, one sometimes experiences the physical presence of the past. I am a junior instructor in the Shotokan School of Karate, in Dallas. The karate students I teach discover' ways of knowing their bodies' strength that came to them through me as well as through my teacher, or sensei, Tong; his sensei, Nishiyama; his sensei, Funakoshi; his sensei, Matsumura; his sensei, the Fuchow Chinese master Ason; and his sensei from the old Shaolin temple in Fukien. In their new bodily intelligence, karate beginners experience the selves of the dead. Likewise, when we murmur a line of Shakespeare or contemplate a Cezanne or hum a phrase of Mozart, those powerful and delighted spirits stir within us, not as if we were possessed-though sometimes, wonderfully, it feels so-but as part of our very nature. Even more deeply, our mothers look out of our eyes when we love our children, and we discover how much they loved us in how we love our own.

Without the art of the lyre, Orpheus cannot pass through the portals of the underworld. The reader or appreciator of art, too, must silence the chatter of the sel f and prepare tu be entered by the ghosts of the past. The compensations take several forms. The first is political freedom. The power of others over oneself comes from one's own desire for what the oppressor can give or withhold; the power of another is always conceded to him by the prior belief in the validity of the oppressor's own desires, and one's recognition of h is possession of those desires. If one's judges and ideals, being in the past, are no longer subject to contemporary masters, and therefore invulnerable to their control, the oppressor stands revealed as another prisoner of time present, another shopkeeper, another advertisement. And what is power? Let us define the possession of power as the assurance that the future will be the direct result of one's own present will, without unexpected results. Power depends on one-way linear cause and effect. Few events in the universe can be accurately described in this way. But the overwhelming majority of real events, especially in the human sphere, are nonlinear and cannot be reduced to the oppressor/victim or cause/effect model. The more detern1inistic and one-way a system is, the more subject it is to thermodynamic decay. It took Stalinist communism only 70 years to dissipate; Hitler's national socialism, less than 20. This law applies as well to much more benign regimes of power; for instance, IBM, Margaret Thatcher, and the Dallas Cowboys. Nothing is as fragile and evanescent as power. If tradition can be understood as the sum of those human institutions that have lasted a long time, and if longevity is not thermodynamically consistent with oppression, then the older a tradition, the less likely it is to be oppressive, and the more likely it is to have enjoyed the respect of the broad mass of its participants. Tradition is the realm of true freedom. This idea is not new; it is a pity that contemporary social theorists have not yet caught up with the simple insight of Confucius. Paradoxically, the civilizations that have set themselves to imitate the past always have been the most creative and truly innovative ones. The brilliance of Japanese culture follows from its devotion to classical Chinese culture, to the extent that one of its three scripts (kanji) and two of its three major rei igious traditions (Buddhism and Confucianism) were imported from China. The European Renaissance was fired by the ambition to recapture the art and thought of ancient Greece and Rome; pictorial perspective was discovered by Brunelleschi in 1420 under the mistaken belief

that he merely was recovering a lost Roman technique, and opera- was invented in Florence by Peri, Caccini, and Monteverdi in an attempt to re-create the effect of Greek tragedy. Botticelli's famous painting of Venus rising from the sea was a careful reconstruction from written accounts of Apelles's long-destroyed fresco in the Temple of Asclepius at Kos. More recently, one can cite the surge of creativity that was released by the Romantic neomedievalism of the 19th century, and the conscious use of classical European models by the writers of the American Renaissance -Melville, Hawthorne, Thoreau, Emerson, and even Dickinson and Whitman. Science itself is the investigation of the past. The whole exercise of science is to assign causes to events and to seek the component elements of complex wholes. Thus it is concerned to find what existed before the present: The biologist who asks what is the species, genus, fami Iy,order, class, and phylum of an animal seeks its origin in an archaic and undifferentiated little group of organisms whose basic body plan has been inherited by wildly di fferent modem descendants. When a chemist analyzes a lump of matter into its molecules, those molecules could be four billion years old; the atoms of which the molecules are made could have been spawned billions of years earlier in the convulsions of an exploding star; the subatomic particles that make up the atoms would be older still, dating back to the first second of the Big Bang. So science is essentially conservative and backward-looking, yet, again paradoxically, the only truly new knowledge we ever get is scientific knowledge, which is the sum of all the facts that have ever surprised human beings by turning out to be different from what was expected: The whole point of experiment and observation is to see something nobody has seep before in the past. Only by devoting itself to the past, to what has already happened and thus cannot be revised according to our wishes, does science come to know new things.

