Telling It Like It Is

THE ENTERPRISE--Followership

THE ENTERPRISE

This week I want to rant a bit about so-called "authorities" who cop out when challenged to further define their subject so it can be understood and used.  Then I will take a stand on the matter.  (Does that surprise you?)

First, the place where I read the "cop out"--Business Week.  Here's the item.
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©BUSINESS WEEK;  CLASS NOTES  FEBRUARY 13, 2006
"How To Play Follow The Leader"  By Jena McGregor
    On Feb. 24, the Kravis Leadership Institute at Claremont McKenna College in Claremont, Calif., will open its 16th annual leadership conference. That's hardly newsworthy: There are hundreds of such confabs, and yes, Rudy Giuliani seems to give the keynote speech at every one.
    But this one's a little, um, different. The theme this year: "followership." It's a discipline that emphasizes independent thinking among those not in leadership roles. This is a field that hasn't gotten its due -- partly because of the term itself. "It has lots of negative connotations, like being sheep and being herded," says Barbara Kellerman, a research director at Harvard's Kennedy School of Government.
    Kellerman, who last year launched what is probably the first university class devoted to the topic, is trying to change that. She's teaming up with others, including Ira Chaleff, an executive coach and one of the forum's organizers. Chaleff hopes the conference will help develop a community of scholars and perhaps produce a professional journal on followership. It's also a way to shift focus to the other half of the equation. "There's a dynamic that plays out between leaders and their followers," he says. "Instead of being a balancing force, they [followers] often become a colluding [one]."
    [HERE'S THE COP OUT] While there's truth in that idea, there's still plenty of work to do to make this a full-fledged crusade. For one, the concept of followership seems hard to define. "I would defer to Ira on this," says Ronald Riggio, the institute's director. "That's a sand trap," says Chaleff when asked exactly what the term means, despite writing The Courageous Follower: Standing Up to & for Our Leaders (Berrett-Koehler, 2003). "I tend to steer around it." Clearly, this is a movement still in search of a leader.
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Say what?  The institute's director "defers" and the author of a book on the subject "tends to steer around it?"

Since I believe deeply in the importance of followers, I won't defer, or "steer around" or cop out"on this one.  I've never seen a great leader without great followers who made the leader's success possible.  I touched the edges of this topic in a column I wrote ten years ago.  This time, I want to take it head on, and to clarify the importance of great followers, and how they share in, or are influenced by the great leader's characteristics.

Make no mistake about it--the great leader is the essential first ingredient, but I have yet to see a great leader that doesn't "somehow" develop a group of great followers, who rise above their own expectations and succeed in their own right.  And I have yet to see an aspiring leader succeed without a group of devoted and competent followers, all pulling together and helping the leader succeed.

What does it take to be number one?
Good leaders and followers must first be good people.
Original written for IndustryWeek's "On Management" column © John L. Mariotti 1996
>--Additions made for this 2006 edition of THE ENTERPRISE.

The other day I was preparing for a speaking engagement and reviewing some old speeches.  When I was doing motivational speeches for sales meetings, I must have read Vice Lombardi's "What It Takes To Be Number One" until everyone was tired of hearing it.  It seemed so right for so many situations, and was a moving set of words by one of my "heroes." It is still great, but I feel like it's time to do my own version.  Vince was a football coach, and for many years I have been a business coach.  (I coached a lot of sports when my kids were young, but only as an amateur.)  That means my version will be titled: "What It Takes To Be A Great Leader (Or Follower)"
>--In nearly all situations, followers outnumber leaders by 10 to 1 or 100 to 1 ... or even 10,000 to 1.   this means that having a solid base of followers is essential to any leader's success.

First there must be competition, which implies an opponent (real or created from prior best performances), and a playing field (a marketplace in business).  Since I am working with a sports analogy, there must be a team.  Who is the leader to lead if there is no team.  I added "or follower" because no leader can be great without a lot of great followers.

