Choosing the wrong partner in the New Economy can be more damaging than choosing none at all.

Kelly credits the company's corporate culture, which has always emphasized promotion from within, for much of its success in the transition. "How do we maximize human performance in that environment? In lots of ways, including extensive training," he says. "But our drivers are part of our DNA. I heard someone asked a UPS driver that question recently, and she said, 'You get it from each other.' That is a concept and philosophy that is not only effective in the New Economy, it is exportable."

Managing the transition to the New Economy involves making choices about partners, as well. William Nussey, CEO of iXL, an Atlanta-based strategic Internet services firm that advises companies making the transition from bricks to clicks, says that the distribution of power and control is no longer clear in the New Economy. As a result, a CEO's ability to build trust and relationships is a distinguishing competitive advantage.

However, choosing the wrong partner can be even more damaging than choosing none at all. A case in point is the recent fall from grace of Toysmart.com Inc., a one-time high-flyer in crowded and competitive online toy market.

Toysmart had partnered with Walt Disney Co., which invested $50 million and took a 60% stake in the toy retailer. Given Disney's strong position in the U.S. family consumer market-Toys mart's prime target-it seemed a match made in heaven. It turned out to be anything but.

Although the deal was reached in May 1999, it was not announced and Toysmart did not get any cash from its new partner until August. Toysmart had to delay its marketing spending, which meant losing its chance to convert customers in the pre-Christmas buying season, Toysmart CEO David Lord said at an IT industry event in June of this year. Disney also did not approve Toysmart's sale of key products such as Disney books and baby items until after the crucial holiday selling season had ended.

Analysts finger a culture clash between the two companies as the major culprit behind the failed partnership. They say Disney took longer to make decisions and operated much more bureaucratically than its dot-com partner. Toysmart, for its part, was not as focused on issues of major concern to traditional retailers, such as profits and inventory turns. And they expect to see more such culture clashes in the future.