Saturday, November 19, 2005

Draft day...every day.

November 20, 2005

The Prodigy Puzzle

By ANN HULBERT

'So you're the geniuses," Senator Carl Levin said, looking pleased as he peered over his glasses. He was addressing the flaxen-haired Heidi Kaloustian, a 17-year-old freshman at the University of Michigan, and John Zhou, a superfriendly 17-year-old senior at Detroit Country Day School, unusual visitors to Room 269 of the Russell Office Building on Capitol Hill. Michigan had distinguished itself, Levin had been informed: the state boasted two Davidson Fellows, and he had clearly been told these teenagers came trailing brainy superlatives. "Genius loves company," announced the September press release about the students who had won scholarships awarded annually since 2001 by the Davidson Institute for Talent Development, a foundation that supports "profoundly intelligent" youths, a more recent term for off-the-charts children. "Seventeen prodigies," the press release went on, were "to be honored at the Library of Congress for contributions to society" in the fields of science, math, technology, music and literature.

Even among these superstars, the young Michiganders stood out. All the accolades and attention added up to a thrilling but evidently also somewhat disorienting experience, at least for one of them. "I'm generally pretty shy, hesitant to show my work," Heidi told me over the summer - a reticence that had only partly been drummed out of her by joining her high school's poetry-slam team at a teacher's insistence. Sitting on the couch awaiting the senator, she looked slightly dazed at being in the limelight: Heidi was one of the four Davidson "fellow laureates" this year - recipients of the top $50,000 scholarship awards for projects they had submitted. She was also the first laureate ever in literature, with a writing portfolio she titled "The Roots of All Things." John, a scientist whose 2005 accomplishments also included semifinalist standing in the national math, physics and biology olympiads, was taking his $25,000 award in stride. He was one of five winners at that level. The remaining eight Fellows received $10,000 each - money to be disbursed for approved educational purposes for up to 10 years.

Apparently feeling his visitors deserved more than the usual small talk, Senator Levin forged on with "Where are your souls?"
"You mean what are our projects?" John responded, ready with the title of his: "A Study of Possible Interactions Among Rev1, Rev3 and Rev7 Proteins From Saccharomyces Cerevisiae." John laughed along with everyone else when Levin remarked, "I understood the word 'protein,' " and with the confident charm of a youth who has spent lots of time with adults, he told the senator he really enjoyed seeing him at a recent AIDS walk in Michigan (for which John had organized a school team). Turning to Heidi, who explained that she wrote both poetry and prose, Levin was prompted to joke, "So writers are worth twice as much as scientists these days?" It was a short step to reminiscences about college-tuition bills for his own daughters. The Senate photographer then sprang into action, arranging a classic portrait of future promise: professorial senator in the middle, flanked on one side by a bright-eyed youth and on the other by a mother wearing a grin her child might later tell her looks goofy.

For the Davidson Fellows who came to Washington in late September for a gathering that culminated in an evening reception at the Library of Congress, the visit to Capitol Hill was more than a photo op. It was an effort to help promote the vision of their patrons, the founders of the Reno-based Davidson Institute, Bob and Jan Davidson. Drawing on a fortune earned in the educational-software business, the Davidsons established themselves as a well-endowed new presence on the gifted-education scene in 1999. Their goal is not just to support extraordinary youthful achievements, though their contributions to the cause of enriching precocious childhoods have been wide-ranging. The institute's enterprises include, in addition to the fellowships, a free consulting service now assisting 750 "Young Scholars" between the ages of 4 and 18 who qualify with top test scores (99.9th percentile, I.Q.'s of at least 145) or, for those without a battery of assessments, portfolio submissions. The Davidsons have also begun the Think Summer Institute, offering college courses for 12- to 15-year-olds. Next fall the Davidson Academy, a public middle and high school for the profoundly gifted, will open on the Reno campus of the University of Nevada. How much pleasure the Davidsons, in their early 60's, take in celebrating the accomplishments of the fellows was obvious at the reception: Bob, strong-jawed and a jokester, and the elfin Jan glowed like godparents as they beckoned the multicultural array of prize-winners up to the dais to speak about their projects - "prodigious work," a term the Institute favors, ranging from the adorable 6-year-old Marc Yu's piano performance to the 17-year-old Kadir Annamalai's work on the "growth of germanium nanowires," useful in thermoelectric devices.

It is the Davidsons' other, related aim that calls forth a different kind of fervor. Authors (with Laura Vanderkam) of a book called "Genius Denied: How to Stop Wasting Our Brightest Minds" (2004), they are on a mission to remedy what they are convinced is a widespread neglect of exceptionally talented children. That means challenging the American myth that they are weirdos or Wunderkinder best left to their own devices or made to march with the crowd. "By denying our most intelligent students an education appropriate to their abilities," Jan Davidson warns a nation in the midst of a No Child Left Behind crusade, "we may also be denying civilization a giant leap forward." Precocious children are not only avid learners eager for more than ordinary schools often provide, the Davidsons emphasize; they are also a precious - and imperiled - resource for the future. The Davidsons, joined by many other advocates of the gifted, maintain that it is these precocious children who, if handled right, will be the creative adults propelling the nation ahead in an ever more competitive world. As things stand, the argument goes, the highly gifted child is an endangered species in need of outspoken champions like the Davidsons, who are role models for the "supportive, advocating parent" they endorse.

The youths have their chance to engage in advocacy, too, and the Davidsons had selected very personable prodigies to visit Washington to publicize the don't-hold-children-back message. (Video presentations are part of the fellowship application process.) "Rounded like an egg" is the simile John Zhou used in the SAT-prep classes he taught (though he himself, a perfect scorer, didn't take any), where he recommends blending a well-honed talent with other interests to "erase the image of the nerd or the geek" - a balanced profile the Davidsons would surely endorse. Their fellows fitted it and proved ideal ambassadors of well-tended youthful brilliance. Admirably poised, they were getting precocious practice for the future eminence that, they were told more than once that day, awaits them.


The Davidsons are not the first Americans dedicated to cultivating early promise and dismantling the popular image of highly gifted children as misfits, an affront to a nation founded on egalitarian principles. More than three-quarters of a century ago, the Stanford psychologist Lewis Terman, armed with his newly minted I.Q. test, set out to challenge the myth that unusually intelligent and talented children are "puny, overspecialized in their abilities and interests, emotionally unstable, socially unadaptable, psychotic and morally undependable." His longitudinal "Genetic Studies of Genius" aimed to prove the opposite: highly gifted youths tended not only to enjoy more wholesome childhoods than ordinary kids but also to become extraordinary adults. His labors have since helped spawn a rich field of research and outreach devoted to exceptionally gifted children - though you might not guess it from the embattled rhetoric employed by gifted-child advocates in general, not just the Davidson Institute.

The lament uttered half a century ago that in philistine America "there are no little leagues of the mind" could not be made in our turn-of-the-millennium meritocracy. Thanks precisely to programs like those run by the Davidson Institute, there is what you might call a farm system devoted to finding talent and developing it, and though the process isn't streamlined, it has become ever more extensive. You merely have to look at the résumés of the Davidson Fellows, which list a stunning array of distinctions - from music and Intel competitions to math and science olympiads to participation in highly selective summer programs. Even as they sound the alarm, prominent advocates themselves celebrate the widening span of resources. Consider, for example, "A Nation Deceived," the Templeton National Report on Acceleration issued last year and subtitled, "How Schools Hold Back America's Brightest Students." In its brief for more grade skipping and subject acceleration, it indicts an educational system that indeed gives talented students short shrift. (Federal money for the "gifted and talented" is minuscule compared with the quarter billion in this year's No Child Left Behind budget, and state and local efforts, though often better, are uneven.) Yet in the course of promoting the benefits of leaping ahead, "A Nation Deceived" also extols "a whole host of outside-of-school opportunities, including award ceremonies, summer programs, after-school or Saturday programs, distance-learning programs and weekend workshops and seminars," to which the talent search serves as a "gateway" for the topmost students, who also have a variety of early college options to consider, like California State University at Los Angeles's lively early-entrance program. Julian Stanley, a Johns Hopkins psychology professor and a pioneer of the gifted-child movement, marveled not long before he died last summer at age 87 at how a dearth of opportunities had given way to a "wealth of facilitative options."

Perhaps the time has come to examine a rather different myth, embraced by gifted-child advocates themselves: that children of unusual intelligence and accomplishments remain a misunderstood, marginalized resource in a culture obsessed with equity and prone to conformity. In fact, youthful prodigiousness is the leading edge of a wider cultural preoccupation with early high performance in our meritocratic era. Among the educated elite, the superchild has become the model child, and the model parent is an informed advocate with an eye trained on his or her child's future prospects. The unusual fate of the precocious child - to become adultified early and yet to remain hovered over for longer - is echoed in the situation of the privileged child, ushered along a highly scheduled path of credentialed performance from cradle onward, with college and career ever in mind.

In short, thanks not least to the gifted-child movement itself, the mission of discovering and molding precocious talent has been mainstreamed more successfully than anyone expected. Once in a while, the more mundane variety of Ivy League-aspiring kids and their ambitious parents pause to ask themselves whether the ethos entails too much early pressure to compete. For truly extraordinary kids, a different version of the question arises, but it is considered less often: could it be that in the quest to pinpoint and promote exceptional youthful promise, testers and contests and advocates may have unwittingly introduced early pressure to conform, not to the crowd but to an assiduously monitored, preprofessionalized and future-oriented trajectory? If the mold-breaking creativity and innovation that advocates invoke are what society wants more of, perhaps it is worth asking whether anointing the ranks of talent-search stars with a sense of foreordained distinction and steering them onto a prize- and degree-laden fast track, the earlier the better, may have its costs. Of course, it is every parent's hope to help satisfy highly gifted children's zeal for mastery and give them fulfilling childhoods, and programs like those the Davidson Institute runs help make that easier. But a look back over a century suggests it may be hubris if the goal of the guidance is to shape truly exceptional destinies in adulthood. Well-intentioned efforts to smooth the path and hone expertise in a hurry might even - who knows? - be a hindrance in the mysterious process by which mature originality ultimately expresses itself.

Long before 20th-century psychology turned its attention to young geniuses, children with extraordinary powers were enshrined in myth as figures to be at once feared and revered. Baby Hercules had occasion to display his prowess in strangling serpents because jealous Juno, angered that Jupiter had sired a son with a mere mortal, dispatched snakes to his cradle. Twelve-year-old Jesus in the temple after Passover, "sitting in the midst of the doctors, both hearing them, and asking them questions," invites not only astonishment "at his understanding and answers," but also rebukes from his bewildered parents; they're unsettled by his insistence that he "must be about my Father's business," well aware that he isn't referring to Joseph. In the Infancy Gospel of Thomas, perhaps the first early Christian attempt to fill in Jesus' life before that temple story, awe is mixed with terror. Jesus is an alarming little boy who doesn't merely make real birds out of clay and work other miracles but causes the death of those who scold him for not resting on the Sabbath and shames masters who try to instruct him in his letters. From the divine/demonic child of antiquity to the Romantic era's idealization of the innocent imaginative genius was perhaps not as big a leap as it seems: the prodigy was the very emblem of prophecy, in touch with mystical truth and powers outside of human time. In his different guises, the phenomenal young emissary came bearing an implicit message: adults beware.