"What It Takes To Be A Great Leader (Or Follower)"
To be a great leader you must have integrity--it is the foundation upon which everything else is built.  It is invisible, but the people around you can feel it more than see it.  A great leader must have vision to see the possibilities in the future, and optimism to know they are there when they aren't quite visible.
>--Great followers also must share the leader's integrity. In some cases, they must have a firmer basis for their integrity because they are not operating from a base of influence.  Great followers must work to understand and internalize the vision set forth by the leader, and to help shape it into a truly shared vision.  Perhaps most of all, great followers must be optimistic when they are inundated with reasons not to be.  This takes spirit, which leads to the next characteristics of great followers.

To be a great leader you must have the spirit to inspire others, and be able to infect them with enthusiasm for the challenges and opportunities ahead. A great leader demands great preparation.
>--But the followers must be willing and ready to  be inspired and to be infected with that enthusiasm.  And again, more than the leader, the followers must do the preparation--the hard homework that is so essential to success.

To be a great leader you must have the toughness to stay the course and accept nothing less than excellence, even when the going is very tough.  A great leader must have persistence to never give up, yet have a sense of humor to be able to laugh at the little upsets.
>--Followers must be tough too, and they must strive for excellence every bit as much as the leader.   Persistence is a manifestation of that mental toughness.  And the ability to laugh at the little upsets is perhaps even harder when a follower or a group of followers are much closer to where the upsets have the most impact.

To be a great leader you must have heart and soul.  Heart to care and share with others, and soul to keep the faith and hope, with charity. A great leader must love--both life and people--and it must be evident.  A great leader attracts other great people.
>--If great leaders need these characteristics, the people who are the followers must also share that heart and soul.  Great leaders can attract great followers, but great followers are instrumental in the success that is attributed to great leaders.

Last, but certainly not least, to be a great leader you must have passion, an indomitable spirit, a will to win, and the confidence in your team to emerge victorious.  Above all, a great leader realizes that leaders don't win, the team of great followers does.
>--Great followers must share the leader's passion and spirit and will to win, and when they do, they develop the self-confidence that makes them winners.  In fact, the totality of this feeling is what builds teams of winners.

Writing nice words like this or reading them to an organization doesn't make the difference.  Living them is what makes the difference. Another Lombardi-ism comes to mind, and while I may not get the quote exactly right, the message was simply, "you can't fool the players."
>--Or, perhaps Vince might have said, "you can't fool the followers!"

There is an almost tangible aura around great leaders.  You can sense it.  It emanates from somewhere deep within them, and makes people want to follow them.  In that sense, Warren Bennis, who has studied and written extensively on leadership says it very well, "Leadership is like beauty, it's hard to define, but you know it when you see it."
>--But followers can not only see it, they can feel it, sense it, almost smell the tangible aura of a leader, and that aura is irresistible to great followers.  They almost audibly cry out for leadership worthy of their followership.

Leaders have many roles, but my definition of the role of a leader is fairly simple: A leader must create a clear understanding of and a healthy dissatisfaction with the current reality, a shared vision of a desired future reality, and an environment in which people are constantly motivated to achieve that vision.

Not everyone can lead large groups of people, yet everyone is a leader in a very personal sense.
>--Yes, every follower is a leader in his/her own right.

Perhaps the real secret of great leadership is the feeling of purpose and self.  The greatest leaders I have known were people of great character like Sam Walton.  They were not pretentious or phony.  Rather they were genuine and sincere.  (Neither were they "perfect!") As I ask myself about what it takes be be a great leader, whether it is of a huge organization or an organization of self (and loved ones)--it is self-respect and integrity.  An Edward Guest poem might be the best closing statement about what it takes to be a great leader--first be a great person, and be comfortable with yourself.  Then begin to live your role.
>--Whether it is as a leader or follower.  Be true to yourself.

