Saturday, October 23, 2004


NEWS: Densmore leaving Transcript; will assist HSV; Clickshare

WILLIAMSTOWN, Mass. -- Aug. 18, 2004 -- Newspaper executive Bill Densmore
is forming a media, marketing and management consulting practice to serve
clients in the Berkshires and southwestern Vermont, and will start by
assisting Hancock Shaker Village while the living-history museum seeks a
new director.

Densmore will leave his current post as advertising director of the North
Adams Transcript to serve as director of the museum in Hancock, Mass., for
the next several months. Densmore will take over when current director,
Lawrence Yerdon, leaves Sept. 5 to head the Strawbery Banke outdoor
history museum in Portsmouth, N.H.

In addition, Densmore Associates will provide sales, marketing and
strategy-planning services to Clickshare Service Corp., a company which
Densmore founded. Clickshare, based in Williamstown and headed by CEO Rick
Lerner, provides Internet user management and transactions handling
capabilities for newspapers and other websites which sell information.

Hancock Shaker Village is an outdoor museum of architecture, agriculture
and crafts. It celebrates Shaker values of gender equality, peace, work,
faith and simplicity through architectural and art preservation, on-site
craft-making performances, education outreach, and exploration of Shaker

"We are intrigued by the relevance of those values to contemporary society
and politics," said Densmore. "And look forward to discovering more as I
work with the HSV staff, trustees, volunteers, donors and visitors."

Densmore and his wife published The Advocate from 1983 to 1992.


1998: Feigenbaum brothers help China in market quest

Feigenbaum brothers help China in market quest

Preaching the gospel of quality

Sunday, November 22, 1998

By Bill Densmore
Special to The Berkshire Eagle


Flashback to 1980: Americans awake to the fact that Japan has emerged
as an industrial powerhouse, challenging U.S. economic supremacy. To
their surprise, an American expert at "total quality management," W.
Edwards Deming, is identified as the key apostle leading Japan's

Flash forward to approximately 2014: Americans wake up to the fact
that China has emerged as an industrial and trading powerhouse, with
the world's largest consumer market. To their surprise, two brothers
from Pittsfield, Mass., preachers of "total quality control," are
identified as key figures in China's success.

Sound farfetched? Not to the brothers Feigenbaum. At age 78 and 73,
respectively, engineer Armand V. "Val" Feigenbaum and his brother,
Donald S. Feigenbaum, may well be able to claim they helped China
emerge from agrarian communism to become the world's most robust
market and the most aggressive challenger yet to U.S. and European

In October, Armand embarked on a 10-day trip to China at the
invitation of that nation's government. He says China is the "new

"In 15 years or less, I expect to see Chinese-made automobiles outside
this window," he says, gesturing to Park Square. "I don't think
realize that would be possible from a country that generated toys and

But he says China has the natural and human resources and the
commitment to total customer satisfaction to deliver better products
and services than its worldwide competition.

Already, he says, one third of TV sets sold in the United States are
now Chinese made.

The brothers are talking about China, total quality and their company,
General Systems, in an interview in their third-floor offices at the
Berkshire Common. The offices are Spartan and tidy -- all utility, no
show. The brothers themselves wear dark suits and polished loafers.

An early prototype X-ray tube -- a vestige of Armand's days as senior
production executive at post-World War II-era General Electric Co. --
sits on a coffee table.

The Feigenbaums founded General Systems in 1968 after each left a
promising career in far-flung GE operations. They returned to their
native Pittsfield, they say, because they wanted to be in a place that
exemplified the work ethic they had seen in their grandfather, an
early GE manager, and which lacked the distractions of modern urban

"We wanted a region that had a respect for engineering technology -- a
history of engineering success in papermaking, iron ore, electrical
engineering and semiconductors -- without being oppressive in terms of
overcrowding," Armand says. "This area had that."

They have not been disappointed. Employee turnover has been minimal
through the years. The brothers don't discuss revenues and are
imprecise about employment levels. But they indicate they have more
than 200 employees worldwide.

They worried this year that they had made a wrong decision as the
city, government and General Electric wrangled over environmental
cleanup. But Donald thinks light manufacturing and information
businesses will increasingly find Pittsfield attractive.

Aside from occasional and mostly unheralded acts of philanthropy, the
brothers are not household names in Pittsfield. But their client list
reads like a who's who of American industrial might: Auto and steel
makers, railroads, banks, farm implementers and international

Listening to the Feigenbaums describe their business -- Armand largely
leads with important emphasis and examples from his brother -- is to
hear a smooth stream of anecdotes and metaphors wrapped around kernels
of insight born of three decades advising a diverse collection of
multi-national giants.

They can chronicle the ills and cures applied to the railroad and
banking industries -- comparing derailments to loan losses -- and
sound authoritative.

Both engineers, the brothers insist that what they provide is an
ever-evolving "technology" of corporate change which has as its aim a
focus on total customer satisfaction. From this goal, they say, arises
a litany of requirements for measuring business processes -- from
manufacturing to human-resources management.

They eschew with a vengeance the word "consulting" placed before the
noun. "We don't feel comfortable just giving advice," says Donald.