Lewis Terman, however, was not a man readily daunted, and his endeavor embodied the ambitions and the confusions - and the elusive predictions - that have marked gifted research and development ever since. Five years after he revised Alfred Binet's intelligence test, creating what became known as the Stanford-Binet I.Q. test, he put it to use in a pioneering survey of a little-understood population. When Terman began seeking gifted California schoolchildren to participate in his "Genetic Studies of Genius" in 1921, he was undertaking the first youthful talent search, eager not just to explore the nature of gifted children but ultimately to predict and improve their chances of future greatness. Convinced that intellectual capacity was innate, he was a eugenicist eager to see the brightest selected out and trained up to guide society. But he was also aware that no one knew when or how, much less which, buds of brilliance might ultimately produce glorious flowers. Terman became determined to see to it that the proverb "early ripe, early rotten" wouldn't describe their fate. He would do his best to boost, not just stand back and trace, the trajectories of subjects, whose well-rounded giftedness augured such promise.

If that interfered with the purity of his findings and predictions, so, too, did Terman's methods for choosing his subjects. His approach made it less than surprising that the Termites, as the study participants were nicknamed, proved exemplary schoolchildren, not lopsided or eccentric at all. Terman's tool, the I.Q. test, was devised in and for an academic context, focusing on verbal and quantitative reasoning and memory skills, which meant scores at the high end correlated closely with classroom success. He was in search of the overall high performers, and his fieldwork further ensured a sample low on idiosyncratic characters. Since Terman didn't have the resources to comprehensively test the more than a quarter-million students in the California school districts he was looking at, he enlisted teachers to help make the first cut. They supplied him with the kids they considered the best, a group unlikely to include "some nerdy person in the corner mumbling to himself," points out Dean Keith Simonton, a professor of psychology at the University of California, Davis, who specializes in the scientific study of historical genius. Testing this cohort - as well as other batches of bright children he rounded up earlier - Terman emerged with an overwhelmingly white and middle-class sample of roughly 1,500 students whose average age was 11 and whose I.Q.'s ranged between 135 and 200, about the top 1 percent. (The mean I.Q. in this group was 151, and 77 subjects tested at 170 or higher.) It is worth noting that his methods selected for a conscientious breed of parents as well, given that lengthy questionnaires about their children were part of the drill.

The data reviewed in the first volume of findings, in 1925, demolished "the widespread opinion that typically the intellectually precocious child is weak, undersized or nervously unstable." Terman's inventories - of physical and personality traits, books read, intellectual and recreational interests, family background - revealed children physically superior as well as more trustworthy and honest, and much better at school (where about 85 percent of them had skipped grades) than a nongifted group used for a rough comparison. On the East Coast, a fellow psychologist, Leta Hollingworth of Columbia University Teachers College - a forerunner whom the Davidsons salute - chimed in with similar positive findings about the gifted students she studied in two public schools. For the rare specimens with I.Q.'s of 180 or higher, the record was somewhat more mixed on the question of social adjustment (more recent studies on "psychological well-being" continue to conflict); Hollingworth drew particular attention to the problem of disengagement at school. But home life in their samples' comparatively well-off and small families seemed enviable. "Fortunately," Hollingworth wrote, "the majority of gifted children fall by heredity into the hands of superior parents, who are themselves of fine character and worthy to 'set example.' "

With this portrait, the pioneers confronted a tension that exists to this day in the quest to rally support for the select cohort. Such a positive account of gifted children was good for their image, but less so for the message that, as Terman proclaimed at the close of the first volume, "the great problems of genius" require urgent attention. The young geniuses seemed to be doing nicely - perhaps all too competently, in fact. In the 1930 follow-up volume to "Genetic Studies of Genius," the Terman team betrayed a hint of defensiveness that reappeared in the 25-year and 35-year follow-ups. Anticipating later critics, they cautioned against undue expectations. "The title is not meant to imply that the thousand or more subjects who have entered into the investigations described are all potential geniuses in the more common meaning of that term. A few of the group may ultimately achieve that degree of distinction, but not more than a few."

The urge to forecast, then as now, drives research on childhood giftedness - yet as Malcolm Gladwell noted in a recent talk, precocity in general doesn't turn out to be a very reliable predictor of truly exceptional mature performance. When a colleague of Terman's, Catharine Cox, undertook the curious exercise of retrospectively computing the youthful I.Q.'s of 300 adult geniuses in the past (drawing on facts from their biographies), she found they were high - but far from the whole story. She also discovered the importance of other qualities, especially persistence and confidence. And she presciently warned that tests "cannot measure spontaneity of intellectual activity; perhaps, too, they do not sufficiently differentiate between high ability and unique ability, between the able individual and the extraordinary genius." Cox concluded that "the extraordinary genius who achieves the highest eminence is also the gifted individual whom intelligence tests may discover in childhood," with the crucial caveat that "the converse of this proposition is yet to be proved."

Focusing on a small cohort of children with I.Q.'s above 180, Hollingworth's case studies couldn't supply clear-cut evidence that a high-testing childhood was a precursor of later extraordinariness. The few she followed into early maturity excelled in their early 20's at academic and intellectual work, and won honors. But she wasn't sure what to conclude about creativity and originality, plainly disappointed that her sample didn't display more. She speculated that this was partly because of nurture: "so harnessed to the organized pursuit of degrees," in one child's case, and subjected to an "education so scrupulously supervised and so sedulously recorded that he had little time for original projects" in another. "The gifted group at midlife," as the Termites were called in the 35-year follow-up study, were highly educated for the time, professionally very successful and well adjusted. But the Terman team tried not to sound too let down that "a majority of gifted women prefer housewifery to more intellectual pursuits," right in step with postwar America.

In 1956, the year Terman died, a Nobel Prize was awarded to William Shockley, who as a California schoolboy didn't make the cut for the Termites but went on to help invent the transistor (and was later hailed as a catalyst in the creation of Silicon Valley, and also pilloried as a racist eugenicist). In 1968, another reject, Luis Alvarez, won the prize for his work in elementary particle physics. No Termite ever became a Nobel laureate, though some became well-published scientists and multiple patent holders. Alumni include journalists, poets and movie directors as well as professors, among whom psychologists have been particularly distinguished, perhaps not surprisingly. Terman, after all, pulled Stanford strings and did everything he could to help his protégés, who had been selected for what are often now called "schoolhouse gifts" and had grown up as a self-identified group imbued, not least by him, with expectations of academically approved achievement.

The fact that "the group has produced no great musical composer," as the study's authors wistfully noted, "and no great creative artist" perhaps wasn't so surprising, either. In part, of course, that is because such figures don't surface very often. In part, it was because "special abilities" weren't what they were testing for - the I.Q.'s appeal was its assessment of general cognitive ability, and the "globally gifted" child was the figure the Terman group fixed on. But in part it was also because when special talents were spotted in their high I.Q. mix, they resisted systematic analysis. Fewer than half of the kids who had shown distinctive artistic abilities stuck with those interests, though musicians were more likely to. (Even in music, the field best known for spawning prodigies, the yield of distinguished mature artists is low. Out of an unusually large concentration of 70 young musical marvels in the San Francisco area in the 1920's and 30's, only 6 went on to notable adult careers: Leon Fleisher, Ruth Slenczynska and Hephzibah Menuhin on the piano, and Isaac Stern, Ruggiero Ricci and Yehudi Menuhin on the violin.)

Terman and his colleagues focused on a batch of precocious literary girls. The researchers set out to compare their work with the juvenilia of eminent writers of the past. But quality and development tended to be highly uneven. That was obvious, for example, in a sampling of the 100 poems produced between ages 6 and 8 by the prolific Betty Ford, an engaging girl with an I.Q. of 188 who was said to skip and dance as she dictated her poetry, if she wasn't feverishly typing it out by herself. Nor did the juvenilia of the great provide a steady standard. In fact, a panel of judges rated poems by the young Longfellow and Shelley below those of Betty and other nobodys. As Terman's team concluded: "One would hardly be justified in attempting to devise methods for the prediction of adult literary accomplishment. Too many factors other than natural ability go to determine the amount and merit of achievement." The 8-year-old Betty herself suggested as much in "Blackbirds," which the judges rated among the poorest of her poems: "But to tell what I have in mind,/Is harder by far, than to guess/What the twitter of those birds mean,/As they spatter their words about."

The Stanford-Binet I.Q. test reached middle age along with the Termites, looking disappointingly staid itself. At least it did from the vantage of those increasingly convinced that youthful giftedness could not be reduced to a fixed and innate general intellectual ability or potential. In postwar America, the terms "gifted" and "talented" crowded out "genius," which sounded suspiciously elitist, and a quest was under way for a wider, democratic conception of human excellence. Psychologists pushed toward a more multifaceted understanding of giftedness, turning their attention to "divergent thinking" and creative capacities - fluency, originality, flexibility - as well as to a wider range of less distinctively intellectual abilities, like "task commitment." It was time, too, to take a more interactive, social view of the emergence and growth of talent, whose very existence in childhood, after all, depended on adult recognition. Youthful giftedness could not be fully appreciated, or cultivated, without viewing it as a social construct, a capacity that flourishes thanks to a confluence of forces: a domain of knowledge with clearly demarcated rules a child can master, adult models and mentors ready to assist and a receptive cultural context. All of these factors help explain why highly structured, permanently valued fields like music and math prove especially hospitable to prodigies. It's also why precocious mental calculators and map makers, for example, were once a sought-after variety of prodigy and no longer are.


Some 50 years after Terman, giftedness was a social construct in flux and in the spotlight. The first federal definition of "children capable of high performance," announced in the Office of Education's Marland Report of 1972, which led to legislation on education for the gifted, was a symptomatic catch-all. The formulation covered students "with demonstrated achievement and/or ability in any of the following areas, singly or in combination: general intellectual ability, specific academic aptitude, creative or productive thinking, leadership ability, visual- or performing-arts aptitude, psychomotor ability." The lineup still led off with what Ellen Winner, professor of psychology at Boston College and the author of "Gifted Children: Myths and Realities" (1996), describes as "the smooth and even image of the globally gifted child." Yet narrower talents - and perhaps quirkier and more uneven ones - now received independent billing, for the old faith had been shaken that I.Q. and creativity were so closely correlated after all. The problem was, there were no good tools for tracking skills like "creative or productive thinking," and in any case, what could that really mean in childhood, a period dedicated to mastering, not generating, knowledge? Looking back to the 1980's, David Henry Feldman, who teaches child development at Tufts University and is the author, with Lynn T. Goldsmith, of "Nature's Gambit: Child Prodigies and the Development of Human Potential" (1986), recalls a sense of frustration with psychometricians and with "creativity as measured by creativity tests, as in how many ways can you use or describe a brick" - but also a sense of ferment. He was busy examining the uncanny extremes that Terman's study had skirted - Feldman's book probes six specialized prodigies and their hothouselike homes - and he found himself sharing ideas with an eclectic array of psychologists tackling the development of creativity from different angles. Among them were Howard Gardner, who was soon to begin work on his theory of "multiple intelligences," and Howard Gruber and Dean Keith Simonton, both busy looking at the history of creative eminence.