MYSELF  by Edward Guest
I have to live with myself, and so, I want to be fit for myself to know; I want to be able as days go by, always to look myself straight in the eye; I don't want to stand with the setting sun and hate myself for the things I've done.
I don't want to keep on a closet shelf a lot of secrets about myself, and fool myself as I come and go into thinking that nobody else will know, the kind of man I really am; I don't want to dress myself up in sham.
I want to go out with my head erect, I want to deserve all men's respect, but here in this struggle for fame and pelf, I want to be able to like myself.
I don't want to think as I come and go that I'm bluster and bluff and empty show.
I never can hide myself from me, I see what others may never see,
I know what others may never know, I never can fool myself -- and so, whatever happens, I want to be self-respecting and conscience free.

There may be many other aspects of leadership worthy of mention, but these thoughts are the best way to begin.  Don't just walk the talk--live the talk.
>--And that, my friends is what leadership--and followership--are all about.

And these statements are as true in 2006 and they were in 1996, and they will remain true in 2016, too...and for as long as humans inhabit the earth, great leaders AND great followers will determine its destiny.

Best, John

THE ENTERPRISE--Incumbent Leaders Reinvented

THE ENTERPRISE

What do these ten companies have in common?  Citigroup, Coca-Cola, Gap, Merck, Microsoft, Morgan Stanley, Nike, Sony, Verizon, Wal*Mart.  (No cheating.  But if you read the most recent issue of FORTUNE, you already know.)

Is it that they are all industry leaders?  Well, maybe, but that's not the answer I'm looking for. 
Is it that they have all created a great deal of wealth for investors over the past few decades?  Perhaps that's true, but that's not the answer either.

Enough game playing.  The answer is that these ten formidable companies were identified as places where the current CEO has one of the toughest jobs in business.  (Actually, Rick Wagoner of GM was deemed to have THE toughest job of all CEOs, and on that there is no argument.)

But why are these CEOs jobs so tough?  Because they have to keep their companies operating and profitable, yielding good returns to shareholders while they REINVENT THE COMPANY!  Perhaps reinvent is too strong a word, and perhaps it is not. I have often said that the only retailer that can stop Wal*Mart IS Wal*Mart itself.  Gap clearly has holes in its proverbial shoes from shooting itself in its feet.  (Although Levi's is the winner in this category, having successfully shrunk the company from $7B to  $4B over the past decade.)

THE SHAPE OF VALUE IS CONSTANTLY SHIFTING
When I wrote my "best content-worst selling" book THE SHAPE SHIFTERS, back in 1997, I stated that the "shape of value" was constantly shifting, and companies must alter their "shapes" continuously to keep providing what their customers believed was the best value "NOW, and NEXT!"  Just ask McDonald's, whose missteps led it to try a multitude of different, mostly ill-advised solutions to the fact that people didn't want mass-produced burgers all made the same way anymore.  They wanted them "my way"  (to take the phrase from Burger King), and both Burger King and Wendy's systems permitted customization of sandwiches AND fast service.  McDonald's is still struggling with it system changes, and its result show the evidence.  Of course BK & Wendy's have each suffered from their own problems, not the least of which is the SHIFT in the market to a variety of "near-fast food,"  but different ambience establishments, where the process is order, sit down, retrieve order, and eat-in--restaurants like Panera Bread, Atlanta Bread, COSI, etc.

POSITIVE CHANGE IS DIFFICULT
It is really hard to reinvent something you created.  I had this feeling again recently when considering how to change The Reunion Conference series I started in 2006.  In ten years, it certainly needed to change, but how?  How could I retain what was right and good about it, and change what was outdated or no longer desirable?  That is a hard, hard job--and I only had to argue it with myself and a small group of cooperative cohorts.  Think about the challenge of changing a hugely successful enterprise like Microsoft or one with its roots in two very different cultures, like Sony.

