CEO Awards - CEO Best Practices - Most

Transcription

Content
P06 - How to Evaluate a CEO?
The Top 20 CEO Questions
P10 - How to Evaluate the Board?
The Board of Directors Scorecard
P12 - Increasing Your Company’s Future Value
An Interview with Leif Klingborg - Author of K-concept
P16 - CEO Awards 2010 - Most Respected CEOs
CEO Profiles
• Carlos Ghosn - CEO of Nissan-Renault
• Christopher Conner - CEO of Sherwin-Williams
• David Blair - CEO of Catalyst Health Solutions
• David Simon - CEO of Simon Property Group
• Eric Schmidt - CEO of Google Inc
• Jeff Joerres CEO of Manpower Inc
• John Wren - CEO of Omnicom Group
• Joseph Saunders - CEO of Visa Inc
• John Stumpf - CEO Wells Fargo & Company
• Matt Rubel - CEO of Collective Brands
• Michael Dan - CEO of Brinks Inc
• Mike Morris - CEO American Electric Power
• Muhammad Yunus - CEO Grameen Bank
• Paul Diaz - CEO of Kindred Healthcare
• Robert Dutkowsky - CEO of Tech Data Corporation
• Steve Jobs CEO of Apple Inc
• Timothy Manganello - CEO of BorgWarner Inc
• Tony Earley - CEO of DTE Energy
P64 - CEO Awards 2010 - CEO Lessons
Lessons from the Most Respected CEOs
Q4 / 2010 | www.ceoqmagazine.com
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Editor’s Letter
Welcome to the CEO Q Magazine
CEO Quarterly is a global executive magazine. Our mission is to
encourage management best practices research and dissemination.
We pursue this mission by publishing the work of top management
experts in a format targeting business leaders.
Every quarter, the editorial team identifies management best practices
and lessons from the world’s most successful CEOs and their teams.
The goal is to provide C-level readers with new perspectives, insights,
intelligence reports, expert opinions, objective analysis, case studies,
white papers, and decision-making tools to help them address emerging
opportunities and challenges.
The CEO Q editorial philosophy is to focus on breakthroughs in
management thought and practice. The authors are required to frame
their findings in a format that saves the CEOs’ valuable time and effort
in developing and aligning their executive teams.
CEO Q is not a news magazine. It is a CEO continuing education
and organizational development tool. CEOs can share the magazine
articles with their teams to promote best practices, with the board of
directors to advocate new strategies, and with their clients to promote
new products or services.
Special Edition - CEO Awards
In addition to our regular executive editions, we occasionally publish
special management reports on major global or regional business
opportunities, challenges, lessons and success stories. In this edition,
CEO Q honors the Most Respect CEOs by profiling their achievements
and sharing some of their executive insights. These are the CEOs to
learn about and learn from. The research behind the CEO Awards was
conducted in partnership with the International Institute of Management.
IIM is a best practices research and executive education institute based
in Las Vegas, Nevada, USA.
CEO Q Sponsorship
This edition of CEO Q magazine is sponsored by the International
Institute of Management (www.iim-edu.org) and its CEO Club (www.
ceoclub.eu) We encourage you to learn more about the sponsors who
made this special edition possible.
04
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How to Evaluate a CEO?
The Top 20 CEO Questions
A Self-Assessment Tool
International Institute of Management
The proper evaluation of the CEO
and the executive team is critical to
the company’s performance. The
evaluation framework of the CEO
can be summarized into two major
areas; business strategy formulation
and execution.
Med Jones
President of
International Institute
of Management (IIM)
www.iim-edu.org
According to a best practices study
conducted by the International
Institute of Management, the CEO’s
key challenge in formulating and
executing the business strategy is
not in finding answers to the tough
questions, the challenge is in asking
the right questions. Asking the wrong
questions will result in skewed
operational or strategic plans.
IIM developed a list of the top 100
Board and CEO questions called
the IIM100 Test. These questions
provide a 360 degree view of the
business.
IIM100 questions can be used as a
self-assessment test, as a planning
session tool or as a framework for
evaluating
potential
CEO/CXO
candidates for succession planning.
In this article, IIM shares the top 10
questions that every board must ask
its CEO and the top 10 questions
that every CEO must ask his/her
executive team.
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The top 10 questions every board
must ask its CEO:
1. Are we in the right business and
markets? What are the growth
areas to invest in and declining
areas to divest?
2. What are the economic and
market research data that
support our strategy?
3. What
are
our
strengths,
weaknesses, opportunities and
threats (SWOTs)?
4. What are we doing to address
each one of the SWOTs?
5. What
are
our
core
competencies? How we can
leverage them?
6. What are the key strategic and
operational risks? How do we
manage them?
7. What are our key performance
targets?
8. How do we plan to achieve those
targets?
9. How can we build a sustainable
competitive advantage?
10.How
can
we
improve
governance,
control
and
reporting functions?
The top 10 questions every CEO
must ask her/his executive team:
1. Do we have a big growth idea?
2. Do we have the right growth
engine
(business
model,
infrastructure,
resources and network)?
3. Does our operations management efficiently
and effectively support our performance targets?
How do we know?
4. Which vendors, partners, clients and employees
are delivering the real value? How do we get
more out of the rest?
5. What are the key SWOTs in each function, and
how do you manage them?
6. How can we build a sustainable competitive
advantage in each function (Marketing, R&D,
SCM, IT, etc)?
7. What initiatives/programs/projects are needed
to execute our strategy? How do we ensure
that they are aligned and executed with the right
quality, on time and within budget?
8. What are the key performance targets and
incentives for each executive (CMO, CFO, COO,
CIO, and CHO)?
9. Do we have the appropriate organization in
place to meet those targets? (IIM’s 5D strategy
framework: budget, tools, products, processes
and people)?
10.How can we communicate our plans better to
our stakeholders in order to win their support
and achieve our goals?
Every CEO/CXO must be able to provide the
answers to the preceding questions, readily, clearly,
and precisely. The executive team members must
be able to provide qualitative and quantitative
answers.
The CEO’s key challenge is not in finding
answers to the tough questions, the
challenge is in asking the right questions.
Asking the wrong questions will result in
skewed strategic or operational plans.
If the executive team is not able to answer all of
the preceding questions, then the leadership team
suffers from management blind spots or a potential
weakness.
IIM developed strategic executive retreat and
coaching programs to help the CEOs and their
executives in answering these questions. The goal
of the strategic retreat programs is to provide crossfunctional collaboration to ensure a 360 degree
business view and formulate comprehensive
executive action plan.
The strategic retreat sessions are facilitated by
executive leadership and strategy experts. The role
of the experts is to facilitate the planning sessions
and provide an external point of view to objectively
validate the answers to each question. The strategic
planning program can be followed by custom
corporate action-learning and support programs
to help the management teams in executing and
aligning the formulated strategies.
Which vendors, partners, clients and
employees are delivering the real value?
How do we get more out of the rest?
What are the key strategic and
operational risks? How do we manage
them?
What initiatives/programs/projects are
needed to execute our strategy? How
do we ensure that they are aligned and
executed with the right quality, on time
and within budget?
If the executive team is not able to
answer all of the preceding questions,
then the leadership team suffers from
management blind spots.
About the Author
Med Jones, is the President of the International
Institute of Management (IIM). IIM is a management
best practices research and education institute. IIM
provides board and executive support services,
strategic planning retreats and custom corporate
training courses for the Global Fortune 1000
companies and governments. To learn more, please
visit: www.iim-edu.org
07
02
How to Evaluate the
Board of Directors?
The Board of Directors Scorecard
One of the by-products of the global financial
crisis is that more attention is being directed
toward the board of directors. There is a significant
rise in investors’ dissatisfaction, class-action
lawsuits and shareholder activism. Shareholders’
complaints include issues such as excessive
executive compensation, conflict of interest, lack of
governance, and passive participation of the board
members.
President Barack Obama’s reform of financial
regulations brings more focus to prompt corrective
actions by federal banking agencies including one
or more of the following;
• Improving management
• Ordering a new election for the institution’s board
of directors; and/or
• Dismissing directors or senior executive officers.
While the target of the new regulations is the
financial sector, the influence of these regulations
will also impact publicly traded companies.
Wall Street financial analysts, news media and
internet blogs are paying more attention to executive
compensation in relationship to the performance of
the company.
There are several infamous examples where
some boards compensated their CEOs with
hundreds of millions of dollars even though the
company lost money during their leadership. The
boards are accused, in these cases, as either
lacking the competence or the will to govern CEO
compensation.
In these tough economic times, investors are
becoming more proactive; they cannot afford to leave
the governance of their investments to unqualified
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directors or to special interest groups.
Boards are given more power to govern and control
the performance of the CEO and the corporation.
Investors are starting to ask the following
questions:
• Are the interests of the board members aligned
with the shareholders or the CEO?
• Are the board members qualified to govern on
behalf of the shareholders?
• How does the board evaluate the company’s
direction?
• Is the board of directors required to direct the
company or just govern the CEO?
• Does the board have the right skill-set, decisionmaking processes, and tools?
The two questions that board members must ask
themselves are:
• Do we have the right information and tools to
manage and improve our own performance as a
governing board?
• Do we have the power, knowledge and tools
to conduct a comprehensive and fair CEO
evaluation?
Few organizations have come up with formal
solutions to help investors evaluate both their CEOs
and their board of directors. A number of leading
experts suggest board self-assessments. This
solution involves the use of management evaluation
frameworks that only need to be applied once or
twice a year. These formal evaluation frameworks
not only define and clarify the overall standards
of performance for the board, they also serve as
educational, collaborative and consensus-building
tools.
The International Institute of Management created
a board of directors scorecard as an effective selfassessment tool. The scorecard covers the essential
elements of the board’s duties and qualifications and
is therefore a good starting point for an evaluation. In
addition, the scorecard covers the board’s structure,
culture, performance standards, quality of meetings,
and strategic planning processes.
Top 12 Board Questions
The following partial list provides a sample of the
evaluation questions:
1. Is there a formal policy document that defines the
standards and procedures for the qualification,
duties, nomination and selection of the board of
directors?
2. What is the qualification of the chairperson of
the board?
• His/her independence?
• What is his/her educational and industry
background?
• His/her board leadership and networking
skills?
3. What is the optimal size of the board?
• The number of board members can range
from 3-33 depending on the company’s size.
The average number is 9 members. How
does the size and the geographic location
help or limit board communications?
4. What is the composition of the board?
• What knowledge and qualifications does
each member bring to the board?
• What value added networks do they bring to
the board?
5. How independent is the board?
• The compensation and the audit committees
must be made up of independent members.
What percentage are insiders vs. outsiders?
• What special interest groups do they
represent?
• Is their compensation aligned with the
company’s performance?
• Do the members have a conflict of
interest? Are they declared, monitored and
managed?
6. Are the board members fully aware of their legal
and ethical duties?
7. Is most of the CEO’s compensation performancebased?
8. Are the inside directors qualified to review
and approve high-level budgets prepared by
upper management? Are they qualified for
monitoring business strategy and core corporate
initiatives?
9. Are the outside directors qualified to review and
approve the strategic direction and key corporate
policies?
10.Does the board evaluate their own performance
on a regular basis?
11. How often and how well does the board
communicate with investors?
12.How often and how well does the board
communicate with the CEO and the executive
team? Is the communication style active or
passive? Political or cooperative?
Every board must be able to provide clear answers
to the preceding questions. If the board is not able
to answer all of the preceding questions, then the
board members suffer from governance blind spots
or a potential weakness. IIM created strategic
board retreats and development programs to help
the board and their CEOs in answering these
questions. In addition to developing board-level
governance competencies, the goal of the strategic
retreat programs is to improve the board and CEO
collaboration, ensure a 360 degree business view
and develop proper governance action plans.
The strategic retreat sessions are facilitated by
leadership and governance experts. The role of
the experts is to facilitate the planning sessions
and provide an external point of view to objectively
validate the answers to each question.
These formal evaluation frameworks
not only define and clarify the overall
standards of performance for the
board, they also serve as educational,
collaborative and consensus-building
tools.
About the Author
International Institute of Management is a
management best practices research and education
institute. IIM provides board and executive support
services, strategic planning retreats and custom
corporate training courses for the Global Fortune
1000 companies and governments. To learn more,
please visit: www.iim-edu.org
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Book Author Interview
Increasing Your Company’s Future Value
Leif Klingborg
Author of K-concept
CEO Q: How do you see your role as a leader in
your company?
Klingborg: My role as leader is to connect everyone
in my team to our future opportunities and then
support them, step-by-step, to move there. The
closer our hearts and minds are connected to our
future, the more we can grow and develop our
potential. Responsible leaders “gather their team” to
build a common vision of the team’s ambition, value
stream, future market, how to cooperate and so on.
They regularly secure discussions supporting the
common progress toward desired targets.
CEO Q: How do you build momentum to achieve
results?
Klingborg: Successful leaders build momentum in
each project and at each level of the organization
by:
• Securing choices about the company’s direction;
“who we want to be” and “what we are building
on”.
• Identifying and developing the unique
competences that will bring the company toward
the edge of our market.
• Communicating values important for building
solid progress.
• Creating supportive blueprints of how to
accomplish this momentum in a well-organized
way.
CEO Q: What is the role of training and support in
achieving company results?
Klingborg: The CEO is supported by key team
leaders with the goal of mobilizing all the company’s
human resources to become the driving force in
building their “Interesting Tomorrow”. To accelerate
the momentum every co-worker needs to be more
self-dependent, take more initiative, take on more
responsibility and extend their desire to learn. Coworkers need support and training to achieve this!
