Daniel McGinn

Stories by Daniel McGinn

  • Passionate Purchases

    Nothing inspires envy like real estate. That's been true for generations, but perhaps never more so than today, as home prices are on a tear in cities across the country. Author Steven Gaines first wrote about rich people jousting for trophy properties in the Hamptons, on New York's Long Island, in the 1998 best seller "Philistines at the Hedgerow." Now he's turned a critical eye on the world of high-end New York City apartments in "The Sky's the Limit: Passion and Property in Manhattan." The book profiles the city's most powerful real-estate agents and takes readers inside the secretive co-op boards that control access to the city's most prestigious buildings--groups who routinely deny attempts from celebrities like Madonna or Mariah Carey to buy apartments. Gaines spoke with NEWSWEEK's Daniel McGinn. Excerpts:Steven Gaines: When I was little, my father was a schoolteacher in Brooklyn, where the starting salary was $12,000 or $13,000 a year. We lived above my grandmother's clothing...
  • FRESH IDEAS

    There was a time when a business leader was someone straight from Central Casting. They were the suit-clad CEOs of the alphabet-soup companies--GM, GE, IBM, AT&T--at the pinnacle of American business. Times change. The men and (occasionally, at least) women who now lead the biggest U.S. corporations still matter, and size still matters as well: business will always be a game in which the score is kept in dollars.But ideas matter, too. So in this installment of NEWSWEEK's series on 21st-Century Leadership, we're highlighting men and women whose influence isn't measured by old-fashioned indicators like the number of employees they manage or the board seats they hold. Instead, these New Thinkers are leading industries in whole new directions. In the profiles that follow you'll meet an executive who's convincing customers who love $4 cups of Starbucks coffee that they should also turn to the chain to buy music. Another is proving that nowadays some of the best advertisements won't...
  • REAL ESTATE: LIGHTS, CAMERA... CLOSET!

    Forget blogs. For desk jockeys, the Web offers a better genre of goof-off sites: online real-estate listings. But while most of these sites offer the same tired set of photos--look: another crummy shot of the living room!--one site's upping the ante in an increasingly competitive industry. Over the last 18 months, Foxtons, a New Jersey-based discount real-estate firm, has hired 21 professional photographers who shoot homes for its Web site with pro-style digital cameras, high-quality flashes and wide-angle lenses. While Realtor.com, the biggest real-estate Web site, offers a maximum of six photos of each listing (most shot by brokers themselves), some of Foxtons's include two dozen shots, such as artsy close-ups of stairways, windows or fireplaces. "We try to give a bit more of the character of the home," says Sean Begley, Foxtons's head of photography, who spends $150 to $200 per shoot.One downside: potential disappointment. Some shoppers complain the photographers do too well, and...
  • MARKET: TOO MUCH INFO?

    On Wednesday, the Federal Reserve is all but certain to boost short-term interest rates to 3 percent, its eighth hike in a year. But for some market-watchers, the deeper insight into the Fed's thinking won't come from the brief rate announcement, but three weeks later when the Fed releases the minutes of its deliberations.Until January, the Fed kept these notes under wraps for six weeks, until after its next meeting. But this year it's released them more quickly--its latest move toward "transparency," a key element in the legacy of chairman Alan Greenspan, who'll retire next January. But is this too much of a good thing? The Dow's reacted sharply to the minutes' release in recent months as investors have struggled to interpret the Fed's musings. "[The Fed's] gotten into the business of giving some sense of where their next move [will] be, and there's some question over whether that's useful or not," says Allan H. Meltzer, a Fed historian. With inflation rising and economic growth...
  • SCHOLARSHIPS: HOLDING LESS SWAY

    For students admitted to several colleges, the clock is ticking: most schools require a deposit by May 1. Choosing can be tough enough--and these decisions are becoming trickier as schools offer more merit scholarships in hopes of luring brighter students to campus, which helps in rankings. Many of these scholarships go to students from affluent families, fueling a hot debate: should scarce dollars be used to fight over rich kids, instead of giving more low-income kids access to college?For the families themselves, that question is less pressing than deciding if their child should, say, accept a full ride from University A or pay to attend College B. Amid growing pressure to find the "perfect" school, some pros speculate that the scholarships are holding less sway, with more affluent families willing to dig deep for their student's ideal college. But there's growing evidence that kids can excel at a wide range of schools, so Washington, D.C., adviser Steve Goodman says turning down...
  • CEO'S: TRAGIC LESSONS LEARNED