rt makes new things, but the innovativeness of art, like that of science, is based on fidelity to the past. When we tread in the steps of the ancient poets and sages, we may sometimes reach where their steps could no longer go-and there we stand at the edge of the radically other, the truly shocking. "You say I am repeating/Something I have said before. I shall say it again./Shall I say it again?" asks T.S. Eliot in Four Quartets, that most modernist and conservative of poems. "Little Gidding," the final Quartet, re-

counts a meeting between Eliot and a "familiar compound ghost," at first unrecognized but rapidly taking the form of Dante Alighieri, who advises Eliot on how to meet his death. The point is that Dante had similarly encountered the ghost of a dead poet-Virgil-in his journey to the land of the dead. And in Virgil's description of the meeting of Aeneas with his dead father, Anchises, in Book VI ofthe Aeneid we can clearly infer Virgil's encounter with his poetic father, Homer, who had given Virgil the makings ofthe underworld in the Odyssey. The story of Orpheus, whose skill on the lyre enabled him to pass through the gates ofthe underworld, to enter the land of the rlead and return to the land ofthe living, is only one version of the universal journey of the shaman-that special individual who, in a trance, leaves his or her body, flies through the air, enters the cave in the mountain, descends to its roots, and learns there the wisdom that the tribe will need for the future. What is the meaning of this story? Not that there is nothing new under the sun, or that we should limit our lives to the precepts ofthe ancestors, but rather that we have more to learn from the vast store of wisdom gathered by human beings over the long span ofrecorded time than we do from yesterday's newspapers. Our ancestors were great adventurers and discoverers, and in their company we are more likely to encounter new things than in that of the fashionable and the memory less. The peculiarly human innovation that nudged us into a different world from our animal relatives was the capacity to pass on thoughts and feelings-even a large moiety of personal identity-from one generation to the next. The innovation was not the ability to pass on information as such: All living species pass on their collective experience in the form of genetic inheritance. What was new was that the subjective world of the individual could now be transmitted, through works of art and choreography and songs and stories and all the other forms of culture. These were the first artificial intelligence programs, fitted to the wetware of the human brain and nervous system but able to evoke in the minds ofthe living the knowledge and skills and style of intelligence of the dead. Still, it is possible to forget and to lose contact with the thoughts of the dead. When this happens to a society, the effect is exactly like that of a massive stroke in the human brain: Hemiplegia, amnesia, and dyslexia propagate along the path of the lesion, parts of the brain are cut off from one another and begin a ruinous civil war, skills and capacities are lost, and isolated sections of healthy tissue atrophy from disuse. The present attempt in the academic humanities to suppress the cultural past and censor our conversation with the ghosts of the dead is not a stroke of this magnitude; it is more like a minor syncope, a scar around which the rest of the cultural brain can jury-rig a set of alternate connections. Our museums, libraries, galleries, opera houses, symphonies, local cultural organizations, bookstores, corporate cultural-enrichment programs, and artmovie theaters are probably sufficient to keep the cultural memory intact even if the humanities and arts departments of the universi-

ties change themselves into ideological re-education camps. But though the memory ofthe dead is not lost, we will still require shamans to establish the communication with them that will enable us to hear what our civilization needs in its next hectic century. And shamans require certain specific skills, which are symbolized in the old underworld stories by the golden bough, the caduceus, the lyre, the magic flute, the shamanic drum, the spirit-doctor's rattle, or the mask of the angakok. The talismans refer to the ancient techniques of the arts-melodic structure, poetic meter, dramatic mimesis, pattern design, storytelling. Modernism, broadly speaking, repudiated all these traditions; and postmodernism is a bitter, nostalgic, incompetent, and promiscuous parody of them. Awakened to both the memory and the extent of the loss, young artists and poets see the new world with ancient eyes, revealed in an amazing, brilliant light; contemporary America transformed in the language of the Orphic lyre, the cities and suburbs come alive in all their strange, Hadean, Arcadian grotesqueness and beauty.

hen we imagine the future, it is relatively easy to extrapolate the technological wonders-virtual reality, artificial intelligence, biomedical immortality, space travel, and so oninto a "futuristic" scene. But the very adjective "futuristic" suggests the limits of this approach. The world today is not more futuristic than it was 20 years ago-rather less, I think. The really remarkable transformations have extended our access to the past. During the Middle Ages, one of the two great periods of Greek and Roman classical design lay not in the past but in the future. Think how the European visual imagination was altered by the excavations of Pompeii, whose frescoes suddenly acquainted them with a whole register of ancient life, so different from the former image of antiquity as a world of time-bleached white marble. Consider how the combination of recording and musical scholarship has brought about the paradox that we are probably more in Bach's musical presence now than any 18th-century German would have been. The national soul of Mexico is today far more Mayan and Aztec and Nahuatl than it was a hundred years ago. Our 21 st century is going to be drenched with the fresh images and sounds and poetry of past ages, and our virtual reality will be our whole human past-what, after all, is there left that is more interesting to explore? Thus any present inhabitant of the past is also a forerunner, a prophetic seer, and advance guard of the future. A contemporary cliche holds that we should pay attention to the future because that is where we shall spend the rest of our lives. It would perhaps be more accurate to say that we should pay attention to the past, and for the same reason. 0 About the Author: Frederick Turner is a poet and professor of arts and humanities at the University of Texas in Dallas. His most recent book is When the Boys Came Back.