When they enter a new corporate environment to "install" their
"technology," the first thing General Systems engineers do is
inventory all of the ways that people and materials are being used
inefficiently or squandered and tally up what it's costing the
company. Then they go to work teaching management and workers how to
change their ways.

Applying a razor-like focus on customer satisfaction, they say the
business gradually sheds extra costs resulting from lack of focus.

In the end, the Feigenbaums say they can prove that the cost savings
realized are many times the healthy fees they charge for their

The have distilled their "technology" of quality down to what they
call 12 proprietary "management operating systems" which are
customized to a particular client's needs, turning management into a
science, not an art.

The 12 systems -- which go beyond "quality" as a mantra -- deal with
such things as new product or service development, material flow and
logistics, asset and information management, financial, marketing and
operations effectiveness. They've also developed 10 "benchmarks" of
total quality.

"We're unique," says Donald. "There's nobody who has developed an
engineering approach, a technology of quality."

Although they may have been at it longer than anyone else, the
Feigenbaums are not the first -- nor will they be the last -- people
to preach the gospel of "quality" to the world's businesses. And what
appears unique is their ability to evolve the pitch as they learn what
works -- or perhaps to some extent as they learn what is required to
satisfy their corporate customers.

Although the brothers are little known in their native Pittsfield,
they say they are treated as celebrities on their now-frequent trips
to China.

"It's bizarre," Armand says. "We are interviewed on the radio and
television stations. It's like we're rock stars."

The reason, he says, is that China's government has turned his 1951
book, "Total Quality Control" (written before Armand reached age 30)
into the "Bible" of Chinese business progress.

Because China does not abide by international copyright conventions,
the brothers have no idea how many copies of the book are circulating,
but they say that every Chinese manager they meet knows of it. It has
been translated by now into 22 languages.

Quality awards named after the Feigenbaums are awarded in Singapore,
Quebec, the state of Massachusetts and by the American Society of

Actually, the Feigenbaums are among at least four gurus of quality,
says Michael Morton, a producer for CCM Productions near Washington,
D.C., which produced a 1980 program for NBC on total quality in Japan.
"And each them thinks their approach is the gospel," he says. "Any one
of the four of them would tell you that, even though the four of them
are very much the same. It's their nature."

The program Morton worked on, "If the Japanese Can, Why Can't We?"
documented how Deming, a physicist working as a post-World War II
reconstruction consultant to Japanese industry, started the notion of
"total quality management" and helped Japan achieve an industrial

To honor Deming, Japanese industry began in 1952 awarding an annual
Deming Prize for industrial excellence. But until the 1980 broadcast,
Deming was a virtual unknown to the U.S. public. After that, he was
famous, courted by the chairman of Ford Motor Co., among others. His
name became almost synonymous with a business quest for quality.
Deming died in 1993.

William Ratcliff, administrator of the not-for-profit W. Edwards
Deming Institute in Washington, D.C., says "Deming was very much
addressing how you manage a company, not in the specialist sense, but
does it to meet the needs of the world, even though his starting point
was a very technical one being a physicist, mathematician and

But comparing the approaches of Deming and the Feigenbaums can be
tricky. Although the Feigenbaums might have seemed more focused on
dissecting processes rather than managing people, in recent interviews
Armand has talked "passionate, disciplined and populist" management
and believing in people.

And the Feigenbaums also argue that numerical quotas are a poor way to
motivate workers to produce customer-satisfying products.

Claire Crawford-Mason, a founding editor of People magazine who
co-produced the 1980 show who has become somewhat of a disciple of
Deming's philosophy, says "The Feigenbaums certainly are distinguished
people, but we are talking about two different universes. Deming had a
complete philosophy of management. The Feigenbaums work at a very
sophisticated level, making much-needed improvements in manufacturing
and the delivery of services -- huge contributions -- but they are
dealing entirely with the tangible world."

"When Deming was still alive," she says, were managing boxes on the
organization charts, and Deming was telling people how to manage the
white spaces between the boxes -- the relationships."

The Feigenbaums would not say they ever focused just on the boxes. But
as they've matured their philosophy, they've realized the importance
of white spaces to even their perception of their home town.

"This part of the world is never going to be the lowest-cost place, or
have a resource base, or be easy to get in and out of," says Armand.
"But it can have human resources -- and that's what quality is about."

The brothers travel the world together, play tennis and golf together
and live together not far from their downtown office. Their father was
an accountant and a grandfather was an early GE-Pittsfield manager.

They share an eternal affection for their late mother, endowed a
public-lecture series at Pittsfield's Temple Anshe Amunim in her name,
and both play classical piano, as she did.

As patrons of music, literature and the arts generally, they also
funded the creation of a writer's room at the Berkshire Athenaeum.

Donald serves on the boards of Berkshire Bank, the Athenaeum, Hancock
Shaker Village, the Berkshire Museum, the Chamber of Commerce of the
Berkshires, and he is a corporator of Berkshire Medical Center.

At Union College in Schenectady, N.Y., the brothers have made numerous
donations and a building and lecture series, the Feigenbaum Forum, are
named in their honor. Both have degrees from Union.

And earlier this month, the University of Massachusetts Medical School
in Worcester announced receipt of $1 million from the Feigenbaums to
endow a faculty professorship to study ways to improve the quality of
patient care in American medicine.