    When it comes to succession planning, corporate boards usually prepare for disaster by putting together what they call "the envelope," which contains instructions on who takes over if the chief executive is suddenly incapacitated. Rarely, however, do companies need to pull out these envelopes as frequently as McDonald's recently has. One year ago this week, McDonald's CEO Jim Cantalupo, 60, died of a heart attack, and the board quickly named his deputy, Charlie Bell, to succeed him. Just weeks later, however, Bell was diagnosed with colon cancer. He stayed in the job until November, but by January, Bell, 44, had died, too.The back-to-back deaths are making corporate boards pay closer attention to the health of the men and women they're considering for top jobs. The goal: to hire healthier CEOs so the envelope never needs to be opened. Recruiter Stephen Mader of Christian & Timbers says many senior executives are already required to have an annual physical. But in reaction to the...
  • FROM HARVARD TO LAS VEGAS

    If you fly into the Las Vegas airport, grab a cab and ask the driver to take you to the town's most fabulous casino, you might arrive at the door of Mandalay Bay, which has a giant shark aquarium, the best pool and classy restaurants like Aureole. Or maybe you'll wind up throwing dice at the Palms, where Paris Hilton and Britney Spears party regularly. But the odds are surely slim that you'll find yourself at Harrah's, a slender and unimaginative casino-hotel, whose 2,530 rooms haven't changed much since its days in the 1970s as a Holiday Inn. Harrah's is strictly a midmarket gambling parlor, more apt to lure in gamblers who lose perhaps $200 an evening than the high rollers who bet thousands per hand. Yet where casino aficionados see an appalling lack of style, Wall Street sees a lot to love. For, despite its lack of trimming and trappings, Harrah's management team has turned the company into a profit machine.Credit for that goes to Gary Loveman, an MIT-trained economist who's...
  • QUICK READ

    The Chairman: A Novel by Stephen FreyAs the new chairman of a major private-equity group, Christian Gillette must not only oversee 27 companies and raise $15 billion for a new fund, but has to figure out who murdered his former boss and attempted to kill him at the funeral--before they try again. And you thought Enron was complicated! The mystery unravels slowly over 320 pages, and there are many twists and turns along the way. But Frey's writing is so vivid and the action so fast-paced, you'll want to stick around for the ride. Some scenes--an explosion, a car chase, even an executive dangling from a 42nd-floor balcony--seem straight out of a Jerry Bruckheimer film. But if the story remained as riveting on screen as on paper, it could be a blockbuster. Stay tuned.All Your Worth by Elizabeth Warren and Amelia Warren TyagiIn their last book, "The Two-Income Trap," the mother-and-daughter team recommended social solutions to ease the financial burden on today's middle-class working...
  • 'THE PRESIDENT ON LINE 1'

    When NEWSWEEK last sat down with Jack Welch, in December 2000, he'd just picked Jeff Immelt as his successor, and the U.S. Supreme Court had just cemented George W. Bush's presidential victory. At one point, Welch interrupted the interview to take a call from the president-elect. In an interview this month, Welch told NEWSWEEK's Daniel McGinn what they discussed--and why he didn't think an affair would cost Suzy her job. Edited excerpts:Did the president talk to you about a cabinet post?I've had opportunities to be considered.You weren't interested?They're brutally hard jobs. You have to understand, the reason CEOs don't often make great cabinet officers is they've been the chief executive for the last, in my case, 21 years. Going to be a staff man for somebody else's policies is not something that appeals to me in any way, shape or form.You were approached last year to run Coca-Cola. Have you ruled out becoming a CEO again?Absolutely positive.The recent firing of Boeing's CEO...
  • BUILDING A BETTER CEO

    During normal times, serving as the chief executive of a big company is an enviable position: interesting work, rich pay and a corporate jet at the ready. During recent weeks, however, CEOs have been nearly as embattled as suspiciously muscled baseball players. Consider the news last week from America's boardrooms. Disney boss Michael Eisner, who'd already been pushed by opponents to schedule his early-retirement party for September 2006, agreed to depart a year earlier to make way for his successor, Robert Iger. At insurance giant AIG, founder Maurice Greenberg resigned under pressure from both his board and New York Attorney General Eliot Spitzer, whose office is investigating AIG. And then there's Bernie Ebbers, the former CEO found guilty on nine counts by a federal jury for the looting of WorldCom. Eisner and Greenberg look downright lucky compared with Ebbers, who faces up to 85 years in prison.Throughout Corporate America, CEOs are being booted faster than off-key singers on ...
  • THE GREEN MACHINE

