Is the pendulum swinging?

Chief Executive, The, July, 2005 by William J. Holstein

Most chief executives I know are stunned by the pounding the media has been dishing out to all CEOs, not just the scoundrels at Enron and MCI/Worldcom. When I have asked them to be visible on an issue, several have said. "I'm just going to let my numbers do the talking for me."

But suddenly, there are some very interesting straws in the wind. The fact that New York Attorney General Eliot Spitzer was not able to win a conviction in the Theodore Sihpol case is big news because it was the first real courtroom test of the Spitzer onslaught. The pending appointment of Christopher Cox as head of the Securities and Exchange Commission, replacing Bill Donaldson, is also hugely important. At a bare minimum, a new tone of enforcement and regulation will be set.

Underlying all this are the first signs in a shift in the media's own debate. It's extremely interesting that Thomas L. Friedman, foreign affairs columnist for The New York Times and author of a new book entitled The World is Flat, has written a column called "CEO's, M.I.A." Friedman is critical of CEOs, but it's not because he thinks they're corrupt.

Rather, he is calling for leadership from CEOs to help reinforce U.S. competitiveness. Here's just a taste of what he said: "America faces a huge set of challenges if it is going to retain its competitive edge. As a nation, we have a mounting education deficit, energy deficit, budget deficit, health care deficit and ambition deficit. The administration is in denial on this, and Congress is off on Mars."

It's not an entirely original thought. In fact, we wrote about it in last month's cover story, "Where is Our Economic Policy?" But it was particularly interesting to see Friedman's take appearing in The New York Times, which has spent the past several years on a crusade against CEOs. Perhaps it's a signal that some critics are waking up to the fact that the U.S. faces a daunting competitive challenge--and actually needs CEOs who aren't so afraid of being investigated and prosecuted that they can provide leadership.

If the overall climate of opinion is shifting, I'd argue that "competitiveness" is the key word in helping achieve that. If CEOs turn up the volume on issues of competitiveness, they may be able to inject more urgency into their own organizations and achieve greater gains in innovation and productivity. Look at what Jim Owens has done at Caterpillar. (See "Cat is Back," page 18.)

Corporate leaders may also be able to cajole and prod Washington into taking some of the tough steps that may be necessary on health care, tort reform, energy and so many other fronts. At the same time, CEOs could begin to repair the enormous damage that's been done to their standing in our body politic. Even though Friedman is late in waking up to the global challenge, I agree that CEOs can do the country--and themselves--a great service by coming out of hiding and re-engaging with the media on the issue of competitiveness.