As medicine is increasingly viewed as a business, the Feigenbaums have
come to view it as a new frontier for a systematic approach to
customer satisfaction.

Besides, when both required treatment at UMass/Worcester a few years
ago, they were amazed "that somehow they had built into that
organization a sense of respect for the people coming there."

© 1998 by MediaNews Group, Inc. and Pittsfield Publications, Inc.


This article above is copyrighted material, the use of which may not have specifically authorized by the copyright owner. The material is made available in an effort to advance understanding of political, economic, democracy, First Amendment, technology, journalism, community and justice issues, etc. We believe this constitutes a 'fair use' as provided by Section 107 of U.S. Copyright Law. In accordance with Title 17 U.S.C. Chapter 1, Section 107, the material above is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. If you wish to use copyrighted material from this blog for purposes beyond fair use, you must obtain permission from the copyright owner.


STORY: Interim director appointed for Shaker Village,1413,101~7514~2349516,00.html

Interim director appointed for Shaker Village

By Jack Dew
Berkshire Eagle Staff

HANCOCK -- As it continues its search for a new leader, Hancock Shaker
Village has chosen an interim director to head the museum for the
remainder of the year.

The museum's board of trustees has appointed Bill Densmore interim
director. Densmore is currently the advertising director of the North
Adams Transcript, a sister newspaper of The Eagle.

Densmore will step down from his job at The Transcript and assume his
duties at the museum in early September. He is simultaneously forming a
media, marketing and management consulting practice, Densmore Associates,
and will be working with Clickshare Service Corp., an Internet company he
founded, as it expands operations.

The museum's current director, Lawrence J. Yerdon, is leaving the village
after 18 years to become the president of the Strawbery Banke Museum in
Portsmouth, N.H.

With Densmore's hire, the museum is turning to someone who has spent his
career in the private sector. Martin Langeveld, co-chairman of the board
of Hancock Shaker Village, said Densmore was chosen partly because he will
bring a fresh perspective. Langeveld is also publisher of The Transcript.

"He brings a good human resources perspective and a kind of non-museum
perspective from outside of the nonprofit world," Langeveld said. "This
interim period is not a period where we want to go and make a lot of
wholesale changes, or any wholesale changes, really, but we do want to
take the opportunity to take stock of the organization."

Densmore said he is not an expert on the Shakers, but has an abiding
interest in their history that was aroused when he saw filmmaker Ken
Burns' 1984 documentary "The Shakers: Hands to Work, Hearts to God."

"I was mesmerized by that movie," Densmore said. "I had no idea that the
Shakers were a religious community, and no idea about their values about
gender equality, peace, work, faith and simplicity. I find I am just
intrigued by the extent to which these values are relevant to contemporary
society. If nothing else, I consider this an opportunity to be close to
all of that for a period of months."

Densmore said he hopes to shepherd the museum safely through the
conclusion of two fund drives with which the village hopes to raise more
than $240,000. He said he wants to give the trustees the time they need to
hire a strong candidate to take over permanently.

Densmore's agreement with the museum will allow him to devote more time to
Clickshare. The company, which operates a service that facilitates the
buying and selling of information over the Internet, ranging from news
articles to music to property deeds, is growing, and he wants the time to
help it along.

And Densmore said he sees a similarity between the Hancock Shaker Village
and his work with Clickshare: "It is really a pleasure to work with people
who are struggling with an institution, whether it's a newspaper, a museum
or a start-up Internet company, who are trying to accomplish something
hard without all the resources you would like to have, because in that
environment, people's best energies and creativity come out."

Jack Dew can be reached at


This article above is copyrighted material, the use of which may not have specifically authorized by the copyright owner. The material is made available in an effort to advance understanding of political, economic, democracy, First Amendment, technology, journalism, community and justice issues, etc. We believe this constitutes a 'fair use' as provided by Section 107 of U.S. Copyright Law. In accordance with Title 17 U.S.C. Chapter 1, Section 107, the material above is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. If you wish to use copyrighted material from this blog for purposes beyond fair use, you must obtain permission from the copyright owner.


1997 -- ComputerWorld workup on SET protocol

SET followup teaser BY BILL DENSMORE

Posted June 30, 1997 on ComputerWorld website

Will you use your credit card on the World Wide Web? IBM wants to make
sure the answer is "yes."

IBM ran a TV ad during the NBA playoffs that shows three men
discussing how one of them had just purchased something on the Web. A
woman walks in and expresses dismay about a credit card being used
across the Internet. But it's OK, the youngest man says -- his
merchant uses the Secure Electronic Transaction (SET) protocol.

While the ad doesn't delve into its specifics, the SET protocol is
essentially a set of written standards that describes how credit-card
associations, banks, merchants and consumers should implement
credit-card transactions across the Web (see related SET tutorial).

The first officially sanctioned version of SET-enabled transaction
software, written by Terisa Systems, Inc. (now owned by smart card
maker Spyrus), became available June 1. It was given birth by a
coast-to-coast collaboration among financial titans: Visa
International, Microsoft Corp., IBM, Netscape Communications Corp. and
MasterCard International.

