"There are a lot of people who don't know anything about soccer, like me, but we know we are excited and pulling for you." -- President Bush, to the U.S. soccer team before its match with Mexico. He declined an invitation to watch with Mexican President Vicente Fox at 2:30 a.m., citing a need to sleep. Annual meetings, those typically innocuous corporate events, are kicking up plenty of controversy these days. Corporate-governance experts point to a growing trend among companies--particularly those with angry shareholders--of holding annual meetings in suspiciously out-of-the-way venues.
Companies claim that picking far-flung places makes meetings accessible to people in other parts of the country. Critics see another motive. "They do this to avoid shareholders" and protesters, says Nell Minow, co-founder of governance site The Corporate Library.
For example, Qwest Communications (Q), based in Denver, moved this year's heavily policed meeting to 20 miles outside of Columbus, Ohio, where 2,000 employees work (compared with 15,000 at headquarters). Ohio isn't among the 14 states where Qwest offers service. A spokesman maintains that the locale aimed "to give Qwest shareowners outside of Colorado an opportunity to participate." Actually, plenty of angry ones showed up.
Another company that moved its meeting far away, to London, was Morgan Stanley (MWD), which expected demonstrations against its financing of a dam in China. A spokeswoman says that "50% of our business comes from overseas" and that the company wanted to reach out. Activists went to London, too.
Governance experts have a message for controversy-dodging execs: "You can run," says Minow, "but you can't hide." The Virgin Megastore on Chicago's Magnificent Mile bristles with energy. Music videos flash, and bass-heavy R&B thumps. For the teens and twentysomethings here, this store is far cooler than the drab, beige Sprint PCS (PCS) wireless store a few blocks away. That store is for parents. So Sprint plans to do a better job reaching out to the crucial under-25 crowd through a joint venture with Virgin. Sprint will operate the network, and Virgin will provide irreverent marketing and pay-as-you-go plans that appeal to the young. Samsung and others will make phones loaded with music and games. Launch of the Virgin-branded service is imminent.
BusinessWeek has learned there are more such ventures on the way. Nextel is currently negotiating a similar "teen" service with a different partner. And Wal-Mart Stores (WMT) is exploring its own branded service aimed at lower-income shoppers, according to a telecom executive close to the company.
With annual subscriber growth now just 14%--half of what it was in 2000--teens and lower-income folks are key to wireless' growth strategy. Teens alone are expected to spend $10 billion on cell- phone service this year, a 26% increase. Says Adventis consultant Andrew Cole: "Those are hypergrowth markets."
Corrections and Clarifications
``Sprint's sprightly marketing push'' (Up Front, July 1) incorrectly stated that Samsung Group and others will make phones loaded with music and games for the Virgin-Sprint wireless service. Kyocera Wireless Corp. is Virgin Mobile USA's exclusive cell-phone provider.
It's not enough to be a hangout for jet-setting celebs. Today's hip restaurants, bars, and hotels are going further--breaking into the music business with their own CDs. The Standard Hotel in Los Angeles, Sunset Beach hotel/restaurant in New York's Hamptons, and the Buddha Bar and Man Ray in Paris are just a few cashing in on the "lifestyle music" trend.
Retailers such as Starbucks (SBUX), Old Navy (GPS), and Pottery Barn have been selling their own compilations at the checkout line for years. But hip restaurateurs and hoteliers have gone an extra step, selling CDs nationwide in stores such as Tower Records and Virgin Megastore.
Since its release in April, Buddha Bar IV ($29.98), a double CD compilation of remixed world music, has been selling 2,200 copies a week, putting it on the Billboard Top 20 Dance Chart. Says John Pace, vice-president of George V Records, the label behind it: "This is a whole new way of doing music business." The Standard's Room Service ($16.99) has sold more than 30,000 copies since its 2001 release. Explains its producer, Alex Calderwood: "With the explosion of music options, people look for a point of view." The new "hip CD" biz delivers it. Nodding off at work may be as hazardous to your health as it is to your job security. People who struggle to stay alert in boring, passive jobs are 33% to 35% more likely to die prematurely than those who have more active jobs, a new study finds. Work that is highly demanding but offers little decision-making opportunity--on an assembly line, for instance--makes an untimely demise 43% to 50% more likely.
The reason? Tedious work can trigger stress-related hormones in the brain, and a boring workday often leads to hazardous habits like drinking and smoking. Bored workers are also less likely to exercise, says Benjamin Amick III, a behavioral sciences professor at the University of Texas who examined data from 5,000 families from 1968 to 1992. "It's an urgent problem," he says.
To address it, managers should tell employees why their jobs are important, redistribute tasks to keep them engaged, and hold meetings to hear concerns, says Amick. "More satisfaction leads to improved physical and mental health and saves money through reduced health-care costs and improved productive time at work." Coffee, anyone? As CEO of the Times Mirror newspaper group, Mark Willes cut costs with near-religious fervor, closing the Baltimore Evening Sun and Newsday's New York City edition and eliminating 3,000 jobs.
Today, rather than deadlines and debt structure, the 60-year-old onetime Wharton finance professor is devoted to the Mormon church. Long an active church member, he now runs its Honolulu Mission, guiding 200 18- to 21-year-old convert-seekers.
Willes received a $9.2 million severance in 2000 when the Tribune Co. (TRB) merged with Times Mirror and now gets $970,000 a year in retirement benefits. He had intended to teach media management at Brigham Young University, and moved home to Utah with his wife, Laura. But his uncle, Mormon Church President Gordon Hinckley, asked him to run the mission for three years. Willes now tours the Hawaiian islands giving talks. God "has given us a perfect plan for living," he told a devotional meeting at BYU's Honolulu campus just after September 11.
Reached at the Mission, Willes declines to say much about his new life: "I'm happy being here just doing this very fulfilling work." The next big thing in wireless Internet connection--3G--promises streaming video and other cool broadband features. It's available in Europe and Japan. But if you want it in the U.S., you'll have to move to Missoula, Mont., or one of the other rural areas now getting the latest technology first.
It may seem ironic given that the high-tech meccas in the U.S. are far, far away. But companies find it more economical to set up wireless networks than to string cable over long distances. The small operators setting up wireless networks don't carry the heavy debt loads of big companies, so are able to move more quickly. It also helps that Senator Conrad Burns (R-Mont.), who co-chairs the Congressional Internet Caucus, is a champion of universal Internet access, particularly in underserved rural markets. A Commerce Dept. study in 2000 estimated that fewer than 5% of towns with populations of 10,000 or less had DSL or cable modem service. "We've got a lot of dirt between light bulbs here," says Burns.
The trio of wireless companies offering 3G in Montana began service in early June. Similar networks are planned for Hawaii and around Vancouver. Take that, Silicon Valley.