(FORTUNE Magazine) – Fensterstock, Wayne Angell, Paul Harvey, Peter F. Drucker, Robert Stempel, Desmond Tutu If all of American business were listening to you right now, what would you tell it to do? Be frank, and realistic -- for this is a moment when American business wants advice. With the U.S. economy convalescing and the world order in stunning metamorphosis, the globe's largest business sector senses an urgent need to change. That is why Fortune asked scores of leaders in commerce, politics, religion, and academia, as well as workers, scientists, writers, and others, what they want U.S. business to do in the coming year. Their widely diverse answers will intrigue, enrage, surprise -- and maybe even help.

Do What You Do Best GEORGE BUSH PRESIDENT OF THE UNITED STATES I think our system works best when independent enterprises take their cue from the market, not from Washington. So in 1992 what I want to see is simply this: I would like to see you do what you do best. You can build on your enormous successes. During the Eighties the manufacturing sector revolutionized the way American companies do business, and you know the results. Manufacturing productivity shot up more than 35%. You keep innovating, pioneering new products, setting new goals, and rising to the challenge, and then if both of us do our jobs, 1992 will mark a new beginning for American business. It is clear to me that American business fundamentally is getting in good shape to be more competitive, to be leaner, to be ready to fire on out there and compete with anybody around the world. That's your goal. My goal is to see that the government doesn't get in the way and where possible -- like hammering out trade agreements -- is helpful to you.

Hire the Middle Class JOHN SCULLEY CEO, APPLE COMPUTER I would like to see our country put the skilled middle class back to work in 1992. American middle-class workers are terrified they will lose their jobs, and they are hesitant to take on more debt because their main investments -- their homes -- are worth less and aren't convertible into cash. Their confidence is shaken to the roots. No wonder we're in a recession. How do we put middle-class Americans back to work? If you look back at the 1980s, most new jobs were created by small business, not corporate America. But right now small business is facing more expenses, higher taxes, and greater obstacles to investment than ever before. I believe we have to create investment incentives, research and development tax credits, long-term capital gains tax relief, and other tax-sheltering opportunities. Small business will be the first to benefit from those kinds of policies. I think the government can take a lesson from watching what businessmen are doing. Most businessmen are Republicans and are sympathetic to the Bush Administration. But in their own companies the most successful of them are taking unpopular actions -- flattening organizations, laying off workers, paring expenses. They aren't just waiting for a recovery. I don't see why the agenda should be any different for the leaders of government.

Create a Company of Ideas JACK WELCH CEO, GENERAL ELECTRIC Welch spoke to executives at the FORTUNE 500 Forum in November. Picture a building. Companies all added floors as they got bigger. Size adds floors. Complexity adds walls. We all built departments -- transportation departments, research departments. That's complexity. That's walls. The job all of us have in business is to flatten the building and break down the walls. If we do that, we will be getting more people coming up with more ideas for the action items that a business needs to work with. Not every idea is a capital I idea. A breakthrough in biotech -- that's the wrong view of an idea. An idea is an error-free billing system. An idea is taking a process that requires six days and getting it done in one. Everyone can contribute -- every single person. The people who process the work in general have better ideas than those in the office, far better ideas. The key is to give them respect, dignity. When you spend three days in a room with people mapping a process, the ideas just about bubble up inside. Just give them respect -- everybody in the organization -- and the improvement is enormous. What we do is give people the right of voice and demand responsibility. Those two things do wonders for you. They get rid of gripe sessions. Somebody says, ''We didn't do it this way; I told my boss we should have done it this way.'' Wait a minute. You participated in the process. You played in the whole game. It was your responsibility to either win the argument or, if you lost it, go with it, not to complain -- because we gave you voice. Neatness and orderliness are not what we are after. We are after getting information to people who can act on it. Think about the regional manager in sales. Why do we have offices for regional managers? What do they do in those offices? We have all built these things to be neat, because those managers have to give reports back to somebody who has to give a report back to somebody else. If instead they were out taking the pulse of that market every single minute -- feeling it, touching it, grabbing it, and getting the information to somebody who could do something about it rather than read it -- then you would have what you want. You would have the ability to deliver and go head to head with competition and win. All we have to do is open up, give people a chance, get them in the process, and I am convinced we can make quantum leaps. But we can't rest. Because while many American companies are improving dramatically against themselves, globally we still have a hell of a long way to go to win this game.

Choose Our Nation's Goals STEVE JOBS CEO, NEXT I would love nothing better than if President Bush stood up and said, ''We are going to have a forum in this country for the next year, and we are going to decide what our basic values are and what our goals are for ten and 20 years out.'' I am old enough to remember John Kennedy saying we are going to put a man on the moon and bring him back by the end of the 1960s. What was so wonderful about that was that everybody understood it, from the scientist next door to the person who collected garbage on Thursdays. Whether you agree with that one or not, we need a lot of goals right now. We need goals that people understand, and we need plans to accomplish them. I'm not for the government planning every aspect of industrial policy. Don't get me wrong. But I very strongly believe that we as a country should have a road map for where we want to be in ten years. I think the last few decades have shown us that a less-than-perfect plan is better than no plan at all. I also think we tend to forget how much planning was done in this country in the 1940s and 1950s -- the interstate highways, all the programs to fund science and technology research in the universities -- which resulted in the prosperity of the 1960s and 1970s. Moreover, great things don't happen in five years. They take a decade or two to happen. The only way to sustain support, investment, and commitment to projects that last longer than a legislative term, or longer than news bites will keep them in the forefront of our consciousness, is with a plan that is agreed to and supported by the American people. The problem is, for decades nobody has asked America, What are we? What do we care about? What do we stand for? What are our priorities? That is the process we have to go through as a country. We have to pick what we can do, have a sustained agreement to try to accomplish that, and measure our progress.