They want to release their potential and grow in
their profession. The team leader’s role is to develop
training and support to close this gap and make the
difference. More skilled and better trained leaders
in an organization will accelerate the development
of the human capital and the company’s overall
performance. The balance between short-term
and long-term team development is crucial to our
ambition of building future value.
CEO Q: What are the team’s expectations from their
leader?
Klingborg: My experience sums up the workforce
expectations as follows; “We have lots of ambition
inside our teams and we want our leaders to keep
up our positive constructive mindset about our
opportunities. We expect them to take responsibility
so we will have the best plan and make sure that
we are connected with the top expertise in our
area. The better our leaders facilitate the common
thinking process within our team, and support us
with external connections, the faster we will move.”
Team members want to feel ownership in their
projects. People are expecting to be helped with
this foundation; the context in which they deliver.
Today, people have access to all crucial knowledge
available in the world and the tools to connect and
interact in new ways. They still need a method, a
way of cooperating, that is fast, efficient and will
support interaction with their surroundings.
13
CEO Q: How do you develop future leaders?
Klingborg: Great companies are eager to make
choices about how to act today and in the future.
They develop leadership behavior and company
architecture to better fit with technological
development opportunities and new behaviors that
our environment is challenging us to find. Every
generation’s needs are different. Each wants to find
their unique style, way of thinking, communicating
and acting. Leadership is about creating and
facilitating the common thinking process of the
people in the loop, it’s about them, it’s a living thing
and it’s about today and the future.
CEO Q: Can you share with us some of your key
leadership concepts?
Klingborg: Understanding and participation are
two key concepts when we first involve everyone.
By providing insight and including them, each
team member becomes an empowered part of
the decision making process. Then they will make
individual choices connected to the common
direction of the team. There are choices behind
every developmental step. Building “Our Tomorrow”
will happen when we establish a learningdevelopment process better and faster than the
competition. Team members look for individual
discussions/coaching about their contributions, their
competences, their role and how to follow the plan.
They feel empowerment when leaders nurture their
“We-spirit”; they want cohesion, diversity, hope and
an environment filled with energy and constructive
ideas.
CEO Q: What is the best way to achieve a unified
direction?
Klingborg: The team will get needed perspectives
when their leaders regularly take the initiative to
look from the outside in: Where are they currently
in their process? How do they feel, think and act?
They receive crucial help to analyze, package and
learn from the past. They grow in understanding
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and will be even more united about the next step
in their progress. We are on the right track when
our foundation increases cooperation and builds
up cohesive teams and team members’ selfconfidence. Feeling strong, safe and secure in
their working situation. The co-workers’ ambition of
connecting with the market edge will grow. We are
always on our way from yesterday toward tomorrow,
somewhere between the old and the new! We know
our direction!
CEO Q: How best to train the leaders?
Klingborg: Co-workers want their leaders trained
for:
•
•
•
•
Continually growing team members’ and teams’
brainpower in their niche.
Developing the emotional strength needed to be
proactive in various situations.
Growing social capacity within the team, building
and developing relationships in every important
field and direction.
Increasing individuals’ and teams’ understanding
how to stay fair, building trust and credibility in
the market.
About Klingborg
Klingborg Consulting serves companies that have
highly complex and challenging development
processes. Klingborg’s experience comes from
cooperating with more than 20,000 leaders. The
founder, Leif Klingborg, known as the “leader of
leaders”, has successfully supported executives,
leaders and world-class coaches. He is also the
creator of the K-concept, a successful method of
mentoring leaders to accelerate the movement
toward their organization’s goals. Since 2000, Leif
has been deeply involved in two renewable energy
projects, seabased.com and verticalwind.se.
Klingborg was awarded finalist honor in the 2010
International Book Awards. Klingborg lives and work
out of Stockholm, Sweden. He can be reached at
www.klingborg.com
CEO Awards
Most Respected CEOs
Welcome to the 2010 CEO Awards. The “Most
Respected CEOs” edition is a collaborative
project between CEO Quarterly Magazine and the
International Institute of Management.
CEOs had a difficult year in 2009. The financial and
economic crises caused a great deal of damage
to the confidence of investors, consumers and
employees. CEOs had to make difficult decisions to
deal with declining revenues and layoffs, while at the
same time finding innovative ways to re-energize
growth. Several industries were hit the hardest
including financial, auto, housing, retail, media and
advertising industries. In the U.S. alone, more than
100 banks closed and more than 100 media outlets
went bankrupt or sold. Industry survivors were
especially considered for their abilities to lead in
difficult times.
The CEOs real test is not how well they
do during good economic times and
bull markets, but also how they manage
stakeholders’ interests and mitigate risks
during an economic downturn.
What are the CEO Awards selection criteria?
According to Med Jones, the president of
International Institute of Management, “At IIM we
wanted to identify the most respected CEOs, not
the most famous or most liked. The key criterion
for inclusion was the respectability of the CEO by
his/her stakeholders, namely the company’s clients,
employees and investors. Our team researched each
CEO by asking the stakeholders what they thought
of the CEO and his/her performance. While this was
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a subjective measure, we also looked at objective
measures such as the CEO achievements relative
to his or her peers in the industry. Since 2009 was an
exceptionally difficult year, the CEO achievements
were judged less by the latest financial performance
and more by the long-term performance of the
company under the CEO’s leadership.
CEO achievements can be growth in revenues
and profits, turnaround, strategic expansion into
new markets, increasing market share relative to
competition, successful mergers or acquisitions,
introducing new breakthrough products/services,
pioneering new business models, and so on.
Unlike other CEO ranking lists, the CEO is not
judged in absolute terms of the revenue or asset
size of his company. The CEO of a smaller, but
well-managed company that provides higher growth
and better returns for investors is more likely to be
considered for inclusion than the CEO of a much
bigger company that has been losing money and
stock value for several quarters.
While the size of the company is an indicator of
the company’s position in its market and the CEO
abilities, it was not the main criteria for inclusion.
The track performance of the individual CEO is
considered more important.
The company’s performance is judged
relative to its competition and industry
conditions.
For example, banks that overcame the financial
crisis gain higher levels of respectability for surviving
the industry collapse, so the relative performance
expectation is different for each industry. CEOs
who survived the financial crisis received higher
respectability scores from their investors, clients
and employees, even when their revenues or profits
were down in 2009.
• David Blair, CEO of Catalyst Health,
the youngest CEO on the list, who
manages a company of less than
1,000 employees
and generates
more than 3.2 billion in revenues.
This year, we selected 18 CEOs from 17
publicly traded companies and 1 nonprofit
bank. Four special CEO honors went to: The research of the “Most Respected
CEOs” has taught us new and important
• Carlos Ghosn, CEO of Nissan Motors, lessons that
challenged the many
for the successful turnaround of a common
misconceptions about the
global giant, and for making a profit in ideal CEO’s personal and professional
2009 during the worst global crisis to profiles.
hit the auto industry
• Steve
Jobs, CEO of Apple for
transforming the way we use
phones and making Apple one of
the most valuable global brands
and companies in the world
• Muhammad
Yunus, CEO of
Grameen Bank for pioneering a
new model of successful multibillion dollar social bank and
leveraging
capitalism
principles
that helped approximately 3 million
families fighting poverty conditions
It is worth noting that no list is all inclusive. There
are many CEOs who are highly respected by their
stakeholders but were not included in this year’s
list. The dominance of American CEOs on the list is
not an indication of a better global respectability; it
is the result of this year’s focus on U.S.companies.
Next year, we plan to expand our listing to cover
more CEOs from all over the world, and to give our
readers the chance to learn from their experiences,
successes and insights.
About IIM
International Institute of Management (IIM) is a U.S.
based management best practices research and
education institute. IIM provides CEO and executive
support services, strategic planning retreats and
custom corporate training courses for the Global
Fortune 1000 companies and governments. To learn
more, please visit www.iim-edu.org
19
CEO Awards
Most Respected CEOs
Carlos Ghosn
Nissan-Renault
A Special CEO Honor
Carlos Ghosn
CEO of Nissan-Renault
The Global Leadership
and Turnaround CEO
Company Profile
Industry: Auto
Manufacturing
Employees: 150,000
Revenues: $83B
Market Cap: $36B
20
Carlos Ghosn receives CEO Q
top honor and leads the list of
the Most Respected CEOs for
2010. This honor is given to him
for his legendary turnaround of
Nissan Motor Co. and his global
leadership success against all
odds.
The CEO Challenge
1. From 1993-1999 Nissan
global operations suffered 7
years of losses. Credit rating
services threatened to lower
their status from “investment
grade” to “junk”.
2. At the same time, Asia was
in the middle of the worst
financial crisis.
3. Carlos was asked to manage
the turnaround of Nissan,
based on his reputation of
cost-cutting at Renault (A
French car company).
4. The company has formidable
financial and operational
challenges, both in scale and
complexity
5. Everyone hates change.
Changing a global giant is
even more difficult.
6. Mr Ghosn was born to
Lebanese
parents
in
Brazil, educated in France,
considered a gaijin (alien)
in a society that suspects
foreigners, and he does not
speak Japanese!
CEO Achievements
Ghosn executed the Nissan
Revival Plan (NRP) by cutting
costs and increasing revenues at
the same time. He turned around
Nissan to profitability in less
than 18 months and achieved
the best financial performance
in the company’s history. Nissan
became the car manufacturer
that grew the most, not only
in growth rate but in absolute
numbers too.
In fiscal year 2009, Nissan
made a profit while most other
automakers were losing money.
Obama’s administration asked
Mr. Ghosn to run General Motors
Corp. but Ghosn declined the
request in order to focus on
building
Nissan-Renault.
In
2010, the Renault-Nissan Alliance became the
first to mass-market, affordable zero-emission
vehicles (Nissan LEAF). Vehicle pre-orders in
the U.S. and Japan have already surpassed
the available production capacity for fiscal year
2010.
CEOs can learn a lot from Ghosn, whether
they are seeking growth through innovation,
executing a turnaround plan or leading in the
global economy.
Mr. Ghosn was born in Brazil on March 9,
1954 to Lebanese parents. He graduated with
engineering degrees from École Polytechnique
in 1974 and from École des Mines de Paris in
1978.
CEO Insights
It sometimes seems to me the North Americans,
Europeans and Japanese working here are
becoming more alike than they are different
CEO Bio
China will be the answer to Japan’s
Carlos Ghosn is the president and CEO of problems
Nissan Motor Co., Ltd., a global automotive
company with 180,000 employees and $83
billion in revenues. Mr. Ghosn joined the
company as its COO in June 1999, became its
president in June 2000 and was named CEO in
June 2001.
In May 2005, Mr. Ghosn became the president
and CEO of Renault S.A. in addition to his
current responsibilities at Nissan. As head
of the Renault-Nissan Alliance, Mr. Ghosn is
responsible for two separate companies with
combined annual global sales of 6.1 million
vehicles. Mr. Ghosn currently serves on the
board of directors of Alcoa.
Prior to joining Nissan, Mr. Ghosn served as
EVP of the Renault Group, since December
1996. He was responsible for advanced
research, car engineering and development,
car manufacturing, powertrain operations and
purchasing. Before he joined Renault, Mr.
Ghosn had worked with Michelin for 18 years. As
chairman and CEO of Michelin North America,
Mr. Ghosn presided over the restructuring of
the company after its acquisition of the Uniroyal
Goodrich Tire Company in 1990. Previously, Mr.
Ghosn had worked as the COO of Michelin’s
South America based in Brazil; as head of
research and development for industrial tires
in Ladoux, France; and as plant manager in Le
Puy, France.
In the car industry, superior design is critical.
Product design defines the first impression the
customer has about our products. With one
look the customer makes their decision about
their appeal. Of course, an attractive design is
not enough to make a product a success, but it
is necessary
We don’t know where the markets are
going, ... We have to observe what’s
going down, see the trends, look at every
vibration on the market, prepare the
technology and jump when consumers
start to think one way or the other
Fiscal year 2009 was a challenging year
in the global economy and in the global
automotive industry...While we have
managed through the financial crisis and
recession, we have not compromised
our strategic priorities. For example,
we have not slowed our investments to
contribute to a zero-emission society.
When the Nissan LEAF goes on sale this
year, the Renault-Nissan Alliance will be
the first to mass-market affordable zeroemission vehicles.
21
CEO Awards
Most Respected CEOs
Christopher Connor
Sherwin-Williams
CEO Achievements
Christopher Connor
CEO of The SherwinWilliams Company
The Talent CEO
Company Profile
Industry: Specialty
Retail (Paints)
Employees: 29,200
Revenues: $7.3B
Market Cap: $7.87B
• Over the past 10 years, SherwinWilliams
shareholders
have
enjoyed an average annual return,
including dividends, of almost 14
percent.
• Despite disappointing results
during the 2009 financial crisis,
the free cash flow for the year
increased by approximately $12
million to an all-time high of $605
million.
• Sherwin-Williams is rated as one
of America’s top 100 companies to
work for.
• The
company’s
culture
of
excellence has created an
environment where outstanding
technology, operational excellence
and engagement all continue
to play a role in the Company’s
growing success.
CEO Bio
Christopher Connor is Chairman
and CEO of The Sherwin-Williams
Company, a global leader in the paint
and coatings industry. Mr. Connor
was elected CEO by the company’s
board of directors on October 25,
1999 and added the title of Chairman
on April 26, 2000.
Mr. Connor,
24
53,
began his
employment with The SherwinWilliams Company in 1983 as
Director of Advertising for the
Paint Stores Group. Over his 25year career with Sherwin-Williams,
Mr. Connor has held a number of
increasingly important assignments
in many different functional areas
of the Company. In addition to
The Sherwin-Williams’ Board of
Directors, Mr. Connor serves on the
board of the Eaton Corporation.