Are Scientists Wrongto Patent Genes? The author discusses two recent books on the new biology that take on different subjects and reach different conclusions, but which together discuss the controversial relationship between scientific discoveries and their inevitable commercialization.

In 1972, Ananda M. Chakrabarty, a microbiologist at General Electric, created a genetically engineered strain of bacteria capable of breaking down crude oil. Chakrabarty then filed for a patent, arguing that the laboratory creation-a living, growing microscopic life- form-was rightfully his. Eight years andthree appeals later, the U.S. Supreme Court ruled in his favor. Science hasn't been the same since. Until the Chakrabarty decision, no one had ever received a patent on a genetically engineered organism. Life, in all its manifestations, was thought to be unpatentable. Until Chakrabarty, in fact, even the idea that scientists might own and profit from life-forms they had created was unheard of. Biology, according to its romantic self-image, was about the pure and selfless pursuit of knowledge, about publishing and sharing, about cooperation and collaboration. But the Court's decision-five to four-in Diamond v. Chakrabarty changed the rules. If life could be patented, then those who worked with life could be entrepreneurs. And if biologists were potential entrepreneurs then genetic science itself had implicitly Reprinted by permission; Copyrighl'1) 1995 Malcolm Gladwell. Originally in The New YorkCl:

become a commercial enterprise, subject as much to the competitive and acquisitive culture of the marketplace as to the collaborative culture of the laboratory. Today, just 16 years after the Chakrabarty decision, hundreds of university scientists have deals on the side with private companies, and it is now inconc~ivable that a scientist would make a valuable genetic discovery and not patent it. A little more than a year ago, after one of the longest and most extensive gene hunts in history, a team led by scientists at the University of Utah in Salt Lake City announced that they had succeeded in finding BRCA 1, the so-called breast-cancer gene. Soon after, they announced that they had .filed for a patent on the gene, that the gene's rights had been sold to a major pharmaceutical company, and that a small biotech company they had founded would immediately start using the gene to make a diagnostic test. In one way or another, the major concerns that continue to surround genetic engineering all center on this transformation. Few people worry any more about the value or the safety of DNA research, but there remains a sense that the union of commerce and genetics is somehow unseemly-that money and DNA don't mix.

In 1972 Ananda M Chakrabarty created man 'sjirst genetically engineered strain of bacteria, for which he later got a patent. This 1970s' photo shows him at work at the GE Research and Development Center in Schenectady, New York.

When, for example, the announcement was made that BRCA I had been found and a patent was being sought, the immediate response of some health advocates was not joy over the speed at which the rcsearch was being turned into something useful but dismay at the fact that the gene had become private property. There is even a campaign afoot, kicked off in 1995 by a broad coalition of rabbis and clergy, to ban gene patents altogether. Although they are not opposed to genetic engineering itself, the campaign's leaders object to the idea that a scientist or a com-

pany should be allowed to own the fruits of human and animal genetic experimentation. Life, they maintain, belongs to God, and not to man. What should we make of this dissension? Do gene patenting and the resulting commercialization of genetic science really cross moral and ethical lines? These questions lie at the heart of two recent and engrossing accounts of the new biology. The books take on very different subjects, and they reach very di fferent conc Iusions, but together they provide an excellent introduction to the debate that, according to one leader of the anti-Chakrabarty movement, may "dwarf the pro-life debate within a few years." Altered Fales, by Jeff Lyon and Peter Gomer, two Pulitzer Prize-winning science writers at the Chicago Tribune, is the story of the rise of gene therapy: the emerging art of treating disease by replacing or repairing defective genes. Traditionally, biotechnology has used the human body as a kind of pharmacy-a source for new therapeutic compounds, which can be cloned, manufactured, and administered just like any other drugs. But gene therapy goes one step further. It involves treating disease by direct intervention at the genetic level. Typically, gene-therapy researchers use as their tool retroviruses-the viruses (of which HIV is one) that do their damage by inserting their DNA directly into the nuclei of the cells that they infect. When those cells grow and divide, the retroviruses divide and spread along with them, which makes them an ideal means of inserting new and helpful genes in human cells. Gene therapi'sts take a retrovirus and strip it of all the genes that make it dangerous: they disarm it. Then they add the gene that is missing or defective in the disease they want to treat, and infect the patient with the modified virus. With luck, the virus will splice the new gene into enough of the patient's cells so that his or her genetic dysfunction can be corrected. Much of Altered Fates is given over to a detailed and fascinating history of the very first gene-therapy experiment: the daring and, ultimately, successful treatment by a U.S. ationall nstitutes of Health (N IH) researcher, William French Anderson, of a