But the impulse to "recharge" the prodigy notion with some of its "original power and mystery," as Feldman put it in his book, failed to gather scientific momentum, he now ruefully admits. (He awaits further brain research.) In the meantime, a less global assessment method than the I.Q. exam had proved itself ideal for identifying the most familiar item on that Marland Report list of special capacities, "specific academic aptitude." There is nothing like a ready tool, and a numerical measure, to cut a phenomenon down to more accessible - and usable - size in America.

The test was the SAT, which Julian Stanley, who established Johns Hopkins as a center of gifted education and research, went ahead and administered in 1969 to an 8th-grade math whiz he had heard was not only excelling in a summer computer course at Hopkins but also helping graduate students. Joe aced the math portion. It emerged that among children under 13 who scored in the very highest percentiles on grade-level standardized tests, there were some who could match or outperform the average high-school senior SAT-taker, particularly on the math section, but also on the verbal section and sometimes on both. The SAT could thus be used as a device for winnowing the top and tiptop performers in specific areas very early. With the help of colleagues, Stanley inaugurated the Johns Hopkins talent search and began gathering subjects for the second-most-famous longitudinal gifted study: the continuing Study of Mathematically Precocious Youth (SMPY), which includes a superselect cohort of students who scored 700 or above on the math or the verbal section before turning 13 (a feat performed by 1 in 10,000 children, those the Davidsons and others label "profoundly gifted"). Intervention was Stanley's real goal, and acceleration - not mere enrichment - became his mission, which meant packing the earliest SMPY phenoms off to college very young. Soon Johns Hopkins had started intensive summer programs where students could devour whole-year math courses, and before long literature classes too, in mere weeks. The Johns Hopkins Center for Talented Youth model caught on. Stanley helped start centers at Duke and Northwestern, and there are now programs as well at the University of Denver, the University of Iowa and Vanderbilt University.

"The idea that we should try to make a universal man out of one person isn't appealing to me somehow," Stanley once said, not sharing Terman's interest in the omnibus genius. Instead he and his team emphasized a more specialized vision: to spot children's narrower talent as linguistic or numerical "symbol analyzers" and, by supporting it early and intensively, help spur them on to excel in that field as adults. It is an endeavor, they have pointed out, right in step with the spirit of the information age that was dawning as the SMPY unfolded. What began as a regional talent search has become national, annually testing nearly a quarter-million students. Last year the Hopkins Center for Talented Youth alone recognized about 400 students who scored above 700 on either or both sections - which suggests the net is quite successful in catching the top kids.

In the SMPY's most select group of high scorers - the 1 in 10,000 cohort - almost all have enjoyed some form of academic acceleration, and Stanley's hope of orchestrating self-fulfilling prophecies so far seems mostly to have panned out. Early adolescent math or verbal trajectories are borne out in about two-thirds of the cases, with the notable exception that high verbal males are as likely to pursue an undergraduate degree in the sciences as in the humanities and arts. Advanced degrees are far more common in this SMPY group than in the general population. Participants also more often receive tenure and take out patents, cited as evidence that the SAT measures "much more than book-learning potential." As SMPY researchers await the analysis of data on the cohort at age 50, it is worth noting their scaled-down accomplishment. They have created what amounts to effective early career-profiling - an instrumental goal rather different from the inspirational visions of their predecessors. Where Hollingworth sought cultural "originations" from her highest I.Q. cohort (not just cultural "conservation"), the new mission is to answer the need for "human-capital specialization" by fine-tuning and facilitating particular expertise earlier and faster.

It is hard to say what might have become of these already high-scoring middle schoolers had they never sat for the SAT and enjoyed summer courses and been anointed as extra-special. Stanley and his associates have not aspired to conduct a rigorously controlled experiment. They do like to claim, though, that if they had been in charge, the future Nobel laureates Shockley and Alvarez would have made the cut. What they neglect to note is that the two of them didn't need finding. It is interesting, though, to wonder what difference, if any, it might have made to Shockley's career had his alternately domineering and indulgent mother received guidance in rearing her brilliant but obnoxious son. And who knows what might have happened had Shockley received an early (nonmaternal) imprimatur of promise and a chance to mingle with brilliant peers - rather than the insult, which reportedly rankled him all his life, of scoring too low (129) to qualify for the Terman study. Might he have avoided his late-life notoriety? Or is it conceivable that he might not have helped invent the transistor at all?


There is no predicting the fate of the fellows anointed by the Davidson Institute over the past five years, and of course the award itself is just one identity-marking moment for them. But the emergence of this junior MacArthur grant at the turn of the millennium points up the persistent tensions in talent development. On the one hand, it is worth wondering whether the inflated rhetoric of adult approval might prove a burden of sorts for children who are already much lauded. Leta Hollingworth advised long ago against placing highly gifted children "in a position which will be a constant stimulus to live up to the role of child prodigy" and warned against overusing "genius," a term generally understood to imply domain-altering powers no child can possibly yet have. Confidence is a crucial ingredient of success in carving out a distinctive path, but too many early plaudits can undermine risk-taking and drive. Outsize external expectations can also be daunting for precocious learners and performers as they make the maturational leap from the work of mastering rules and skills to the challenge of asserting more self-conscious control of their gifts.

On the other hand, the Davidsons' revival of the reverent terminology is a reminder that precocious accomplishments are wondrous in themselves: the monumental efforts and results children are capable of can be amazing, never mind what those children may (or may not) go on to become. These are awards for hard-earned achievement, not for test-taking ability or abstract potential, Jan Davidson emphasizes as she explains why she feels it is appropriate for the fellows to speak to the press and be saluted by senators and congressmen. By the same token, she doesn't want to see public attention drawn to the other lucky beneficiaries of the Institute's help, the 750 Young Scholars, who are selected merely "for being smart, a God-given gift." The arduous fellowship application (which asks about the labors and mentors involved, and the social significance envisaged) is wisely geared to older adolescents: despite the talk of "prodigies," only 3 of this year's 17 are younger than 16. In Washington, effusions over the fellows' precocious promise and polish are offset by an emphasis on their persistence and their initiative in seeking out guidance - surely a better identity than "genius" for kids with, let's hope, lots of exploratory stumbling ahead of them.


At the evening reception in the Library of Congress, John Zhou and the other dark-suited teenage scientists seemed to be in their element, chatting over the hors d'oeuvres as if they were veterans of public events like this - which the handsome Lucas Moller, who was clearly practiced at answering lay inquiries, gave every sign of being. Moller, a 17-year-old from Moscow, Idaho, has been researching Mars dust ever since fifth grade, when at the suggestion of his scientist father he submitted an entry to a NASA-sponsored school contest and won. It was the beginning of a relationship with a NASA mentor, which has led him on to other related projects and assorted conferences. The basic pattern proved to be common. Entering competitions and finding internships or connections, governmental or academic: from Stephanie Hon (working on Alzheimer's) to Milana Zaurova (studying malignant brain cancer), nearly every science/technology fellow had a similar tale of closely mentored opportunity to tell in the morning discussions that the Davidsons videotaped for clips to quote from when they lecture. It was not quite grist for the "genius denied" paradigm: if schools couldn't offer direct help, no fellow said schools actively stood in the way.

In fact, with all the enabling institutions, it was sometimes hard to tell exactly where and how the young scientists' drives originated. Over lunch, John Zhou's mother - whose husband left China after Tiananmen Square, with her following later - confessed that she had despaired that her bored sixth grader's energy was disappearing into computer games, only to be reassured when she succeeded in redirecting it into Web design, and he became a whirlwind of accomplishment (even setting up a site for a branch of his city's library). "I don't know if I was going to fall through the cracks, like my mother said," John said with a laugh. He was more inclined to credit the example of other purposeful kids as the real catalyst for his many endeavors. As a group, the scientific fellows are definitely not lacking in passion, the galvanic trait everyone invokes these days, including the Davidsons and the fellows themselves. Bob and Jan astutely pressed the kids to also discuss their frustrations - a darker side of intense commitment that too often gets left out, notes Felice Kaufmann, a psychologist who has been following up on a similar group, called the Presidential Scholars. The young scientists obliged. Stephanie Hon, for example, was crushed to think six weeks of research had been in vain, only to discover that a computer glitch accounted for her nonresults - "the best of both worlds," as she put it, "taste the failure but still have the success." No one could say these fellows lack tenacity. What they wouldn't be confused with, though, is that figure of lab lore, the unkempt obsessive pursuing the experiment everybody says is fruitless, or the kid outdoors absorbed for hours watching insects. These are well-connected youths with timely projects - security devices and computer innovations, as well as urgent diseases - who have kept very busy excelling at a well-tailored array of other interests as well, from the saxophone to ballroom dancing and the Boy Scouts.

The musician fellows did not blend in quite so effortlessly that evening, since two of the four of them looked rather young to be mingling at a reception in such an elegant setting: Marc Yu, who plays the cello in addition to the piano, and the 12-year-old Karsten Gimre, also a pianist (as well as a sophomore at Pacific University in Forest Grove, Ore., majoring in math and physics). When it comes to "true" prodigies, preadolescents with spectacular abilities, the Davidson Institute follows the historical pattern of finding them mainly in the realm of music. In publicly touting the very young performers as prodigies, the Institute steps into an ongoing debate. For at least a quarter century now, there has been "a benevolent conspiracy" among influential musical figures to fend off burnout by trying to foster "a more humanistic, nonexploitative approach to the development of talent," as the writer Marie Winn put it in a New York Times Magazine article in 1979. What a researcher named Jeanne Bamberger has termed a "midlife" crisis seems to occur for prodigious young musicians: a transitional period of cognitive and emotional maturation during which only some performers manage to move beyond intuitive imitation to a more reflective sense of direction. Parents must carve out space for precocious players to "have a childhood. . .an adolescence," according to influential figures like Itzhak Perlman; resist the pressure, they urge, to "get management" and a packed schedule of practice and performance.

Yet pressure also unavoidably goes with the terrain of musical promise. After all, even if most musicians with phenomenal early talent won't emerge as great mature artists, the stars of the future will surely have been young phenomenons. Marc's mother is well aware of that - and knows that constructive practice at Marc's age requires an adult at his side. So does Marc, who appreciates how much work his idols Yo-Yo Ma and Lang Lang devoted to honing the technique that no virtuoso can do without. The message for kids that Marc passed on in his session with the Davidsons will no doubt be their most used quotation. "You should play Game Boy less," he said in his slightly lisping cadence, "and you should practice more." Marc's cello teacher understandably worries about all the attention (he has been on "The Tonight Show" and "Oprah"), yet this bubbly boy who can bear down on his music with undaunted intensity seems proof of the pleasure - never mind future fame - this kind of driven focus can bring.

Karsten, who by age 6 had already placed first in the International Young Artists Concert at the Kennedy Center, couldn't help casting more of a shadow with his listlessness in his morning session with the Davidsons. To their opening question about how he got started on the piano, he quietly replied: "Actually, I didn't want to do it. My mother wanted me to have something to do when I was older. And then I liked it." Asked at the end about what lay ahead, he said, "I really don't know what I'm doing," adding with a sigh that he would "just graduate in math and physics." By then it had become clear that Karsten, even before facing any subtle maturational challenges of adolescence, had run into a physical obstacle: elbow tendonitis had forced a hiatus in his playing, he said, and now his wrist hurt. Though he is feeling better, it was the kind of setback that could well leave a phenomenal performer sounding temporarily adrift.