His many civic and community board
engagements include the Greater
Cleveland Partnership, the Rock
and Roll Hall of Fame and Museum,
The Playhouse Square Foundation,
University Hospitals Health System,
United Way Services of Greater
Cleveland, The Commission on
Economic Inclusion, Team NEO,
Fisher College of Business at The
Ohio State University, the National
Manufacturers Association and
The National Paint and Coatings
Association. Mr. Connor is the
past Chairman of the Board for
Keep America Beautiful, University
Hospitals Health System and Walsh
Jesuit High School.
Mr. Connor is a 1974 graduate of
Walsh Jesuit High School and a
1978 graduate of The Ohio State
University.
CEO Insights
We look for top talent, because we believe
people are the ultimate competitive
advantage. We reward innovative people
with a real drive to accomplishment.
20, 30, 40 year careers
are not
uncommon in our company. That is
why we are rated as one of the top 100
companies to work for.
We enter 2010 cautiously optimistic that
the worst of the global recession is behind
us. At the same time, we acknowledge
that economic recovery may be slow and
erratic, and coatings demand in many
end markets will likely remain weak. Over
the past three years, we have worked
hard to make Sherwin-Williams a leaner,
financially stronger and more profitable
company. We have fine-tuned our capital
structure, tightly managed fixed costs
and SG&A expense, reduced inventories
and expanded our distribution platform
domestically and abroad. These actions,
along with our continued focus on
serving a diverse and increasingly global
customer base, have positioned us to
perform well through the balance of this
recession and outperform in a recovery.
We are confident that 2010 will be a year
of improvement for the Company.
About Sherwin-Williams
Sherwin-Williams operates over 3,350 paint stores
in the United States, owns many of the paint and
coatings industry leading brand names, and sells
products in over 50 countries around the world.
25
CEO Awards
Most Respected CEOs
David Blair
Catalyst Health
A Special CEO Honor
David Blair is one of the best CEOs
under 40 years old. At a young age,
he took the company to great growth
levels. Under his leadership, Catalyst
Health became one of the fastest
growing companies in the world.
CEO Achievements
David Blair
CEO of Catalyst Health
Solutions
The Fast Growth CEO
Company Profile
Industry: Insurance
Brokers
Employees: 995
Revenues: $3.2B
Market Cap: $1.93B
26
• Revenue growth from $5 million
at IPO (1999) to $3.6 billion in
projected revenue for 2010
• Market cap growth of 750% in 10
years, from ~$200 million in 1999
to about $1.5 billion
• Net Income compounded annual
growth rate (CAGR) of 30% since
2005
• In the two most recent consecutive
years, Catalyst Health Solutions,
Inc has been awarded the top
customer satisfaction ratings for
“Overall Service and Performance”
in
the
Pharmacy
Benefit
Management Institute (PBMI)
Pharmacy Benefit Manager (PBM)
Customer Satisfaction Report
to
develop
the
Company’s
supplemental benefits programs,
resulting in record growth.
In 1999, Mr. Blair was named the
Company’s CEO and Director of
the Company’s Board of Directors.
In 2001, Mr. Blair launched a
major initiative to complement the
Company’s supplemental benefits
and expanded into the pharmacy
benefit
management
industry
through selective acquisitions and
strategic investments.
Catalyst Health Solutions, Inc.
has experienced a rate of growth
substantially greater than its
competitors and positioned itself
as a market leader in providing
superior quality of care and unbiased
pharmacy benefit management
solutions.
CEO Bio
The company maintains a strong
focus on innovation, efficiency,
and superior service and has
a long-standing commitment to
transparency and flexible pricing
options from traditional to fully passthrough.
David Blair joined Catalyst Health
in 1997 as CFO and subsequently
spearheaded a successful national
marketing
research
campaign
With a commitment to innovation
and a unique knowledge of the
healthcare industry, Mr. Blair has
steered Catalyst Health Solutions,
Inc. from a small regional player to a nationally
recognized healthcare company.
The company is built on strong, innovative
principles and provides an unbiased,
clientcentered philosophy, which has consistently
resulted in industry-leading client retention rates
and performance.
Prior to joining Catalyst Health Solutions, Inc.,
Blair served in a financial role for United Payors
and United Providers, where he contributed to
the Company’s initial public offering and several
strategic acquisitions.
He is a Director of the Leadership Board for the
Christopher and Dana Reeve Foundation and is
a frequent participant in panel discussions and on
advisory boards and steering committees, where
he lends his entrepreneurial skills and expertise in
healthcare to advance various initiatives.
CEO Leadership
“While the abilities to think strategically,
embrace
innovation
and
drive
performance are important hallmarks of
a good leader, a great leader is one who
creates and sustains a work environment
that consistently motivates employees to
perform at their best. David has effectively
managed through such changes by
utilizing timely communication to keep
employees focused and engaged, while
maintaining a steadfast commitment to
leadership development as a means to
ensure the success of the organization’s
pipeline..”
- Monica Wolfe - Vice
President, Human Resources
CEO Insights
Our success at Catalyst Health has been
driven by our commitment to continually
recruit and retain the best and brightest
professionals in our industry. We
reinforce throughout the organization our
vision of placing the unique needs of our
clients first - having a simple, common
objective empowers our employees
and aligns business decisions. We
challenge our team to identify and
develop innovative, targeted solutions
aimed at meeting and exceeding our
clients’ expectations. We then focus on
effective corporate-wide communication
processes and appropriate performance
incentives. All strategy, from the delivery
of our services, to improvements that
maximize operational efficiencies, to the
development of lowest net cost solutions
are built around these key principles.
The
Company’s
commitment
to
transparency, customized programs,
and lowest net cost solutions in the
management of pharmacy benefits
continues to drive our success
About Catalyst Health Solutions
Catalyst Health Solutions, Inc. (NASDAQ CHSI)
manages prescription drug benefits for more than 7
million people in the United States and Puerto Rico.
Its subsidiaries include Catalyst Rx, a full-service
pharmacy benefit manager; HospiScript Services,
LLC, one of the largest providers of pharmacy benefit
management services to the hospice industry;
and Immediate Pharmaceutical Services, Inc., a
fully-integrated prescription mail service facility in
Avon Lake, Ohio. The Company’s clients include
self-insured employers including state and local
governments, managed care organizations, unions,
hospices, third-party administrators and individuals.
27
CEO Awards
Mr. Simon is the son of the late Melvin Simon,
chairman emeritus of Simon Property Group. He
holds a B.S. degree from Indiana University and an
MBA from Columbia University’s Graduate School
of Business.
Most Respected CEOs
David Simon
Simon Property Group
CEO Insights
CEO Achievements
In 1993 Simon led the efforts to take
Simon Property Group public with a
nearly $1 billion initial public offering
that, at the time, was the largest real
estate stock offering.
David Simon
CEO of Simon Property
Group
The M&A CEO
Company Profile
Industry: REIT -Retail
Employees: 3,300
Revenues: $2.81B
Market Cap: $28.3B
Mr. Simon became CEO in 1995.
Since that time, he has orchestrated
more than $25 billion in strategic
acquisitions that, together with
ground-up
development,
have
allowed the company to assemble a
portfolio of top-tier shopping centers
that serve as home to virtually every
top retailer.
The strategic acquisitions and highly
disciplined expense management
created a superior shareholder value
over the past decade including last
year’s worst financial crisis. Under his
leadership , the company delivered
a total stockholder return of 58%
in 2009, significantly outperforming
total returns of the MSCI U.S. REIT
Index (“RMS”) of 28.6% and the
S&P 500 Index of 26.5%. SPG has
outperformed both the RMS and
the S&P 500 in nine of the last ten
years.
CEO Bio
David Simon joined the company
28
in 1990 and became the CEO in
1995.
Simon Property Group, Inc., an
S&P 500 company and the largest
U.S. publicly traded real estate
company. Simon Property Group
is a fully integrated real estate
company which operates from five
retail real estate platforms: regional
malls, Premium Outlet Centers®,
The Mills®, community/lifestyle
centers and international properties.
The Company currently owns or
has an interest in approximately
380 properties in North America,
Europe and Asia. Before joining the
organization, Mr. Simon was a vice
president of Wasserstein Perella &
Co., a Wall Street firm specializing
in mergers and acquisitions and
leveraged buyouts.
Mr. Simon is a member and former
chairman of the National Association
of Real Estate Investment Trusts
(NAREIT) board of governors and is
a former trustee of the International
Council of Shopping Centers
(ICSC). He has received numerous
industry honors, and in 2000, he was
inducted into the Indiana University
Kelley School of Business Academy
of Alumni Fellows. Mr. Simon is
recognized as one of the world’s
best-performing CEO’s.
The Prime Outlets portfolio is an excellent
strategic fit and presents a compelling
opportunity for Simon to benefit from
shoppers’ increased demand for
discounted brand-name merchandise.
We believe that our strong track record of operational
excellence, financial resources, and history of
successful acquisitions, make us well positioned
to improve the performance of these assets for the
benefit of tenants, retailers and consumers
Simon’s offer provides the best possible outcome for
all General Growth Property (GGP) stakeholders.
Simon is in the unique position of being able to
offer GGP creditors and shareholders full, fair
and immediate value. Our offer provides muchneeded certainty to conclude GGP’s protracted
reorganization process. We are confident it is the
best option for all GGP constituencies and far
superior to any other third-party proposal or standalone plan that could be completed. This acquisition
also offers a compelling value-creation opportunity
for Simon shareholders. Simon’s strong track
record of successfully completing large acquisitions
and our history of delivering superior propertylevel performance ideally position Simon to create
additional value with GGP’s portfolio
[I was confident that] we could pull
through one of the most difficult economic
crises on record. We had the people, the
vision, the properties, the balance sheet
and the work ethic to navigate our way
through turbulent times. One year ago,
the world was in an economic meltdown.
U.S. stocks plunged to new bear-market
lows following financial market fears that
brought the Dow down to levels not seen
since 1997. SPG common stock was
trading below $30 per share. We were
in the midst of a national credit crisis and
the debt markets were dysfunctional.
Unemployment was on the rise. Retailers
were experiencing continued declining
sales and bankruptcies were increasing.
We expected, and in fact experienced, a
very difficult year. Despite the negative
external factors, from the economy to
the consumer, the landscape provided
us with the opportunity to demonstrate
our position as a leader in the real estate
industry. Our people rose to the challenge
and we accomplished what we set out to
do.
Today, we have over $4 billion of cash on
hand, including our share of joint venture
cash, and availability on our corporate
credit facility of more than $3 billion,
for a total liquidity position in excess of
$7 billion. This capital will keep us wellpositioned to pursue new opportunities
in our efforts to profitably grow the
Company. We will also use this capital
to continue our efforts to de-leverage the
Company
About Simon Property Group
Simon Property Group, Inc. is an S&P 500 company
and the largest real estate company in the U.S. The
Company owns or has an interest in 393 retail real
estate properties comprising 263 million square feet
of gross leasable area in North America, Europe
and Asia. Simon Property Group is headquartered in
Indianapolis, Indiana and employs more than 5,000
people worldwide. The Company’s common stock
is publicly traded on the NYSE under the symbol
SPG.
29
CEO Awards
Most Respected CEOs
Eric Schmidt
Google
CEO Achievements
Since joining Google in March 2001,
he has helped grow the company
from a Silicon Valley startup to a
global company. Today, Google
is the Internet’s premier brand for
search, media and advertising.
Eric Schmidt
CEO of Google Inc
The Search CEO
Company Profile
Industry: Internet
Search, Media and
Advertising
Employees: 21,800
Revenues: $26.21B
Market Cap: $150B
Half of Google’s revenue comes
from selling text-based ads that are
placed near search results and are
related to the topic of the search.
Another half of its revenues come
from licensing its search technology
to companies like Yahoo.
As the CEO of Google, Eric has
delivered steady growth while
expanding Google’s global reach. He
attributes this success to Google’s
ability to attract and develop top
talent.
Eric built an organization and a work
environment that allowed the free
flows of information and encouraged
employees to innovate.
Google internal work model is based
on innovative collaborative projects.
Staff devote 20 percent of their work
time to special projects of their own
design, a policy that is at the core of
its innovation culture.
30
While CEO of Google in 2008 and
2009, Schmidt earned a base salary
of just $1, and other compensation
of $508,763 in 2008 and $508,763
in 2009. He did not receive any
cash, stock, or options. Schmidt
is one of the few people who have
become billionaires based on stock
options received as an employee in
a corporation.
CEO Bio
Eric Schmidt left Novell after the
acquisition of Cambridge Technology
Partners. He was interviewed by the
founders of Google, Larry Page and
Sergey Brin and hired him to run
their company under the influence of
venture capitalists John Doerr and
Michael Moritz.
At
Google,
Schmidt
shares
responsibility for Google’s daily
operations with founders Page and
Brin. Google is a triumvirate (from
Latin, “of three men”) a political
regime dominated by three powerful
individuals.
Schmidt
focuses
on building a global corporate
infrastructure needed to maintain
Google’s rapid growth as a company
and on ensuring that quality remains
high while product development
cycle times are kept to a minimum.
Schmidt’s technical and business background
uniquely prepared him to lead Google. Prior to
joining Google, Eric was the CEO of Novell and
Chief Technology Officer at Sun Microsystems, Inc.
everyday is: “This is what we do. Is what
you are doing consistent with that, and
does it change the world?”