young girl suffering from ADA (adenosine deaminase) deficiency, a rare immunological disorder known popularly as "bubblebaby disease."The balance of the book is an exploration of the potential uses of this technique, since there are, at least in theory, very few diseases that wi IJ not be amenable in some way to genetic intervention. High blood pressure? Replace the genes that predispose some people to hypertension with a set of genes that don't. Breast cancer? Identify every woman carrying defective genes of the ki nd that lead to breasttumors, and replace those genes. Some of these experiments are years away, of course. But it's possible to see in their range an explanation of why biotechnology has evolved in such a drainaticand, for some, vexing-way. It was once the case that basic science and the kind of applied biomedicine that resulted in the invention of drugs were two entirely distinct phenomena. At one end of the chain, a scientist might notice that a certain chemical compound had certain interesting properties in the test tube. At the other end, a drug company might take that compound, test and retest it, try it out on m ice and maybe on monkeys, pray that it didn't have weird side effects, and try to figure out how to manufacture it; then, tens of millions of dollars and a decade or more later, that compound could maybe-just maybe-make it to the marketplace. Now the gap between basic and applied research has been narrowed. Gene therapy means that the m in ute you fi nd and decode a gene that plays a key role in disease you have something of value, and that discovery can be patented and protected. It can be cloned and grown in a laboratory, without the millions of dollars in production costs that a conventional pharmaceutical house needs for such research. In short, the financial and technical barriers to entering the pharmaceutical industry are being removed, which is why virtually all the major players in gene therapy have either formed alliances with private industry or founded biotech firms themselves. This is a prospect that Lyon and Gomer-like the religious coalition formed in 1995-find troubling. Greed, they write, rather than "scare-mongering

and eugenics scenarios," is the biggest long-term threat to gene therapy. Biologists have been "shameless," often "shattering the boundaries of good taste in their zeal to form private companies, join advisory boards of start-ups, welcome venture capitalists into their labs, and accept equity positions with the promise of lucrative stock deals down the road." Statements such as "The pursuit of pecuniary gain interferes with the process of seeking truth, most people believe" abound. Piece by piece, the genetic information found inside every human being is being decoded, patented, and sold off to the highest bidder, and Lyon and Gorner are not happy. These are serious charges, but the authors don't do a very good job of substantiating them. Why is the rush by scientists to form companies, for example, evidence of greed and shamelessness? I-Jow, exactly, does the pursuit of pecuniary gain interfere with the process of seeking the truth') Isn't the extraordinary access that gene scientists have to biological "truth" the reason they are worth so much money') And wouldn't the real ethical lapse be for gene therapists, having conceived of technologies with vast and immediate therapeutic value, not to try and bring them to market as quickly as possi ble? The irony is that only a few years ago the most persistent complaint against medical science was that it was too removed from the needs of patients and too slow in translating laboratory work into something useful. Now, just at the moment when the emerging fields of genetic engineering seem to have answered those complaints, people like Gomer and Lyon have decided that they don't like market-oriented science after all. It is tempting to conclude that Gomer and Lyon are simply hostile to the commercial world, but that may bc unfair. It may just be that, like so many of the contemporary critics of biotechnology, they don't understand it. Take the Chakrabarty case, for instance, which began this whole controvcrsy. Legal doctrine in the United Statcs holds that products of naturc arc not patentable. Stumbling onto a ncw form of precious stone in a desert doesn't give you patent rights to that object. You didn't invent the

stone. You merely found it. But in 1980 the Supreme Court ruled that Chakrabarty's bacteria could be patented because they had been genetically altered~modified and perfected by his own ingenLiity. The well-known ethicist Leon Kass argued in his 1985 book, Toward a More Natural Science, that the Court's decision overstated the extent of Chakrabarty's contribution. Chakrabarty did not deserve a patent, Kass wrote, because he himself did not create the new bacteria: "Rather, he played the matchmaker for a shotgun wedding ... while the living organisms did the work." This is the secular version of the point made by the religious critics of Chakrabarty. To them, the granting of gene patents represents a usurpation of God's

A patent is more than a reward for ingen uity. It also represents a deliberate attempt to keep the process of discovery open. position as the father of life. These are superficially appealing arguments, but they miss the point. Patent law has never pretended that the inventor plays the role of creator. lfit did, precious little in our world could be patented. Patent law is a nil/eh more modest undertaking: it is about encouraging people to advance human understanding, to make inventive and useful contributions to society. That is just what Chakrabarty did, and that is clearly what gene hunters do. To receive a patent o~ a gene, scientists specify where the gene is situated, what its exact genetic sequence is, what function it performs in the body, and what they intend to do with their discovery~and none of these are trivial accomplishments. BRCA 1, for example, was hunted for four years by a dozen major research teams around the world at a cost of tens of millions of dollars. The winner was the University of Utah team, which cleverly used genealogical records compiled by the Mormon church to zero in on fami Iies that passed the defective gene from generation to generation. The Utah team did not invent BRCA 1. But through its own ingenuity and effort it was