As the Library of Congress reception was breaking up, the literary laureate was standing off to the side, feeling "very weird," she commented. Heidi Kaloustian, the only fellow in literature, hastened to say she had "great respect for science," but the evening had brought home to her just what a different place she was in from the young researchers. A professional path seemed to open out before them, with scientific papers already in the works for some, patent possibilities in view for others, further lab options surely ahead for all. Almost as if in sisterly solidarity, Maia Cabeza, the lone girl musician, came up to ask Heidi eagerly whether her portfolio - which, along with her poetry, contains a striking trio of fictional portraits of female coming-of-age ordeals in other cultures - was going to be published. Trying not to sound too appalled, Heidi answered: "I wouldn't dream of trying. I have so much more to learn." Heidi confided that the fellowship, though hugely welcome, has also been daunting. "I have to top something when I'm not even sure how I did it." It is not that she lacked teachers; she felt indebted to one in particular, and had a fabulous summer with other artistic kids at the Interlochen Arts Camp in Michigan. Her spirited mother, an avid reader and nurse, who, instead of whisking her daughters to a round of activities, made sure they had lots of time with books, clearly has inspired confidence in her daughter. Still, to have an imagination like Heidi's is to be aware of how mysterious the future twists and turns may be (and how rarely $50,000 drops down on struggling writers).


Unexpectedly, given that nonverbal brilliance is popularly associated with an aura of weirdness, it is the Davidson Fellows outside the realms of math, science and technology who look quirky by comparison, kids who have embarked on sometimes unwieldy projects that propel them they are not quite sure where. With criteria far less clear-cut in the nonquantitative fields, the institute's judges (who are anonymous) are evidently eager to reward reach and a degree of intellectual nonconformity, and on one occasion extreme youth: a 10-year-old named Alexandra Morris received a fellowship for her literary work. (There is even an "outside the box" category, though so far no winners.) The first year of the fellowships, 2001, 15-year-old Daniel Ohrenstein was awarded for tackling "The Endeavor of Seeing the Essential Nature of Existence," a series of rather woolly philosophical lectures that Ohrenstein, now an engineering major, says he shies from rereading since he has become a convert to "clear thinking" and "vowed never to use the words 'everything' and 'nothing' again." That same year, 16-year-old Rachel Emery says she was rescued by the Davidson award she won for an existential-fantasy novella written in what her mother calls the depths of depression. An eclectic energy has fueled her subsequent course through Simon's Rock, an experimental college designed for high-school-age students, and on to Wellesley, where she continues to work on several novels and to be, as she puts it, "constitutionally incapable of attempting anything on a reasonable scale."

For caution about forecasting and scripting the futures of the highly gifted, there is no better place to look than the past. History has plenty of humbling examples, one of them cited by the psychologist Howard Gruber, who observed that "any fellowship-awards committee comparing young [Thomas] Huxley's plans when setting out on the voyage of the Rattlesnake with young Darwin's plans when setting out on the voyage of the Beagle - both wrote them down in a page or so - would have given first place to Huxley and put Darwin on the waiting list." It was precisely Huxley's impressive "hard-edged analytic objectivism," Gruber speculated, that may have proved a handicap, where Darwin's vaguer, receptive cast of mind was crucial. "When someone asked Albert Einstein, 'What is your key to success?' " Dean Keith Simonton says, his answer was "I'm just curious." Simonton went on: "How do you cultivate that? It's a hard thing to do." He notes that Einstein himself "couldn't be mentored, refused to listen to his teachers, went his own way."


Nobody, of course, expects to handpick the next Einstein. Still, it is worth remembering that the solicitously individualized "scaffolding" for the highly gifted that experts currently recommend, and the pre-professional alacrity that programs like the Hopkins Center for Talented Youth and the Davidson Fellowships often reward, are themselves experiments in progress. Look at eminences in the past, and what stands out in their childhoods is an animus toward school, a tolerance for solitude and families with lots of books. What also stands out is families with "wobble" - which means stress and, often, risk-taking parents with strong opinions - rather than bastions of supportiveness where a child's giftedness is ever in self-conscious focus. Norbert Wiener, the founder of cybernetics and himself a prodigy who went to Tufts at 11 and Harvard at 15, wrote that prodigious children need to develop a "reasonably thick skin" - to feel they aren't demonized and will find a niche, but not to expect the world to supply a spotlight. Simonton speaks of the importance of being able to be "on the failure track for a while, take time off, take a real risk." Creativity and innovation, he says he is convinced, depend on "exposure to the unusual, to the diverse, to heterogeneity," which inspires a "recognition that there are a lot of different ways of looking at different things." There are also all kinds of ways that this "awareness that there's more than one possible world" can dawn. (The fact that it is built into the immigrant experience is one reason, on top of an ethos of incredibly hard work, that Simonton says he believes kids of recently arrived families so often dominate the ranks of the spectacularly talented.)

No one would recommend throwing more obstacles in highly gifted children's way. But as experts sound the alarm about the brilliant minds that aren't being found or are being frustrated, it is some solace to think that the real geniuses aren't necessarily being denied. They are biding their time and will take us by surprise.

Ann Hulbert, a contributing writer, is the author of "Raising America: Experts, Parents and a Century of Advice About Children."

Copyright 2005 The New York Times Company

Friday, November 18, 2005

Paragons...and parasites.

Where the Money Is

Nathan Vardi
1,659 words
28 November 2005
Forbes
116sidebar
Volume 176 Issue 11
English
(c) 2005 Forbes Inc.

A sampling of how much medical types can earn in a good year.

$149 million

R. Blane Walter

Advertising

Being the son of Robert Walter, longtime chief of drug wholesaler giant Cardinal Health, probably didn't hurt. But Walter, 34, also has a great sense of timing: He got into the pharmaceutical advertising business just as the Food & Drug Administration relaxed direct marketing rules in 1997, unleashing a flood of ad dollars that turned drugs into famous brands. The pill industry spent $4.4 billion last year on ads, says TNS Media. InChord Communications, Walter's Westerville, Ohio firm, got in early, using basketball legend Earvin (Magic) Johnson to promote GlaxoSmithkline's HIV drug Combivir and landing Eli Lily's Prozac account in the late 1990s. Last month InChord sold out to Ventiv Health, which provides consulting and marketing to pharmas. The income is Walter's cash share of the capital gain.

$4.7 million

Dan S. Wilford

Nonprofit Hospital chief

Perhaps the most richly compensated head of a medical nonprof, Wilford retired in 2002 after building Houston's Memorial Hermann from a three-community outfit into a 12-hospital system that earned $117 million on revenues of $1.8 billion in 2003, the latest year it reported. The hospital says his compensation that year "was not typical, as it included reporting of accrued benefits from Mr. Wilford's 18 years of service as well as retirement benefits." (Herbert Pardes, chief of New York-Presbyterian Hospital, cleared $3.4 million in 2003.) If all this strikes you as unusual for a tax-exempt organization, you're not alone. Last year the Internal Revenue Service started looking into the pay packages of nonprof executives. In April IRS Commissioner Mark Everson told the Senate that "excess compensation by an exempt organization is not permissible." But what is excessive?

$124.8 million

William McGuire

Health Insurance

As the nation's highest-paid health care executive, McGuire, chief of UnitedHealth Group, has built the nation's second- biggest such insurer and returned an average 33% a year to shareholders since he took over in 1991. Part of that success is helping companies keep costs down. Meantime, McGuire has built himself quite a stash, collecting lots of stock options. Last fiscal year he pocketed $115 million on them--and at year-end had an unexercised hoard worth $1 billion.

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Doctors Within Borders
Some medics make a decent but hardly outrageous living.
Pediatrician $161,188
Occupational therapist $44,244
Urologist $335,731
Pharmacist $90,854
Optometrist $107,413
Neurologist $211,094
Psychologist $79,306
Obstetrician $247,348
Median 2004 salary. Source: Medical Group Management Association.

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$55,502

Mary Ann Carr

Nurse Practitioner

Carr, 53, is the first line of care for 1,800 or so patients annually in rural Alsea, Ore. Her one-woman, nonprofit clinic is open to patients 221/2 hours per week. She works 45 hours a week, doing exams, writing prescriptions, ordering lab tests, X rays, MRIs and so on. Medicaid covers one-fourth of her patients, another third have Medicare or supplementary insurance, and the rest are underinsured or without coverage. Nobody gets turned away. Says she: "My husband keeps warning me that when I retire no one's going to want to work this job for this salary."

$18.6 million

Nicholas Perricone

Dermatologist

Perricone uses his medical credentials to flog his three-step program--special diet, cosmeceuticals and nutritional supplements--in his bestselling books and on public TV fundraisers. You can find most of his products, which are largely unregulated by the feds, on his Web site and in his Manhattan store. Perricone continues to argue that his stuff can help "take off 10 years in 28 days" and that his program provides "long-term age-defying benefits."

Perricone enjoys his income. Divorce filings say he spends $245,000 a month, including $4,117 on apparel and $24,000 on business travel and entertainment. Documents show he owns two homes, one a $2.6 million pad in Ormand, Fla. Perricone is also generous, pledging $5 million to his medical school, Michigan State University.

$5 million

Phu (Peter) Luong

Alleged Medicare Fraudster

As the founder of United Medical Supply in Huntington Beach, Calif., Luong was doing very well for himself until last March. That's when he was indicted for submitting $24 million in fraudulent billings to Medicare. The U.S. Attorney in Los Angeles says the government paid UMS $14 million for motorized wheelchairs and nutrition products that were medically unnecessary--and charges that Luong's employees solicited and drove Medicare beneficiaries to doctors who wrote bogus prescriptions for them. Luong has pleaded not guilty. Nevertheless, he has had to do without some of his toys. The feds have seized an estimated $3 million in assets, including a $185,000 yacht and a $118,000 Rolls-Royce.

$3 million

Ansbert Gadicke

Venture Capitalist

The odds of backing a win-ner aren't great in this business, and cashing in on one usually takes three to five years. But Gadicke, an M.D. and general partner of MPM Capital, which has invested $2 billion in biotech and drug outfits, scored big time in no time. In April Pfizer bought Idun Pharmaceuticals, a portfolio company in phase II-B clinical trials for a hepatitis C treatment, giving MPM a 442% return on a $22 million investment in nine months. "We are making very significant amounts of money for our investors," says Gadicke.

$5 million

Garth Fisher

Plastic Surgeon

Plastic surgeons don't have insurance companies policing their rates because insurance almost never covers their services. Fisher charges $10,000 to straighten noses and as much as $50,000 for a face-lift. Still interested? You've got up to a two-year wait to get into his Beverly Hills office, thanks to his appearances on ABC's Extreme Makeover. He also shows up on Oprah, Good Morning America and Larry King Live whenever he can. And he manages to perform 8 to 15 procedures--from neck- lifts and cheek implants to breast enhancements--each week, supplementing his income with sales of $30 DVDs touting the virtues of scalpel sculpting and by hitting the speaking circuit.

$3 million

Setty Viralam

Neonatologist

This west Palm Beach, Fla. specialist did well when he sold out his practice in 1998, but today he's fighting the taxman in court. An IRS audit denied him $264,000 of deductions he took that year --supposedly into a foundation that his lawyer claims made loans to students who intended to go into charitable activities or paid them for volunteer work.