Earlier in his career, Eric was a member of the
research staff at Xerox Palo Alto Research Center
(PARC) and held positions at Bell Laboratories and
Zilog. He holds a bachelor’s degree in electrical
engineering from Princeton University as well as a
master’s and Ph.D. in computer science from the
University of California, Berkeley.
Search companies, which I won’t mention
by name, tried to do so many things at the
same time, they forgot all about search.
They either missed the next revolution of
search or they created an opening for a
Google to enter
Eric is a member of President Obama’s Council
of Advisors on Science and Technology. He was
elected to the National Academy of Engineering
in 2006 and inducted into the American Academy
of Arts and Sciences as a fellow in 2007. Eric also
chairs the board of the New America Foundation. A
former member of the Board of Directors of Apple
Inc. He also sits on the board of trustees for Carnegie
Mellon University and Princeton University.
CEO Leadership
Google organizational and human capital
strategy is summed up by Ivan Ernest,
Head of HR, Engineering & Operations.
“Hire learners. Trust them.Give them
freedom, information and tools. [Execute
via] Flat structure, small projects and
small teams. Discuss everything in
public. Be meritocratic. Reward success,
but don’t penalize failure.”
Technology is always evolving, and
companies can’t be afraid to take
advantage of change
The thing that people seem to miss about
not just Google, but also our competitors,
Yahoo, eBay and so forth, is that there’s
an awful lot of communities that have
never been served by traditional media
We weren’t here to hope and hang on.
We wanted to win
When the Internet publicity began, I
remember being struck by how much the
world was not the way we thought it was,
that there was infinite variation in how
people viewed the world
CEO Insights
Anytime you’re in a pressure situation
you find out who’s going to step up and
do it and who’s going to fade into the
I’m able to bring business expertise, but
background
more importantly, operating experience.
The people at Google are young. Every
The competitive threat has been a big
day there are lots of new challenges. I
overhang on the stock and I would say
keep things focused. The speech I give
about half that has been lifted
31
CEO Awards
Most Respected CEOs
Jeffrey Joerres
Manpower
CEO Achievements
In 2008, Manpower celebrated its
60th anniversary. Considering the
average multinational company lasts
between 40 and 50 years, this is a
major achievement to the executives
that built and led the company.
Jeffrey Joerres
CEO of Manpower Inc.
The People CEO
Company Profile
Industry: Staffing and
Outsourcing
Employees: 28,000
Revenues: $17.3B
Market Cap: $4B
Despite the global recession,
Manpower operating cash flow
continues to be strong, at $414
million, ending 2009 with $1 billion
in cash. Manpower is the world
leader in RPO (recruitment process
outsourcing).
As the CEO, Jeff has led a
transformation
of
Manpower’s
business strategy, adding new
business lines that have expanded
the company’s ability to assist
clients and candidates in navigating
the changing world of work. His role
at Manpower has seen him advising
domestic and foreign government
officials about how to transform their
labor markets to compete in the
global economy. Under Jeff’s tenure,
Manpower has experienced rapid
growth, expanding the footprint of
the organization to 4,100 offices
across 82 countries and territories.
His achievements for the company
have seen Manpower share value
32
more than triple, and the company
has climbed the ranks of the Fortune
500 American companies list,
moving from 183 to 119 in 2009.
Jeff is a strong proponent of job
training and workforce development
initiatives.
CEO Bio
Jeffrey A. Joerres is Chairman and
CEO of Manpower Inc. Having joined
Manpower in 1993, Jeff served as
Vice President of Marketing, and
later, as Senior Vice President of
European Operations and Global
Account Management. It was in 1999
that he was promoted to President
and CEO, and in 2001 that he was
named Chairman of the Board.
Outside of the company, he
serves on the board of trustees
for the Committee for Economic
Development (CED), and is co-chair
of the CEO Diversity Committee of
the Greater Milwaukee Committee.
In addition, Jeff was the 2008 Cochair at the World Economic Forum
India Economic Summit.
Prior to joining Manpower, Jeff held
the position of Vice President of
Sales and Marketing for ARI Network
Services, a publicly held, high-tech
electronic data interchange company. He has also
held several management positions within IBM.
In addition to the Manpower’s board, Jeff is a member
of the board of directors of Artisan Funds, Federal
Reserve Bank of Chicago, Johnson Controls and
the U.S. Council for International Business (USCIB).
He is also a 2008 Woodrow Wilson International
Award Recipient for Corporate Citizenship; Featured
Second Life Thought Leader in 2009 Evolution of the
Virtual Workforce; Featured Panelist in 2009 U.S.
Secretary of Education Initiative for Advancement of
Technical Colleges to Address Trade Skills Gap.
Jeff has a bachelor’s degree from Marquette
University’s College of Business Administration,
from which he graduated in 1983.
CEO Leadership
“Jeff’s leadership style is rooted in role
modeling. He conducts himself the way
he expects his employees to behave –
as true ambassadors for the Manpower
group of companies with a passion
for people and the role of work in their
lives. He is relentless in his pursuit of
the company’s goals – providing our
clients with the best possible talent - but
knows how to balance cost reduction
with investment. Jeff has motivated the
whole organization to get behind what
we are trying to achieve.” VP of Human
Resources
CEO Insights
It is critical to get out of your office and
meet people face to face. You have to
stay connected with your people so
that you know where the challenges lie
within your organization. The imperial
CEO belongs to a bygone age - in the
contemporary world of work, CEOs are
here to serve, not to be served, and
management is all about flexibility and
agility. Being solution-oriented is a big
part of being a leader - it’s a tremendous
leadership quality
Talent mismatch is a global problem, but
it is more acute at the mid- to higher-level
skills
To foster job creation, one of the groups
that initiatives should be targeted at is
potential new business owners. New
small business owners will drive longterm job creation in this country, and
skilled trade workers can potentially own
their own business and have three or
four employees within a few years
The [regulation] is hindering one of our
greatest sources of innovation by having
too low a limit on the number of nonimmigrant (H1B) visas. We are preventing
the brightest minds from entering the
country, which is nonsense given that
the growth of this country came from
people who arrived here from overseas
with an idea, developed it and created
employment. Two thirds of Silicon Valley
companies were started by people born
outside the U.S. If the brightest minds
cannot come to the U.S., it will be our
loss because there are plenty of other
places like Shanghai, Mumbai, Abu
Dhabi, Qatar and Dubai...[This] harms
our competitiveness on the world stage
33
CEO Awards
Most Respected CEOs
John Wren
Omnicom Group
CEO Achievements
John Wren, 58, is the President
and CEO of Omnicom Group Inc.,
the leading global marketing and
corporate communications company.
He was named CEO in 1997 and
elected President in 1996.
John Wren
CEO of Omnicom
The Advertising CEO
Company Profile
Industry: Advertising
Services
Employees: 63,000
Revenues: $12B
Market Cap: $11.8B
Under his direction, Omnicom,
founded in 1986, has achieved
status as a world-class company
with the best corporate and divisional
management in the advertising and
marketing communications industry,
as well as the leading brands in
marketing, including BBDO, DDB,
Fleishman-Hillard,
Interbrand,
Ketchum, OMD, PHD, Porter Novelli,
Rapp and TBWA.
Mr. Wren entered the advertising
business in 1984, joining Needham
Harper Worldwide as an executive
vice president. Part of the team that
created Omnicom in 1986, he was
appointed Chief Executive Officer
of the Diversified Agency Services
division of Omnicom in 1990.
He was responsible for growing this
division into the holding company’s
largest operating group, comprised
of companies in a wide array of
disciplines ranging from public
relations to branding.
34
John
has championed the
company’s investment in the
recruitment and development of
talent through several key programs,
including
Omnicom
University,
an in-house global leadership
development faculty. It forms the
core of Omnicom’s commitment to
attract, retain and motivate talent.
Wren is involved with a number of
philanthropic activities. A member
of the Board of Directors of Lincoln
Center for the Performing Arts, Inc.,
John is also a Vice-Chairman of
Continuum Health Partners, the
third-largest healthcare system in
the New York Metropolitan area, and
the Chairman of Long Island College
Hospital. Mr. Wren is, in addition,
a Trustee of the Arthur Ashe
Foundation and active in healthcare
education
for
disadvantaged
communities.
He received numerous accolades,
including the Gold Medal Award from
the Catholic Youth Organization and
the Ellis Island Medal of Honor, for
his many philanthropic contributions
to the community.
CEO Insights
Our success can be directly correlated
to the full suite of skills our management
teams bring to their agencies. Excellence
in all aspects of business management is
an ongoing priority and a core strategic
advantage for Omnicom. For more than
a decade and a half, we have invested
in formalizing and disseminating our
collective business knowledge through
advanced education programs, seminars
and conferences.
their offerings to better meet the needs
of clients in a rapidly evolving digital
environment
As we look at individual countries and
regions, we are cautiously optimistic
about continued global recovery (in
2010), although we expect significant
variation by region...On the cost front,
we continued to keep a close eye on
costs and have asked our agencies to
remain mindful of the potential risk to the
economy...At the same time, our agencies
are now increasingly focused on taking
advantage of growth opportunities, both
The story of 2009 was one of balance. through new business efforts as well as
It was about how Omnicom’s leading growing our existing client accounts
portfolio of global advertising and
marketing
brands,
balanced
by Our business is built on the strength of
geography and discipline, withstood the our management teams and the talented
worst global recession in the Company’s professionals around the world. They
history. It was about the remarkable job have worked extremely hard to help us
our agencies did of balancing the need to navigate through last year...We adjust
manage costs with the need to maintain our incentives (bonuses) based upon
the high quality of services they provide to what the outlook is. It’s done at least
clients...Perhaps most importantly, it was once a quarter where we look at that
about how Omnicom was able to balance and we make whatever adjustments are
the short-term response to our difficult appropriate
economic environment with a long-term
strategy to grow our exceptional portfolio We intended to use our strong balance
of businesses and take advantage of sheet to increase our dividend, buyback
the many opportunities that economic stocks, and make strategic acquisitions
recovery will offer
The beautiful thing about Omnicom is
We challenged our agencies to align no single client is that significant. There
costs with anticipated decreases in are a lot of clients. It’s not that we have
revenue. We challenged them to do far five major clients and we are tracking our
more with much less, while also adjusting progression against those five
35
CEO Awards
Most Respected CEOs
John Stumpf
Wells Fargo & Company
CEO Achievements
In addition to leading one of the
world’s largest banks and financial
services companies, John Stumpf
is respected for his leadership
performance and honesty.
A CEO that does not sugarcoat or
omit bad news is a CEO to trust.
John Stumpf
CEO of Wells Fargo &
Company
The Trust CEO
Company Profile
Industry: Financial
Services & Banking
Employees: 267,600
Revenues: $69.3B
Market Cap: $135B
In his letter to the shareholders
(during 2008 financial crisis) he
said “We made some mistakes but
kept our credit discipline...It will be
a rough year for our economy and
our industry. Consumer loans will
continue under stress, chargeoffs
[uncollectible debt] probably will
continue to rise.”
Wells Fargo emerged stronger than
most other banks and the reason is
that they did not invest in what they
did not understand (unlike AIG, Bank
of America, and Citigroup).
Wells Fargo’s Recognitions
• Ranked world’s 41st in Revenues
in all industries (2009 Fortune)
• Newsweek America’s #1 Green
Bank and #13 Greenest Big
Company (2009)
• Human Rights Campaign Perfect
Score of 100 on Corporate Equality
36
Index (2009)
• DiversityInc. Top 50 Companies
for Diversity (2009)
• Top 10 Companies for Recruitment
and Retention
• Bank Technology News #1 Bank
Technology Innovator of the Year
(2009)
CEO Bio
John Stumpf was named Chief
Executive Officer in June 2007,
elected to Wells Fargo’s Board of
Directors in June 2006, and has
been President since August 2005.
He became the Chairman for Wells
Fargo & Company in January 2010.
A 27-year veteran of the company,
he joined the former Norwest
Corporation
(predecessor
of
Wells Fargo) in 1982 in the loan
administration department and then
became senior vice president and
chief credit officer for Norwest Bank,
N.A., Minneapolis.
He held a number of management
positions
at
Norwest
Bank
Minneapolis and Norwest Bank
Minnesota
before
assuming
responsibility for Norwest Bank
Arizona in 1989. He was named
regional president for Norwest
Banks in Colorado/Arizona in 1991.
From 1994 to 1998, he was regional president for
Norwest Bank Texas. During his four years in that
position, he led Norwest’s acquisition of 30 Texas
banks with total assets of more than $13 billion.
In 1998, with the merger of Norwest Corporation and
Wells Fargo & Company, he became head of the
Southwestern Banking Group (Arizona, New Mexico
and Texas). Two years later he became head of the
new Western Banking Group (Arizona, Colorado,
Idaho, Nevada, New Mexico, Oregon, Texas, Utah,
Washington and Wyoming).
In 2000, he led the integration of Wells Fargo’s
acquisition of the $23 billion First Security
Corporation, based in Salt Lake City. In May 2002,
he was named Group EVP of Community Banking.
In December 2008, he led one of the largest mergers
in history with the purchase of Wachovia.
He serves on the Board of Directors for The Clearing
House and the Financial Services Roundtable. He
also serves on the Board of Trustees of the San
Francisco Museum of Modern Art.
A Minnesota native, he earned his bachelor’s degree
in finance from St. Cloud State University, St. Cloud,
Minnesota and his MBA with an emphasis in finance
from the University of Minnesota.
eyes and ears in industry, academia
and non-governmental organizations
to make sure we anticipate emerging
environmental issues in our communities
and globally
The financial services business remains
fragmented business. There isn’t any one
player that controls 30, 40, 50 percent
market share like you’d see in other
industries
We never participated in some of the real
exotic things that the industry and others
participated in. For example: we never
understood why it made sense to make
someone a loan, a home mortgage with
negative amortization. So you would owe
more on the home later than what you
started with. That didn’t seem sensible to
us. Because you don’t know what’s going
to happen in the future.