Concentrate on Trust WARREN BENNIS PROFESSOR, UNIV. OF SO. CALIFORNIA A top expert on leadership, Bennis is the author of 18 books, including On Becoming a Leader. Leadership and the trust gap will be increasingly important issues in the Nineties. The reason is the dicey, spastic, fluid, ambiguous environment. In my 40 or so years of being in organizations, consulting with them, and trying to research them, I have never experienced a time when the environment was as complex and unpredictable as it is now. This creates extraordinary problems of trust and morale in an organization because the changes are hard for any CEO or officer of a company to forecast and communicate. Imagine a tripod of qualities that every executive has -- a tripod because they have to be held in balance. One is his or her ambition or drive -- very necessary. Another is competence, also critical. The third is values, integrity. The most successful leaders have a terrific role balance. But in times of crisis, change, and recovery, I've seen a number of organizations go for a person with terrific ambition and terrific competence absent integrity. I call those destructive achievers. I think that's what we have to work on. It's not the only answer to the trust gap. But the answer has to start at the top.

Become More Japanese SHOTARO ISHINOMORI AUTHOR, JAPAN INC., A COMIC BOOK American businessmen at the level of manager or higher need to put aside some of their individualism and think more of their company's long-term benefit. In the U.S., managers receive very large salaries, and they are always changing jobs, so there is no continuity. American businessmen are more workaholics than the Japanese. That should not change. But the Japanese people believe they should work for their company's and their country's benefit. That's why Japan has become powerful, and why, even though Americans work hard, the U.S. is not as powerful. If Americans adopt the same attitude as the Japanese, then the U.S. economy will become stronger than Japan's. Its foundation is weak. We're just selling technology. We have no raw materials. Japanese companies have persisted in spite of this. If Americans adopt the same persistence, the countries' economic positions will be reversed. Not that things will change by the end of 1992. Japan's own economic success took 20 years. But if Americans make the effort, I would suspect the two countries could reach the same level in the next four or five years. After that, the U.S. will surpass Japan.

Look at Local Deficits RED POLING CEO, FORD MOTOR Our philosophy has been that we would forgo some sales during peak years in order to operate closer to trend demand over a period of time. That has worked for us. So we don't have the overcapacity problem some other companies do in this economy. If you look at this recession compared with other recessions after World War II, there have been two big differences. One, the banks have problems, and the monetary actions taken to alleviate those have not flowed through to the consumer. The second, and this is one I feel economists have not properly reflected in their projections, is the deficits in the public sector. In the depths of the 1982 recession, local and state governments had a deficit of $2 billion. This year it is around $37 billion. This is one of the reasons I think we've had a much slower recovery. The actions taken to close those budget gaps -- spending cuts or tax increases or a combination -- are all negative. They are all bad news, and they have affected a lot of people.

Demand Zero Defects CARLA HILLS U.S. TRADE REPRESENTATIVE U.S. manufacturers should make defect-free delivery their No. 1 objective. Global competition has made our companies more aware of this, but many have a way to go. The standards of a decade ago don't play anymore. A defect rate of 4% used to be okay, but now 0.4% is too high. In a Japanese company, employees are encouraged to pull the chain that stops the assembly line if they think something is wrong. We can learn some things from the Japanese.

Wage War on Regulation PAUL DRUMM JR. CEO, KENYON CORN MEAL Drumm left IBM 20 years ago to take over Rhode Island's Kenyon, one of America's oldest companies. What do I want U.S. business to do in 1992? Do something about regulation! For small business especially, it's a real hassle. Everyone's passing laws every day. They pile up. Just to add on an 8-by-10 boiler room and bathroom required permits from the state board of health, the fire marshal, the traffic commissioner, the department of environmental management because we're on the river, and though the mill's 150 years old, the zoning board because this area is now residential. I think from now on our smallest package will have to be a 50-gallon drum. That's just large enough for the label FDA says we have to use now. In 1992, I say business has to find time to do business.

Invest in the Young JOHN SINGLETON MOVIE DIRECTOR Singleton, 23, directed Boyz N' the Hood. His next film is Justice. U.S. companies should be investing in the future of America. They shouldn't be thinking in terms of the next year or the next two years, they should be thinking in terms of the next 20 years -- for their own good as well as for the good of the people who sustain them. The reason that America is in the situation it is in right now is that they don't think like the Japanese. When the Japanese invest in something, they think about what will happen in the long term. There is a certain power structure in place right now that is making it difficult for people like me to go to college. You don't see people going to jail just because they are sick; it's because they are not afforded their part of the American dream. People are taught that there is no way you are going to be able to do anything through the avenue of education. If a person is not allowed to create, they are going to use all their creative energy other ways, not always good. Education is just not a priority in this country. I tell people that there is a situation right now where you are going to either have or have not. That's sad. There is going to have to be a whole reevaluation of priorities in this country. You have a government that is filled with a bunch of old people, who don't think in terms of people who aren't senior citizens like them. What makes you think they are going to think about the average 13- or 14-year-old? Corporate America should be putting money both into hiring different types of people and into education.

