The Highs and Lows of BEING A CEO - chief executive officer - Brief Article

Chief Executive, The, August, 2001 by Julie Fields, Eric Young

Of all the challenges a CEO faces today, simply showing up to accept the job would hardly rank near the top of anyone's list. But for L. Dennis Kozlowski of Tyco International, even that ceremonial occasion proved an endurance test of sorts.

It was July 1992, and Kozlowski was in New York City on his way to meet with Tyco's board of directors when, in the middle of Lexington Avenue, the former high school athlete tripped and fell. His hands in his pockets, Kozlowski landed on his shoulder, and as he sat up he felt a shooting pain. His shoulder had popped out of its socket.

A passerby called an ambulance, which took Kozlowski to an emergency room. "They pulled my shoulder out and popped it back into place," recalls the now 51-year-old CEO. Hours late, he rushed to the board meeting, arriving as it was breaking up. "Did I still get the job?" he asked. "Yes," a board member replied, "in spite of yourself."

While the demands on chief executives rarely involve physical pain, Kozlowski's tumble illustrates a fact of life for corporate warriors today: Problems with potentially serious consequences can, and do, arise when least expected. But unlike the remedy for a dislocated shoulder, the challenges related to running a company often lack a quick or clear-cut fix. Or, as Kozlowski puts it: "The things that reach my desk are all the gray areas. If something's black and white, then people can figure that out themselves."

Indeed, if there is one constant in the life of a CEO it is uncertainty. As the world shrinks, it becomes more complex. The U.S. economy seems poised to rebound one moment, then sputters the next. And public markets swing wildly on rumors and sound bites. Yet the pressures on chief executives to deal swiftly with setbacks and produce reliable earnings for Wall Street are greater than ever.

All of this is happening, of course, at an ever-increasing speed. Shareholders have short fuses, and boards are quick to oust even seasoned leaders who fail to perform.

Obviously, top corporate jobs are not without their rewards. Compensation from salaries and stock options can be astronomical, and media attention can boost the profiles of high-flying CEOs into the stratosphere of rock stars.

Few CEOs have experienced as many highs and lows as Kozlowski. Raised in Newark, NJ, the son of a police detective, Kozlowski rose through the ranks at Tyco, and as CEO has overseen hundreds of successful acquisitions and phenomenal revenue growth. Along the way, he reduced the company's dependence on the cyclical construction business by expanding its holdings in security services and health care. In July, Tyco reported a 22 percent rise in net income in its fiscal third quarter, and forecast continued profit growth for the year, despite weakness in its electronic business. And in August, Tyco agreed to acquire Sensormatic Electronics for about $2.18 billion in stock, and $116 million in debt.

Nonetheless, Kozlowski can't seem to shake skepticism about Tyco's ability to succeed as a conglomerate. The shadows of ITT and AT&T loom large, although Kozlowski prefers to draw comparisons to another conglomerate that has performed well - General Electric.

But those doubts pale in comparison to accusations, aired in late 1999, that Tyco had used improper accounting practices to inflate earnings. These claims, by money manager and short-seller David W. Tice, spurred a Securities and Exchange Commission inquiry and cut Tyco's market capitalization in half. "Once the stock started tumbling, there was a feeding frenzy," says Kozlowski, who considers the episode a low point in his career. In July 2000, the company, which strongly denied the accusations, won vindication when the SEC closed its investigation and took no action.

In facing such trials Kozlowski is not alone. CEOs confront hundreds, even thousands, of decisions in a day. They fire customers, and crunch mind-numbing quantities of numbers; they manage hungry investors and employees who want more.

If anything, the tough economic climate has only heightened the peaks and valleys, from landing a major new account to coping with a delisting from the NASDAQ. Ten CEOs recently talked with Chief Erecutive about these experiences and other, more subtle ones, in summing up the highs and lows of their jobs. What follows are their stories.