CEO Insights
We call them team members (an asset
in which to invest), not employees (an
Demonstrating the benefit of our expense to be managed)
diversified business model, most of
our consumer business showed strong About Wells Fargo & Company
Wells Fargo & Company (NYSE: WFC) is a
growth this quarter and helped to offset diversified financial services company providing
the decline at Home Mortgage
banking, insurance, investments, mortgage and
This outstanding group of environmental
experts,
representing
diverse
perspectives and expertise, will help
Wells Fargo bring a thoughtful and
balanced approach to integrating
environmental considerations into our
business practices. They’ll also be our
consumer finance through more than 10,000 Wells
Fargo and Wachovia stores, 12,000 Wells Fargo and
Wachovia ATMs, the internet and other distribution
channels across North America and internationally.
They headquartered in San Francisco. One in three
households in America does business with Wells
Fargo. Wells Fargo has $1.2 trillion in assets and
more than 281,000 team members across its 80+
businesses. It is ranked fourth in assets and second
in market value of its stock among its US peers as
of December 31, 2009.
37
CEO Awards
Most Respected CEOs
Joseph Saunders
Visa Inc
CEO Achievements
Joseph W. Saunders
CEO of Visa Inc.
The CEO of the largest
IPO in U.S. History
Company Profile
Industry: Payment
Processing Network
Employees: 5,700
Revenues: $ 7B
Market Cap: $ 64B
When Saunders took the helm as
Chairman and CEO at Visa In, he
successfully
combined
several
independent Visa entities, including
operating units in the US, Canada,
Latin America, Asia Pacific, and the
Middle East, into a single global
company. The Saunders-led $19
billion Visa Inc. IPO, which merged
these entities, remains the largest
IPO in U.S. history.
Under Saunders’ leadership, Visa
had a stellar track record of financial
performance since the IPO. In the
midst of the country’s economic
challenges Visa has continued
to post strong operational and
financial performance, all while
delivering excellent results for its
shareholders.
Since the IPO, Visa has consistently
exceeded analysts’ expectations
for each earnings period. The
financial community has praised
the resilience of Visa’s business
model, the company’s diverse
product set, and senior leadership’s
ongoing commitment to expense
management.
In 2009, Visa returned more than $2.1
billion to shareholders in the form of
38
dividends and buybacks. Additionally,
Saunders has aggressively committed
Visa to investing in innovation that
enables consumers and clients to use
Visa products and services in more
ways and in more places.
To position Visa for future growth, in
2009 Visa invested in its processing
capabilities in two key areas:
• Visa established a joint venture
– Visa Processing Service Pte.
Ltd. (VPS) with Yalamanchili
International to deliver flexible
processing services to clients
outside the US.
• In parallel, Visa opened a new
global data processing center
in North America with several IT
enhancements that further improve
the flexibility, reliability, and scale
of VisaNet and increase Visa’s
ability to process the ever-growing
number of increasingly complex
electronic payments around the
world.
Under Saunders, Visa has increased
its commitment to global financial
literacy. In 2009, Visa announced at
the Clinton Global Initiative Conference
that it would educate 20 million people
worldwide about the fundamentals of
money management by May 2013.
CEO Challenges
Financial regulations and expanding to global
markets under current global economic conditions
CEO Bio
Joseph W. Saunders was named chairman and chief
executive officer of Visa Inc. in May 2007. Prior to
his current role, Saunders served Visa International
as executive chairman of the transition governance
committee. He previously served as president of
card services for Washington Mutual, Inc. after
the acquisition of Providian Financial Corporation,
where he acted as president and chief executive
officer. From 1997 until 2001, Saunders served as
chairman and chief executive officer of Fleet Credit
Card Services at FleetBoston Financial Corporation.
Saunders holds a B.S. in business administration
and an MBA, both from the University of Denver.
CEO Insights
Financial regulatory reform is meant
to make our financial system safer
and fairer for consumers. Now, it is
about to be hijacked by the nation’s
largest retailers, whose lobbyists have
attached an amendment that would net
their companies billions of dollars at
consumers’ expense. It does the direct
opposite of the bill’s intended purpose.
It should be stripped out before the bill
reaches President Barack Obama
Online commerce continues to grow
rapidly, and (CyberSource) acquisition
will enable Visa to offer new and
enhanced services that will better meet
the growing demand among merchants
globally for robust, secure online payment
processing capabilities which in turn will
grow the entire eCommerce category...
And, as eCommerce increasingly
migrates to mobile devices, we believe
the combination of Visa and CyberSource
technology and services will position Visa
to lead in mobile eCommerce
Syncada complements Visa’s core
payments business by expanding
our capabilities in B2B supply chain
management. By investing in this leading
platform, we can offer Visa’s financial
institution clients around the world
access to Syncada’s services, backed
by a comprehensive sales and support
infrastructure that will help extend
the reach and capabilities of Visa’s
commercial product suite
I am confident that Visa’s world-class
employees, competitive strategy, leading
brand and network, and diverse product
offering will lead to continued success for
the company...My experience working
with Visa has demonstrated that this is
a high-performing, highly focused team
that delivers results
About Visa Inc
Visa is the world’s largest payments technology
company. It connects consumers to 1.7 billion
cards, millions of ATM and acceptance locations,
and 16,400 financial institutions in more than 200
countries and territories around the globe, enabling
them to use digital currency instead of cash and
checks. At the heart of business is VisaNet, one of
the world’s most advanced processing networks.
It is capable of handling more than a half billion
transactions per day. Visa does not issue cards,
extend credit or set rates and fees for consumers.
Visa’s network innovations, however, enable its
bank customers to offer consumers more choices
on how to pay – debit, prepaid, or credit cards.
39
CEO Awards
Most Respected CEOs
Matt Rubel
Collective Brands
CEO Bio
Matt Rubel
CEO of Collective
Brands, Inc.
The Retail CEO
Company Profile
Industry: Apparel
Stores
Employees: 13,500
Revenues: $3.32B
Market Cap: $0.85B
Matt Rubel is recognized for his
leadership in forming Collective
Brands and establishing the
company’s vision of creating the preeminent, consumer-centric, global
footwear, accessories and lifestyle
brand company. He is also recognized
by the investment community as
one of the top CEOs within apparel
and footwear industry. Under Matt’s
leadership, Collective Brands has
evolved into a dynamic and diverse
global enterprise, with a strong
portfolio of iconic brands reaching
consumers across the world through
wholesale, retail, e-commerce,
licensing and franchising channels.
The company expanded its global
footprint to nearly 100 countries
worldwide.
Matt is responsible for the
Shoes4Kids program which donates
more than 77,000 pairs of shoes to
children during the holiday season
Matt Rubel became the CEO of
Payless and ShoeSource in June,
2005. Matt’s strategy was to create
an
inspiring,
customer-centric
organization with a new position
as a specialty retailer dedicated to
democratizing fashion in footwear
and accessories.
40
In July, 2007, Matt led the acquisition
of The Stride Rite Corporation and
the formation of Collective Brands,
Inc. (NYSE: PSS), the parent
company of Payless ShoeSource,
Stride Rite (now named the
Collective Brands Performance
+ Lifestyle Group) and Collective
Licensing International. Matt was
named CEO and President. In May,
2008, he was elected Chairman of
the Board, CEO and President of
Collective Brands, Inc.
From 1999 to 2005, Matt was
Chairman, President and CEO of
Cole Haan, a leading marketer of
high quality men’s and women’s
shoes and accessories, and
subsidiary of Nike, Inc. At Cole
Haan, Matt guided the company
into a new era by re-energizing the
brand and creating a strong global
presence. During his time with Cole
Haan, the company doubled in
size and expanded its global foot
print, positioning the company as a
leading fashion brand.
Matt is active in several industry
and civic organizations, including
the Jay H. Baker Initiative at the
Wharton School – University of
Pennsylvania; Young President’s
Organization; University of Miami
Board of Trustees, Florida; Chairman
of the Footwear Distributors and Retailers of
America; Matt is a member of the American Ballet
Theater (ABT) Board of Governing Trustees, the
International Council of Shopping Centers (ICSC)
Board of Trustees, and the Board for National Retail
Federation (NRF).
CEO Insights
Be ready for change with dynamic action.
Be creative, work with teams and build
relationships. Learn from your mistakes
and move on
What is great for us is that kids continue to
change size and our children’s business
is doing well even in a recession
High levels of unemployment currently
at play could slow the recovery on Main
Street and at retail. Employment growth
is really a necessary factor for vibrant
growth in the consumer sector
Our strategy, regardless of the economic
climate, is to remain focused on the
consumers...They hold the key to any
retailer or brand success
We can be successful if we understand
our customers’ needs and desires, and
then find innovative ways to deliver great
product and provide an outstanding,
experience in our stores
Our CRM capabilities have grown beyond
our expectations in the last few years,
and are providing us with meaningful new
insights on how to reach and connect
with our customers on a deeper level
41
CEO Awards
Most Respected CEOs
Michael Dan
Brink’s
CEO Achievements
Dan turned around of The Brinks
Company by focusing the company
business, divesting unprofitable
companies, fixing a faltering BAX
business unit and selling it for double
the valuation from $600 million to
$1.1 billion
Michael Dan
CEO of Brinks
The Coaching CEO
Company Profile
Industry: Security
Services
Employees: 50,000
Revenues: $3BB
Market Cap: $1B$
Dan executed a strategy to improve
the company’s operations and
financial position following The
Pittston Company’s failed attempt to
sell Brink’s in the 1980s. Dan’s plan
succeeded so well that, instead of
selling Brink’s, The Pittston Company
became Brink’s.
One of the most significant
achievements was getting out of
the coal business. Under Dan’s
leadership, the transition brought
Brink’s back to its roots and left the
company in a position to increase
profits in the long term. Revenues
at BAX another business unit had
been faltering since the late 1990s.
He made the decision to turn the
company around, then sell it for
higher valuation. In 2005, he sold
BAX for $1.1 billion. Wall Street
valuation of BAX at that time was at
about $600 Million
In the 1990s, when charged with
42
improving the lackluster performance
of Brink’s international affiliates,
Dan instituted a policy of purchasing
controlling interests in international
affiliates whenever possible and
dissolving or selling any joint venture
that refused to cooperate. This
policy gave the company the control
it needed to ensure consistency of
service and to transform from an
international organization into a truly
global company.
In 1984, Dan decertified the
Teamsters, a process that served
as a strategic turning point for the
company by lowering wage costs and
making Brink’s a more competitive
force in the industry.
How he won his employee respect?
• Establishment and funding of a
retiree health and benefits plan
to secure the future of retired
employees from all Brink’s legacy
businesses.
• Establishing a universal, zerotolerance code of ethics throughout
Brink’s global operations.
• Instilling throughout Brink’s a
focus on safety and security
and, specifically, “bringing every
employee home safely each
night”.
CEO Bio
Michael Dan, 59, is Chairman, President and CEO
of The Brink’s Company. Dan joined the company in
1982 as Director of Automotive Design. Later, he
became Regional Vice President, Executive Vice
President of North America, then President and CEO
of the Brink’s holding company with responsibility for
all security businesses. In 1998, Mr. Dan became
President and CEO of The Pittston Company, and
in 1999 he was elected Chairman, President and
CEO. Before joining Brink’s, Incorporated Mr. Dan
was President of Armored Vehicle Builders, Inc.
He attended Morton College and is a graduate of
the Advanced Management Program at Harvard
University.
CEO Leadership
“Dan’s leadership style is incredibly open
and always transparent. He’s a fantastic
teacher and very engaged at all levels of
the organization.” - Frank Lennon - VP &
Chief Administration Office
CEO Insights
In today’s world, rather than tell board
members the answers, you have to involve
them in the problem, get their input, and
evolve issues so you end up with a strong
consensus on the board. Although you
won’t always get everyone aligned on
every issue, a strong consensus helps
leverage the board’s value and ensure
you are getting their wisdom and insight
as you run a very complicated global
business
For a CEO, nothing is more valuable than
time, and it’s important to understand
your priorities so you can know how best
to schedule your time and focus on the
right things. You have to understand what
you can and can’t do with your time
I’ve learned that teams win. If you
understand where you are, where you
have to go and can get the organization
lined up in support of the direction, the
organization (the team)is unstoppable
I am direct; I am hands-on. I cannot get
enough information. I read company
reports from every country, every
sales person...Information gives me
perspective. When I visit the field, armed
with information, I can make sure that
what I’m hearing and seeing supports
what I’ve been reading. It allows me to
give our managers new perspective and
valuable insight to help them deal with
personnel issues, operational problems,
or other challenges
At this point in my career, I’m almost
like a professor, trying to transfer all my
knowledge to the senior managers of this
company
About Brink’s Inc
The Brink’s Company is a leading global security
services company listed on NYSE with more than $3
billion in revenues, 50,000 employees worldwide,
and operations in more than 50 countries. The Brink’s
company provides armored car transportation, ATM
servicing, currency and coin processing and other
value-added services to banks, retailers and other
commercial and governmental agencies around the
world.
43
CEO Interview
Lessons from a Global CEO
Michael Dan - CEO of Brink’s Inc.
A leadership interview with one of the most respected CEOs
CEO Q: What is your most important professional
achievements at your current company?