Make Morality the Goal ANITA RODDICK FOUNDER, BODY SHOP INTERNATIONAL The Body Shop is a 702-store retail chain selling cosmetics worldwide. Companies should begin to focus on a new bottom line, making moral decisions. For example, when the Body Shop needed a soap factory, it would have been easier to attach it to our headquarters in England. We put the factory instead into an area in Scotland with 70% unemployment, giving work to folks who had been idle for nine years. We now provide jobs for over 100 people, who make some 20 million bars of soap; 25% of their profits go back into the community. The stroke you get is not in the shares going up another bloody five pence, but rather in an enthusiastic work force that's proud of what you do and is motivated by it. It's no longer enough to simply provide an environmentally safe product. Consumers are asking to see environmental audits and practices. Every company should have an environmental team that is directly linked to the CEO and the board. The idea of acting morally must extend to how a company treats its employees. Rather than focusing just on what they earn, you listen to what they need. You harness their energy and opinions. You empower them. The old authoritarian mode no longer works. One program we've created to help our employees develop is a volunteer corps. We sent people over to renovate three orphanages in Romania. These folks came back transformed. They are concerned citizens. They were shown the source of their power, which is responsibility through service. They're not just cashiers and wrappers anymore. Their perception of who they are and how they feel about their work has changed. Recently at the Body Shop, we've been asking ourselves, How else can we contribute? We campaign for human and social rights. Why not help develop political consciousness? The presidential elections are coming up, and it's hard to get people to vote. We're thinking of using our U.S. shops as voter registration booths. A move like this goes beyond politics and business. It's global citizenry.

Accept Industrial Policy ANDREW GROVE CEO, INTEL In 1992, I would like to see a government that gives a shit about U.S. industry before it's too late. I don't care what denomination that government is. Industrial development doesn't happen on the same time scale as wars but with the same kind of energy. Everything from investment policy to trade policy and development policy needs to be brought together in a coordinated fashion. We've been intimidated into not calling it industrial policy because the current and previous government said that was bad. The name doesn't make it good or bad. I don't care if you call it applesauce, but that's what needs to be done.

Stop Harassment Now MURIEL SIEBERT PRESIDENT, MURIEL SIEBERT & CO. Siebert in 1967 became the first woman to buy a seat on the New York Stock Exchange. She served as New York state superintendent of banks while running her present discount brokerage. Business has got to make a real effort to clean up its act, especially in my industry, and work on setting up a standard of morality. It has to come from the top of the corporation. Those of us who've worked know Anita Hill was for real. Harassment ruins productivity. There is no reason women should have to take the nonsense I put up with early in my Wall Street career. I also wish business would take more of an interest in lobbying. When did auto sales start to drop? When the interest deduction on auto loans was eliminated. Didn't Congress understand that this would happen? Business should educate Congress on economic reality.

Liberate Capital Gains T. J. RODGERS CEO, CYPRESS SEMICONDUCTOR In 1992, I would like to see our country streamline our capital formation machine. American companies are all running around with sandbags tied to their legs. People like me keep harping about eliminating or reducing the capital gains tax, and it really would make a difference. It really does influence the cost of capital, and a higher cost of capital really does make us less competitive with Japan and the rest of the world over the long haul. Worse, a high cost of capital has a cumulative effect. It's like swallowing a little bit of lead with your food every day; it builds up and starts to weigh you down and poison your system, and after a while you can't escape it. I don't think President Bush has pushed the idea of cutting capital gains taxes as hard as he should. He goes out and bangs on the table now and then and says we've got to do it, but what he hasn't done is convince the public why cutting the capital gains tax is good for everyone. * There is a paradox. If you try to tell Joe Blow he would be better off if we cut the taxes for the guy who makes a million dollars a year, of course he is going to ask why. The explanation is where President Bush has fallen short. We all can understand the argument that we would be better off if we took some billionaire's billions, for example, which may be in tax-free bonds or something like that, and put them to work building semiconductor plants or whatever to employ people. President Bush hasn't explained that.

Bring Expectations to Earth ANDREW JOHNSON YARD WORKER Johnson, 27, is an Atlanta attorney who was laid off from a small law firm this summer. In partnership with another young out-of-work lawyer, he is doing yard work. Something has definitely got to change. Everybody I know is having a hard time, whether they're in the law, or marketing, or retail, or advertising. There are no raises and no bonuses, just layoffs and cutbacks of benefits and vacations. I don't know how business can solve the problem except try to avoid repeating it. Somehow I guess we've got to get more realistic in our expectations. I mean, I wasn't making much as a lawyer, not that much more than I'm making in yard work. But I think law school enrollments started going up ever since L.A. Law ((the TV series)) came along. Too many people are getting their world view from TV. It's not all L.A. Law. I wish it were. I see people who cheated on law school exams, then misrepresented themselves on their resumes, and they're working as successful attorneys. One thing about yard work, though. It's honest work, and you can see the results and feel good about them right away, neither of which is necessarily true in law.

Team Up With Government JOSEPH GORMAN CEO, TRW I think America is losing the competitiveness battle extraordinarily fast. Not enough people in business are speaking up about the seriousness of the situation. We've got to find more effective ways to work with government toward the common end. Every other industrialized nation tends to have a pretty good working relationship between government and business. We're going to have to go out and seek help in making absolutely certain that we've got a level playing field and that we've got a government backing us on all reasonable fronts. Take the Japanese. I gave a speech to them. They are going to have to bring their system of competition and trade into alignment with those in North America and Europe, or the Americans and Europeans won't stand for it. What I'm saying is, hey, change while you've still got time to do it voluntarily.

Fix the Reporting System NOBORU HATAKEYAMA VICE MINISTER, MITI The U.S. government has to face the underlying reason ((for U.S. industry's lack of competitiveness)) and change the businesses' reporting system from a quarterly system to a yearly one. The priority issue for the U.S. now is to strengthen its competitiveness rather than to protect stockholders' interests. Whenever we suggest that the U.S. change the reporting system, the government tells us the quarterly reporting system is indispensable to protect the interest of the stockholders. Then which is important? The benefit of the stockholders or the competitiveness of U.S. industry? Sometimes the interests of the stockholder may be more important. But since the U.S. has been suffering from a large trade deficit, if the U.S. government really intends to address this problem, they have to face reality. For business, trust instead of skepticism would help competitiveness. A company should trust its supplier. If there is more trust, costs can be reduced drastically.