$48,000

Robert Levin

Foreign Aid Doctor

The income figure is a little misleading. For six months during 2003, Levin, a family physician from Minneapolis, earned $7,200 working for Doctors Without Borders in war-torn northern Uganda. Working ten hours a day, seven days a week in sweltering conditions, he nursed severely malnourished kids and worked in camps in the line of fire. Back home, to make ends meet, Levin worked two part-time jobs, teaching family medicine at a community program of the University of Minnesota and working an emergency room in a rural part of the state. Says Levin, 40: "I felt like I needed to go practice medicine where people were really in desperate need."

$77.9 million

Edwin Mac Crawford

Pharmacy Benefit Manager

Crawford runs Caremark, the nation's largest (by market cap) pharmacy benefit manager, which helped fill 484 million prescriptions for health care plan members last year. By building a network of 60,000 retail pharmacies and using Caremark's purchasing power, Crawford has kept drug prices in check. But like other PBMs, Caremark is spending as much time in the courtroom as in the nation's medicine cabinets these days. In September the company paid $137.5 million, settling a six- year federal investigation into kickback allegations, among others, made against a unit Caremark acquired last year. The feds and four states are expected to join a whistleblower fraud claim.

$2 million

W.J. (Billy) Tauzin

Lobbyist

The former Louisiana Congressman became chief of the Pharmaceutical Research & Manufacturers of America, the drug industry's lobbying group, at the start of the year. As onetime head of a House committee, Tauzin helped create the new $720 billion Medicare prescription benefit. Now he is trying to persuade his former colleagues that what's good for his new constituents is good for America. Example: an intense effort on Capitol Hill to keep generic-drug makers from getting licenses to produce patented flu vaccines.

$6 million

Mark Bogart

Inventor

While completing a Ph.D. in biology at UC, San Diego, Bogart filed patent 4,874,693 in 1986. Since the mid-1990s this 55-year-old, a Hawaii resident, has been collecting licensing fees on the common procedure for testing the blood of pregnant women for certain indications of Down syndrome in a fetus. Bogart never did any testing himself, and Michael Watson, executive director of the American College of Medical Genetics, says his innovation was already largely known when he filed the patent. True or not, big outfits like Quest Diagnostics pay him a royalty each time they test, approximately $6 a pop. Bogart's patent runs out in October 2006. --N.V. with the business reporting class at UC, Berkeley's Graduate School of Journalism.

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Ultrahealthy Returns

Most of these medical fortunes come not from saved-up paychecks but from capital appreciation.

$2.8 billion Peter Nicholas
cofounder of medical-device maker Boston Scientific
$2.2 billion Patrick Soon-Shiong
founder of generic-drug maker American Pharmaceutical Partners
$1.7 billion Thomas Frist Jr.
cofounder of hospital operator HCA Healthcare
$1.5 billion Michael Jaharis
founder of drugmaker Kos Pharmaceuticals
$1.3 billion Gary Karlin Michelson
developer of spinal surgery medical patents
$1.2 billion Phillip Frost
founder of generic-drug maker Ivax

Charity, or blood from a stone?

November 12, 2005

Low-Cost Credit for Low-Cost Items

By PAULO PRADA

RIO DE JANEIRO, Nov. 11 - Márcia Regina da Cruz, a 40-year-old janitor and mother of three, decided to splurge.

Ms. da Cruz, who lives in São Vicente, a coastal town an hour's bus ride from São Paulo, made a purchase in September equal to one-fifth of her monthly salary. She bought three irons - one for herself and two as gifts for her mother and sister - for 72 reais, or just over $32.

"It was a big purchase," she said. "I normally couldn't pay for it."

She could, though, because of a new policy at CompreBem, a supermarket chain owned by Grupo Pão de Açúcar, Brazil's biggest retailer. The plan allows her to pay for the purchase in 10 interest-free monthly installments of about $3.20 a month.

Big retailers in Brazil are lowering the bar for what they will sell on credit. Though the country's shops and department stores have long sold big-ticket items on installment plans, Brazilian and multinational retailers, like Wal-Mart Stores and Carrefour of France, have begun offering purchase plans with monthly payments that come to no more than one or two reais - about 45 to 90 cents.

The shift is an effort by retailers here to squeeze more spending from the big, but cash-short, bottom of the consumer base in Brazil, South America's biggest economy. Amid a tepid recovery that has yet to blossom into strong, sustained growth in retail demand, vendors are going to new lengths to help low-income Brazilians pay for everything from their weekly rice and beans to inexpensive items like clothes, radios, blenders and other goods. The installments are interest-free until a payment is missed, and then interest of at least 3 percent a month is charged.

"Retailers are trying to wring the very last bit of disposable income from consumers who would like to buy more, but often can't," says Paulo Francini, an economist at the Federation of Industries of the State of São Paulo, an influential business organization.

Low-income consumers - defined roughly as those earning less than 1,000 reais, or $445, a month - make up nearly half Brazil's population, according to government figures. A recent study by Target Marketing, a consultant group based in São Paulo, found those Brazilians accounted for only 11 percent of all consumer spending, representing annual purchasing power of nearly $54 billion.

Manufacturers in recent years have developed new products to better tap that market, introducing low-cost versions of coffees, shampoos, even washing machines. When the Swiss food giant Nestlé discovered recently that some Brazilians give condensed milk as a present - a can retails for 2.30 reais, or $1.02 - the company developed a gift-wrapped version of the product.

"It's not about reaching a new part of the market," said Ivan Zurita, chief executive of Nestlé's Brazilian operations. "It is the market."

Brazil's erratic economic history made it a long slog for retailers to reach this market. Expensive credit - Brazil still boasts the highest real interest rates in the world - kept most low-income consumers from seeking loans. And years of runaway inflation meant stores were able to offer few affordable payment plans.

But economic changes in the last decade helped curb inflation and laid the groundwork for what many economists believe is a nascent period of prolonged, if modest, growth. After years of stagnation, Brazil's gross domestic product in 2004 grew by 4.9 percent, the quickest clip in a decade, and is expected to grow by more than 3 percent this year.

Slower inflation enabled stores to introduce payment plans for retail goods that many consumers once strained to finance - from tennis shoes and televisions, to refrigerators and home computers. So successful was retail credit, especially among the middle class, that price tags in many stores now highlight the cost of the monthly installment, with the total price in much smaller print below.

Yet a big portion of the consumer base still struggles with bare necessities. That is why vendors recently began applying their credit plans to low-cost items, too.

"You want to make it easy for even basic purchases," said João Carlos de Oliveira, president of the Brazilian Association of Supermarkets in São Paulo.

The approach was evident one recent Saturday evening at a Wal-Mart in southern Rio. Price tags offer telephones in 12 monthly installments of 3.57 reais. A plug-in electric grill sold for 12 monthly payments of 1.87 reais. Wines, domestic or imported, were offered for three interest-free monthly installments.

Wal-Mart and other big retailers use one central tool for such promotions: internal, or "private label," credit cards.

Because many low-income Brazilians do not have bank accounts, retailers offer their own cards to provide credit to customers unable to meet the conditions for traditional bank cards. With no annual fees and low salary requirements - stores compute card limits using monthly income stubs - the cards offer many consumers their first experience with credit. They also give stores a platform to offer special card-only promotions, which foster user loyalty.

At Carrefour, the second-biggest retailer in Brazil, the store card is now used in nearly 40 percent of sales, outpacing cash, checks and bank cards as the most frequent form of payment. Customers with a minimum monthly salary of 150 reais - half Brazil's minimum wage - qualify for the card and can use it for purchases as small as 5 reais. Purchases over 30 reais can also be paid, interest-free, in 5-real installments.

Retailers are using the cards to attract those for whom even these requirements are difficult. Pão de Açucar, for instance, has a card it offers customers who were initially denied credit. Though the card cannot be used for payment, it allows customers to take advantage of card-only promotions and creates a tool to track the customer's spending habits.

"We can analyze their spending patterns and calculate a credit level to offer them in the future," says Hugo Bethlem, executive director of the company's CompreBem and Sendas supermarkets.

Brazilian banks want to cash in on the boom, too. Banco Itaú, one of the country's biggest private banks, has signed agreements in the last year to administer cards used by two big retail chains, including Pão de Açúcar. Last year, União de Bancos Brasileiros, or Unibanco, acquired Hipercard, Wal-Mart's private-label card.

Now, banks plan to use the cards to offer services - like insurance and personal loans - to Brazil's legions of so-called bank orphans, consumers still foreign to the traditional bank branch.

"There's a huge segment of the population that we can only reach because of their relationships with retail stores," said Antonio Matias, director of institutional relations at the Brazilian Banking Federation and a vice president at Banco Itaú.

Márcio Caldeira, a street vendor, says he rarely uses banks at all. Sitting at the credit desk of a Sendas supermarket in Nova Iguaçu, a bustling, working-class suburb north of Rio, he says he wants a Sendas card to complement three other retail cards he uses to buy things like sodas, that he later sells on the sidewalk.

"Sometimes the little costs add up," he adds, "but they make it easier to finance my work."

Copyright 2005 The New York Times Company

Shoving the job.

NEW YORK--(BUSINESS WIRE)--Nov. 15, 2005--Business leaders
continue to approach the CEO position with apprehension, according to
a new global study conducted by Burson-Marsteller with the Economist
Intelligence Unit (EIU). The 2005 CEO Capital(TM) research reveals
that executives are now thinking twice about the corner office, with
54 percent of global business influentials reporting they would not
want to be CEO if given the choice.
The highest levels of CEO disillusionment are found in North
America and Europe (64 percent and 60 percent would decline a CEO
offer, respectively). Asia/Pacific business influentials (51 percent)
are divided about seeking the CEO role and Latin Americans are the
least negative - only 27 percent do not want to be CEO.

Why Not Be CEO?

For the first time, global business influentials were asked their
reasons for wanting or not wanting to be CEO. The overriding factor in
choosing not to be CEO is the absence of a positive work/life balance.
More than six out of 10 respondents (64 percent) cite this reason as
the leading obstacle to pursuing the corner office. Other barriers
cited are the tyranny of quarterly earnings, persistent stress and
intense public scrutiny. Interestingly, global business influentials
are less likely to cite the actual pressures of running a business -
regulatory oversight, cost-cutting, talent development, stakeholder
demands and critical media - as leading reasons for turning down the
CEO position if offered.
"CEOs today are increasingly challenged by time zones, global
markets, unpredictable crises and an expanding portfolio of
stakeholders demanding attention," said Dr. Leslie Gaines-Ross,
Burson-Marsteller's Chief Knowledge & Research Officer Worldwide and
the study's architect. "Not until companies train the next generation
of leaders to better balance work/life pressures will executives
clamor for the top job."

So Why Be CEO?