Neither did the ad explain that SET will eventually require online
credit-card users to possess a new form of identification called a
"digital certificate," an electronic identity vouched for by a trusted
third party such as a bank. The protocol was designed to all but
eliminate the risk that you aren't who you say you are when you
conduct business with banks, legitimate merchants and credit-card
companies on the Internet.

"They tried to make sure that you could do some things in SET that we
take for granted in the ordinary commerce world, like making sure you
can buy something and then return it and unwind the transaction," said
Carl D. Howe, an analyst at Forrester Research, Inc. in Cambridge,

But IBM wasn't trying to explain all that. In fact, if it were up to
IBM and other promulgators of the protocol, SET would become such a
familiar brand name that no one would question what it means. They
would just know that it indicates "trust." To reinforce the brand
notion, the card associations are holding a gala event on July 18 in
San Francisco to unveil a new SET trademark. SET software vendors will
have to have their product certified by an independent authority that
Visa and MasterCard have established and will be required to license
and use the SET trademark if they pass muster.

We're clearly not there yet. In fact, merchants and analysts
don't yet understand how SET benefits anyone but banks and the
credit-card companies, unless banks and card associations lower
transaction fees as a carrot to see it widely adopted. A few merchants
are threatening to announce on July 4 a campaign to bolt from the
card-association fold. And no one is sure yet how SET certificates are
going to get into the hands of consumers to make the system work.
Finally, it is possible that other payment mechanisms will emerge for
settling Internet purchases directly to bank accounts, bypassing
credit cards all together. And already a debate is brewing over
whether the current version of SET includes a cryptographic engine,
painfully slow on current hardware.

Some analysts actually see SET working at cross-purposes. "SET will
completely backfire, [especially if] you stick it on the TV and tell
[consumers] only SET is secure," said Chris Stevens, an analyst at the
Aberdeen Group in Boston. "Not every [merchant] will work with SET
overnight, so the immediate perception will be that sites without SET
will not be secure."

In fact, Stevens said, the SET originators might have been better off
promoting the Internet as a secure environment and managing the risk,
rather than splitting hairs over security technology, especially since
SET covers only a small piece of the whole security picture: "It only
covers consumer-to-merchant [commerce]," Stevens said. "The real
problem with security is that there's too much, not too little. There
are too many competing standards."

SET's supporters say the protocol's technology basis is tried and
true, and any bugs will be worked out in trials during the next six
months or so. And anyway, they add, anything that will unite major
financial and business interests around a common standard is vitally
important for that reason alone, whatever its underlying technology.

"The proof of the pudding eventually has to be [whether it is]
interoperable" among vendors, said Steve Mott, senior vice president
in charge of SET implementation at MasterCard. "And that is where we
are certain we still have a lot of work. It's not going to pop out at
the end of nine months as a perfect baby that everyone can be happy
with. Software, particularly Internet software, isn't perfect at

One fact that can't be overlooked is that an estimated $100 million of
Internet commerce was completed in 1996, most of it via credit cards,
without the benefit of SET. This has some businesses wondering why SET
is needed and warning that if the credit-card vendors want to see it
adopted, they are going to have to provide a financial incentive to
merchants and consumers by lowering transaction fees.

The card associations acknowledge that Internet commerce using SET is
aimed at cutting the potential for fraud losses. But they decline to
predict whether this will result in a lower percentage taken out of
each merchant's transaction. Lower transaction fees could also make
credit cards viable for settling smaller transactions, but no one
expects the current credit-card infrastructure to handle so-called
"micropayments," charges of less than $1 for pieces of information or
software a la carte.

"The proper incentives would be a rate structure that is
more favorable for transactions that are SET-compliant," said Tim
Knowlton, Internet merchant-card services manager at Wells Fargo Bank.
"If you look at the history of changes in the credit-card industry,
they are always driven by (changes in rates). We certainly expect that
SET will reduce [merchant] fraud."

From a technical standpoint, SET is unnecessary, according to some
analysts and merchants. They say the Internet browser protocol Secure
Sockets Layer (SSL), combined with existing forms of user
authentication, may be adequate. SSL already encrypts credit-card
numbers sent across the Internet to a merchant.

But SET goes a step further. It hides the credit-card number from the
merchant who is accepting it, forwarding it only to the issuing bank
for authorization of the charge. Thus the value of SET is that it
eliminates a potential human source of fraud at the merchant level.
"The goal of SET is to have the risk of an Internet transaction become
equal to a card-present transaction," said Cathy J. Medich, Internet
commerce marketing director at VeriFone, Inc. and a former executive
director at CommerceNet, an industrywide consortium.

At the same time, "merchants would rather sell something using SSL at
a higher discount rather than lose a sale because the customer wasn't
SET-enabled," said an executive at a key credit-card processor who
requested anonymity.

Executives at LitleNet LLC, a Lowell, Mass.-based electronic
clearinghouse, said they're finding that merchants are more interested
in SSL than SET. And John McCombie, technical leader for LitleNet's
Internet commerce solutions, said he is reluctant to invest
engineering time in SET because the standard is still evolving.

"We're not going into the SET thing yet," agreed Shital Anagol, senior
software engineer at OnSale, Inc., an Internet-based hardware auction
business. OnSale uses credit-card processing services from CyberCash,
Inc., which uses SSL encryption. "I think the only thing that will
come out of it is standards."