Get Truly Global STANLEY GAULT CEO, GOODYEAR To a very large degree we are underestimating our global competitors' capability and speed of change, and we are overestimating our own immunity from the need to change. We are overestimating our ability to recover economically and underestimating the power of the rest of the world. If a company with global competitors does not have a realistic and viable plan to be truly a global enterprise, then that company certainly can't be successful. Goodyear has been in the international arena for over 70 years, with 85 plants in the U.S. and 25 other countries. Yet we still have many markets where we're not participating and many others where we're not participating in an acceptable fashion. Think of China, Africa, India -- that will be the biggest nation on earth in less than two decades, less than a generation. We must find a way to get into these markets with the products that we used to sell here at home.

Minister to the Survivors DEE SODER PRESIDENT, ENDYMION Psychologist Soder's New York City firm advises companies and individuals on strategy and executive development. Companies have to start paying attention to the people left on board, particularly at the middle and senior level. Everybody talks about investing in people. Now they really have to begin to. In 1991, if you pushed your people too hard, they'd put up with it. In 1992 they're going to be dropping out. You'll lose the best people, either mentally or actually. Even though it's going to be a tough year, the very best people are getting so stretched that they're saying, ''It's not worth it. I'd rather go out and do something else for a lot less money.'' For middle- and top-management people, wise companies are putting in individualized training programs. They're not just shipping people off to a three-week course somewhere. They're evaluating them individually, and providing them with a better sense of themselves. You can do this even when you're downsizing. If somebody has just seen the person in the next office get fired, he has even more interest in working on his own development.

Keep Your Chin Up LORD WHITE CHAIRMAN, HANSON INDUSTRIES Anyone who undersells American business is making a big mistake. It's vital, thrusting, competitive. But this eternal war between Congress and the White House hurts U.S. business. Or take the Fed -- its fear of inflation could lead to stagflation. There's no point in the government telling business to do better. Government has to do its part. Two of the best things that could happen to U.S. business in 1992 would be the passage of the $150 billion transportation bill and another cut in interest rates. The worst thing would be more creeping socialism, like the luxury tax. This legislative attitude -- soak the rich -- was what wrecked Britain. I'd hate to see that happen here.

Fight Poverty the Right Way JACK KEMP SECY. OF HOUSING AND URBAN DEV. All of us, Democrat or Republican, liberal or conservative, really need to come together in a new war on poverty that makes sense this time. The welfare system in America is not a springboard to opportunity. It is a trap, a swamp. It sucks people in and makes them dependent. Not only do we have to take microsteps to inject opportunity and jobs and education into the inner cities of our country, we have to take macrosteps. On that basis the President has correctly called for a cut in the capital gains tax. He has asked Congress to put some oxygen back into this economy, to raise the value of assets, to lower the cost of doing business. The capital gains tax is not a tax on rich people. It is a tax on poor people who want to get rich. We have got to spend some time building a ladder out of poverty upon which people can climb. Giving people some boots and some straps with which to exercise their self-help, I think, is the greatest goal. It's not a new idea. Abraham Lincoln said in 1860, ''I want the black man to have the same equality of opportunity to get rich with everyone else, when he may look forward to being a hired laborer this year, and then next year to work for himself, and then someday to hire other people to work for him.'' Abraham Lincoln was defending entrepreneurial capitalism. I am convinced that all too many members of the U.S. Congress are worried that somewhere someone is going to get rich. They are not worried about how many people are getting poorer as we snuff out and tax the capital, the source of seed corn for the next generation of entrepreneurship.

Remember the Retailer MARLA OTTENSTEIN MANUFACTURERS' REPRESENTATIVE Ottenstein owned a pair of small retail stores in Washington, D.C., selling luggage and offbeat gifts. Squeezed out of business in the slump, she now peddles fancy duffel bags, elegant toothbrushes, and similar upscale items to Washington retailers. American manufacturers aren't creative anymore. They're afraid of failure. They aren't willing to spend the money to develop, manufacture, and market new products. I think the Europeans and the Japanese are more creative. Every year the Europeans and Japanese will bring out new products, no matter how bad the market seems. Too many American manufacturers repeat the same line. They don't even change the packaging. To save on the cost of carrying inventory, manufacturers don't stock merchandise the way they used to. When I started in business ten years ago, I put in an order for a customer and got it almost overnight. Toward the end I had to wait as much as six weeks. Manufacturers used to give retailers free samples, not of major items like a large piece of luggage, but of a makeup kit of the same fabric. Retailers appreciate that. It tells them that they are important. As a manufacturers' rep, I gave a pharmacist a toothbrush one of my clients makes. He said he wasn't interested in selling them. I said, ''That's okay, this is just for you.'' He called me later and placed an order for the pharmacy. Manufacturers should learn to service the little guy.

Invest in Europe ROBERT HORMATS VICE CHAIRMAN, GOLDMAN SACHS Europe will probably grow slowly in 1992, but it will nevertheless present outstanding opportunities for companies that seize them as trade barriers continue to fall. The recent decision of the nations of the European Free Trade Association -- chiefly Scandinavia, Switzerland, and Austria -- to tie themselves more closely to the European Community offers some of the most tantalizing prospects. No American company can fail to reevaluate its European strategy, but I'd especially like to see smaller American companies become more involved with Europe in the year ahead. Europe is now such a major part of the global economy that they will find it difficult to succeed unless they have a bigger stake in its growth potential. Few U.S. companies will find it worthwhile to invest in Eastern Europe unless they already manufacture or have distribution networks in the EC. Otherwise it doesn't make sense to be there, since these markets are small and lack much spending power. For companies that can integrate Eastern Europe into their EC operations, the time is now probably right to make investments as the pace of market reform picks up.

