Top 12 traits of today's CEO - Management

Chief Executive, The, Nov, 1995 by Thomas J. Neff

The days of micromanagement and iron-fisted CEOs are gone. Today's executives need a new bag of skills to cope with the challenges of globalization, empowerment, and technological innovation.

Eastman Kodak's George M.C. Fisher said it best a few years ago, when he was chief executive of Motorola: "You don't run a company like this. You cooperatively grow it."

That's certainly a departure from the past few decades, when Harold Geneen's micromanagement at ITT and Roger Smith's anti-labor practices at General Motors were standard procedures in American business.

Today's CEOs are vastly different from those who reigned before 1985. Executives now need a host of new skills to deal with a world ruled by re-engineering, empowerment, increasingly stringent corporate governance, globalization, and fast-paced technological innovation. For example, Alexander J. Trotman of Ford Motor Co. currently is putting his operating experience, global outlook, and technological knowledge to good use in building his vision of the 21st century - integrated worldwide manufacturing of cars and trucks - a goal that would have been impossible to achieve a decade ago.

FOCUS ON COMPETENCE

Granted, CEOs who follow George Fisher's philosophy are ahead of the game, but there's a lot more to it. Though there is no such thing as a "perfect" CEO, corporate America tends to admire those who possess certain core traits. Since 1985, Spencer Stuart has placed dozens of CEOs at the head of Fortune 500 companies. Here are the 12 qualities we most often look for in our searches for those who have the potential to lead today's businesses successfully into the next millennium.

Balance of strategic vision and operating experience. A prime candidate combines hands-on experience with a clear vision of a company's direction. For example, Larry Bossidy of Allied Signal oversaw nearly every business in General Electric's $60 billion portfolio before he took the helm at Allied Signal. Conversely, Apple founder Steve Jobs and Compaq founder Rod Canion had extraordinary vision but less strong operating skills.

Leadership and team building. An ideal chief has experience running a significant business as a CEO or COO, or has been a key group executive of a large diversified unit. This person also must be capable of managing board and stakeholder relations. An outstanding leader, team builder, and motivator was the late Mike Walsh of Tenneco. By contrast, Frank Lorenzo, ex-CEO of Continental Airlines, knew how to save an airline but couldn't lead his employees to the promised skies.

Performance-driven personality. A CEO with an eye on tomorrow has a strong bottom-line orientation and a successful track record of results. GE's Jack Welch earned the nickname "Neutron Jack" for his early attacks on GE's bureaucracy, but he turned the corporation into a model of a 21st century company. On the other hand, Kay Whitmore, former CEO of Eastman Kodak, was engulfed by a bureaucracy and couldn't restructure fast enough to satisfy investors and the board.

Good judgment anchored by prudent risk taking. A CEO who possesses this rare quality acts boldly, with courage, tenacity, and persistence, but also is objective enough to realize when a cause is lost. Charlotte Beers of Ogilvy & Mather fits this profile. Her decision to take on the $500 million worldwide IBM advertising business was a bet-the-firm move that appears to be working. However, Ross Johnson, former CEO of RJR Nabisco, was not so skillful. Blinded by the perquisites of his position, he lost control of his management team, and ultimately, his company.

Financial acumen. A CEO must know how to value hard and soft assets for what they are worth and leverage them outright or through joint ventures and alliances. For instance, David Johnson of Campbell Soup took a company that had grown only 7 percent annually from 1985 to 1989 and propelled it into double digits with his "20-20-20 business vision." His goal: to achieve a 20 percent annual growth in earnings per share, at least 20 percent return on equity, and a cash return on assets of 20 percent. To achieve this, he spun off 14 marginal operations in two years, pushed for efficiencies, and introduced a number of new products.

An executive who apparently lacked such financial savvy was Harry Figgie Jr., formerly of Figgie International. The conglomerate ran into a cash squeeze in 1993, forcing new CEO Jack Reilly to put 15 of the company's 22 businesses on the block to pay off $250 million in bank loans and leases.

International/global experience. A CEO moving toward the 21st century must have a global perspective combined with significant international market experience. CEO Roberto C. Goizueta has molded Coca-Cola into, perhaps, the first truly global marketing company. Goizueta's opposite is Lee Iacocca, former chairman and CEO of Chrysler, who was a vocal protectionist and "Japan-basher." In fairness to Iacocca, however, he took his stance partially to protect Chrysler during the company's worst hours.