the first to unloek the gene's secrets. If you can get a patent for building a better mousetrap, it is very hard to argue that you don't deserve a patent for decoding the mysteries of breast cancer. A patent is more than a reward for ingenuity, however. It also represents a deliberate attempt to keep the process of discovery open. Had the Supreme Court ruled against Chakrabarty, gene-hunting would have descended into secrecy. Why would any researcher disclose his discovery if a competitor could steal it without repercussion? A patent, in this sense, represents a trade. The patent office grants a scientist a 20-year exclusive commercial license for his gene. In exchange, the scientist agrees to disclose everything he knows about the gene, so that other scientists can use .that information and the scientific process can go on. This does not sound like a major ethical transgression. It sounds like an intelligent compromise. This is not to say that the introduction of patents into the laboratory has had no effect on the way in which research is conducted. Margaret Heckler, the Secretary of Health and )-Iuman Services in the Reagan Administration, once described the NIH as "an island of objective and pristine scientific research excellence untainted by commercialization influences." That was 13 years ago. Today, numerous N IH employees hold patents and others h~ve been perm itted to form all iances with outside companies~deals that can place limits on the scientists' ability to collaborate. Gomer and Lyon are right to see this as a problem. But what they don't seem to appreciate is that, like gene-patenting, this change in t~e scientific culture represents a reasonable compromise in the name of pushing research forward. This is a point grasped far more successfully by Barry Werth in The Billion-Dollar Molecule, his account of four years in the life of Vertex Pharmaceuticals, a small Cambridge, Massachusetts, drug start-up. Vertex is engaged in what is known as "rational drug design"~a new approach to making drugs which, like gene therapy, emerged from the biomedical explosion of the past 20 years. Many drugs~that is,

standard chemical compounds-work by latching on to specific receptors on human cells, much as a key fits into a lock. Traditionally, a company screening for, say, a drug to combat HIV would put a receptor from the virus in a test tube and then run thousands of chemical compounds through it, looking for the right chemical "key." Rational drug design, however, concentrates on the other end: it examines the lock. Scientists take the cell receptor they are interested in, break it down, put it on a computer, make a three-dimensional model of it, and then construct, molecule by molecule, a key that will fit into it. The consequences of this approach are enormous. The more nearly perfect the fit between the drug and the molecular lock, the better the drug works and the fewer side effects it causes. Having fewer side effects means that you can use higher doses, and at higher doses a whole range of drugs that now have only limited efficacy suddenly start to look like wonder drugs. Rational drug design is also, at least in theory, a dramatically cheaper way offinding new therapies. Screeni ng programs cost tens of millions of dollars. Rational drug design can be conducted in a university laboratory, and that means that this technology, like gene therapy, has had the effect of narrowing the gap between basic and applied research and bringing the scientific and business worlds into close and, at times, uncomfortable union. Vertex is just such a corporate-academic hybrid. Founded by Joshua Boger, who was a top executive at the giant drug film Merck, it has a scientific advisory board studded with some of the biggest names in academic biomedicine, and its staff originally included members of university faculties. From the beginning, Vertex was an attempt to bring the creativity and flexibility ofacademic science to a private company. The firm's vision, however, was repeatedly compromised. One of its earliest collaborations, for example, was with the Harvard University chemist Stuart Schreiber. Schreiber is one of the world's preeminent drug designers, and on paper the case for the two to work together was compelling. But Vertex is a business, try-

ing to beat competitors to market, and Schreiber is an academic, accustomed to a freer exchange of ideas. The two quickly proved incompatible. ''I'm not concerned that Stuart will find a compound that will compete with ours," Werth quotes Boger as saying. "But I'm tremendously concerned he may tell everyone in the world what we're doing." Boger, as Werth points out, "feared that Schreiber was 'persistently naive' about the need for secrecy." As Vertex grows, the tensions between the company's scientific and corporate agendas become more and more apparent. Desperate to make scientific progress in order to satisfy the company's investors, Boger drives his scientists almost to ex-

"It would be nice ifscience were still pristine and untainted by commea-cialization, butwe are now demanding something more: we are demanding that it be useful." haustion. There are screaming matches and alcohol-dre'nched interludes. One of the firm's top researchers boycotts a reception held for Vertex's Japanese backers, because of what he considers "aviolation of the purity of science." Boger, who is one of the most brilliant chemists of his generation, becomes obsessed with financing his company. "As always the icy short-term pressure of raisin'g money subsumed the vagaries ofmorality and social good," Werth writes, after Boger hesitates to invest heavily in a promising idea for an AIDS drug. "Vertex wouldn't pick the project that would benefit the most people or target the most pressing need; no company would. It would pick the project with the best overall chance of success, which first meant having a good story to tell investors. In that arena, by late 1990, AIDS was a rough sel!." It is everything that Lyon and Gomer fear will happen in the new world ofscience. Except for one thing: Vertex, under Boger's direction, makes astonishing strides. In the space of the four-and-ahal f years covered by Werth's book,