Study Psychology EDWARD BERNAYS COUNSEL ON PUBLIC RELATIONS Bernays, 100, of Cambridge, Massachusetts, is the father of public relations (and nephew of Sigmund Freud). Since 1919, when I first began providing public relations counsel to General Electric, Westinghouse, Procter & Gamble, and so on, I've had 700 clients. And what I've seen is that heads of big companies almost always know business in terms of finance or manufacturing, but very few know psychology. That's a problem, because what Thomas Jefferson said still holds: Every important activity in this country depends on the consent of the public. You have to understand how people's minds work -- their subconscious as well as their conscious. Every leader of every large corporation ought to go out and get one or two of the best books on psychology and read them. That way he'd know how to appraise the courses of action recommended by his public relations staff.

Learn How to Help Schools LEWIS BERNARD MANAGING DIR., MORGAN STANLEY Bernard has been the point man on a Brooklyn education project he and the firm began four years ago. If business is really going to help education, the desire to do good is just not enough. What happens to businessmen, in the company of politicians and educators, is that their brains become scrambled. An example: Originally, we adopted a Brooklyn high school in which two other businesses were also involved. And I happened to be at the school one day when the CEO of one of those came for his annual fly-by. He asked the principal, ''How are things going?'' And the principal said, ''Life is hard, and I've got all these problems.'' And the CEO said, ''I know, and you're trying to do your best. Keep up the good work, and here, have five computers,'' and he leaves. Well, that's not terribly constructive. Five computers? Attached to what? To get anywhere in helping education, business should be businesslike. It should have a long-term commitment and a vision of what it wants to accomplish and a specific set of objectives against which it can measure its progress and the schools'. You need partners to make something like that happen. Based on my limited experience in New York, I have not found dealing with the Board of Education that effective. It's a little like going to the top of the house and finding that the telephones are not connected to the boiler room. The key, I think, is to find a superintendent and a principal, and if you find them, they will lead you to teachers, and the teachers will lead you to students. You don't want to waste your time as I did for two years with people who either don't want your help or can't use your help. Originally, we were in the wrong school -- one that was extremely disorganized, working with people who didn't have responsibility or accountability but who were unwilling to admit that to me. What I also learned is that Morgan Stanley and I do not necessarily have any credibility with the schools. So I went to Teachers College at Columbia University, which had enormous credibility. They cut through a huge amount of red tape. They helped us design a set of specifications to interview a dozen schools, and we came down to two finalists and adopted both. Now we've got a pilot project involving a computer simulation -- in effect, a videogame -- to teach high school kids something about business and teamwork and problem solving. It's going at both schools, with a total of about 100 students involved.

Don't Be Afraid of Russia ANATOLI SOBCHAK MAYOR, ST. PETERSBURG, RUSSIA Mayor Sobchak is a member of the Soviet Parliament, an adviser to Gorbachev, and chief negotiator for the Soviet side in talks with newly independent Estonia. Many in Moscow think it inevitable that he will someday occupy Gorbachev's chair. I want to address not simply businessmen, but American government circles as well. In the past year, and, God help us, possibly in the coming year, U.S. policy has not been entirely appropriate for the situation unfolding in the Soviet Union. Let's remember how things were last year, and up to September of this year. The U.S. said, ''Yes, we are ready to help. But we are going to hold back widescale aid and economic cooperation because we don't see deep- seated political and economic reform.'' Then we had the putsch, and all that was connected with it. At last, irreversible changes had taken place. The whole communist system had crumbled, which would permit the U.S. government to lift its limits on aid. But this isn't happening. And now there is a new explanation: ''We can't get involved because we don't know who to do business with, or who to give aid to. To the center? Or the republics? The union is crumbling. We have to figure out where the real power is.'' But the U.S. should not allow itself to take such a position. A good policy must overtake events and influence them -- and not be geared to events that have already taken place. We expected more active cooperation from the U.S. government and from American business circles. The question of giving humanitarian food aid would never have arisen if we had solved the issues of setting up real economic cooperation.

Market the Deficit DON NOVELLO WRITER Best known as Father Guido Sarducci, the Vatican gossip reporter who visits Saturday Night Live and Late Night With David Letterman, Novello was once a star copywriter at ad agency Leo Burnett. A beer called Deficit Beer could help the economy. Two cents on every can would go to reduce the national deficit. We could have a whole line of Deficit products, which would be different from a tax because they would cost more and be status symbols. Instead of Gucci, you would buy Deficit handbags. A Deficit Gold card would be for people who have made it and would want to be part of the Deficit Society; 1% of all you charge would go to pay off the national debt. These products could also help make the word ''deficit'' respectable.

With the Russians posing less of a threat now, we should turn all the B-52s into flying casinos. They could fly around the U.S. and even go to Japan. Twelve miles offshore, they would be exempt from gambling laws. The S&L bailout should be associated more directly with President Bush. I suggest a line of President Bush products -- pasta sauces, popcorn, all the stuff Paul Newman sells. Call them Bush's Own. If they could rescue the S&Ls, everyone would be willing to try them once.