IT'S HARD TO KEEP YOUR FOOTING WHEN THE TERRAIN IS SHIFTING
Coke may still be "the real thing," but cola beverages have lost ground to bottled water, sports drinks, fruit drinks, etc.  What do you do when you are the "king" of a shrinking "kingdom."  Phil Knight at Nike has built a uniquely powerful business, and tried to bring in a highly qualified CEO from outside to take it to the next level.  But Knight (and perhaps Nike's culture) couldn't stand the shock of such a different way of doing things, and William Perez (formerly of S. C. Johnson) is now back in Florida pondering what went so wrong.

WATCH OUT FOR THE IMMUNE SYSTEM
What went wrong is that companies, like human organisms, have an immune system.  The stronger the "body," the stronger the immune system.  The corporate immune system fights off invaders who want to alter its structure and how it operates and behaves.  Companies also has a corporate DNA on which is imprinted the gene structure that made them successful.  These two biological metaphors are why so many mergers fail in the integration phase.  Look no further that HP and Compaq to find an illustration of this.  Or consider AOL and TimeWarner.

INCUMBENT INDUSTRY LEADERS ARE AT RISK
I agree with the FORTUNE editors who made the list.  Perhaps 1-2 companies might have been omitted or added, but the premise was still the same.  Rebuilding the engine or a race car during the race is very tough.  And the race never seems to stop.  Further, thanks to what we now call "disruptive technologies," the incumbent is virtually never the one to find the new business model or new technology that unseats it from its lofty perch.  (Both Clayton Christenson of Harvard and Gary Hamel of London Business School have explained this far better than I can in this limited space.)

"IF YOU'RE COASTING, YOU MUST BE GOING DOWNHILL" (a quote from my days in the bike business)
So what's the message, the lesson for us in this.  It is that the status quo is a dangerous place to stay.  As Will Rogers put it, "Even if you're in the groove, if you stay there too long it becomes a rut."  Change is constant.  Evolutionary change is the only way for large successful companies to do it.  Revolutions are too bloody, too risky and too hard to start--or stop.  But change they must.   

My candidate for the most promising "evolutionary" change of early 2006 is the Disney-Pixar combination, and the fact that the arch revolutionary of the computer industry will now be a part of Disney's board.  If those two can merge DNA's, watch out.  I'll be watching closely--you should too--it is a giant step in the path of convergence of computers and entertainment.  Exciting times, huh?

Best, John

THE ENTERPRISE--Energy and Health Care IT

THE ENTERPRISE

THE END OF AN ERA
The end of an era.  The Feb. 3. 2006 Wall Street Journal article headline reads "Western Union's  Last Telegraph Marks the Conclusion of an Era."  Such a monumental historic event only managed to find its way to page B3!  This brings to mind a quote I have repeated many times to illustrate that no matter how much things change, they stay the same. 

“Over the course of a few years, a new communications technology annihilated distance and shrank the world faster and farther than ever before.  A world-wide communications network whose cables spanned continents and oceans, it revolutionized business practices and gave rise to new forms of crime.”    —Source: Steve Woolgar in the Wall Street Journal, June 27, 2000.

THE PONY EXPRESS
But he wasn't being quoted on the Internet, but rather on the telegraph and the quote was referring to the year 1840.    The telegraph did change everything, because it was the first means by which information could travel faster than people, and reach distant places before those traveling there could get there.  Before that, information traveled at the speed of a horse (the Pony Express), or perhaps at the speed of people traveling by horse or wagon. What a dramatic change this made in society.  Governmental decisions could be transmitted nearly instantaneously.  News stories, some true, many distorted to serve selfish interests, could influence policy and decisions across the land.  Does it sound like I am talking about current events?   I'm not.  This was in the mid-1800's, before many of our states had even elected statehood.  I thought about this as I visited a town Granville, Ohio, which was founded in 1805 and then stopped at a couple of the Inns that were built there shortly thereafter. (One of which will be the site for our Tenth Reunion Conference in Sept. 2006)

THE HORSE AND BUGGY ERA
This era was well before the automobile was even invented.  Karl Benz and Gottlieb Daimler did that in Germany, around 1885.  It was an era when predictions were that if trends didn't change, we'd be knee deep in horse manure from all the horses and wagons used for transportation.   But that prediction didn't come to pass.  Many apocalyptic predictions don't.  Perhaps, someday, the Earth will run out of oil, but I doubt seriously that anyone reading this need worry about it.  That doesn't mean we shouldn't have an energy policy; it means the reasons for it, and the content of it must consider far broader matters than just the supply of oil.