Vertex goes from a bare-bones, 23 -person operation with only the vaguest scientific agenda to a 135-person firm with six prom ising drug projects. This is the trade-off presented by the post-Chakrabarty world, and Werth captures it wel!. In a crucial passage he recounts a conversation he had with Manuel Navia, one of Vertex's top scientists. Navia was the first person to figure outthe structure-in essence, to describe the lock-of a critical part of the AIDS virus known as HIV protease, and he published his findings, to great fanfare, in the distinguished journal Nature. But it soon became clear that he had made a mistake. In the frenzied, results-oriented atmosphere of commercial research, Navia had misinterpreted about 15 percent of the structure. It wasn't a cri tical 15 percent, and it made no difference to those who were using his model to design drugs to stop the virus. Nonetheless, t:Javia was widely criticized, his reputation savaged by academic competitors. According to Werth, though, Navia was unapologetic: "'My personal mission is to use this methodology to make drugs. I'm not an academic. When you work in a place like this, and you're cranking out a structure in four months or nine months, you're cutting a lot of corners. You're supposed to cut corners. My job here is not. ..to provide them with perfect crystal structures two-and-ahalf years from now; it's to provide them with adequate crystal structures now.'" This is not the voice of science corrupted by commerce. This is science in an honest struggle to balance the confl icting responsibilities of the laboratory, the marketplace, and the patient. Those who deny that this struggle is necessary-those who cringe at the thought of university researchers forming companies and "life" being patentedare those for whom science and research remain in some way a romanticized abstraction. It would be nice if science were still objective, pristine, and untainted by commercialization, but we are now demanding something more: we are demandingthatitbeuseful. 0 About the Author: Malcolm Gladwell is New York bureau chief of/he Washington Post.

FACE TO FACE WITH

,";\~TI~ SC()~S(S( that is not the idea. There is very limited confrontation with the Marxist government. That's something else. Arguments, arguments and confrontations. The main thing is the spiritual side of the 'boy becoming a man, having been enthroned at a very young age and then the idea of the escape. Instead of being an escape it is really a journey for the preservation of the spiritual nature of Tibet. And he takes Tibet with him, all around the world. Have you selected the cast? Scorsese: They'll all be nonprofessionals, all Tibetans. And that's going to be a tough call because we need three Dalai Lamas~a three-year-old, a 12-year-old, and a 17-yearold. We went up to see the Dalai Lama in Dharmshala and we met a lot of Tibetans up there. This was your first audience with the Dalai Lama? Scorsese: No. I met him a number of times over the past four years, in New York, in Washington, D.C. How does he strike you as a person? Were you overawed by his presence? Scorsese: Actually, yes. I find him the kind of world leader that we are missing. A man with compassion. That's what you need these days, especially with things getting more complicated and more signals being sent into the homes through television and video. I must say I find that it's more important to look inside than out. That's what I have been learning. I don't know if I can do it [laughs]. Do you think ordinary mortals like us can raise ourselves to that height? Scorsese: I really don't know. I think the only way to do it would be to alter your lifestyle completely. We have to get away from the bombardment of images and messages and politics. We are still evolving. This is not the end of the human chain. We are not perfect beings. So maybe if we all survive a 100,000 years from now, maybe then the spiritual side wi 11be stronger than the animal side, that is violence, I hope. 0

RON BROWN (1941-1996)

Secretary of Goodwill U.S. Commerce Secretary Ronald H. Brown, who died March 3 in a plane crash near Dubrovnik, Croatia, along with 34 others including several prominent business leaders, was a strong advocate of American business interests. During his three-year tenure, Brown's pragmatic approach combined with his abilityto generate goodwill earned him the sobriquet of "commercial secretary of stat e." He led numerous trade missions all over the world, including a highly successful visit to India in January 1995 (see SPAN, February 1995), winning admirers wherever he went. One such admirer was Prime Minister P.V. Narasimha Rao. In a condolence message to President Bill Clinton, Rao expressed shock over the untimely death of the Secretary of Commerce. He said: "Brown's warm personality, his hopes for the future ofIndo-American commercial ties, and his determination to get things done, impressed us greatly .... We will miss his guiding hand." Brown's getting-down-to-business approach appealed to many others in the Indian Government and business establishment as well. Commerce Secretary Tejinder Khanna said Ron Brown gave a "new thrust and dynamism" to India's commercial relations with the United States. In his condolence statement, he said: "His death has robbed India of a close friend and well-wisher." The then president of the Confederation ofindiafllndustry (Cll), Rajive Kaul, echoed the same sentiment when he said: "The cn feels a sense of deep anguish, sorrow, and loss at the tragic death [of Brown]." The president of the Federation of Indian Chambers of Commerce and Industry (FICCI), Deepak Banker, said he was deeply influenced by Brown's "proactive and constructive attitude to problems and challenges." Brown's pursuit of "commercial diplomacy" was effectual in putting India on the U.S. Government's list often big