Lead the Battle for the Poor JIMMY CARTER CHAIRMAN, THE CARTER CENTER The former President recently launched the Atlanta Project, a community-wide effort to attack the social problems of poverty, mostly through volunteerism. I would like to see business play the crucial, driving role in realizing the American Dream for families who now have no hope. The greatest discrimination on earth is not racial or ethnic discrimination. It's discrimination by rich people against poor people. So I see the need for a massive team effort -- in health care and community development and education and job training. It has to operate at the community level and be largely extra-governmental. The core of it -- the capability to organize, to meet specific goals, to make far- reaching but practical plans -- is a special characteristic of American business, a strong suit of American entrepreneurs. Leadership is probably the best way in which business can become involved. Business leaders in communities from Philadelphia to New York, from Austin to Los Angeles, have to be the ones to come forward. Government officials can't do it because they are bogged down in minutiae and are suspected of just trying to get reelected, or have given up hope. Whereas business leaders can come forth and create, say, a blue-ribbon commission so powerful and influential that politicians have to cooperate with it or face a tremendous political stigma. Business leaders need to realize that, in the long run, such efforts are in their own best interests. In coming years the labor pool will decrease in size, and a lot of workers aren't likely to be adequately trained to fulfill the basic job requirements demanded by business in an increasingly technological world. Business also depends on a thriving society in which people are able to purchase goods, as well as to produce those goods. Most obviously: Business leaders live in their communities. Their families live there, their children are raised there, their future is there. The more business can contribute to building a united, dynamic, progressive, safe community, the better off every member of that community -- including business -- will be.

Invade the Political System LEE IACOCCA CEO, CHRYSLER It would be nice if everybody could get together: government, labor, and management. It sounds like industrial policy, and that's a term they don't want to hear in Washington. But we've got a real serious problem, and how else do you attack it? You can't get mad at the Japanese: They've got a plan and it works. We in the auto industry don't have any power because we haven't gotten together. But we're starting to. We have these various consortia -- five of them, going for six -- in which people from GM, Ford, and Chrysler can get together under Justice Department rules and talk about technical issues: battery technology, plastics, CAD/CAM, and so on. That's a step in the right direction, though you can say we should have done it ten years ago. You've got to get a coalition where you've got some clout, and you've got to invade the political system. The problem with business is, we speak with different tongues. I think we're getting murdered here, and I think some of the rules have got to be changed. You want to grow the country, you'd better talk to business. Why? Because that's where the jobs are. We're the guys who create the jobs. It's not the Army anymore. The real jobs are in industrial America, and we gotta rebuild it. And nobody wants to acknowledge that it is a tough job that's going to take a while. If a society doesn't take care of its little kids, it's sick. So we gotta get back to education. At the other end of the scale, if you don't take care of your mother's and father's frail bodies, you're sick. But you gotta have a job to do that. I feel like the guy on the football team who is losing 60 to nothing at the half. He goes into the locker room, and the coach says, ''We're not changing the game plan. We'll take them in the second half.'' We're behind 60-zip! We gotta change.

Pay for More Scholarships JAMES O. FREEDMAN PRESIDENT, DARTMOUTH COLLEGE I want American business to provide support for greater accessibility to colleges and universities. And that means accessibility to children from less affluent families, from minority families, from first-generation American families. The most important way for American business to accomplish this is to provide more scholarship support. American business should certainly create a job training program similar to what they have in Germany -- a program that would let students who don't choose to go on to college find ways in industry to have on-the-job training. In Germany, at age 16, if you don't want to go to college but want to become a computer specialist or a tool and die maker or an auto mechanic or whatever, there are programs in industry that are very sophisticated, and after three years you get a certificate that means you truly know what you're doing.

Restore a Sense of Shame JERRY STERNER PLAYWRIGHT Sterner, whose play Other People's Money was recently made into a film, was formerly president of a New York City real estate investment company. The first thing business should do is give every executive who is making a six-figure salary a pay cut every time he lays off an employee. That might help a little bit. It is astounding to me that every time a company announces the closing of a plant or the laying off of thousands of workers, its stock goes up. Banks merge, and Wall Street applauds. What in God's name are they applauding? The acknowledgement of failure. But the stock goes up, thousands of people lose their jobs, thousands of square feet of office and retail space come onto a glutted market, and executives with their stock options and incredible salaries live happily ever after. That is insane. The only way to right things is to let the pain be shared. Someone other than the employees and the community has to share in the pain. How the stock market could be close to its all-time high while people are out there bleeding on the street is embarrassing to me. Because the pain has not been shared. I am a capitalist and a registered Republican, and I'm embarrassed to be that. We have gone, under my Republicans, from being the largest creditor nation to being the largest debtor nation. We are rapidly becoming a banana republic. We can't even fight a war without other people's money. That to me is a banana republic. I don't know what can turn it around. There used to be some corporate sense of shame. I don't feel it out there anymore. We're not embarrassed any longer about the things we used to be embarrassed about. Bankruptcy has become a tactic. That's stunning. We don't even apologize to the people we fire anymore. Maybe a sense of shame can turn it around.

Drop That Smug Grin BILL GATES CEO, MICROSOFT There's a naivete in the U.S. about economics that's been reinforced by the relative success of market vs. centrally controlled economies. There's an extreme view now that we've got it right and we understand how this stuff works, that everybody should just imitate us and the world would be a better place. That bothers me, because making market mechanisms work is very hard. We haven't figured out how to tap competitive energy in very large and critical parts of the economy, like education and health treatment or large parts of communication and transportation. Let's come up with new ways to do things -- new market mechanisms. It's not ideological. It's not Democrat vs. Republican. It's structural. Economists should be telling us how to do these things. Of course there would have to be broad political acceptance. It would be nice if we moved away from the blissful view that we are so capitalistic, there's nothing that needs changing.