THE STATE OF OUR UNION--AND MORE   
When George W. Bush gave the State of the Union speech a few weeks ago, many wondered what his laundry list of topics and initiatives would be. Of course one would be to stay the course to protect our freedom and thwart terrorism.  (I refuse to say "defeat" as I would refuse to say we could "defeat" evil or stop "sin.")  That included pushing the agenda to promote liberty and democracy (in Iraq ... and other oppressed countries).   And of course there was the obligatory part about the need for (selective) eavesdropping on suspected terrorists.  His comments on Social Security & Medicare were also expected, but the bi-partisan commission was a welcome idea since it is one of few approaches that might actually lead to some kind of reform.  So was the concept of a competitiveness initiative based on education--but that is a very long term approach.   If he had announced one based on "training & re-training" current displaced workers, that would have been far more effective in the near term.  My favorite take-aways (I guess everyone who listens has a few) were the ones on using Information Technology to improve and lower the system of Health Care, and on the topic of Energy Independence for the US, including the development of alternative fuels for our vehicles. 

HEALTH CARE AND INFORMATION TECHNOLOGY
A brief statement on IT in Health Care:  Come on people, just get on with it.  The government has to do its part, which is to mandate action and provides some standards (preferably developed by a blue-ribbon commission of private sector experts), and offer some kind of economic incentives for early adopters and penalties for "foot-draggers."   A few leading medical and IT organizations are already moving.  This needs a BIG push, since it won't just reduce costs and maddening, old-fashioned forms to fill out 3-4 times with the same info--it will improve health care by making history and medical records readily available, and it can reduce errors of all kinds while providing a wealth of data to evaluate still more improvements.  Some one throw some cold water on the privacy paranoids.  Hackers already steal more vital data than this will put at risk.  Come on--would you rather have great info privacy and die?  Or have great medical systems and live?  I know my choice.

ENERGY INDEPENDENCE
I am so tired of filling the coffers of madmen in the Middle East--whether it is our so-called friends like Saudi Arabia (with friends like this who needs enemies--check where al Qaeda originated and where the 9/11 attackers were from)--or worse, like the Iranian, Syrian and Venezuelan groups of US haters.  There is absolutely no reason (except for politicians) that the US cannot be essentially energy independent--at least of oil used for fuel and many other energy needs.  Nuclear power plant technology has come light years since Three Mile Island.    We know how to build and operate them safely and just need to get real about what to do with spent fuel.  (Maybe we can export it to be buried in the deserts of the Middle East.)  The Alaskan National Wildlife Refuge is teeming with--not wildlife, it's actually pretty scarce up there--but with oil.  We need to get on with an orderly plan to tap it.  We can also make huge quanitites of Ethanol, both from corn (which we grow in abudance, and pay many farmers NOT to grow it) and from other kinds of biomass which we also have or can easily produce in abundance.  And our vehicle producers already know how to make vehicles that run on it , and our ubiquitous filling stations can pump it.

Lest someone think I don't believe conservation is part of the answer--I do--big time.  We need to demolish the CAFE lobby (that's Corporate Average Fuel Economy, a measure--albeit erroneous and outdated--of how efficiently the various car/truck companies' vehicles are at using fuel.)  We need to jump the requirements by at least 1-2 mpg each year until it exceeds 30 mpg, and the know-how and technology to do that exists right now!  We need to fund alternative energy development in the short term with added taxes on gas produced from oil (I know, they are regressive and penalize the poor--so give them a tax credit if they drive a vehicle that gets over 30 mpg).   I can't feel sorry for a "poor person" driving a used behemoth, V-8 SUV or truck and complaining about gas prices.  The US can be energy independent of foreign oil in this generation, perhaps in a decade or two, maybe less.