    Annual meetings can be a dangerous place for chief executives. You never know when a Michael Moore-style protester will grab the microphone and start heckling. If that happens, the standard procedure is for the boss to listen respectfully, avoid engaging and hope the protester runs out of hot air quickly. But John Mackey doesn't believe in the traditional rules of business. At the 2003 shareholders' meeting of Whole Foods Market, of which Mackey is cofounder and CEO, animal-welfare activist Lauren Ornelas lambasted Mackey for selling meat from ducks that were raised in what she considers cruel conditions. Instead of giving her the textbook brushoff, Mackey offered his e-mail address. They corresponded for a few weeks, but stopped when the debate failed to sway either of them. Six months later Ornelas opened her in box to find a new e-mail from Mackey. After talking with her, he'd read a dozen books on animal welfare, he wrote, and eventually decided Ornelas was right. He'd become a...
  • GENDER: FORMULA FOR SUCCESS

    During Harvard president Larry Summers's now infamous talk, he sparked a firestorm by arguing that biology might be a factor in holding women back in their science and engineering careers. But he also offered a subtler argument: that if many universities were really discriminating against women, some other savvy school would be scooping up those promising female scientists. In the Q&A session that followed, one participant challenged him: "The chemistry department at Rutgers is doing that."According to the American Chemical Society, 11 of the top 50 universities have no women among their full professors of chemistry, but at Rutgers, New Jersey's state university, six of 30 are female. Overall, 25 percent of Rutgers's chemistry faculty are women, making it tops in the nation; the average university has 12 percent women chemists. Rutgers department chair Roger Jones admits that he urges women who are unhappy elsewhere to send him a resume. His key recruiting pitch isn't about day...
  • BULLY IN THE PULPIT

    They're called change agents. They swoop in to transform stodgy institutions, using their power of persuasion--or brute force--to implement their bold agenda. It's a risky tack, one that guarantees large numbers of people will hate the boss's guts. If successful, change agents are celebrated. But at every step of the way, opponents lie in wait, ready to pounce at the slightest misstep. They can sense moments of vulnerability. Can this leader be toppled?This storyline may feel like a tired cliche in corporate America, where CEO ousters have become as common as love triangles in soap operas. But last week this narrative unfolded with high drama in a place where power struggles usually occur more discreetly: the ivory tower. A month after giving an ill-advised talk on why women aren't more successful in science and engineering, Harvard President Larry Summers faced his first faculty meeting. For 90 minutes professors berated the former Treasury secretary, their denunciations...
  • PRINTING CASH, FOR NOW

    The sign in the window at Staples appears altruistic: "Recycle your empty inkjet cartridges," it urges. "We'll donate $1 to local education." But this program isn't aimed only at saving the world--it's also intended to swipe some milk from the cash cow known as printer consumables. Staples takes those donated cartridges and sends them to suppliers who clean them, refill them with ink and repackage them in green-and-black boxes as Staples-brand cartridges, which compete alongside brands like Canon and HP. Consider HP's trusty No. 56 black inkjet cartridge, which sells for $19.99. Staples' "remanufactured" version fetches $16.99--15 percent less. The cashier will throw in $7 worth of printer paper to get shoppers to try Staples ink.Among HP's dysfunctional collection of businesses lies a real gem: its printing and imaging division. HP sold $24 billion worth of printing gear last year, which delivered the bulk of HP's $4.2 billion in operating profits. Much of this profit comes from...
  • KING OF THE HILL