Sparkle! SIRIO MACCIONI OWNER, LE CIRQUE Maccioni's Manhattan restaurant reached the apex of society and celebrity dining spots in the Eighties. Today everything is low-key. What happened? Did we lose the war? Why in New York, in America, do we have to go to lunch and be low-key? We should be sparkling! It's a bad word, low-key. The money doesn't go away. If people don't want to be seen spending money in New York, they go spend it in Paris. We've come to believe that you should be ashamed to have a beautiful car, a beautiful house. Why should I tell my son to work hard and learn five languages -- so he can live ''low-key''? My business from September to November is 7% higher than last year. Even I don't believe it. But these last few months I've paid even more attention than ever. I improved quality and service. We are completely and desperately overbooked.

Abase Yourself -- Soon MICHAEL LEWIS AUTHOR, LIAR'S POKER I am a fatalist. I do not believe that an American businessman will ever take good advice unless he is already predisposed to it, in which case he doesn't need it. My good advice, sure to be ignored, is that every top corporate executive make a conspicuous display of self-sacrifice. Take a pay cut and fly a commercial airline for a change. As the recent collapse of the Soviet Union has shown, an organization run for the benefit of the people on top cannot compete with an organization run for the benefit of all involved. Assuming that this piece of advice will be ignored, I offer another: Sell out to the Japanese as quickly as possible, for your price will never be higher.

Stay the Course KATHLEEN BROWN TREASURER, STATE OF CALIFORNIA Brown, daughter of a former governor (Pat) and sister of another (Jerry), is on the boards of the state's two big pension funds and struggles with its sagging economy. I'd have the same message for business as for government: Don't overreact to the current economic environment; focus on the long term; add value to your products and services; view your workers as assets. And I would urge that belt tightening and sacrifice in business start at the top. Executive compensation should be consistent with corporate performance and should bear some realistic relationship to employee compensation. Other industrialized nations have nothing comparable to the kind of excessive compensation we see in American companies. At CALSTRS ((the California State Teachers Retirement System)) we have targeted 11 companies that have executive compensation packages that are out of sync with corporate performance. We haven't announced who the 11 are. We're writing them letters and will determine what steps and strategies we will pursue as we get closer to the spring. CALPERS ((the California Public Employees Retirement System)) is also targeting companies. If you look at the complaints about the toughness of regulation in California, you'd have to say that the state grew complacent over the past decade as we grew and grew. The situation has changed rather dramatically, and I see California's major challenge as trying to maintain its share of the nation's business activity. The absolute first step is for us to make an attitude check as to how we do business in the state. We need a little common sense about our regulatory processes. They can be and should be streamlined. For its part, businesses have to be mindful that they can't run away from environmental regulation. Maybe they'll buy five years in Utah or Arizona, but California has always been the bellwether, so we ought to figure out how to make it work here. Business has quietly sulked away. Instead, it needs to come to the table and work with government, work with labor leaders, and work with ! environmentalists to come up with a reasoned approach to doing business in the state of California.

Value People Over Animals KATHLEEN MARQUARDT CHAIRMAN, PUTTING PEOPLE FIRST Marquardt's organization fights the animal rights lobby and asserts humans' ''right to drink milk, eat meat, wear leather, wool, fur, silk, and down; to hunt and fish; to go to circuses, rodeos, and zoos; to own pets, and to benefit from biomedical research.'' Big business has got to wake up. It's shooting itself in the foot. It's donating money to organizations that are trying to destroy it. Business has got to weigh the benefit of short-term PR gains against the threat of its own demise. We got a call the other day from a pharmaceutical company thinking of giving money to Greenpeace, so they could look good. A pharmaceutical company giving money to Greenpeace? That's like giving your enemy a gun and saying: ''Please, blow me away.'' The animal rights movement is trying to look moderate. But read their literature. They're antibusiness, antiprofit. The animal rights movement is seeking to destroy a way of life -- to tell us we can no longer believe in the Judeo-Christian principles this country was founded on. They insist every form of life is equal: humans and dogs and slugs and cockroaches. They're telling us we have to live like that, and to believe what they believe. And we don't.

Make More in the U.S.A. AKIO TANII PRESIDENT, MATSUSHITA I would like to see American business make a commitment to understanding the world market and a plan to manufacture more products for the U.S. market in the U.S. In North America, for example, our goal is to build 50% of the products we sell in the U.S. within its borders, with 70% local content. In some cases this is probably more than American companies do. There must be a strategic effort by American business to understand the needs of the markets in Europe and Asia, and they must invest with a long- range commitment. It is not easy. It requires a thorough understanding of the cultures and the local requirements of the countries in which they want to do business. American companies' greatest strengths are their access to a great reserve of natural resources and a large labor pool; the labor pool in Japan is shrinking. American business also has a talent for marketing and advertising products and, most important, the ability to focus on problems and solve them. Its weaknesses: thinking there must be almost instant return on investments -- the short-term philosophy -- and the tendency to shift production offshore.

Sell More Outside the U.S.A. ROBERT MOSBACHER SECRETARY OF COMMERCE I sure do have a wish list for business in 1992. American companies have to start with exporting and understanding that the market is the world. Businesses large and small have an opportunity to get into the global marketplace because 95% of consumers are outside the U.S., and a lot of areas are growing much faster than we are. Another major wish of mine is that all companies begin thinking longer term. Everything they do should focus on market share rather than short-term profits. They should be taking advantage of today's low interest rates, which give us a big leg up on foreign competitors.