OBSOLETE OPEC, FLUSH THE PAPER-BASED MEDICAL SYSTEMS
So, Mr. President, the telegraph is gone, replaced by the Internet and satellites and fiber optics and Wi-Fi.  The horse and buggy is long gone, so lets lose the horse manure in policies that keep the US a prisoner of radical Islamists who happen to sit atop lots of oil reserves.  Let's OBSOLETE OPEC.  We decided half a century ago to put a man on the moon and we did it, pretty fast, I'd say (and a lot of our current space technology is still of that vintage.)  How about  we quit spending money replacing tiles on obsolete spacecraft and make our next "Man on the Moon" projects just two:  Energy Independence and Information-based Infrastructure for Health Care. 

Aim the your Presidential hunting rifle at these two and the "stray bullets" will hit (and improve) a lot of other important problems (Medicare/Medicaid for one biggie).  Since 60% of Americans disapprove of what you are doing anyway, and that disapproval has never caused you to change your plans or actions in the past...now is the time to make the John Kennedy-esque speech calling for Congress and all Americans to rally around "Freedom--from Tyranny and Terrorism, from Imported Energy, and from archaic Information Infrastructure in our Health Care and Medical systems." 

Now there's a platform I can get excited about.  How about you?

Best, John

THE ENTERPRISE--Jobs & the US' Vitality

THE ENTERPRISE

This is a long one, so sit back, get a cup of your favorite brew, settle in and get ready to have some misconceptions blown to hell...with opinions and data that are not mine alone.

FIRST--THINGS I WISH I HAD SAID OR WRITTEN:
From President Bush's State of the Union Address, the best line by far: "Hindsight alone is not wisdom. And second guessing is not a strategy." What a great, legendary line!! Take that, all you critics!
Next--The final paragraph of FORTUNE'S "Mastering the Art of Disruption" by Fred Vogelstein, (Feb. 6, 2006, pp. 23-24) on the subject of how Steve Jobs continues to move across the technology and entertainment landscape, out-smarting or out-innovating or out-performing nearly everyone else. Specifically on his role in orchestrating the Pixar acquisition by Disney and how his influence will grow as he joins Disney's board. Vogelstein writes, "...In the process, Jobs would get an even bigger landscape to gallop across--and a much bigger horse. Imagine the possibilities for disruption with the resources of both Apple and Disney at his disposal. Overnight the iPod could get deeper access to ESPN as well as the entire library of Disney films and ABC television shows. Can you feel the tremors?"

I do feel the tremors, and I bet a lot of others feel those big footsteps coming. This is the best thing that has happened to Disney in years. It won't be bad for Apple either, and as a long time Mac user, that's fine with me too.

MORE ON JOBS, AND I DON'T MEAN STEVEN THIS TIME
Ever heard of JOLTS? The Bureau of Labor Statistics of the U.S. Department of Labor conducts a monthly survey called Job Openings and Labor Turnover Survey (JOLTS). It involves the collection and publishing of job openings and labor turnover data sampled from establishments on a voluntary basis, including employment, job openings, hires, quits, layoffs and discharges, and other separations. 

The number of unfilled jobs--used to calculate the job openings rate--is an important measure of the unmet demand for labor. With that statistic, it is possible to paint a more complete picture of the U.S. labor market than by looking solely at the unemployment rate. BLS only began collecting this data in Dec. 2002, so we can't make historical comparisons, but it offers some real eye-openers. . You can go to the source yourself at http://www.stats.bls.gov/news.release/pdf/jolts.pdf.

On the last business day of November 2005 (latest data), there were 3.9 million job openings in the US, and the job openings rate was 2.8%. The job openings rate did not change significantly in November, but has generally trended upward since September 2003 from below 2%. The job openings rate is the number of job openings on the last business day of the month as a percent of total employment plus job openings. So, by this measure, the job market is 40% better than it was two years ago. Of course, we do not known how good the market was in 1999, so this may be misleading. But the recent trend is quite good.