Although generous compensation, perks and prestige dominate
headlines worldwide, they are among the least compelling reasons given
by global business influentials for wanting to be CEO. The top three
reasons for wanting to be CEO are the opportunity for complex
problem-solving (56 percent), ability to have a personal impact on the
business (43 percent) and satisfaction of having their ideas
implemented (36 percent). A sizeable number of global business
influentials also cite helping a company go from "good to great" (33
percent) and building a company that lasts (26 percent) as primary
reasons for seeking the corner office.
"All businesses today are in dire need of talented, ethical and
credible leaders. The reluctance of many senior executives to accept
the top slot will continue to impact efforts to restore overall trust
in companies across the globe," said Patrick Ford, Burson-Marsteller's
Global Corporate/Financial Practice Chair. "The demand for leaders
continues to expand. Continued success in global commerce lies in the
willingness of upcoming qualified CEOs to take calculated risks, roll
up their sleeves and execute on the details."
Burson-Marsteller's new research highlights the need to have
willing executives in line to succeed outgoing CEOs. As we witness a
rapidly rising CEO departure rate (a Fortune 1000 CEO departs every
two business days, www.ceogo.com), the need has never been greater to
build the next generation of global leaders.

About the 2005 CEO Capital Study

Burson-Marsteller has been conducting landmark research on CEO and
corporate reputation since 1997 (www.ceogo.com). The new 2005 CEO
Capital study was conducted in 65 countries online with the Economist
Intelligence Unit (EIU) between May and July 2005. It was completed by
685 business influentials -- CEOs, senior executives, financial
analysts, business media and government officials. Roughly one-third
of respondents came from North America (26 percent), Europe (32
percent), Asia-Pacific (32 percent) and one-tenth from Latin America
(10 percent). Participants were drawn from a cross-section of 19
industries.

Thursday, November 17, 2005

The last shot across the bow for now.

Be Data Literate -- Know What to Know
By PETER F. DRUCKER
Dec. 3, 1992

Executives have become computer-literate. The younger ones, especially, know more about the way the computer works than they know about the mechanics of the automobile or the telephone. But not many executives are information-literate. They know how to get data. But most still have to learn how to use data.

Few executives yet know how to ask: What information do I need to do my job? When do I need it? In what form? And from whom should I be getting it? Fewer still ask: What new tasks can I tackle now that I get all these data? Which old tasks should I abandon? Which tasks should I do differently? Practically no one asks: What information do I owe? To whom? When? In what form?

A "database," no matter how copious, is not information. It is information's ore. For raw material to become information, it must be organized for a task, directed toward specific performance, applied to a decision. Raw material cannot do that itself. Nor can information specialists. They can cajole their customers, the data users. They can advise, demonstrate, teach. But they can no more manage data for users than a personnel department can take over the management of the people who work with an executive.

Information specialists are toolmakers. The data users, whether executive or professional, have to decide what information to use, what to use it for and how to use it. They have to make themselves information-literate. This is the first challenge facing information users now that executives have become computer-literate.

But the organization also has to become information-literate. It also needs to learn to ask: What information do we need in this company? When do we need it? In what form? And where do we get it? So far, such questions are being asked primarily by the military, and even there mainly for tactical, day-to-day decisions. In business such questions have been asked only by a few multinationals, foremost among them the Anglo-Dutch Unilever, a few oil companies such as Shell, and the large Japanese trading companies.

The moment these questions are asked, it becomes clear that the information a business most depends on is available, if at all, only in primitive and disorganized form. For what a business needs the most for its decisions -- especially its strategic ones -- are data about what goes on outside of it. It is only outside the business where there are results, opportunities and threats.

So far, the only data from the outside that have been integrated into most companies' information systems and into their decision-making process are day-to-day market data: what existing customers buy, where they buy, how they buy. Few businesses have tried to get information about their noncustomers, let alone have integrated such information into their databases. Yet no matter how powerful a company is in its industry or market, non-customers almost always outnumber customers.

American department stores had a very large customer base, perhaps 30% of the middle-class market, and they had far more information about their own customers than any other industry. Yet their failure to pay attention to the 70% who were not customers largely explains why they are today in a severe crisis. Their non-customers increasingly were the young affluent, double-earner families who were the growth market of the 1980s.

The commercial banks, for all their copious statistics about their customers, similarly did not realize until very late that more and more of their potential customers had become non-customers. Many had turned to commercial paper to finance themselves instead of borrowing from the banks.

When it comes to non-market information-demographics; the behavior and plans of actual and potential competitors; technology; economics; the shifts signaling foreign-exchange fluctuations to come and capital movements -- there are either no data at all or only the broadest of generalizations. Few attempts have been made to think through the bearing that such information has on the company's decisions. How to obtain these data; how to test them; how to put them together with the existing information system to make them effective in a company's decision process-this is the second major challenge facing information users today.

It needs to be tackled soon. Companies today rely for their decisions either on inside data such as costs or on untested assumptions about the outside. In either case they are trying to fly on one wing.

Finally, the most difficult of the new challenges: We will have to bring together the two information systems that businesses now run side by side -- computer-based data processing and the accounting system. At least we will have to make the two compatible.

People usually consider accounting to be "financial." But that is valid only for the part, going back 700 years, that deals with assets, liabilities and cash flows; it is only a small part of modern accounting. Most of accounting deals with operations rather than with finance, and for operational accounting money is simply a notation and the language in which to express nonmonetary events. Indeed, accounting is being shaken to its very roots by reform movements aimed at moving it away from being financial and toward becoming operational.

There is the new "transactional" accounting that attempts to relate operations to their expected results. There are attempts to change asset values from historical cost to estimates of expected future returns. Accounting has become the most intellectually challenging area in the field of management, and the most turbulent one. All these new accounting theories aim at turning accounting data into information for management decision-making. In other words, they share the goals of computer-based data processing.

Today these two information systems operate in isolation from each other. They do not even compete, as a rule. In the business schools we keep the two apart with separate departments of accounting and of computer science, and separate degrees in each.

The practitioners have different backgrounds, different values, different career ladders. They work in different departments and for different bosses. There is a "chief information officer" for computer-based data processing, usually with a background in computer technology. Accounting typically reports to a "chief financial officer," often with a background in financing the company and in managing its money. Neither boss, in other words, is information-focused as a rule. The two systems increasingly overlap. They also increasingly come up with what look like conflicting -- or at least incompatible -- data about the same event; for the two look at the same event quite differently. Till now this has created little confusion. Companies tended to pay attention to what their accountants told them and to disregard the data of their information system, at least for top-management decisions. But this is changing as computer-literate executives are moving into decision-making positions.

One development can be considered highly probable: Managing money -- what we now call the "treasury function" -- will be divorced from accounting (that is, from its information component) and will be set up, staffed and run separately. How we will otherwise manage the two information systems is up for grabs. But that we will bring them together within the next 10 years, or at least sort out which system does what, can be predicted.

Computer people still are concerned with greater speed and bigger memories. But the challenges increasingly will be not technical, but to convert data into usable information that is actually being used.

Mr. Drucker is a professor of social sciences at the Claremont Graduate School in California.

Leading in the leading of leaders.

From Chief Executive Magazine.

Best Companies for Leaders

“Nothing I do will have a more enduring impact on P&G’s long-term success than helping to develop other leaders.”
—Procter & Gamble’s A.G. Lafley

Somewhere out in the global sprawl of 160 countries where Procter & Gamble sells its products is a 35-year-old manager who, one day, will be CEO. And the company’s current chief executive, A.G. Lafley, sitting at headquarters back in Cincinnati, is watching, focusing his attention far and wide on those bright upstarts.

Lafley takes succession management and leadership development seriously. He and his senior vice president for human relations, Dick Antoine, regularly look through four “bands,” or layers, of managers to identify future CEOs. Members of the board of directors get the same names and are encouraged to go out into the field to meet the possible CEOs-in-waiting. “The further out you look, the more speculative it is,” says Lafley, who is 58. “When I’m guessing on a 35-year-old, I really am guessing.”

Overall, Lafley says he spends a third to half his time on leadership development. The company says it cannot calculate precisely how much money it spends on leadership development, but it is obviously huge. All employees are subject to 360-degree reviews beginning within a year after they start, and there are a raft of leadership development programs that span an entire career. Line managers are evaluated—and compensated—not just on their business results but also on the basis of how well they develop their organizations. The company also has a computerized Talent Development System containing names of 3,000 top executives and details of their backgrounds in order to help in identifying the right person for the right job.

P&G says it believes it would take competitors considerable time and money to fully replicate its leadership development system. “The people we hire, and the focus we put on their development as leaders, are critical to P&G’s ability to innovate and compete,” says Lafley, who says he is constantly looking for “teachable moments” to improve the skills of his management team. “Nothing I do will have a more enduring impact on P&G’s long-term success than helping to develop other leaders.”

All of which helps explain why P&G came in first in this year’s ranking of the Top 20 Companies for Leaders, co-sponsored by the Hay Group and Chief Executive. P&G beat out several companies that have long been lionized for their leadership development such as IBM, General Electric and Johnson & Johnson. The bragging rights will be particularly sweet for Lafley because he sits on the GE board, advising CEO Jeff Immelt.

While P&G and Pepsi, which came in No. 2, are known for management continuity and for promoting from within, other companies making the list this year for the first time, such as Motorola and Home Depot, have gone through cultural transformations under CEOs Ed Zander and Bob Nardelli, who came in from other companies.

Results this year, the fourth year that the magazine has published this ranking, are not strictly comparable with prior years because of changes in research methodology. But it is the first time the magazine has published a consolidated list of global companies, not just U.S.-based ones or non-U.S. companies. One clear outcome: Major U.S. companies have an edge over European multinationals. Japanese and Korean companies, such as Toyota Motor and Samsung Electronics, are nowhere to be seen.

For all these companies, however, one thing is clear: Leadership development has exploded in importance in recent years. “If you called these companies up 20 years ago, you pretty quickly would have been delegated to the HR people,” says Murray Dalziel, group managing director for global practices at the Hay Group, headquartered in Philadelphia. “But these issues aren’t HR issues anymore. They are line management issues. There’s been a profound shift.”

One of the debates among CEOs is how to get the right balance between cultures that promote from within versus those that rely on acquisitions or external recruiting to re-energize management teams. “If you get all the talent from within, there will be a tendency toward inward-thinking over time,” says Dalziel. “But if all the talent comes from outside, it’s extremely hard to gel.” He says 20 to 30 percent of a company’s management talent ought to be from outside.

Lafley is acutely aware of the risks inherent to a company’s promote-from-within policy (although he notes that because of acquisitions over the past 20 years, including Gillette, some 40 percent of the company’s managers are non-P&G’ers). The company encourages its executives to sit on the boards of other companies and to engage in professional networks. It also benchmarks itself against companies as small as L.L. Bean.

“Continuous Selection Machine”

P&G also has surprising internal diversity, Lafley argues, despite the popular impression that it is largely a soap and paper company. “But we are so much more,” he says. “We’re in the pharmaceuticals business, we’re in the cosmetics and fragrance business. We do over $2 billion of business in China a year. We do over $1 billion in Russia. We have so many opportunities to move our managers around, across geographies and across businesses, to broaden them. Our diversification really helps us.

In terms of the techniques that P&G uses to develop talent, it does not rely on a university-like campus, such as the one GE has at Crotonville, N.Y., or Motorola has in Schaumburg, Ill., where promising managers go to spend several days at a time. P&G isn’t convinced it’s worth the money to build such a campus-like facility. Instead, the emphasis at P&G is on intense one- or two-day training sessions and then sending managers immediately back to the job. The company also says it has had mixed experience with external coaches and courses of instruction created by consultants or universities.

