The National Governors' Association's Making America Work initiative had a dual focus. Five task forces spent a year developing action agendas to address five barriers to self-sufficiency and productivity: teenage pregnancy, adult illiteracy, welfare dependency, alcohol and drug abuse, and dropping out of school. The second phase of the initiative dealt with the need to develop productive workers, create efficient workplaces, and support responsive communities. This report describes the actions taken by selected states with regard to these issues over the past year. The report examines state initiatives in the following areas: changing the way states define and solve problems (focusing on the interrelated nature of problems and the special needs of different age groups); changing the way states do business (assessing problems and establishing priorities, targeting individuals and tailoring services, sorting out responsibilities, and forging collaboration); developing productive workers (increasing program flexibility and responsiveness, and reorienting training to reinforce economic growth); developing efficient workplaces (stimulating technology development, encouraging labor-management cooperation, and assisting entrepreneurs); and supporting community diversification. (MN)