Michael: Helping to chart a course to ensure the
success of the Brink’s organization following The
Pittston Company’s failed attempt to sell Brink’s in
the 1980s. Fortunately, we were able to improve the
company so well that we ended up selling off the
assets of The Pittston Company and today, Brink’s
is the company left standing.
CEO Q: How did you do that?
Michael: I also believe very strongly in focusing
the company, establishing this focus early on was
the key to success all these years. When I became
president of Brink’s, Incorporated, we were minority
owners in just about all of our operations throughout
the world, and I wanted Brink’s to take control of it’s
own destiny. I developed a strategy to apply new
technologies, get control of our insurance, share
best practices, and either buy out or sell shared
interests, where appropriate, so that we could take
hold of and control our future and the destiny of
the company. The strategy took six or seven years
to execute, but it allowed us to be where we are
today.
CEO Q: What education or prior experience helped
you succeed at turning around Brinks?
Michael: Before joining Brink’s, I worked for a
small company called Armored Vehicle Builders,
Incorporated. I worked there seven or eight years,
and assumed the position of president at the age of
27. The company was located in Massachusetts but
we sold armored and personal protection vehicles
44
all over the world. This helped me develop a global
mindset and helped me understand what it took to
be a good general manager—all at a very young
age. During this time, the company was in trouble
and I had to learn to make payroll every week. I
had to learn, very quickly, how to balance sales,
marketing, operations, finance, and other aspects
of the business. This is what laid a foundation for
me and allowed me to have an impact when I came
to Brink’s.
CEO Q: What lessons did you learn on your way to
becoming a CEO?
Michael: The best lesson I’ve learned on my way to
becoming a CEO is to always do the right thing, no
matter what. You can’t be afraid to drive change as
long as the interests of your employees, customers
and company are at the forefront. Don’t be afraid.
You can change and do anything, if you set your
mind to it. Also, I’ve learned that teams win. If you
understand where you are, where you have to go
and can get the organization lined up in support
of the direction, the organization—the team—is
unstoppable.
CEO Q:
CEO?
What lessons have you learned as a
Michael: You have to set the tone and strategy,
and stay positive—no matter what. There is always
something positive to be gained, a lesson to be
learned, even in big failures. Also, people are much
smarter than we generally give them credit for, and
I try to never forget that.
CEO Q: What are the key success factors for a
CEO?
Michael: Trust needs to be given to the people in
your organization, but as a CEO, you have to earn
the trust of your team and you have to do this every
day. Also, you have to stay true to your ethical
standards. People either have high ethics and
standards or they don’t. These are lessons we learn
early in life from our families and friends. If someone
doesn’t share our high standards of ethics, there’s
no place for them in the company. Period.
CEO Q: What are the key challenges for a CEO?
Michael: Focus. For a CEO, nothing is more
valuable than time, and it’s important to understand
your priorities so you can know how best to schedule
your time and focus on the right things. You have
to understand what you can and can’t do with your
time.
A CEO must have excellent communication skills.
Obviously a CEO’s honesty and integrity must be
above and beyond reproach, and you’d better have a
lot of empathy for people. People are going to make
mistakes; when this happens, my first question is
always “did they learn from this?”
Another key challenge for a CEO is stress
management. This is a very stressful job. Many CEOs
fail because the stress eats them up physically and
mentally. As a CEO, if you can’t manage the stress,
you’re not going to make it; you will fail.
CEO Q: How did you overcome those challenges?
Michael: I’ve been fortunate. For me, priorities
are easy. I’ve always been good at prioritizing and
managing my time wisely. As for ethics, I have my
parents to thank because it’s probably from them that
strong ethics are so well engrained in me. Managing
stress, on the other hand, is a learned behavior.
You’ve got to be able to take a step back, take a
deep breath, and find ways to alleviate stress—ways
that work for you. I do yoga and like to hike. I find
these activities to be good stress relievers for me
because they take me out of my stressful position,
both mentally and physically.
CEO Q: How do you manage the relationship with
your board of directors?
Michael: Total transparency on all issues and open
access to the entire management team are key.
In today’s environment, which is vastly different
from the environment when I first became CEO,
there is a creative tension that’s necessary in the
boardroom because of liabilities, Sarbanes-Oxley
and the regulatory environment that continues to
evolve. The only way to successfully handle these
challenges is to be totally transparent so that board
members have everything they need and want to do
their jobs.
Also, it’s important to recognize—and respect—
that the board’s duties and responsibilities to the
shareholders, as well as their personal liability, are
at risk. Questioning and probing is their job; they
need to query my decisions and actions to make
sure I’ve considered all the angles. I can’t lose this
perspective because I need for them to be part of
the process.
In today’s world, rather than tell board members the
answers, you have to involve them in the problem,
get their input, and evolve issues so you end up
with a strong consensus on the board. Although you
won’t always get everyone aligned on every issue, a
strong consensus helps leverage the board’s value
and ensure you are getting their wisdom and insight
as you run a very complicated global business.
CEO Q: How do you identify and develop your top
performers?
Michael: We have a formal review program that I
established when I first took over as CEO of Brink’s.
It’s a formal review process whereby we look at all
of our top performers, evaluate their strengths and
weaknesses, their skills and experience, and look
at their current job and their next job so we can also
determine the skills and/or experience they need.
We do this from a succession planning perspective,
looking at opportunities for those who are ready
now and opportunities for those who will be ready
the next three to five years and beyond. The entire
process takes a full month of my time each year. I
work closely with our head of Human Resources and
take the recommendations to our board of directors.
The board provides input and gives us perspective
based on their own experience or what they see in
other companies. Their queries are quite detailed;
they want to know how we’re developing our people
and the steps we’re taking to address the needs of
45
our people and the company, both now and in the
future. We believe this is the most important thing
we do because we’re only as good as our people.
CEO Q: What do you look for in your successor?
Michael: I look for a competent leader who is
willing to question everything. It is important to have
the confidence to review everything that’s already in
place and ask questions. My successor must also
have ethical standards that are unquestioned. He or
she must have a strong work ethic and be willing to
travel a lot as this is, after all, a global company.
CEO Q: What advice do you give to rising CEOs?
Michael: Teams win, individuals don’t. When you’re
in school, you strive to be the best in your class, or
when you join a company as a sales executive, you
want to be the best sales executive. But when you
become a senior leader, it’s no longer a competition.
It’s about them, your team. It’s not about you
anymore. CEO’s must understand that, otherwise
they won’t be successful. Also, be yourself. A lot of
people forget this and try to emulate someone else.
Don’t do that; just be who you are.
CEO Q: Do you admire another CEO or a leader
(current or historical)? Why?
Michael: There are many CEOs and leaders I admire.
If I had to pick one, I’d say Fred Smith, the founder
of Federal Express, who’s also a friend. Because
he was an entrepreneur who started a company
and took it from a small start-up to a global giant.
He stayed there through all those evolutions. Most
people don’t have the skills to manage a company
through that degree of transition and change. Fred
has all the traits of a good CEO.
I also admire Bill Gates. He’s obviously successful,
but he was also smart enough to know he had to
hire professional business managers. Steve Jobs is
another leader I admire. He was fired because he
couldn’t manage a big company but he came back
and achieved incredible success.
CEO Q: Would you say luck has something to do
with your success? If yes, how so?
Michael: Yes; I was lucky to be born to great
parents. They taught me a lot at a very young age. I
46
believe your ethics and moral compass are formed
at an early age, and I’ve been fortunate to have truly
great parents. Also, regardless of the challenges
I’ve faced in my career, I’ve always received support
from my bosses. With my personality and aggressive
efforts to do the right thing and get things done, it
could have easily gone the other way; all it would
have taken is one manager to hinder my progress,
but I’ve been lucky.
CEO Q: How do you manage organizational politics,
and conflicting personalities, interests, and views?
Michael: I believe in managing organizational
politics and conflicts head-on. If you see a snake,
in this case organizational politics, you have to
address it instantly. Otherwise, another snake will
crawl into a room, then a third and all of sudden there
are snakes everywhere and you feel overwhelmed.
Address the problem early and head on. In my
experience, organizational conflict often occurs
because everybody is trying to get their jobs done
and they mean well, but they don’t always appreciate
the job challenges others in the organization face.
Everyone has a job to do but that doesn’t mean
they understand what their coworkers do or their
needs. I believe that, if people understand and
respect other people’s jobs and their needs, you
can resolve 90% of conflict situations. You have to
want to resolve conflict, though, and that’s where
communication and emotional intellect come in to
play. If you’re not emotionally intelligent or aren’t a
strong communicator, you’re not going to be able to
deal with organizational conflict, or you may even
cause conflict.
CEO Q: How do you balance and manage various
stakeholders’ interests?
Michael: You start by always doing the right
thing. If you do the right thing—what’s best for
the company, what’s best for customers, and
what’s best for employees—the numbers will take
care of themselves. If you do the right thing, the
stakeholders, including the communities in which we
operate, will benefit and you’ll have the resources
you need to make sure everyone is satisfied. In the
event you have to take action that appears, in the
short time, to be disadvantageous to a stakeholder,
you have to be able to explain what you’re doing and
why it’s important. That’s where emotional intellect
and communication skills come into play. You’ll find
that when you explain things rationally and clearly,
people will give you the benefit of the doubt, and
when you’re successful or if you’re on the wrong
path and make the necessary corrections, they’ll
trust you more and appreciate your ability and
willingness to make the tough calls.
CEO Q:
style?
How do you describe your leadership
Michael: I am direct; I am hands-on. I cannot
get enough information—ever. I read company
reports from every country, every sales person. I
did that for Brink’s Home Security and BAX when
those companies were under the Brink’s umbrella.
Information gives me perspective. When I visit the
field, armed with information, I can make sure that
what I’m hearing and seeing supports what I’ve been
reading. It allows me to give our managers new
perspective and valuable insight to help them deal
with personnel issues, operational problems, or other
challenges. At this point in my career, I’m almost like
a professor, trying to transfer all my knowledge to
the senior managers of this company.
CEO Q: How do you compete in a global business
environment?
Michael: You have to read; you have to do your
homework. I watch for trends so I can anticipate
changes and know how to maintain our discipline in
the face of external pressures. I travel a lot, too. I visit
with government officials, with customers, and with
employees. I belong to the Business Roundtable,
where I’m able to interact with other CEOs. All of
this is like going to school, it’s an education I can
apply to our business and to our company, and to
help our leaders understand the global dynamics of
our business and strategic direction.
CEO Q: How do you compete in a recession?
Michael: You batten down the hatches. Fortunately
we have a strong balance sheet and a company that
is less affected than many in a recession. We get
after expenses and communicate with employees so
they know what we’re doing and why. The recession
will end and we want to come out of it a stronger,
leaner company with more leverage.
CEO Q: How do you see the future of the U.S.
economy and your industry?
Michael: I believe the U.S. economy is going to
be very difficult for the next three to five years. The
economy will recover but, unfortunately, the job
market isn’t going to recover as quickly because
many jobs have been lost and it will take years
before those jobs transition into other industries.
It’s going to be painful. The government is broke so
the amount of support, the safety net, is going to be
severely strained. For our industry, in the U.S., our
base industry is shrinking as banks pull back, close
branches and reduce ATM servicing needs. But there
are new lines of business that will enable Brink’s to
continue to be the leader in our industry. The rest of
the industry has been consolidating around us for
the past 15 years and there’s not much consolidation
left to go. Our competitors’ performance, however,
is drastically trailing ours and I believe they’ll have a
tough time making the technology investments that
we have and developing the solutions they need to
differentiate themselves as we have.
CEO Q: What advice would you give the U.S. policy
makers to help the economy and your business?
Michael: They ought to start by adopting SarbanesOxley as we have, and they need greater fiscal
discipline. They also need to understand how
business works.
CEO Q: Can you please share any life or personal
lessons that other CEOs might relate to?
Michael: The most important thing I’ve learned is
that you can’t be a CEO and not make mistakes.
What you have to do is recognize the mistake—
publicly—and fix it. The sooner you do it, the better.
CEO Q: Can you share with us a CEO humor?
Michael: A new CEO is given three envelopes,
numbered 1, 2 and 3, by his predecessor and told
to open them in the event of disaster or financial
crisis. When the first disaster occurs, the new
CEO opens the first envelope and it says “blame
your predecessor”. A year later, a second disaster
occurs and the CEO opens the second envelope
and reads, “blame the environment”. When the third
disaster strikes, the CEO opens the envelope and
reads, “prepare three envelopes.”
47
CEO Awards
Most Respected CEOs
Mike Morris
American Electric Power
CEO Achievements
AEP has endured the economic
downturn without cutting employment.
The CEO adopted hiring and salary
freezes and spending restrictions.
Mike Morris
CEO of American
Electric Power (AEP)
The Motivation CEO
Company Profile
Industry: Electric
Power Generation
Employees: 21,670
Revenues: $13.6B
Market Cap: $17B
The company also drew on its
lines of credit before the credit
markets tightened and in April 2009,
completed an equity offering of 69
million shares with net proceeds
of $1.64 billion – the largest equity
offering in history for the U.S.
regulated electric utility industry.
AEP has been a national leader
in voluntarily reducing carbon
emissions and advocating for a
legislative solution to the climate
change issue.
The company installed the world’s
first integrated carbon dioxide
capture and storage system at a
power plant and has been awarded
$334 million in federal stimulus
funding to help bring this technology
to full commercial scale.
