This handbook describes the methodology of the Investing in People Project, conducted in Connecticut, Iowa, Kentucky, Washington, and West Virginia to help states in assessing their current work force and economic development systems and in building more comprehensive, integrated, and effective strategies for improving the work force. The handbook describes what happened to the state teams during the project, summarizes what the teams achieved, and provides lessons for other states that may wish to undertake such a project. Case studies from the five state projects are included. Appendixes to the guide provide Investing in People Project guidelines for building successful teams and examples of work force development policy initiatives from Germany, Kansas, Kentucky, Oklahoma, Oregon, Pennsylvania, and South Carolina. A bibliography lists 18 references. (KC)