Use Nonmonetary Rewards JOYCE FENSTERSTOCK MANAGING DIRECTOR, PAINE WEBBER Refinance debt, particularly if you're a noninvestment-grade company with 13% or 14% debt, as so many companies are now. You can cut 400 or 500 basis points off your borrowing rate. Look also at new incentives for employees. Paying people a lot of money has covered a multitude of sins in the past. Now, especially in my industry, but elsewhere too, the big bucks just aren't there. So it's crucial to create an environment where people really want to come to work and make the best contribution they possibly can. You do that by recognizing people's efforts and their successes, and by communicating effectively and listening carefully. It's okay to cut people's pay or even lay people off as long as employees perceive that you're behaving logically, consistently, and fairly. If they don't, you're in serious trouble.

Bet on Stable Prices WAYNE ANGELL GOVERNOR, FEDERAL RESERVE Managements need to recognize the determination of the Federal Reserve Board to achieve price-level stability. When they make contracts with suppliers of labor or materials, they base them on an estimate of their ability to price their products competitively in a world market. If they expect prices to rise, they make agreements with suppliers on that basis. Then, if they have misjudged monetary policy, they will have trouble passing those costs along and sales will be poor. But if businesses accurately anticipate monetary restraint, they will be more constrained in what they pay suppliers. This means they will be able to sell their products in a competitive world market and keep volume and employment high. So the employment and output loss that come from monetary restraint occur only because business anticipated some other policy.

Control Yourself PAUL HARVEY AMERICA'S NO. 1 RADIO NEWSCASTER Business must police itself better or government will usurp businessmen's prerogatives, and free enterprise will become just that much less free. Self- government without self-discipline doesn't work. We never heard of problems in savings and loans . . . until deregulation. Then some, unrestrained, got greedy. In North Bergen, New Jersey, a manufacturer of fluorescent lamps had been claiming his lamplight can cure the blues, reduce cavities, and enhance sex. So the FDA had to step on him. Verse two of America the Beautiful includes these words: ''Confirm thy soul in self-control.'' Either we behave voluntarily, or we shall be forced to behave. Government cannot look the other way when a suburban Chicago firm sells the Air Force defective parachute cords.

Charles Watson, professor of management at Miami University, has been five years interviewing chief executive officers of our nation's most successful corporations, including Du Pont, 3M, Alcoa, Dow, Xerox, AT&T, and Whirlpool. His new book, called Managing With Integrity, concludes that successful business leaders adhere to traditional values -- honesty, decency, hard work, kindness, and fair play. More and more, big business is discovering that self- discipline is good for business.

Choose Your Company's Size PETER F. DRUCKER AUTHOR, MANAGEMENT CONSULTANT The advantages of smaller size are becoming very great. Young graduates go to work for giant companies because they have a recruiter on campus and a training program, and three out of five leave within five years. They used to go from one big company to the next. Now they go from a big company to a medium-size company. When you look at who is exporting, it is not the big companies. Yes, GE has done very well with aircraft engines, and Boeing with aircraft, but other than that, practically all the exporters of manufactured goods are medium-size companies, highly specialized. I don't think big companies will disappear. I think that in the future it will be a strategic decision whether you want to be bigger or not, when in the past bigness itself was the goal. Some businesses will have to be very big, but I see more and more businesses where medium size is much better and where it simply diffuses results and destroys profitability to try to be big. It is becoming increasingly important to think through what is the right size.

Rebuild U.S. Manufacturing ROBERT STEMPEL CEO, GENERAL MOTORS The biggest challenge we face is to encourage our political leaders to set some goals to restore economic stability and strength to our domestic manufacturing base. We have to get a long-term vision on this. I think government can help companies come out of this recession with a few cost-effective moves. Take the regulations that were piled on the auto industry in 1991. The deadlines for meeting them need to be stretched out to help reduce the horrendous investment costs we have in the near term. I'm talking about some provisions of the Clean Air Act, regulations regarding safety and air bags and emissions of CFC, the coolant we use in vehicle air conditioners. The second area we have to look at is to realistically address the health care crisis. We need to provide reasonable and cost-effective medical care so we can become internationally competitive and don't have to carry a disproportionate share of the costs. Look, for example, at the impact of new accounting rules for retiree health care on our heavy manufacturing industries: autos, steel, rubber. That's going to cost GM between $16 billion and $24 billion. Finally, what I'd like to see in 1992 is, How do we get us moving again? The U.S. really has to get started again. This last couple of months we've seen everybody fixing their bottom lines by restructuring and cutting jobs. I think we need some growth in the U.S. and the creation of more jobs so we can have a good quality of life. One of the things I am hopeful the Administration can do is get right at implementing provisions of the transportation bill so we can start rebuilding and repairing roads and bridges, and put people to work.

Do More Than Win DESMOND TUTU ARCHBISHOP OF CAPETOWN You are powerful people. You can make this world a better place where business decisions and methods take account of right and wrong as well as profitability. One where we can say, ''Hey, we are made for togetherness, for family, for fellowship. We are created to be the children of God, and we are made for love, for joy and laughter, for peace and reconciliation, for | compassion, for caring, for sharing, for humanity.'' If victory and success are all that matter, we may indeed win, but should it be at exorbitant cost? Is it worth it to have won but to have lost out in the incredible pressures on family, on relationships, and in terms of personal integrity -- and even all those stomach ulcers and sleepless nights? As powerful business people, your social and political conscience is crucial. You must now make a stand on important issues: the environment and ecology, affirmative action, sexual harassment, racism and sexism, the arms race, poverty, the obligations of the affluent West to its less-well-off sisters and brothers elsewhere. Your decisions affect people -- people who are of infinite worth because they are created in the image of God. God depends on you.