Rob Reesor, senior software engineer at Virtual Vineyards, a Palo
Alto, Calif., Web-based wine merchant, added, "We're seeing it as
something that will definitely come into play down the road a bit. We
would like to have something that is standard."

Perhaps a bigger issue is getting digital certificates into the hands
of users. SET, which is largely a protocol for consumers and perhaps
for employee-purchasing cards, will require a user to possess such a

"Using certificates with SET is going to delay its acceptance because
it assumes that people will be interested in getting these
certificates," said Stan LePeak, a vice president at Meta Group, Inc.
in Stamford, Conn.

Some experts say that future versions of Internet browsers
sold or distributed by Microsoft and Netscape will include software
that permits the program's owner to connect to a bank or other Web
site and download a SET certificate after providing the required
identification. Or banks may simply permit downloading of the
certificate-generating software from their Web sites. "The software
will be distributed, we believe, directly by software vendors and can
be distributed by banks as well," said Stephen M. Herz, senior vice
president of Internet commerce at Visa.

So far, the only entity that is mass-marketing the sale of digital
certificates (SET and non-SET) is VeriSign, Inc., which said it had
issued 750,000 certificates by the end of April. But VeriSign's
certificates are intended more for proof of identity than proof of
financial responsibility.

If banks jump on the SET bandwagon, they could set up customers to
download SET certificates to their home computers. But until that
happens, merchants may want to press ahead with SSL-secured

Putting aside the question of whether SET is needed, vendors are
beginning to offer it in the marketplace. On April 9, IBM unveiled
what it said was the industry's first SET-enabled merchant server,
Net.Commerce Version 2.0. In late April, the first cross-border
SET-based transaction was carried out between the charge-card company
Europay Norway and Denmark's PBS to order an airline ticket from
Norway's Braathen Safe airline. IBM provided the technology.
Early users of Net.Commerce will include Brel, Dai Nippon Printing
Co., L. L. Bean, Hoffmaster, the Danish Payment Systems (PBS), Ingram
Micro, United Parcel Service, Inc., Borders Books & Music and Arena di
Verona, IBM said.

IBM is also providing SET technologies to the e-Comm group, a
consortium of leading French banks and Visa International. And
approximately 100,000 customers of Japan's Fuji Bank are scheduled to
try out their debit cards through 1998 in a pilot using IBM's server
and digital certificate technologies. The Fuji test is unique because
it involves IBM designing an extension of the SET protocol for
PIN-based card transactions.

IBM's early lead in the SET software prototyping sweepstakes may soon
start to erode, however. In a one-two punch, Hewlett-Packard Co.
announced in May it would purchase VeriFone, a vendor of electronic
payment software, and a week later said it would align nonexclusively
with Microsoft to sell end-to-end electronic commerce systems to banks
based on the SET protocol. It announced prototype efforts with Bank of
America and Sumitomo Bank, among others. VeriFone's Medich said HP
will focus on linking bank legacy systems to VeriFone payment
software. Banks will get an end-to-end system for $600,000 to
$800,000, Medich said.

VeriFone, which makes the gray point-of-purchase "swipe"
terminals that millions of merchants use, is working hard to come up
with new products that will also enable digital commerce. These
include a "personal" automated teller machine (ATM) that would allow
consumers to load "cash" onto their smart card from home. HP is
aggressively moving to install smart card readers on computers it

Also entering the SET gateway software sweepstakes is Austin,
Texas-based GlobeSet, Inc., which is behind a test site launched by
Wal-Mart Corp. on June 2 in cooperation with American Express Co. and
GTE Service Corp. First Virtual Holdings, Inc., the first
micropayments vendor on the World Wide Web, said June 2 it will
incorporate SET as an option in its payment system.
From another corner of the world, South African-based BankGate Team
has developed a SET 1.0 system that bears an important distinction:
It's free.

Rather than merchants and banks making a significant capital outlay,
BankGate will customize, install and maintain the product for each
institution at no cost. Instead, customers pay a transaction fee. The
system includes four components: a certification authority, wallet
software, a merchant server and a payment gateway.

In terms of pilots, MasterCard said it knows of 22 planned SET pilots
in 11 countries. Visa is collaborating on some of those and also has a
pilot with 30 banks involving much of the European marketplace. It has
other tests running or ready to run in Singapore, Taiwan and Japan.
But as of June, only one U.S. bank had announced involvement in a SET
pilot. The Chase Manhattan Bank NA and Wal-Mart are enabling selected
employees to purchase merchandise from Wal-Mart Online using a
SET-enabled Wal-Mart Chase MasterCard. IBM is providing many
components of its CommercePoint payment software, while First Data
Corp., an electronic payment processing vendor, will provide
credit-card processing services. Later this summer, the initiative
will be expanded to Chase, First Data and Wal-Mart customers.

As for the scarcity of announced U.S. pilots, the card associations
say U.S. banks are just more secure in their markets, more willing to
take a wait-and-see attitude on new technologies and more wary of
making announcements on tests and experiments than their international
counterparts. More skeptical observers theorize that the largest U.S.
banks may be wary that SET will give the card brands a permanent place
in the digital commerce marketplace -- a role that may not be required
if banks can interoperate with one another directly.