How about the fact that 4,586,000 people found a new job in November, but then 4,337,000 needed to find new jobs, as they left their old jobs for one reason or another. A whopping 2,612,000 people left for presumably greener pastures. 1,498,000 people heard Donald Trump's famous line, "you're fired" or were simply laid off. Can you imagine that between quits and layoffs, roughly 1.1% of the country lost a job they presumably wanted to keep in just one month! That translates into over 10% of US employees in any one year losing a job. 249,000 more people were hired than fired.

Most amazingly (to me) 3.4% of the country found new jobs in just one month, and almost 40% of employees this year will change jobs. Now, this is not getting promoted to a better position or moving from one position in a company to another, but changing the actual firm for which they work. Of course, a lot of the job fluidity can be explained by younger people changing jobs, temporary seasonal help and so on. We need to create a net new 150,000 jobs a month or so to keep the unemployment rate from rising, due to growth of population, etc. But that aside, the data points to a remarkably dynamic and fluid job market in the US. It also means that we are creating a lot more than 150,000 jobs a month. More like a few million, but we are losing a few hundred thousand less than that few million.
For a lot of America, employment is not a certain prospect, and old fashioned lifetime employment is more rare than ever. Perhaps this explains why the wiser route is portable retirement vehicles like 401(k) plans, and portable health insurance plans.

Statistics like these illustrate why simplistic media or politicians hype about jobs leaving the US or the unemployment rate is just the outer edge of a very interesting onion. Peeling away layer after layer shows a very different story (and may make your eyes water too.)

EVIDENCE THAT REPORTS OF THE DEMISE OF THE US MIDDLE CLASS IS A MYTH...

GREAT AMERICAN DREAM MACHINE
By STEPHEN MOORE and LINCOLN ANDERSON
WALL STREET JOURNAL December 21, 2005; Page A18

New reports by the Census Bureau and the Fed on the economic well-being of the typical American family reveal that over the past three decades, the vast majority of families have experienced a rapid growth in their income and wealth. Now that nearly six out of 10 households own stock and two out of three own their own homes, the average family -- for the first time ever -- has net worth (assets minus liabilities) of more than $100,000. Median family income has climbed to more than $54,000 a year.

Almost no one in the national media has taken notice of this good news, which has been camouflaged by a barrage of misleading and gloomy stories on "stagnant wages," "the growing income gap between rich and poor," "the disappearing middle class" and "rising poverty in America." The reality is that if the economic growth, employment and family-finances numbers get any better, the media will soon have to start calling this the "Clinton economy."

What the reports tell us is that the vast majority of Americans have not bumped into income glass-ceilings, but rather are experiencing an astonishing pace of upward income mobility. The Census data from 1967 to 2004 provides the percentage of families that fall within various income ranges, starting at $0 to $5,000, $5,000 to $10,000, and so on, up to over $100,000 (all numbers here are adjusted for inflation). These data show, for example, that in 1967 only one in 25 families earned an income of $100,000 or more in real income, whereas now, one in six do. The percentage of families that have an income of more than $75,000 a year has tripled from 9% to 27%.

But it's not just the rich that are getting richer. Virtually every income group has been lifted by the tide of growth in recent decades. The percentage of families with real incomes between $5,000 and $50,000 has been falling as more families move into higher income categories -- the figure has dropped by 19 percentage points since 1967. This huge move out of lower incomes and into middle- and higher-income categories shows that upward mobility is the rule, not the exception, in America today.

It is true that the median-income numbers have fallen slightly in recent years. But this has been the pattern during virtually every recession and immediate post-recession period of the last 40 years. Median-income growth stalls, and then when the recovery picks up steam, incomes resume their inexorable march upward. That is why the long-term trend is what we should be paying attention to. And examining this data leaves no room for argument: The middle class has not been "shrinking" or losing ground, it has been getting richer. For example, the Census data indicate that the income cutoff to be considered "middle class" has risen steadily.