    For some skiers, the midday meal is a modest repast--say, a brown-bag lunch, some watery cocoa or a bowl of expensive chili eaten elbow-to-elbow in a drafty mountainside cafeteria. But those skiers don't dine at the Game Creek Club atop Vail Mountain, where members pay a $50,000 initiation fee to feast, as they did on a recent Friday, on a buffet of seafood and roasted quail. At a table near the center of the room sat New York Mayor Michael Bloomberg, with another billionaire, buyout maven Thomas H. Lee, nearby. At a window, enjoying the scenery--outside and in--was Vail Resorts chairman and CEO Adam Aron. There was lots to like: the view was better than a Rocky Mountain postcard.And these high-priced lunches were only going to enhance the corporate bottom line.The Game Creek Club--one of several intimate members-only eateries that Aron has opened at Vail of late--is just an example of how the ski industry is learning new tricks. For years it was a no-growth washout: for most of the...
  • IT'S MUELLER TIME

    In the past decade the ski industry has surely gone corporate, with publicly traded companies like Vail buying up resorts and diversifying into hotels. But as the M.B.A.s schuss into ski country, there remain some traditionalists who believe stocks and snow don't mix. Prominent among them are Tim and Diane Mueller, among the most successful of the remaining mom-and-pop ski moguls.The Muellers, high-school sweethearts who grew up on New York's Long Island, became involved in the vacation biz in the 1970s when they helped Diane's parents develop resort communities in Vermont and the Virgin Islands. In 1982 the Muellers, then in their early 30s, borrowed heavily to buy Okemo, then a back-water ski area in Ludlow, Vt., that was in desperate need of upgrading--their old Poma lifts were the stuff of lore and sores. Over the next few years they added slopeside condominiums, trails, lifts and lodges, and skiers took notice. Today Okemo has twice as many lifts and three times the trails it...
  • SHOPLIFTING: THE FIVE-FINGER FIX?

    The holidays are not just the busiest time for shopping--they're also the busiest time for shoplifting. For retailers, so-called shrinkage--which includes employee theft and return fraud, along with folks' taking the five-finger discount--is a $34 billion-a-year problem. Technology like closed-circuit cameras and electronic merchandise tags have helped to reduce it, but now stores are turning to a new tool to fight back: computer models that help them better predict which items are prone to being swiped.The software, marketed by firms like SPSS and Security Source, uses historical data on sales, returns, voided transactions and inventory to identify suspicious patterns. The software helped Chase-Pitkin, a home-improvement chain in upstate New York, realize that outdoor merchandise like gas grills and Christmas trees was disappearing--something it ordinarily wouldn't have caught until doing post-holiday inventory. Now motion detectors and extra staffers keep those items from walking....
  • COLLEGE: PIMP MY... RENTAL

    Today nearly every college student has a cell phone and an iPod, but there's one possession that remains rare on many campuses: a car. Due to limited parking, many schools restrict students from keeping vehicles. That forces them to rely on public transportation or to rent cars (which is hard, since many rental-car companies serve only drivers 25 or older). Those inconveniences are creating opportunities for Zipcar, the car-sharing service that's been offering by-the-hour car rentals to city dwellers since 2000.Zipcar began testing its cars-on-campus concept at MIT in 2002. Today it has rentals at 18 East Coast colleges. Zipcar charges students a $25 membership fee; drivers then pay rates starting at $8.50 an hour or $65 per day, which includes gas and insurance. While Zipcar generally rents only to drivers 21 and older, this fall Wellesley College inked a deal that allows even freshmen drivers behind the wheel. The company's college fleet--it includes the Toyota Prius, Volvo S40,...
  • YOGA: STRETCHING AN EMPIRE

    When the Internet boom came crashing down, high-tech entrepreneurs Rob Wrubel and George Lichter were left with bad backs from too much time on airplanes and in front of computers. To recuperate, the duo--who'd previously led the software company Knowledge Adventures and the search engine Ask Jeeves--turned to yoga. And while casting about for their next business venture, they bypassed ideas like water-purification technology and instead became the co-CEOs of Yoga Works. Their goal: to launch a national chain of high-quality yoga studios.Since last year they've bought up established studios in Los Angeles, New York and Orange County, Calif.; they currently operate 14 locations and are working the kinks out before expanding nationally. They compare their business to Whole Foods Market, which brings healthy food to the masses while earning nice profits. Fifteen million Americans already practice yoga, according to Yoga Journal, and 20 million others intend to start. "It's not a fad,"...
  • RE-ENGINEERING 2.0