The U.S. marketplace is critical not only because of its size but also
because credit/debit cards are so prevalent. In the international
marketplace, so-called "smart" cards are already commercialized, and
the assumption is that electronic transactions will be adopted quickly
in those markets.

"The rollout plans that the banks have is really critical," Verifone's
Medich said.

One analyst at a major accounting firm said he is watching
Integrion Financial Network, a consortium of 16 U.S. banks and IBM
formed last year with $60 million in capital, to see whether it
emerges with a plan for electronic commerce interoperability.

Integrion has access to half of the U.S. consumer base and 60% to 70%
of merchants, the analyst said. If bank ATM cards, for example, could
be used across the Internet, the need for the credit-card association
as an intermediary would fade.

"A lot comes back in transaction fees to the card associations," the
analyst said. "There is the possibility that electronic commerce
models will kill 20% to 40% of the credit-card associations' revenue
streams. If Integrion can build a model that can do intraconsortium
clearance, they don't have to go into the card associations at all.
They could do clearance at significantly less cost than today."
The card brands hope that Integrion is focused on streamlining
check-processing and electronic data interchange-based payments, not
on the credit-card market. IBM said that is not the case exclusively.
Integrion's board is said to be working on refining its mission, which
has not been clearly articulated in public. In the end, however, banks
appear poised to remain at the heart of the process, either through
their ownership of the card associations or as arbiters of financial
transactionsthrough other intermediaries.

"Is the payment system going to be disintermediated?" asked Ed Jensen,
president of the bank-owned Visa International Services Association,
when asked for his opinion on the idea of nonbank players entering
electronic commerce. "There are lots of people that are speculating
that. I don't think it's even close to a possibility of happening when
you look at the total scale of the payment system. If you want a safe
transaction, you are going to need a certificate from a bank."

Whether or not you believe SET is destined to live a life with
purpose, it is guaranteed a life of importance merely because of the
stature of its parents. The world's credit-card issuers are banking on
the SET protocol to extend their central position in world commerce
onto the Internet, eliminating the threat of merchant fraud and
reassuring consumers. At stake is not so much the future of Internet
commerce but how quickly it materializes and who benefits most

Densmore is a freelance writer in Williamstown, Mass.

If you enjoyed this article, you may also want to see our companion
magazine, Emmerce, which appeared in the April 28 issue of
Computerworld. Contact Editor Alan Alper to receive a complimentary
Copyright © 1998 @Computerworld. All rights reserved.


This article above is copyrighted material, the use of which may not have specifically authorized by the copyright owner. The material is made available in an effort to advance understanding of political, economic, democracy, First Amendment, technology, journalism, community and justice issues, etc. We believe this constitutes a 'fair use' as provided by Section 107 of U.S. Copyright Law. In accordance with Title 17 U.S.C. Chapter 1, Section 107, the material above is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. If you wish to use copyrighted material from this blog for purposes beyond fair use, you must obtain permission from the copyright owner.


1998: When a business is a family affair

When a business is a family affair

Sunday, April 26, 1998

By Bill Densmore
Special to The Eagle


Susan Glaser marched into the office of her brother, Peter, who runs
the family manufacturer. His back was to her as she strode in. He was
facing a window, standing, and reading some papers.

"Peter, you've got to do something about that brother of ours. He's
being rude and overbearing with employees and we're going to lose some
of our best people," blurted out Susan.

Peter kept reading and didn't turn around. "Oh? What's the problem,
has John asked some people to get off their duffs and start working?
Who's complaining to you now?"

Susan flashes an exaggerated role of her eyes to the audience of 100
dining patrons and launches into a litany of her "brother's" abuses.

Susan and Peter are not actually brother and sister; they are husband
and wife. Although they own a business together, it is a two-person
leadership training and organizational development consultancy, not a
manufacturing company. And the audience one night in March was a
gathering at a Holyoke restaurant of family business owners from
around Western Massachusetts.

The Glasers, who are based in Eugene, Ore., produced their two-hour
dramatization of family-business problems and solutions -- skits
followed by lectures and lessons from real experiences -- at the
request of the Family Business Center at the University of
Massachusetts-Amherst, one of dozens of such study and resource
centers at universities nationwide.

Much of every day's business news focuses on Wall Street megamergers,
antitrust and world economics. But many of the businesses in the
Berkshires and elsewhere are still owned by fathers, mothers, sons,
daughters, sisters or husbands and wives. How do they thrive?

"You work harder for each other," says Donald Ward III, 39, the eldest
of three brothers who share ownership of Ward's Nursery Inc. in Great
Barrington. "You also are willing to work longer. And there needs to
be a lot of communication. If there is a key to a family business
that's it right there -- communication."

Ward and others, including the Glasers, say the recipe for making a
success of a family business involves the same staples as running any
business, but with a few extra ingredients and some changes in

"'It's a great myth that family businesses fail any more frequently
than non-family businesses,' says Mark A. Fischetti, of Lenox,
managing editor of the quarterly Family Business magazine, which was
started in 1989 in Great Barrington and is still edited from there.
"They fail for the same reasons any business fails -- tough markets,
financial hard times and competition."

Family Business has 6,000 subscribers and costs $95 a year.