Back in 1967, the income range for the middle class (i.e., the middle-income quintile) was between $28,000 and $39,500 a year (in today's dollars). Now that income range is between $38,000 and $59,000 a year, which is to say that the middle class is now roughly $11,000 a year richer than 25 to 30 years ago. This helps explain why middle-income families can buy things like cable TV, air conditioning, DVD players, cell phones, second cars and so on, that were considered mostly luxury items for the rich in the 1950s and '60s.

The upper-middle class is also richer. Those falling within the 60th to 80th percentile in family income have an income range today of between $55,000 and $88,000 a year, which is about $24,000 a year higher than in 1967. This rapid upward income mobility indicates that the great American Dream, in which each generation achieves a higher living standard than their parents, is alive and well.

[NOTE: several paragraphs on positive wealth creation and negligible change in poverty levels were omitted. The entire editorial is at: http://online.wsj.com/article_print/SB113513427028228173.html, or I can email the full text]
Mr. Moore is senior economics writer and a member of the Journal's editorial board. Mr. Anderson is chief economist at LPL Financial Services.

IF YOU ARE STILL WITH ME...THIS IS THE "CLOSER"...AMERICA IS STILL "THE LAND OF OPPORTUNITY"

-----Excerpted from "The Nation of the Future"
By David Brooks in The NYTimes
"Everywhere I go people tell me China and India are going to blow by us in the coming decades. They've got the hunger. They've got the people. They've got the future. We're a tired old power, destined to fade back to the second tier of nations, like Britain did in the 20th century.This sentiment is everywhere - except in the evidence. The facts and figures tell a different story.

Has the United States lost its vitality? No. Americans remain the hardest working people on the face of the earth and the most productive. As William W. Lewis, the founding director of the McKinsey Global Institute, wrote, "The United States is the productivity leader in virtually every industry." And productivity rates are surging faster now than they did even in the 1990's.

Has the United States stopped investing in the future? No. The U.S. accounts for roughly 40 percent of the world's R. & D. spending. More money was invested in research and development in this country than in the other G-7 nations combined.

Is the United States becoming a less important player in the world economy? Not yet. In 1971, the U.S. economy accounted for 30.52 percent of the world's G.D.P. Since then, we've seen the rise of Japan, China, India and the Asian tigers. The U.S. now accounts for 30.74 percent of world G.D.P., a slightly higher figure.

What about the shortage of scientists and engineers? Vastly overblown. According to Duke School of Engineering researchers, the U.S. produces more engineers per capita than China or India. According to The Wall Street Journal, firms with engineering openings find themselves flooded with résumés. ....

... What about America's lamentable education system? Well, it's true we do a mediocre job of educating people from age 0 to 18, even though we spend by far more per pupil than any other nation on earth. But we do an outstanding job of training people from ages 18 to 65. At least 22 out of the top 30 universities in the world are American. More foreign students come to American universities now than before 9/11.

More important, the American workplace is so competitive, companies are compelled to promote lifelong learning. A U.N. report this year ranked the U.S. third in the world in ease of doing business, after New Zealand and Singapore. The U.S. has the second most competitive economy on earth, after Finland, according the latest Global Competitiveness Report. As Michael Porter of Harvard told The National Journal, "The U.S. is second to none in terms of innovation and an innovative environment."

What about partisan gridlock and our dysfunctional political system? Well, entitlement debt remains the biggest threat to the country's well-being, but in one area vital to the country's future posterity, we have reached a beneficent consensus. American liberals have given up on industrial policy, and American conservatives now embrace an aggressive federal role for basic research. ...

... America's problem over the next 50 years will not be wrestling with decline. It will be helping the frustrated individuals and nations left so far behind."

Nice job David. I think you nailed it. I hope all of you who read THE ENTERPRISE have a new and different perspective now. It is time to start building--not tearing down. Let's get going.

Best, John