emerging markets worldwide. During Brown's five-day visit to India last year the two countries reactivated the Indo-U.S. Economic/Commercial Subcommission. Also, a high-level private-sector body, the U.S.-India Commercial Alliance (USICA), was set up to find, as Brown put it, "a new and flexible means of bringing together business and government" and "challenging all of us to lay the foundation for the closer commercial ties which we seek" (see SPAN, January 1996). For the 54-year-old Commerce Secretary, "commercial diplomacy" was "central to and not a by-product of foreign policy," and it helped create the "starting point from which we may expand our relationship in many directions." He was confident that this approach would add a new sense of urgency to Indo-U.S. economic and trade ties. "Commercial diplomacy brings benefits for both the U.S. and India-providing India the tools needed to foster its remarkable growth and economic reforms, while further expanding India's vast market to American firms and creating jobs and opportunities in the United States," he said when he visited New Delhi. As was his wont, Brown was accompanied by a delegation of prominent American business leaders. During Brown's visit the two countries signed more than 25 agreements totaling $7 billion in the fields of power, telecommunications, health care, environment, petrochemicals, insurance, and financial services. Brown noted that the achievements of the trip had "surpassed" his own expectations. He described his meeting with Prime Minister Narasimha Rao thus: "We were encouraged by his tenacity, by his vision of the future, by his willingness to pursue economic reform in a way that makes sense for the Indian people." When Brown's plane crashed into a Croatian hillside, the Commerce Secretary was on a similar trade mission in Bosnia: to secure new businesses for 12 American industry leaders as part of the U.S.-led $5 billion campaign to promote economic reconstruction of the region. The crash rung the curtain down on a brilliant career during which Brown transcended the racial barrier and became one of the most successful AfricanAmerican figures in public life. "He had perfected that uncommon skill," wrote the Washington Post s Kevin Marida after Brown's death, " ...the ability to glide like a swan between black and white worlds, touching down everywhere in between, neither a stranger nor a captive to his race." Born in 1941 in Washington, D.C., Ron Brown grew up in New York's Harlem district, where his father was manager of the famous Hotel Theresa, hostelry to such legendary heroes as Duke Ellington and Joe Louis. It was also the place where he had his first brush with a political figure-getting his picture taken with Richard Nixon. He was 12 at the time. "I immediately decided I wanted to be a Democrat," he said many years later. With the help of a scholarship, Brown attended Middlebury College in Vermont-where he was the only black in the class-and later received a law degree from St. John's University in

New York. He also served for four years in the Army. Brown's march into politics began in the late 1960s when he gravitated to the civil rights movement under the guidance of such mentors as former New York Governor Mario Cuomo, who taught him law at St. John's University, and Edward Kennedy, who plucked out Brown from the National Urban League, a renowned civil rights group, to manage his election campaign in the key state of California during his 1980 presidential bid. After working for Kennedy, Brown came back to Washington and soon became an eminent lobbyist, both as a businessman and as an advocate of public policy. In 1988 he returned to politics as Jesse Jackson's election manager. His consensus-building approach helped unify the Democratic Party and he emerged as chairman of the Democratic National Committee-the first AfricanAmerican to head the party. In his official capacity Brown healed the divisions in the party and was a pivotal figure behind President Clinton's 1992 victory. During his three-year tenure at the Commerce Department Brown successfully promoted his "export-led" economic agenda all over the world, persuading governments to open their markets and investment regimes for foreign participation. Also during his stewardship, the United States formulated the first-ever comprehensive review of its commercial strategy for the 21 st century by identifying ten big emerging markets that offered the greatest trade opportunities. Brown devised specific targets stressing upon the growing links between government and business strategies, and set up the necessary infrastructure to promote American exports and help win foreign business projects for American companies. George Fisher, chairman of Eastman Kodak Co., who accompanied Brown on a trade mission to China two years ago, recalled: "He was unbelievably good about picking up the phone and making the right calls. He put the full respect of the U.S. Government behind American business on those trips." Another business leader, Dennis Bakke, CEO of AEC Corporation, who accompanied Brown to India last year, described how Brown was instrumental in his company getting a $600 million contract to build a power plant. "While he was there, we were actually able to get the agreement signed before he left." In the death of Ron Brown, President Clinton said he has lost a personal friend. Addressing the employees of the Commerce Department the President described Brown as "one of the best advisers and ablest people rever knew .... Ron Brown walked and ran and flew through life and he was a magnificent life force, and those of us who loved him will always be grateful for his friendship and his warmth." Later, speaking at a special memorial service for him, the President said: "There was a noble Secretary of Commerce who never saw a mountain he couldn't climb or a river he couldn't build a bridge across." -A.B.