For families, the key trouble points -- and in some cases strengths as
well -- usually involve succession, communication and responsibility.


Leaders of any business need to plan for the day when new leadership
will take control. In a public company, the options are wide open, and
the pool of potential successors broad. In a family business, one
generation must pick leadership from a small pool of relatives or
offspring if it wants the business to stay "in the family."

Picking a leader from such a small group can be divisive if it is not
done with care, communication and consistently over a period of time
which allows for careful training.

"The biggest problem is succession, that's clear," says Fischetti.
"One part of the problem is that most times the person who is running
the company as CEO has been there for decades. They know
intellectually they should make plans for a successor but emotionally
it's much more difficult and so they tend to put it off."

Fischetti says this procrastination tends to frustrate family members
waiting in the wings and puts operation of the business -- and key
decisions -- in a holding pattern.

"But the flip side is that if the family is enlightened about
succession, the opportunity is they know long in advance who their
potential successors can be and so can spend a long time grooming
them, teaching them, getting a good support system," adds Fischetti.
"So it can be much more orderly and the successor can be more prepared
to take over."


Any business needs professional communication among management and
employees. But how do members of a family, who also share control of a
business, keep their business communication professional without
allowing historical rivalries or personality quirks to creep in? By
paying careful attention to keeping communication frequent and

"Because family members know each other, what they don't hear allows
them to make assumptions based upon the history of their
relationship," says Ward. "When there is a close relationship, you
tend to take each other for granted and be a bit more lazy in your
communications. You have to be overstated. When something bugs you,
don't carry it. Get it out and deal with it early on."

Efficient communication among members of a family can often make the
business they own more agile in a competitive environment, says
Fischetti. That's because a private, family business is not burdened
by responsibilities of disclosure and approvals to large boards of
outside directors or shareholder groups.

"The family company oftentimes in a day can make a major decision and
get on with it," says Fischetti.


Ideally, businesses are run by managers whose responsibilities are
clearly defined so that employees know who is in charge of which part
of the business. But what happens if family members begin treating the
workplace like the home front, and overlapping responsibilities? How
do employees then know who to please, and who makes the final

"I think it's important that you identify your responsibilities and
let each one do their job," says state Rep. Peter J. Larkin,
D-Pittsfield, 44, who co-owns The Fahey Beverage Co., with his father,
William D. Larkin Jr., 72. "You don't need duplicative efforts and you
don't need dissention. You've got to trust that each is capable."

Fahey, a Pittsfield-based beer, wine and soft-drink distributor, has
14 employees.

At Ward's Nursery, for example, Donald Ward III is in charge of
contracting, brother Michael, 36, runs the sale of retail shrubs,
perennials and plant material and third brother Gregory, 38, watches
over the Ward's retail store and all non-plant sales.

The trio's father, Donald Ward Jr., still has an office on the
premises, but he isn't involved in the nursery. Instead, since he sold
the business to his sons in early 1995, he has been a regional
nursery-sales representative.

Management gurus didn't begin to focus on the dynamics of family
businesses until about a decade ago. For much of the 20th century,
most businesses were family businesses. Now they are perceived --
perhaps wrongly -- as a shrinking or at least fragile genre.

Actually, 90 percent of U.S. businesses -- especially smaller ones --
are family owned, says Ira Bryck, who runs the Massachusetts Family
Business Center.

Bryck's interest in the genre is personal as well as professional.

"I grew up with family businesses on both sides of my family," says
Bryck, who moved to Northampton in 1994 after closing the
fourth-generation Freeport, N.Y., children's retail clothing, toys and
book store he had taken over from his father.

He started working the cash register when he was age 5.

"I swore I would never join the family business, but I spent 17 years
there," recalls Bryck. In the end, he said, the hours didn't justify
the profits and other rewards possible in a specialty now dominated by
nationwide players.

Bryck wanted to raise children in a less-urban environment. When the
family arrived in Northampton, Bryck developed a business plan for a
new retail business -- then decided that was a crazy idea. At the same
time, he learned UMass, following a nationwide trend among land-grant
institutions, wanted to start a support center for family business. He
applied and got the job running it.

Now Bryck's center is funded completely from fees for conferences and
seminars and from five corporate sponsors who ante up another $50,000
to $75,000 a year.

"When a family member calls, they usually are looking for a referral
to an objective, skilled person to help them with a transition,
management, control, or communication problem," says Bryck. "It might
be a priest, an insurance agent, a lawyer or a mediator. Sometimes I
advise them to build an outside board of advisors."

He adds: "There are always difficult issues and conflict in the family
and having a forum to be able to raise them and just to dispel a lot
of anger and fear becomes very important."

The pride felt by the founder of a family business naturally fosters a
desire to see the business perpetuated in the hands of an able spouse,
relative or offspring. But Bryck and others say that may not always be
the best thing for the business. Any business needs to have the best
person at the helm and a founder normally needs to feel that the best
person is another family member -- and that the family member wants to
be part of the business. That may not always be the case.

Both the Wards and the Larkins have several other siblings who aren't
part of the family business by choice.

"A family member should only be working in the family business if they
have the desire to do a good job and the talent to do a good job in
that particular field," says Bryck.