    When it comes to using technology to re-invent how companies do business, Michael Hammer wrote the book on the concept. His 1993 best seller "Reengineering the Corporation" (with coauthor James Champy), launched thousands of corporate reorganizations--and nearly as many "Dilbert" strips. Eleven years later companies are still hiring Hammer, an engineer and former MIT professor, to teach them to become more efficient. Why is it taking so long to learn these lessons? Partly, Hammer tells NEWSWEEK's Daniel McGinn, because it takes time for companies to learn to use today's whiz-bang technology to streamline their operations. And partly because "for many organizations, re-engineering has become a way of life." Excerpts:Re-engineering was celebrated at first, but later it was demonized for driving layoffs. Why?Hammer: Every new business concept has a life cycle. At first it's overhyped, and then the counterreformation sets in--you start to see criticisms of it. Being criticized is fine,...
  • SWIMMING UPSTREAM

    For shopaholics, the village of Freeport, Maine, spells danger. The main street is lined with merchants offering all manner of temptations, from $285 Allen Edmonds shoes at one end to the $2,500 Thos. Moser rocking chairs at the other. But the primary attraction lies smack in the middle: the 160,000-square-foot L.L. Bean store, a retailing Disneyland luring 3 million visitors annually. Inside are acres of backpacks, cross-country skis, fleece vests, chamois shirts and hand-sewn moccasins, along with a climbing wall and indoor trout pond. Across the parking lot lies Bean's Hunting & Fishing annex, with enough guns and ammo to supply an infantry division. The Bean shoppers who prowl these premises--24 hours a day, 365 days a year--seem energized. Some have the same expectant look of the devotees who line up at dawn beside a soon-to-open Krispy Kreme location. But up Main Street at Bean's headquarters, CEO Chris McCormick takes little comfort in this frenzy of buying. The shoppers...
  • Is This Any Way To Run An Airline?

    Michael O'Leary is sitting in his spartan office on the outskirts of Dublin airport, wearing headphones and crooning along--badly--to the U2 classic "Bad." "If you twist and turn away," he warbles, in a key that makes a visitor wish a jet would roar overhead. The music is coming from a handheld device about the size of an Etch A Sketch. It's a digital media player, equipped with music from 100 CDs and hours of video: cartoons, sitcoms, even first-run movies. Starting next month Ryanair, the no-frills airline O'Leary has turned into an industry darling, will begin renting the devices to passengers for $6 per flight. The plan has all the markings of the strategies Ryanair has made famous. The handheld units are far cheaper than installing the seat-back TVs other airlines use, and renting them gives Ryanair a whole new way to squeeze money from its passengers during flights. Says O'Leary: "We think this is going to be the next really big thing up in the air."If his track record is any...
  • MATING BEHAVIOR 101

    It was just after sunset on a warm day at the College of New Jersey. Under a rising moon, the soccer team ran the field in the lighted stadium. Outside the student union, a guitar duo played an acoustic set. And in a dormitory lounge, 27 freshmen sprawled on couches as psychology professor Elizabeth Paul quizzed them about their sex lives. There was hardly any talk of "dating" or "boyfriends" or "girlfriends"--this is 2004, not a rerun of "Happy Days." Instead, the students and the professor talked about "beer goggles" and what happens when partners "catch feelings." Even as freshmen these students know enough about "hooking up" to hold forth for more than an hour. As they dished, Paul scrawled in her notebook. Their musings may contain the spark for her next big research project.Since the late 1990s the media has been filled with accounts of adolescent hookups. The phrase describes one-time sexual encounters--anything from kissing to intercourse--between acquaintances who've no...
  • NO ROAD TO RUIN

    For anyone who drools over home-makeover shows, visiting the KB Home studio in Las Vegas is like a child's trip to Disney World. The showroom is filled with granite counters, oak cabinetry, sleek appliances and young couples tricking out their dream home. This is where customers of KB, the nation's largest builder of entry-level homes, choose accessories, from superinsulated windows to built-in surround-sound speakers. The average buyer spends $25,000 on these options, but it seems painless thanks to the handy chart that studio director Miguel Hutton hands out at the door. The chart, with a sliding arrow pointing to the current mortgage rate, shows that $25,000 in upgrades will add just $145 to a monthly mortgage payment, or, as Hutton explains it, just "$35 a paycheck."Such is the power of low interest rates, which have helped fuel the biggest run-up in home values in a generation. For years experts have debated whether skyrocketing home prices--up 9 percent nationally in the last...
  • BUSINESS: THE ANTI-WAL-MARTS