The Cranes Come Back to

The park personnel and the naturalists and bird-lovers at Bharatpurwere simply ecstatic. There was reason for their elation: On February 1, after an absence of two years, the splendid, ultrarare Siberian cranes returned to the world-renowned Bharatpur marshes. Everyone looked hopeful for a possible revival of the "wintering" of Sibes (in popular parlance) at Bharatpur-including George Archibald, director of the International Crane Foundation (ICF) in Baraboo, Wisconsin. Archibald and his team were at Bharatpur from February 15to 18. Years 1994 and 1995 were an agonizing period for the crane scientists gathered at Keoladeo Ghana National Park in Bharatpur. For three months beginning January 1994, scientists from the ICF, Russia, and India waited patiently for the wild flock of Sibes that usually wintered in Bharatpur (see SPAN, June 1994). They were to release some captivereared Siberian chicks in an attempt to mix them with their wild brethren and bolster the gravely endangered population of these magnificent birds. But, to their dismay, for the first time in about 200 years, the cranes failed to arrive,jolting crane-conservation scientists and bird-lovers alike. Were these lilies of birds already totally decimated? Did all this mean a possible extinction of this subpopulation of one of the most threatened crane species? Or, had they merely strayed offtrack? Questions like these loomed large and premonitions of the worst kind faced us all. It was the same sad story in the 1995 wintering season too, leading one and all to the sad conclusion that the Siberian cranes had been totally wiped out. Nevertheless, early this year scientists and bird-lovers again parked themselves at Keoladeo National Park hoping against hope that these magnificent birds might reappear. And to their utter delight, on February 1 they spotted a tiny, four-member flock of Siberian cranes flying into these waterfowl swamps! No one quite believed what they saw. These hardy cranes had survived whatever lactor(s) kept them from reaching Bharatpur for the past two seasons as part of their traditional autumnal migration. The Sibes had returned from apparent "extinction. A specific population salvaged by some chance miracle. Of the four wild Sibes that arrived, one was a chick that was ringed last August by the pioneering Russian crane conservationist, Alexander Sorokin (popularly known as Sasha). He is an acknowledged expert in the breeding behavior ofSibes and in charting their migratory route through banding and satellite-transmitter techniques. Sasha is credited with the initial discovery of the breeding site of the Bharatpur-wintering Sibes along the Kunovat basin in the vast, hostile terrain of western Siberia. What may be of some significance to conservationists is the fact that February 1 is the latest when the Sibes have ever arrived at Bharatpur, and a group offour is the smallest num-

Bharatpur

ber that has ever arrived. Where have these Sibes been for the past two wintering seasons, and why they failed to arrive at Bharatpur are difficult questions to answer. One is quite alarmed since just four birds do not constitute a very viable number for the arduous migratory journey from Siberia to India-and back. The Sibes' return nevertheless is a milestone in the natural history of migratory birds. This may as well be the beginning of an upsurge in the preservation of the western Siberian population of this crane species. The ICF and park officials at Bharatpur are sure to redouble their efforts and mount new strategies forthe preservation of this fragile population of the India-wintering Sibes. It is quite obvious that without collaborating with the captive breeding programs of the ICF and programs like putting satellite transmitters on the Sibes, there simply cannot be any hope of saving the Siberian crane population. We simply do not have the infrastructure, nor the much-needed scientific motivation to save this splendid winter guest. Unfortunately, the permission to put transmitters came late this time, and the AmericanRussian scientists (Meenakshi Nagendran, Sorokin, and Yuri Markin) could attempt to capture only one of the birds before they flew off on theirreturnjourney to Siberia. ICF Director Archibald, who was doing fieldwork in Cairns, Australia, was informed by fax ofthe Sibes' arrival. He reached Keoladeo on February 15 with an entourage of three-John and Judy Day, and an American professional photographer Eleanor Briggs. Soon all of us were riding the park's battery-operated bus to reach the site where the Sibes were. There was a tremendous sense of anticipation. Before we could reach the site, the bus had to halt at several points for taking photos of other birds. Obviously, with all these avid photographers, the ride was perforce punctuated by much picture-taking. We were savoring every bit ofBharatpur's peak-season avian spread that lay before us! We spent more than two hours at the Sibe spot, with everyone hastily photographing, trying to capture every move and moment of these errant birds that had played truant for the past two years. Laterwe went to Shanti Kutirwhere I met myoid friend Nagendran and David Ferguson, . wildlife biologist and international coordinator of the U.S. Fish and Wildlife Service which, in conjunction with the ICF, is actively involved in a worldwide effort to save the Siberian crane. Then it was time to leave Bharatpur, and we all hoped that this spectacle of the wintering ofSibes would go on forever for the benefit of humankind. 0 About the Author: P Kumar is a freelance photojournalist specializing in wetland birds, especially cranes. He has been teaching zoology at Hansraj College. Delhi UlliversityJor the past two decades.

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