Executive branch: The top job has grown so complex that CEOs practically need a presidential cabinet to stay informed and on their toes - Management - Chief Executive Officers/United States - Statistical Data Included

Chief Executive, The, Feb, 2002 by Jennifer Pellet

What a difference a crisis makes. Before September 11, Transportation Secretary Norman Mineta was strictly a behind-the-scenes player. But as a hijacked plane hurtled toward Washington, Mineta was hustled under guard to a secret bunker. There he manned an open line to the Federal Aviation Administration, relaying the distance countdown, "20 miles, 10 miles, the Pentagon's been hit," to Vice President Dick Cheney, who was seated nearby. Without conferring with Cheney, Mineta immediately gave the order to ground the 4,800 planes in the air and shut down airports nationwide, a decision that likely foiled other terrorist plots, according to reports from both the Bush administration and the FBI.

Mineta's part in managing that crisis underscores the crucial roles played by the handpicked members of the presidential cabinet. Suddenly, in the aftermath of the hijackings and during the anthrax threats, other cabinet members, including Secretary of State Colin Powell, Defense Secretary Donald Rumsfeld, Health and Human Services Secretary Tommy Thompson, Attorney General John Ashcroft and the newly appointed Office of Homeland Security, Tom Ride, have been thrust into the news daily.

Clearly, the president and the nation are relying on this team of experienced leaders entrusted with clearly delineated areas of responsibility, each of whom is empowered to make critical decisions. Sound familiar? That may well be because these cabinet members function like today's management teams, albeit on a larger scale. "I view my management team members as trusted colleagues, advisers and teammates, and I have to believe that our president views his cabinet the same way," says Robert Selander, CEO of MasterCard International, based in Purchase, N.Y. "The individuals have important experiences and skills that make them not only qualified for their jobs, but qualified to participate in a broader policy-making leadership team."

In fact, the events that thrust government leaders into crisis mode had a similar impact in corporations as CEOs and their cabinets rushed to cope with the repercussions of terrorist attacks. At Merck, the global pharmaceutical powerhouse, for example, the prospect of bioterrorism, specifically the threat of smallpox, spurred immediate action within multiple divisions, none of which wasted time waiting for one of their twice-monthly management meetings before leaping into motion. "Without a formal request from the government, our research organization and our vaccine division asked themselves, 'What do we have to do to put together the capability to respond to this?' They just started moving," reports Ray Gilmartin, CEO of the $40.3 billion Merck, based in Whitehouse Station, N.J.

A team of experienced officers and a collaborative corporate culture, asserts Gilmartin, enabled the rapid response. "Because of the working relationships between manufacturing, marketing and research," he explains, "they were able to work out an entire program, very much self-initiated, within days." Ultimately, however, Merck and other U.S. manufacturers were outbid by British-based Acambis PLC, which in November was awarded a $428 million contract to produce smallpox vaccines.

At MasterCard, it was the financial ramifications of a virtual halt in personal and business travel that sent the executive team scurrying. "On September 11," recalls Selander, "we were in the final stages of finishing this year's forecasts and our budget for next year. We took both documents and threw them in the wastebasket because there was a substantial change in the growth trajectory of our business. So everyone went back and found ways to take $35 million out of operating expenses and rethink resource allocations. It meant people who had expectations and plans in place had to redo all of that and give up a lot of things."

Some teams would be hard-pressed to undertake such an arduous task without infighting. At MasterCard, which pulled in $1.57 billion in revenues last year, the cuts that top execs brought back to the table were more than ample. "We were able to do it without pulling teeth," says Selander. "In fact, we were actually able to give some resources, people and money back to certain areas."

Both Selander and Gilmartin are quick to point out that the post-September 11 story could have been very different. "It was not as angst-causing a process as it would have been [before we restructured the executive team] three or four years ago, when I would have been personally saying, you have to take this out and that out," Selander asserts.

Without the right people around the table, Gilmartin adds, urging cabinet members to be proactive can be disastrous. "We encourage individual initiative, so that we can move and catch up later in terms of what we are doing, because we have a common understanding of what we're trying to do," he says. "But you have to have the right people, otherwise there's risk in running an organization this way."

Yet picking the "right" people and team structure is no easy task. In fact, "it's a critical issue in why some CEOs fail," notes Noel Tichy, a former GE executive and author of the book Leadership Engine. "It's not because of a lack of brainpower at the top; it's that they don't exercise power to get an aligned team fast enough. In all revolutions, it's your generals that get you. It's what Jacques Nasser wrestled with, and it's what killed Bob Allen at AT&T."