    The toy business is a cruel place these days. The latest reminder came last week, when Toys "R" Us announced plans to split its company in half--and possibly get out of the toy business altogether. The toy seller's move makes it the latest company to be squeezed out by Wal-Mart--both KB Toys and FAO Schwartz have filed for bankruptcy since the chain began deeply discounting toys a few years ago.Although this storyline feels familiar--another business crushed by Sam Walton's empire--it doesn't tell the whole tale. "In almost every category in which Wal-Mart competes, there's at least one competitor that has figured out how to hold their own," says Bain & Co. consultant Darrell Rigby. They're finding ways to justify higher prices, most often by offering unique products or better service. Upscale grocery chains like Trader Joe's are growing; specialty retailers are stealing sales from Wal-Mart in the hair-care and cosmetics categories, and in home electronics Best Buy is thriving...
  • SOME OF THE SMALL SURVIVE

    Joseph Diaz is standing in a Wal-Mart in suburban Boston surrounded by "shut-up toys." That's his name for the cheap playthings--93-cent blocks, 88-cent kites--shoppers buy to quiet their kids. But amid the bargain-basement merchandise are a few toys that make Diaz, president of the upscale toy chain Learning Express, a bit nervous. In one aisle he spots Legos at prices 20 percent less than his stores charge. On a high shelf he spies a $97.52 Radio Flyer wagon. "That's a big price point," he says. It'd make a great birthday gift for a grandchild--and a lost sale for Learning Express.A few years ago every big retailer was struggling to devise a strategy to compete with Web retailers like Amazon.com. Lately they're focused on a different threat: Wal-Mart Stores. The chain is already the world's largest company, but its expansion into new regions and product categories is remaking entire industries: as Wal-Mart began deeply discounting holiday toys in recent years, chains like KB and...
  • TAKING DEPRESSION ON

    On the long list of worries Mom and Dad have when a child goes to college--grades, homesickness, partying--there's a new issue: the apparent rise in mental illness on campus. More than 1,100 college students commit suicide each year, according to estimates by mental-health groups. And even when students aren't in acute distress, they're suffering in surprisingly large numbers. In a 2003 survey by the American College Health Association, more than 40 percent of students reported feeling "so depressed, it was difficult to function" at least once during the year; 30 percent said they were suffering from an anxiety disorder or depression.While there's debate over why the numbers seem to be rising, there's also concern that colleges aren't dealing with the problem. In January the Crimson, Harvard's student newspaper, published a widely discussed five-part series concluding that "an overwhelming majority" of Harvard undergraduates experience mental-health problems. The series further...
  • PLUMBING: THE FUTURE OF FLUSHING

    Americans are used to ordering things ranging from french fries to popcorn in small, medium or supersize. Now those same decision-making skills may become useful in the bathroom, thanks to an innovative plumbing technology: dual-flush toilets. The new gizmos are the industry's latest attempt to help reduce water usage, a movement that hasn't always gone smoothly. The last big toilet makeover came more than a decade ago, when the U.S. government decreed that new toilets should use just 1.6 gallons of water per flush, down from the 3.5-gallon standard that had ruled the industry for decades. But consumers complained that it often took two or more flushes to clear the bowl; so many people preferred the old toilets that some plumbers imported them illegally from Canada. "We're still getting complaints about people not happy with the performance," says Bill Gauley of Veritec Consulting. The dual-flush toilets, which have been used for years in Australia and parts of Europe, rely on a...
  • DEALING WITH DEPRESSION

    On the long list of worries that Mom and Dad have when a child goes to college--grades, homesickness, partying--there's a new issue gaining prominence: the apparent rise in mental illness on campus. More than 1,100 college students commit suicide each year, according to estimates by mental-health groups. And even when students aren't in acute distress, they're suffering in surprisingly large numbers. In a 2003 survey by the American College Health Association, more than 40 percent of students reported feeling "so depressed it was difficult to function" at least once during the year. Thirty percent identified themselves as suffering from an anxiety disorder or depression.While there is debate over why the numbers seem to be rising, there's also concern that colleges aren't dealing with the problem adequately. In January 2004 the Crimson, Harvard's student newspaper, published a widely discussed five-part series which concluded that "an overwhelming majority" of Harvard undergraduates...