The key to understanding how P&G does what it does is that leadership development is all-pervasive and permeates the culture. “I think the most important thing we do is that we are a continuous selection machine,” Lafley says. “We start when we recruit kids from universities. We have a process. We have an assessment tool that we use. We recruit for values, brains, creativity, leadership and accomplishment. Then every step of the way through your career here, you are assessed. I think that’s the biggest driver.” The Hay Group researchers also identified practices that work and ones that don’t.

Leadership development at Home Depot, which came in eighth—making its first appearance ever in this ranking—is somewhat different, in part because that company has undergone a more sweeping cultural transformation under Nardelli. After arriving in 2000, he found a highly decentralized spawl of stores and regions with very little central coordination and command. Since then, he has attempted to keep the best people from the “old” Home Depot while at the same time professionalizing management by drawing in outsiders. Partly because of staggering growth (it opens a new store every 48 hours on average) and because of traditionally high turnover in the retail industry, Home Depot is hiring 20,000 people a year. Out of the top three layers of management, 98 percent are new to their positions within the past four years, says HR executive vice president Dennis Donovan. Of those top managers, some 56 percent have come in from outside Home Depot in the same period.

Nardelli and Donovan worked together at GE Power Systems and have brought along some of their GE know-how, but they have had to develop many new tools and programs with the assistance of a staff of organizational psychologists. The Home Depot approach features a “competency model” for its high-potential leaders. Donovan and his team have researched other large companies and interviewed successful leaders internally to come up with a profile of the person who will perform best at Home Depot.

These high-potential people are then put through an assessment. Candidates for senior executive jobs face a four- to eight-hour interview and must provide as many as 10 to 15 references. “We get an MRI on that person’s leadership ability,” says Donovan. “That gets fed back to the individual for development. And it goes to me and Bob.” At this level, the company tracks 200 to 300 “high potentials.”

One of the debates in development is the use of the 360-degree review, where subordinates, superiors and even outside business partners are asked about a manager’s performance. Should it be used only when deciding whether to promote an individual, or should it also be used for other purposes? Should it be used at all levels of a company or just at the most senior levels? Are questionnaires better or are interviews that are circulated verbatim more revealing? And how can the process be managed so that it promotes development, rather than derailing a manager’s career or being perceived as being overtly political?

The Home Depot answer is to use the 360-degree tool quite aggressively. “If we’re serious about leadership, we’re going to use instruments like 360s to develop, select, reward and manage the careers of people,” says Donovan. His team has trained 500 internal coaches who manage the process. They ask questions such as, What’s the root cause of a particular behavior?

Among the most powerful tools at all the companies that develop management talent well are the personal involvement of the CEO and his close relationship with the top HR executive. Nardelli extends his personal reach down as far as the summer intern program. “When Bob spent two hours with the interns, it blew them away,” says Donovan. Much as P&G’s Antoine can finish Lafley’s sentences, Donovan speaks Nardelese: “Whenever Bob is asked what we spend on leadership development, he says, ‘I don’t look at this as a cost. I look at this as an investment.’”

Q & A

Creating A Culture That Looks Outward

Procter & Gamble Chief Executive A.G. Lafley spoke with Editor in Chief William J. Holstein about his company’s leadership development efforts. They were joined by Dick Antoine, human resources senior vice president. Here are excerpts:

Q: What’s the heart of your strategy to develop leaders?

Lafley: Everything begins here with our purpose. It’s very simple. We provide branded products that improve everyday lives. The values of the company are integrity, trust, ownership, leadership, passion for service and winning. Then we have principles such as “respect for the individual” and “innovation is our lifeblood.” Every employee has one of these little pamphlets. It’s on every Web site and in almost every conference room everywhere in the world. We’re quite public about all that and we’re even, in a shorthand kind of way, pretty public about our strategy. We’re not surprising our competition. They know broadly what we’re trying to do.

Then we turn to strategy, which is choices. Our whole focus has been to grow and profit from the core—and that means core businesses, core capabilities, core technologies. Our second choice was to expand our portfolio in health, personal care and beauty care because that would serve more consumers’ needs for longer lifetimes. Then the third one is to serve low-income consumers who can’t always afford our products, especially in developing markets. I say this because I live it. But I guarantee you that if you dropped into any group, anywhere, in the company, they could explain all this.

Then (the other piece of this is) selecting, developing, training, teaching and coaching the leadership team. They are the leadership engine. We’ll do at least $68 billion in sales post-Gillette. We’re in 80 countries. We sell in 160. We have over 100,000 employees. It’s going to go to 130,000 or 140,000. This company is run by 20 presidents of line businesses and 100 general managers and their functional leadership that supports them. So that’s about 250 people. It’s one team with one purpose and one dream and one set of strategic choices.

Q: How do you avoid insularity? Many CEOs say, “I want a third of my people to be from outside. I want a mix.”

Lafley: We do it in two ways. By last count, and post-Gillette, 40 percent of our managers actually did not start with P&G. That’s happened in the past five years. We didn’t start becoming acquisitive until the mid-1980s with Norwich Eaton Pharmaceuticals and Richardson-Vicks. Then there was Noxell and Max Factor. The way we’ve refreshed our management pool has primarily been through acquisition.

The other thing is that we do recruit from outside for skilled positions. We don’t make a big deal about it because there is value in the “promote from within culture.” The value is that we grow up together, we share values, we go through tough business challenges together, and when you’re expecting that general manager or president promotion, we don’t all of a sudden bring in the headhunting firm and the job goes to someone outside. At the top of the company, most of the top 150 jobs are a competition among P&G’ers.

The other thing that helps us with insularity is that we’re so diversified. I think we’re still thought of as a soap and paper company. But we are so much more. We’re in the pharmaceuticals business, we’re in the cosmetics and fragrance business. We do over $2 billion of business in China a year. We do over $1 billion in Russia. We have so many opportunities to move our managers around, across geographies, developed and developing, and across businesses, to broaden them. I think it would be much tougher if we were just a beauty company and only operating in one major market, say Western Europe or North America. There would be a greater risk of insularity.

Antoine: The other thing is that A.G. says that “the consumer is boss.” That keeps all of us focused on the outside. Then we do extensive benchmarking, all the time, of best practices of other companies. We don’t have any monopoly on good ideas. Then, finally, are the networking opportunities. Each of us is expected to participate and belong to networks. The CFO belongs to a couple of different external groups. I belong to two. These are our counterparts at other companies and you get together to talk about problems and issues. I find these tremendously valuable.

Lafley: All our top players have the option to join at least one external board. We’re on Motorola’s board, we’re on Xerox’s board, we’re on Textron’s board, we’re on GE’s board. We’re on a lot of boards. We compare notes. We also do home-and-away benchmarking sessions. We’ve done them with Dell, Cisco, GE, IBM, 3M, Emerson Electric and L.L. Bean. We go somewhere where they’re world class in something and offer an exchange. We ask, “What are you interested in where we might have a robust process?”

Q: You’ve built a leadership team that is, on the main, internally grown, yet you’ve said to those people, find 50 percent of your ideas outside. Why?

Lafley: The genesis was recognizing that the most precious thing that we have is innovation. It’s the lifeblood. Frankly, innovation leaders are industry leaders. I’m hard-pressed to think of an industry where the leader over time isn’t the innovation leader.

When we looked at our innovation process, we asked ourselves, “What are we really good at?” Well, we think we’re really good at developing, qualifying, testing and commercializing innovation. And we’re pretty good at the first step, which is ideation or invention. But there are a lot of other people out there who are pretty good at that. We said, “You know what? Invention can come from anywhere.” There was a lot of data that said building a bigger research lab wasn’t necessarily going to get you more invention. Or, it might get you invention, but you might miss commercializing it. Xerox had a famous research lab out in California and it did a lot of invention. Silicon Valley ended up commercializing it. For some reason, Xerox didn’t.

So, we said, the model for invention in the 21st century is going to be a network. The network is going to have to be connected externally because the best idea can come from anywhere.

Like, who needs medical school, dude?

November 16, 2005
Being a Patient
Young, Assured and Playing Pharmacist to Friends

By AMY HARMON
Nathan Tylutki arrived late in New York, tired but eager to go out dancing. When his friend Katherine K. offered him the Ritalin she had inherited from someone who had stopped taking his prescription, he popped two pills and stayed out all night.

For the two college friends, now 25 and out in the working world, there was nothing remarkable about the transaction. A few weeks later, Katherine gave the tranquilizer Ativan to another friend who complained of feeling short of breath and panicky.

"Clear-cut anxiety disorder," Katherine decreed.

The Ativan came from a former colleague who had traded it to her for the Vicodin that Katherine's boyfriend had been prescribed by a dentist. The boyfriend did not mind, but he preferred that she not give away the Ambien she got from a doctor by exaggerating her sleeping problems. It helps him relax after a stressful day.

"I acquire quite a few medications and then dispense them to my friends as needed. I usually know what I'm talking about," said Katherine, who lives in Manhattan and who, like many other people interviewed for this article, did not want her last name used because of concerns that her behavior could get her in trouble with her employer, law enforcement authorities or at least her parents.

For a sizable group of people in their 20's and 30's, deciding on their own what drugs to take - in particular, stimulants, antidepressants and other psychiatric medications - is becoming the norm. Confident of their abilities and often skeptical of psychiatrists' expertise, they choose to rely on their own research and each other's experience in treating problems like depression, fatigue, anxiety or a lack of concentration. A medical degree, in their view, is useful, but not essential, and certainly not sufficient.

They trade unused prescription drugs, get medications without prescriptions from the Internet and, in some cases, lie to doctors to obtain medications that in their judgment they need.

A spokeswoman for the Drug Enforcement Administration says it is illegal to give prescription medication to another person, although it is questionable whether the offense would be prosecuted.

The behavior, drug abuse prevention experts say, is notably different from the use of drugs like marijuana or cocaine, or even the abuse of prescription painkillers, which is also on the rise. The goal for many young adults is not to get high but to feel better - less depressed, less stressed out, more focused, better rested. It is just that the easiest route to that end often seems to be medication for which they do not have a prescription.

Some seek to regulate every minor mood fluctuation, some want to enhance their performance at school or work, some simply want to find the best drug to treat a genuine mental illness. And patients say that many general practitioners, pressed for time and unfamiliar with the ever-growing inventory of psychiatric drugs, are happy to take their suggestions, so it pays to be informed.

Health officials say they worry that as prescription pills get passed around in small batches, information about risks and dosage are not included. Even careful self-medicators, they say, may not realize the harmful interaction that drugs can have when used together or may react unpredictably to a drug; Mr. Tylutki and Katherine each had a bad experience with a medication taken without a prescription.

But doctors and experts in drug abuse also say they are flummoxed about how to address the increasing casual misuse of prescription medications by young people for purposes other than getting high.

Carol Boyd, the former head of the Addiction Research Center at the University of Michigan, said medical professionals needed to find ways to evaluate these risks.

"Kids get messages about street drugs," Ms. Boyd said. "They know smoking crack is a bad deal. This country needs to have a serious conversation about both the marketing of prescription drugs and where we draw the boundaries between illegal use and misuse."

To some extent, the embrace by young adults of better living through chemistry is driven by familiarity. Unlike previous generations, they have for many years been taking drugs prescribed by doctors for depression, anxiety or attention deficit disorder.