CEO Bio
Michael G. Morris, age 63, director
since 2004. Elected president and
chief executive officer of AEP in
48
January 2004; chairman of the board
in February 2004; and chairman,
president and chief executive officer
of all of its major subsidiaries in
January 2004. A director of certain
subsidiaries of AEP with one or more
classes of publicly held preferred
stock or debt securities and other
subsidiaries of AEP. A director of
Alcoa Inc. and The Hartford Financial
Services Group, Inc. Mr. Morris was
formerly a director of Cincinnati Bell,
Inc. (2005-2008).
CEO Leadership
“One of Mike’s hallmark
leadership best practices is
the respectful way that he
treats employees throughout
the organization. He puts
in a tremendous amount of
time responding to employee
e-mails and letters, visiting
and talking to employees
throughout our 11 states,
and using online blogs and
face-to-face presentations
to
communicate.
Mike
seeks out feedback from employees,
answers difficult questions honestly and
transparently, and creates deliberate
opportunities for employees to feel
comfortable sharing their thoughts,
frustrations and recommendations. Mike
also has the ability to set a compelling
vision and energize employees around
it. He takes on high profile, industryleading initiatives that create pride within
the company and makes decisions in a
timely manner.” - Gen Tuchow, VP HR AEP
CEO Insights
I learned early in my career that managing
through motivation and encouragement
is the strongest way to get things done.
I believe in listening to the diverse views
of employees, respecting and valuing
their unique ideas, and giving them the
tools to do their jobs and be successful.
It’s important that we prepare our internal
talent for the next level of leadership, so
we have set up a targeted development
program and perform succession
planning throughout the organization.
I also rotate members of my executive
team into different assignments every
18 months to broaden their experience.
Our company has a strong focus on
building relationships with all of our
stakeholders, including employees,
customers, regulators, policy makers,
and organizations that don’t agree with us
on certain issues. We have become more
agile by listening, learning and partnering
with others to meet our challenges
I’m trying to get to a comprehensive,
system approach
We must move forward and address
the current inadequacies of our nation’s
existing transmission infrastructure
This transaction is significant because it
completes the divestiture of assets... that
did not align with our strong domestic
utility operations. The divestitures leave
us with an improved balance sheet
and a strategic focus on our core utility
business
The energy industry is ready for
renewables, but it faces four significant
hurdles to succeed.. the first challenge
is the location of renewables relative to
their peak consumption... The second
challenge is the intermittent nature of wind
and solar power... The third challenge is
the price.. And the fourth challenge is The
regulatory maze lengthens that tangles
up project development
About AEP
American Electric Power is one of the largest electric
utilities in the U.S. delivering electricity to more than
5.2 million customers in 11 states. AEP ranks among
the nation’s largest generators of electricity, owning
nearly 38,000 megawatts of generating capacity.
AEP also owns the nation’s largest electricity
transmission system, a nearly 39,000-mile network
that includes more 765-kilovolt extra-high voltage
transmission lines than all other U.S. transmission
systems combined.
49
CEO Awards
Most Respected CEOs
Muhammad Yunus
Nobel Peace Prize Winner
Grameen Bank
A Special CEO Honor
Transforming the life of millions of
people; helping them fight poverty
while making a social profit.
Muhammad Yunus
CEO of Grameen Bank
The Economist CEO
and the recipient of the
2006 Nobel Peace Prize
Company Profile
Industry: Financial
Services (Microcredit)
Employees: 24,700
Revenues: $ 9.8B
Market Cap: $ 6.7B
“[Muhammad Yunus’] ideas have
already had a great impact on
the Third World, and...hearing his
appeal for a ‘poverty-free world’ from
the source itself can be as stirring as
that all-American myth of bootstrap
success.” ––The Washington Post
Former U.S. President Bill Clinton
was a vocal advocate for awarding
the Nobel Prize to Muhammad
Yunus. In a speech given at
University of California, Berkeley in
2002, President Clinton described
Dr. Yunus as “a man who long ago
should have won the Nobel Prize
[and] I’ll keep saying that until they
finally give it to him.”
Professor Muhammad Yunus is
internationally recognized for his
work in poverty alleviation and the
empowerment of poor women.
He successfully melded capitalism
with social responsibility to create
the Grameen Bank, a microcredit
institution committed to providing
small amounts of working capital to
the poor for self-employment.
50
From its origins as an action-research
project in 1976, Grameen Bank has
grown to provide collateral-free
loans to 7.5 million clients in more
than 82,072 villages in Bangladesh
and 97% of whom are women.
The successful and innovative
approach to poverty alleviation
pioneered by Professor Yunus
in a small village in Bangladesh
has inspired a global microcredit
movement reaching out to millions of
poor women in a hundred countries
throughout the world from rural
South Africa to inner city Chicago.
The unethical and risky derivative
financial practices of many bankers
proved toxic to their customers,
employees and investors. What
is sad is that the U.S. government
proposed the creation of the “Bad
Bank” to absorb all their toxic
assets.
US economists and government
policy makers can learn few lessons
from Muhammad Yunus by creating
the “Good bank”.
Not only it is a good socioeconomic
goal to serve the underserved
communities, it is also good for the
investors. With its $9B collateralfree loans to 7.5 million clients and
amazing rate of 98% loan repayment rates (no
western bank can compete with that rate), the
Grameen bank could become the new model for
banking and economic development. - Med Jones
- President of International Institute of Management
CEO Bio
Born in 1940, Muhammad Yunus is a world famous
Bangladeshi banker. Professor Muhammad Yunus
received the Nobel Peace Prize in 2006 in Oslo,
Norway, for his pioneering work in fighting global
poverty through loans and other financial services
for the poor.
Microcredit involves the lending of small amounts
of money to the world’s poorest people to start
micro-businesses and move themselves away from
poverty.
He previously was a professor of economics where
he developed the concepts of microcredit and
microfinance.
He is one of the founding members of Global
Elders.
Yunus also serves on the board of directors of the
United Nations Foundation, a public charity created
in 1998 with entrepreneur and philanthropist Ted
Turner’s historic $1 billion gift to support United
Nations causes.
The UN Foundation builds and implements publicprivate partnerships to address the world’s most
pressing problems, and broadens support for the
UN.
Yunus is the author of Banker to the Poor and a
founding board member of Grameen America and
Grameen Foundation.
have denied them those opportunities...I
wanted to give money to people like this
woman so that they would be free from
the moneylenders to sell their product at
the price which the markets gave them
- which was much higher than what the
trader was giving them
Sometimes I felt that nobody was paying
any attention, like I’ve been screaming
and nobody’s hearing me. Now suddenly
this prestigious [Noble Peace] prize
comes, and you get a feeling that you
can whisper, the whole world listens.
This is your time to say what you wanted
to say
Poverty is a threat to peace. It is
breeding ground for political turmoil
a
I was teaching in one of the universities
while the country was suffering from a
severe famine. People were dying of
hunger, and I felt very helpless. As an
economist, I had no tool in my tool box to
fix that kind of situation
I went to the bank and proposed that
they lend money to the poor people. The
bankers almost fell over...
My greatest challenge has been to
change the mindset of people. Mindsets
CEO Insights
play strange tricks on us. We see things
the way our minds have instructed our
We have created a society that does eyes to see
not allow opportunities for those people
to take care of themselves because we
51
CEO Awards
Most Respected CEOs
Paul Diaz
Kindred Healthcare
CEO Achievements
Paul Diaz is the President and
Chief Executive Officer of Kindred
Healthcare, Inc., one of the largest
providers of healthcare services in
the United States.
Paul J. Diaz
CEO of Kindred
Healthcare Inc.
The Healthcare CEO
Company Profile
Industry: hospitals and
long-term healthcare
facilities
Employees: 39,500
Revenues: $4B
Market Cap: $0.5B
Kindred is a New York Stock
Exchange (NYSE) listed company
with revenues in excess of $4 billion
and over 54,000 employees in 41
states.
Fiscal 2009 was a year of solid
operational and financial performance
at Kindred Healthcare, despite a
difficult economic, regulatory and
reimbursement environment.
Revenue gains in each of its three
operating divisions: Hospitals – 5%,
Nursing and Rehabilitation Centers
– 3% and Peoplefirst Rehabilitation
– 11%. Overall revenues of $4.3
billion were 4% ahead of last year
In the past two years, Modern
Healthcare magazine named Mr.
Diaz one of the 100 Most Powerful
People in Healthcare.
In 2008, Modern Healthcare named
him one of the top 25 Minority
Executives in Healthcare. In addition,
in both 2008 and 2009 Hispanic
52
magazine named Mr. Diaz one of
the 25 Best Latinos in business.
CEO Bio
Mr. Diaz is an attorney and
accountant who earned a bachelor’s
degree in Finance and Accounting
from American University’s Kogod
School of Business and a law degree
from Georgetown University.
Mr. Diaz serves on the Board
of Directors of DaVita (NYSE:
“DVA”), and the Board of Visitors of
Georgetown University Law Center.
He was formerly on the Board
of
PharMerica
Corporation
(NYSE:PMC), the Board of the
Bloomberg School of Public Health
at Johns Hopkins University, and
the Board of Trustees and Executive
Committee of the Suburban Hospital
Healthcare Systems in Bethesda,
Maryland.
CEO Insights
Our strong financial results
were driven by continued
improvement in our people,
quality
and
customer
services goals and reinforced our
Management Philosophy: If we take care
of our people, and focus on quality and
customer service, our business results
will follow
I have been extremely lucky over the
years, primarily in having good mentors
who looked after me and helped me get
stronger
My advice for the up and coming is
to broaden your skill-sets, learn the
operations, the finance and the customers
[relationship management]
We often approach our job as a silo. To
have a broad-based sense of what we
do is very important
Our mission is to promote healing,
provide hope, preserve dignity and
produce value for each patient, resident,
family member, customer, employee and
shareholder we serve
Our investments in staffing, training and
the modernization of our physical plants
are also paying off, as we continue to
enhance our capabilities to serve shortstay rehabilitation patients and higher
acuity longer term residents
About Kindred Healthcare
Kindred operates a diverse blend of health care
service businesses including long-term acute care
hospitals, skilled nursing facilities and contract
rehabilitation sites in more than 600 locations across
the United States.
53
aspects of the company’s extensive worldwide IT
products distribution operations. He joined Tech Data
in 2006 and has over 30 years experience in the IT
industry including senior management positions
in sales, marketing and channel distribution with
leading manufacturers and software publishers IBM,
EMC and J.D. Edwards.
CEO Awards
Most Respected CEOs
Robert Dutkowsky
Tech Data Corporation
CEO Achievements
Robert Dutkowsky
CEO of Tech Data
Corporation
The Sales CEO
Company Profile
Industry: Computers
Wholesale
Employees: 7,600
Revenues: $23B
Market Cap: $1.84B
In January 2006, Tech Data - the
world’s second largest distributor
of IT products—named technology
industry veteran Dutkowsky as
its new CEO and Board Member
in October 2006.
Dutkowsky’s
first order of business was to
oversee the final stages of Tech
Data’s European restructuring and
business optimization plans. He also
turned his eye toward expansion
and introduced a new corporate
strategy of execution, diversification
and innovation that would be the
foundation for Tech Data’s future
success. Very quickly, the company
was once again positioned for
profitable growth throughout all
regions in which it operates. His
strategy paid early dividends. At the
conclusion of Dutkowsky’s first full
fiscal year with the company, Tech
Data generated a record $23.4 billion
in net sales with 80 percent increase
in net income.
During the economic challenges of
2009, Robert’s strategy of execution,
diversification and innovation to
positioned Tech Data, its customers
and its vendor partners for future
growth. Despite declines in net
sales experienced across the entire
IT industry, Tech Data has created
56
new efficiencies, enhanced services
levels and broadened its solutions
resulting in increased profits.
Tech Data made a number of
acquisitions expanding its product
offering, customer portfolio, technical
capabilities and geographic reach.
These included the acquisition of
certain assets of Compumedi, a
leading IBM distributor in Spain;
certain assets of Investronica’s
Portuguese IT distribution operation;
certain assets of Man and Machine’s
German-based Autodesk distribution
operations; and certain assets of
Ireland’s sole Autodesk distributor
Cadco.
In the Americas, Tech Data
announced several distribution
agreements, further diversifying
its solutions portfolio. These new
and expanded vendor partnerships
include
Force10
Networks,
Brocade’s IP networking solutions,
Pelco video surveillance solutions,
Sharp LCD TVs and more.
For its last fiscal year (reported Jan.
31, 2009), Tech Data generated a
record $24.1 billion in net sales.
Dutkowsky
In 1997, Dutkowsky joined EMC as executive vice
president, Markets and Channels before being
promoted to president, Data General in 1999. During
his time at EMC, the company’s revenue grew from
$2 billion to $9 billion. In 2000, Dutkowsky was
named president, chairman and CEO for GenRad,
leading the company to a successful merger with
Teradyne, a test equipment manufacturer for
semiconductor, electronics and network systems
companies. Later, in 2002, Dutkowsky served as
chairman, president and CEO of J.D. Edwards
until the company integrated with PeopleSoft.
Immediately prior to joining Tech Data, Dutkowsky
was chairman, president and CEO of Egenera, Inc.,
a utility computing company based in Marlboro,
Mass.
He serves on the board of directors for SEPATON, a
data storage and protection manufacturer. He also
is a member of the board of directors for the United
Way of Tampa Bay, the Tampa Bay Rays Foundation
and the advisory board of the University of South
Florida Business School.