Corydon L. Thurston is executive vice president of Berkshire
Broadcasting Co. Inc., which owns radio stations in North Adams and
Great Barrington. The company was founded by his father, Donald, who
remains active as president although he is of retirement age. Thurston
made a conscious decision to adopt the community-oriented lifestyle of
running a small-market broadcast operation, but he doesn't assume it
will be right for his children.

"I don't have any interest in forcing them into the broadcast or media
fields," says the younger Thurston, who thinks his own career
benefited from some time away from North Adams headquarters.

"If after they have an opportunity to explore life in other places
they want to, we'll certainly find an opportunity for them. The
commitment to the area and to the business has to be there."

Thurston adds two other elements to his measure of success in the
family business. One is the ability to leave the business at the
office. "You've got to program time to separate, be apart, leave the
business at the door and relax and re-energize," he says.

The other element, he says, is to understand that "being someone
else's son is a positive experience. For some it might be hard. It
hasn't been for me. Dads are always involved."

Fifteen years ago, when Martha and John Storey of Williamstown founded
Storey Communications Inc., a "how-to" specialty book-publishing
business in Pownal, Vt., one often-typical problem they didn't have
was defining roles. The couple have known each other since ages 12 and
13 respectively and had worked on enough projects together to have
things pretty well sorted out.

But almost from the beginning, says John Storey, they realized the
need to get regular outside advice as their publishing house grew to
its current $16 million-a-year size.

Although keeping the legal board of directors small, they formed an
eight-member board of outside advisors which meets regularly. Despite
the Storeys' offers, the advisors don't accept pay, preserving their

"They usually go home with a big box of books and a big hunk of
Vermont cheese," jokes Storey.

With children ages 30, 28 and 23, the Storeys now have annual family
meetings with a semi-formal agenda to talk about the future of the
business. So far, none of the children are directly involved in the

"The kids originally didn't have much to say or ask," says Story. "But
now they are quite lively sessions where it is apparent that all three
kids have absorbed a lot of information about the company and are very
keenly interested in what's going on."

With a company the size of Storey Communications or larger, there
would always be a logical role for a family member to play, says
Story. But he says too many businesses make the mistake of assuming
that knowing how to manage is the same as knowing how to be a leader.
And a company needs a leader.

"Clearly, if familiy members are not prepared for leadership, then
they have no business running the company," he says. "But they can
contribute nicely in various areas of interest and real capability."

© 1998 by MediaNews Group, Inc. and Pittsfield Publications, Inc.


This article above is copyrighted material, the use of which may not have specifically authorized by the copyright owner. The material is made available in an effort to advance understanding of political, economic, democracy, First Amendment, technology, journalism, community and justice issues, etc. We believe this constitutes a 'fair use' as provided by Section 107 of U.S. Copyright Law. In accordance with Title 17 U.S.C. Chapter 1, Section 107, the material above is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. If you wish to use copyrighted material from this blog for purposes beyond fair use, you must obtain permission from the copyright owner.

Friday, October 22, 2004


1999: Three-day Boston UMass conference studies future of e-commerce

More Than 100 Attendees Study Future of Ecommerce and Information Payments At
Three-Day Summit Beginning Wednesday in Boston
Event Kicks Off UMass Initiative; Sponsors Include IBM, Clickshare

BOSTON--(BUSINESS WIRE)--June 15, 1999--
Researchers, publishers and Internet commerce companies will learn the latest
on how the information superhighway will be better paved for consumers during
a three-day conference kicking off on Wednesday in Boston.

The "Electronic Commerce: Foundations for the Future" summit is the kickoff
of a University of Massachusetts initiative to better connect its business
school and computer-science curriculums to the explosion in Internet

At the same time, the more than 100 attendees from the United States and as
far away as France and Israel are expected to propose forming a new research
group. The Internet Information Payments Collaborative, or IIPC.NET would
come up with a standard for making it easy to buy and sell information on the
Internet -- including text, sound and pictures.

"I have been surprised to learn that nearly 40-percent of the attendees are
CEOs or CFOs of their companies," said Dr. Leslie D. Ball, associate dean,
information-technology initiatives at the UMass Isenberg School of Management
in Amherst. "The program covers business issues to technology, to education
and includes a major section on payments."

Among topics expected to be on the table are a just-announced initiative to
come up with a standard way for web surfers to send their billing and
credit-card information among different web sites. The so-called ECML
initiative is designed to eliminate consumers having to re-enter such
information at each new website they visit.

International Business Machines Corp., and Clickshare Service Corp., a
Williamstown, Mass.-based ecommerce startup, are among sponsors of the event.

The conference is taking place at the BankBoston Conference Center, 100
Federal Street, in downtown Boston, through Friday afternoon. UMass President
William Bulger keynotes the event with an address at 9 a.m. on Wednesday.
Other speakers and panelists are from Fleet Bank, IBM, Lycos Inc., AT&T and
the World Wide Web Consortium based at MIT.

Walk-in registration is available at $795 for the three-day event. For more
information or for press inquiries call the conference program office in
Amherst at 413/545-2484, or after Wednesday, at the Suissotel, One Avenue de
Lafayette, in Boston, at 617/451-2600, or send EMail to

BW0218 JUN 15,1999

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