Direct-to-consumer drug advertising, approved by the Food and Drug Administration in 1997, has for most of their adult lives sent the message that pills offer a cure for any ill. Which ones to take, many advertisements suggest, is largely a matter of personal choice.

"If a person is having a problem in life, someone who is 42 might not know where to go - 'Do I need acupuncture, do I need a new haircut, do I need to read Suze Orman?' " said Casey Greenfield, 32, a writer in Los Angeles, referring to the personal-finance guru. "Someone my age will be like, 'Do I need to switch from Paxil to Prozac?' "

For Ms. Greenfield, who could recite the pros and cons of every selective serotonin reuptake inhibitor on the market by the time she graduated from college, years of watching doctors try to find the right drug cocktails for her and for assorted friends has not bolstered faith in their expertise.

"I would never just do what the doctor told me because the person is a doctor," said Ms. Greenfield, who dictates to her doctors what to prescribe for her headaches and sleep problems, and sometimes gives her pills to friends. "I'm sure lots of patients don't know what they're talking about. But lots of doctors don't know what they're talking about either."

Prescriptions to treat attention deficit disorder in adults age 20 to 30 nearly tripled from 2000 to 2004, according to Medco, a prescription management company. Medications for sleeping disorders in the same age group showed a similar increase.

Antidepressants are now prescribed to as many as half of the college students seen at student health centers, according to a recent report in The New England Journal of Medicine, and increasing numbers of students fake the symptoms of depression or attention disorder to get prescriptions that they believe will give them an edge. Another study, published recently in The Journal of American College Health, found that 14 percent of students at a Midwestern liberal arts college reported borrowing or buying prescription stimulants from each other, and that 44 percent knew of someone who had.

"There's this increasingly widespread attitude that 'we are our own best pharmacists,' " said Bessie Oster, the director of Facts on Tap, a drug abuse prevention program for college students that has begun to focus on prescription drugs. "You'll take something, and if it's not quite right, you'll take a little more or a little less, and there's no notion that you need a doctor to do that."

Now, Going Online for Pills

The new crop of amateur pharmacists varies from those who have gotten prescriptions - after doing their own research and finding a doctor who agreed with them - to those who obtain pills through friends or through some online pharmacies that illegally dispense drugs without prescriptions.

"The mother's little helpers of the 1960's and 1970's are all available now on the Internet," said Catherine Wood, a clinical social worker in Evanston, Ill., who treated one young client who became addicted to Xanax after buying it online. "You don't have to go and steal a prescription pad anymore."

In dozens of interviews, via e-mail and in person, young people spoke of a sense of empowerment that comes from knowing what to prescribe for themselves, or at least where to turn to figure it out. They are as careful with themselves, they say, as any doctor would be with a patient.

"It's not like we're passing out Oxycontin, crushing it up and snorting it," said Katherine, who showed a reporter a stockpile that included stimulants, tranquilizers and sleeping pills. "I don't think it's unethical when I have the medication that someone clearly needs to make them feel better to give them a pill or two."

Besides, they say, they have grown up watching their psychiatrists mix and match drugs in a manner that sometimes seems arbitrary, and they feel an obligation to supervise. "I tried Zoloft because my doctor said, 'I've had a lot of success with Zoloft,' no other reason," said Laurie, 26, who says researching medications to treat her depressive disorder has become something of a compulsion. "It's insane. I feel like you have to be informed because you're controlling your brain."

When a new psychiatrist suggested Seroquel, Laurie, who works in film production and who did not want her last name used, refused it because it can lead to weight gain. When the doctor suggested Wellbutrin XL, she replied with a line from the commercial she had seen dozens of times on television: "It has a low risk of sexual side effects. I like that."

But before agreeing to take the drug, Laurie consulted several Internet sites and the latest edition of the Physicians' Desk Reference guide to prescription drugs at the Barnes & Noble bookstore in Union Square.

On a page of her notebook, she copied down the generic and brand names of seven alternatives. Effexor, she noted, helps with anxiety - a plus. But Wellbutrin suppresses appetite - even better.

At the weekly meetings of an "under-30" mood-disorder support group in New York that Laurie attends, the discussion inevitably turns to medication. Group members trade notes on side effects that, they complain, doctors often fail to inform them about. Some say they are increasingly suspicious of how pharmaceutical companies influence the drugs they are prescribed.

"Lamictal is the new rage," said one man who attended the group, "but in part that's because there's a big money interest in it. You have to do research on your own because the research provided to you is not based on an objective source of what may be best."

Recent reports that widely prescribed antidepressants could be responsible for suicidal thoughts or behavior in some adolescents have underscored for Laurie and other young adults how little is known about the risks of some drugs, and why different people respond to them differently.

Moreover, drugs widely billed as nonaddictive, like Paxil or Effexor, can cause withdrawal symptoms, which some patients say they only learned of from their friends or fellow sufferers.

"This view of psychology as a series of problems that can be solved with pills is relatively brand new," said Andrea Tone, a professor of the social history of medicine at McGill University. "It's more elastic, and more subjective, so it lends itself more to taking matters into our own hands."

To that end, it helps to have come of age with the Internet, which offers new possibilities for communication and commerce to those who want to supplement their knowledge or circumvent doctors.

Fluent in Psychopharmacology

People of all ages gather on public Internet forums to trade notes on "head meds," but participants say the conversations are dominated by a younger crowd for whom anonymous exchanges of highly personal information are second nature.

On patient-generated sites like CrazyBoards, fluency in the language of psychopharmacology is taken for granted. Dozens of drugs are referred to in passing by both brand name and generic, and no one is reticent about suggesting medications and dosage levels.

"Do you guys think that bumping up the dosage was a good idea, or should I have asked for a different drug?" someone who called herself Maggie asked earlier this month, saying she had told her doctor she wanted to double her daily intake of the antidepressant fluoxetine to 40 milligrams.

In another recent posting, a participant wrote that his supply of the beta blocker Inderal, acquired in Costa Rica, was running out. He uses the drug for panic attacks, he said, but he has not told his doctor about it. "What do I do/say to get her to prescribe me some?" he asked.

"CraZgirl," who said she was not currently taking any medications, received a resounding "yes" to her posting that asked, "If you wouldn't go on meds for yourself, is it reasonable to do it to keep your marriage intact?"

Still, for some young adults, consulting their peers leads to taking less medicine, not more. When Eric Wisch, 20, reported to an anonymous online group that he was having problems remembering things, several members suggested that he stop taking Risperdal, one of four medications in a cocktail that had been mixed different ways by different doctors.

"I decided to cut back," said Mr. Wisch, a sophomore at the University of Rochester who runs www.thebipolarblog.com, where he posts his thoughts on medications and other subjects. "And I'm doing better." Despite frequent admonitions on all the sites to "check with your Pdoc," an abbreviation for psychiatrist, there are also plenty of tips on how to get medications without a prescription.

"I know I shouldn't order drugs online," one participant wrote in a Sept. 26 posting on the Psycho-babble discussion group. "But I've been suffering with insomnia and my Pdoc isn't keen on sleep aids."

What should he do, the poster wanted to know, after an order he placed with an online pharmacy that promised to provide sleeping pills without a prescription failed to deliver?

Another regular participant, known as "med-empowered," replied that the poster was out of luck, and went on to suggest a private e-mail exchange: "I think I know some sites where you could post your experience and also get info about more reliable sites."

For a hefty markup, dozens of Web sites fill orders for drugs, no prescription required, though to do so is not legal. Instead, customers are asked to fill out a form describing themselves and their symptoms, often with all the right boxes helpfully pre-checked.

Erin, 26, a slender hair stylist, remembers laughing to herself as she listed her weight as 250 pounds to order Adipex, a diet pill, for $113. One recent night, she took an Adipex to stay up cleaning her house, followed by a Xanax when she needed to sleep.

Like many other self-medicators, Erin, who has been on and off antidepressants and sleeping pills since she was in high school, has considered weaning herself from the pills. She wishes she had opted for chamomile tea instead of the Xanax when she wanted to sleep.

"I feel like I have been so programmed to think, 'If I feel like this then I should take this pill,' " she said. "I hate that."

But the problem with the tea, she said, is the same one she faces when she is coloring hair: "It's not predictable. I know how these drugs are going to affect me. I don't know if the chamomile tea will work."

Online pharmacies are not the only way for determined self-prescribers to get their pills. Suffering from mood swings a decade after his illness was diagnosed as bipolar disorder, Rich R., 31, heard in an online discussion group about an antidepressant not available in the United States. A contractor in the Midwest, Rich scanned an old prescription into his computer, rearranged the information and faxed it to pharmacies in Canada to get the drug.

"My initial experience with physicians who are supposed to be experts in the field was disappointing," Rich said. "So I concluded I can do things better than they can."

Even for psychiatrists, patients say, the practice of prescribing psychotropic drugs is often hit and miss. New drugs for depression, anxiety and other problems proliferate. Stimulants like Adderall are frequently prescribed "as needed." Research has found that antidepressants affect different patients differently, so many try several drugs before finding one that helps. And in many cases, getting doctors to prescribe antidepressants, sleeping pills or other psychiatric medications is far from difficult, patients say.

The result is a surplus of half-empty pill bottles that provides a storehouse for those who wish to play pharmacist for their friends.

The rules of the CrazyBoards Web site prohibit participants from openly offering or soliciting pharmaceuticals. But it is standard practice for people who visit the site to complain, tongue-in-cheek, that they simply "don't know what to do" with their leftovers.

The rest takes place by private e-mail. Sometimes, the person requesting the drugs already has a prescription, but because the medications are so expensive, receiving them free from other people has its merits.

A Post-Hurricane Care Package

Dan Todd, marooned in Covington, La., after Hurricane Katrina, said he would be forever grateful to a woman in New Hampshire who organized a donation drive for him among the site's regular participants.

Within two days of posting a message saying that he had run out of his medications, he received several care packages of assorted mood stabilizers and anti-anxiety drugs, including Wellbutrin, Klonopin, Trileptal, Cymbalta and Neurontin.

"I had to drive down to meet the FedEx driver because his truck couldn't get past the trees on part of the main highway," said Mr. Todd, 58. "I had tears in my eyes when I got those packages."

It doesn't always work out so well. When Katherine took a Xanax to ease her anxiety before a gynecologist appointment, she found that she could not keep her eyes open. She had traded a friend for the blue oval pill and she had no idea what the dosage was.

An Adderall given to her by another friend, she said, "did weird things to me." And Mr. Tylutki, who took the Ritalin she offered one weekend last fall, began a downward spiral soon after.

"I completely regretted and felt really guilty about it," Katherine said.

Taking Katherine's pills with him when he returned to Minneapolis, Mr. Tylutki took several a day while pursuing a nursing degree and working full time. Like many other students, he found Ritalin a useful study aid. One night, he read a book, lay down to sleep, wrote the paper in his head, got up, wrote it down, and received an A-minus.

But he also began using cocaine and drinking too much alcohol. A few months ago, Mr. Tylutki took a break from school. He flushed the Ritalin down the toilet and stopped taking all drugs, including the Prozac that he had asked a doctor for when he began feeling down.

"I kind of made it seem like I needed it," Mr. Tylutki said, referring to what he told the doctor. "Now I think I was just lacking sleep."

Copyright 2005 The New York Times Company