Dutkowsky earned a bachelor’s degree in labor and
industrial relations from Cornell University. He also
is a recipient of the 2000 Ellis Island Medal of Honor
recognizing distinguished American citizens
CEO Insights
CEO Bio
Robert
Dutkowsky began his IT career in 1977 when
he joined IBM as a salesman. He spent 20
years with IBM, where his rise through the ranks
included various sales and marketing and general
management positions, and tenures as director,
Software and Services; vice president, Product
Marketing; executive assistant to former IBM CEO
Lou Gerstner; vice president, Distribution – IBM
Asia/Pacific; and vice president, Worldwide Sales
and Marketing – RS/6000 product line.
oversees
all
If you’re hiring sales guys you want to hire guys that
make things happen.
The (IBM HR guy), bless his heart, (asked) “What do
you want to do when you grow up?” I said, “I want
to be President of IBM...And he said, “If you want
to do that, you want to be a salesman. The last six
guys who ran IBM started out as salesmen...I said,
“OK, I’m going to go be a salesman... IBM probably
hired 50,000 people that year. How did I get the right
answers at the right time?
Friday night my wife would say, “Can
we go to the movies this weekend? Did
you sell anything this week?” It was
real commission, hand-to-mouth kind of
stuff.
IBM has a real formalized development
program. Every employee has a
development plan. Gary (My mentor)
said, “You have a lot more skill than to be
a marketing representative for IBM. You
need to go into management...We’ve
decided that you’re going to move on...
You were being groomed for your next
job, and your next job, and your next
job.
I was working for Lou Gerstner at the time. He was
chairman of IBM, and he came into my office and
asked, “Do you have any international experience?”
I said, “Yes, I lived in Nebraska once.” I thought that
was kind of cute, but he didn’t laugh at that. In typical
Lou fashion, he said “In 90 days you will be living in
Tokyo. Get your wife and family ready for this.”
About Tech Data
Tech Data Corporation (NASDAQ GS:TECD) is
one of the world’s largest distributors of technology
products from leading IT hardware and software
producers. Tech Data serves more than 125,000
IT solution providers in over 100 countries. Every
day, these resellers depend on Tech Data to costeffectively support the technology needs of end users,
including small and medium businesses (SMB),
large enterprises and government agencies.
57
CEO Awards
Most Respected CEOs
Steve Jobs
Apple
A Special CEO Honor
Steve Jobs
Founder and CEO of
Apple Inc.
The Innovation CEO
Company Profile
Industry: Personal
Computers
Employees: 34,300
Revenues: $57B
Market Cap: $236.4B
A visionary, charismatic, and creative
CEO who proved all his past enemies
wrong. His vision and pioneering
innovations transformed the way
we use computers and phones and
changed the industry forever. He gave
the world, the Macintosh GUI, Toy
Story, iPod, iPhone, iPad, MacBook
Air and iTunes. With his return to
Apple, he turned the company around
to become one of the best performing
and most valuable companies on Wall
Street. Jobs is listed as either primary
inventor or co-inventor in over 230
patents. He earned a salary of $1
per year since he returned to Apple
as the CEO in 1997. During that time,
he also did not sell a single share of
Apple stock even though his holdings
of Apple are estimated to be over
$1.1 billion (5.5 million shares). It is
believed that Steve Jobs accounts for
$20 billion or more of Apple’s market
value.
CEO Bio
Steve Jobs is the cofounder and
CEO of Apple Inc. In the late 1970s,
Jobs and his team designed,
developed and marketed one of the
first commercial lines of personal
computers, the Apple II series.
58
After losing a power struggle with the
board of directors in 1985, Jobs left
Apple and founded NeXT, a high-end
computer. Apple’s subsequent 1996
buyout of NeXT brought Jobs back to
the company he cofounded. Jobs also
served as the CEO of Pixar Animation
Studios. He became a member of the
board of The Walt Disney Company in
2006, following the acquisition of Pixar
by Disney. In 1986, Jobs acquired
the computer graphics division of
Lucasfilm Ltd which was spun off as
Pixar Animation Studios. He remained
the CEO until its acquisition by the
Walt Disney company in 2006. Jobs
is also a member of Disney’s Board
of Directors and owns approximately
138 million shares of Walt Disney
(DIS) stock that he received from the
Pixar Animation Studios sale.
CEO Challenge
Could history repeat itself? In the
early years of Apple, the company
had a superior graphical operating
system (OS). Jobs lost the OS
market to Microsoft by insisting on
selling a closed system. On the other
hand, Microsoft partnered with PC
manufacturers and dominated the
global OS market even when it had an
inferior OS at that time. Today, Apple’s
iPhone faces the same challenge from
Google’s Android. Will Steve Jobs
stick to the old strategy or will he preempt Google
and protect his smart phones market dominance?
Since Jobs is one of the most famous and most
covered CEOs in the media, we chose to focus less
on his biography and share more of his insights with
our readers.
CEO Insights
A lot of companies have chosen to
downsize, and maybe that was the right
thing for them. We chose a different path.
Our belief was that if we kept putting
great products in front of customers, they
would continue to open their wallets
Be a yardstick of quality. Some people
aren’t used to an environment where
excellence is expected
Innovation distinguishes
leader and a follower
between
Your time is limited, so don’t waste it living
someone else’s life. Don’t be trapped
by dogma. Don’t let the noise of other’s
opinions drown out your own inner voice.
And most important, have the courage
to follow your heart and intuition. They
somehow already know what you truly
want to become. Everything else is
secondary. Almost everything – all
external expectations, all pride, all fear of
embarrassment or failure - these things
just fall away in the face of death, leaving
only what is truly important. Remembering
that you are going to die is the best way
I know to avoid the trap of thinking you
have something to lose. You are already
naked. There is no reason not to follow
your heart
We do not say anything about future
a products. We work on them in secret,
then we announce them
Pretty much, Apple and Dell are the only We’re the last guys left in this industry
ones in this industry making money. They who can do it, and that’s what we’re
make it by being Wal-Mart. We make it about
by innovation
Clearly iPhone plus iPod touch have
Sometimes when you innovate, you created a new class of gaming. It’s
make mistakes. It is best to admit them surprising how good some of them are.
quickly, and get on with improving your ... Console games the software is $30 or
$40 a game. It’s cheaper on iPhone, so
other innovations
the market has exploded
To turn really interesting ideas and
fledgling technologies into a company We discovered something -- people are
that can continue to innovate for years, it going into apps. They’re not just going
onto to websites
requires a lot of discipline
59
CEO Awards
Most Respected CEOs
Timothy Manganello
BorgWarner
CEO Achievements
Timothy Manganello
CEO of BorgWarner Inc.
The Globalization CEO
Company Profile
Industry: Auto Parts
Manufacturing
Employees: 12,500
Revenues: $4.4B
Market Cap: $5.0B
2009 was an extraordinary year
for BorgWarner and the global
automotive industry. Due to an
unprecedented economic downturn,
Tim faced serious challenges such
as managing cash flow, fighting to
secure liquidity, and maintaining
profitability for BorgWarner. He
worked to develop the financial
capability within BorgWarner to
emerge from the recession as a
stronger company.
Tim led BorgWarner with a strategy
focusing on operational excellence
and efficiency. He was able to
unify people from the shop floor
to the boardroom re-focusing on
the financial discipline necessary
to be successful in the crisis. He
anticipated and reacted quickly to
market conditions, right-sizing the
business operations to achieve
positive cash flow and earnings for
the year. He targeted an aggressive
20% decremental margin on the
change in operating income versus
the reduction in sales and was
successful in achieving this target.
Tim strengthened the financial
structure of the company with a
successful convertible bond offering
during a time when the market was
60
reacting unfavorably to the auto
industry.
BorgWarner Net Income Growth
(LFY): Turnaround from loss of
-35.6M to profit of +27M despite
major decline in revenues In a very
difficult year for the global auto
industry. The strategies that the CEO
implemented allowed BorgWarner
to regain profitability in the third
quarter of 2009 and to be one of two
automotive companies to maintain
an investment grade rating without
sacrificing BorgWarner’s future in
the area of new business or R&D
spending.
CEO Bio
Timothy M. Manganello has been
chairman and chief executive officer
of BorgWarner Inc. since June
2003.
Mr. Manganello began his career in
the automotive industry in 1973. He
was named to his current position
in February 2003, after having
served for one year as president
and chief operating officer. Prior
to holding the position of COO, he
was executive vice president of the
company and served as president
and general manager of BorgWarner
TorqTransfer Systems from January
1999 to 2002. During his career at BorgWarner, he
has held senior management positions in operations,
sales, and business development.
Before joining BorgWarner in 1989, Mr. Manganello
held product engineering management positions at
Chrysler Corporation from 1973 to 1981, and sales
management positions at PT Components-Link Belt
from 1981 to 1988. A resident of Bloomfield Hills,
Michigan, Mr. Manganello holds a bachelor’s degree
and master’s degree in mechanical engineering
from the University of Michigan. He also completed
the Advanced Management Program at Harvard
Business School and is a graduate of the Chrysler
Institute program.
He is a member of the board of directors of Bemis
Co., Inc. (NYSE), and the Detroit Branch Chairman
of the Federal Reserve Bank of Chicago. He is also
a member of the University of Michigan College of
Engineering’s National Advisory Committee; and the
Chairman of the Executive Committee of the Board
of Trustees for the Manufacturer’s Alliance/MAPI.
CEO Insights
We are successful because we have
leading technology, we have strong focus
on financial discipline, and we have broad
customer base
Consumers want better fuel economy
and reduced emission in every region
of the world and these needs are driving
demands for BorgWarner’s leading
power train technologies
BorgWarner Inc has become a de facto
European company as employees have
increased in Europe while declining in
North America
We are bringing advanced technology to
China. We would rather be the first one
into China with new technology, and gain
the first-mover advantage
We will do an acquisition that will bring
in new technology, or more diversified
customer base, or put us in a part of
the world that is a growing one...Most
of our acquisitions will be done globally,
...We do an acquisition in Japan to begin
business with Toyota
We figure that we can come up with
the best technology solutions to include
the economy and emissions. The
OEMs would want to do business with
BorgWarner
We have three operating principles, which
are based on BorgWarner’s powerful
or lasting competitiveness in the world.
Firstly, we have set up plants in different
parts of the world to get closer to our
customers and to meet their demands
better. Secondly, when we are unable
to satisfy our customers in an area due
to economic or other factors, we will
transfer some products to the more
competitive manufacturing bases, such
as India and China. Thirdly, to boost its
global competitiveness, BorgWarner will
encourage its India and China plants to
serve customers from other countries and
regions. For examples, a BorgWarner’s
heat energy plant in China is providing
products directly to the plants of Ford
South Africa and American Chrysler,
bypassing the BorgWarner’s plants in
the U.S. or other countries and regions
61
CEO Awards
MASCO Corporation, the Nuclear Energy Institute,
Business Leaders for Michigan (formerly Detroit
Renaissance), the Detroit Zoological Society, United
Way for Southeastern Michigan and Cornerstone
Schools.
Most Respected CEOs
Tony Earley
DTE Energy
He is on the Department of Energy’s Electricity
advisory board, the advisory board for the College
of Engineering for the University of Notre Dame and
the listed member advisory board for the New York
Stock Exchange.
CEO Bio
Tony (Anthony) F. Earley, 60, has
been chairman and chief executive
officer of DTE Energy (NYSE: DTE),
a Detroit-based diversified energy
company since 1998.
Tony Earley
CEO, DTE Energy
The Smart Energy CEO
Company Profile
Industry: Electric
Utilities
Employees: 10,244
Revenues: $8.3B
Market Cap: $8B
DTE Energy owns Detroit Edison,
an electric utility serving 2.2 million
customers in Southeastern Michigan
and Michigan Consolidated Gas
Company (MichCon), a natural gas
utility serving 1.3 million customers
in more than 550 communities
throughout Michigan.
DTE Energy also owns several
nationwide non-utility companies
engaged in providing energy services
to large industrial customers, the
transportation and storage of fuels
such as natural gas and coal, energy
trading and the development of
unconventional gas resources.
Earley is chairman of the Edison
Electric Institute (EEI), the trade
association of investor utilities. In
this role he is actively involved in the
development of national policies on
energy, the environment and climate
change issues.
As a former Chair of the Nuclear
Energy Institute, he has played an
62
active role in revitalizing the nuclear
industry in the United States.
Earley joined Detroit Edison as
president and chief operating officer
in March 1994.
From 1989-1994, Earley served as
president and chief operating officer
of the Long Island Lighting Co.
(LILCO), an electric and gas utility in
New York.
Prior to 1989, he served LILCO in
several other positions, including
executive vice president and general
counsel.
Earley joined LILCO in 1985 from the
law firm of Hunton & Williams, where
he had been a partner in that firm’s
energy and environmental team.
Earley earned a bachelor of science
degree in physics, a master of
science degree in engineering and a
law degree, all from the University of
Notre Dame.
He served as an officer in the United
States Navy nuclear submarine
program where he was qualified as a
chief engineer officer.
Earley serves on the board of
directors of Ford Motor Company,
CEO Insights
DTE Energy will receive $83 million
from the U.S. Department of Energy to
accelerate its SmartCurrents program
over the next two years. The grant will
be matched by DTE Energy and its
technology partners. We estimate the
accelerated startup of the SmartCurrents
program will result in the creation of 700
deployment and construction jobs for IT
contractors and overhead linemen, and
350 permanent positions for suppliers
to this effort. This estimate does not
include second tier or pull-through
opportunities created with an increase
in local production and commercial
growth of this technology. There are
environmental benefits, too. By reducing
our vehicle use related to meter reading,
we’ll also cut our carbon emissions and
fuel consumption.”
The combined effect of our $3.4 billion
investment, when the projects are fully
implemented, will create thousands
of jobs, including higher paying
career opportunities for smart meter
manufacturing workers, make the grid
more reliable and empower consumers
to cut their electricity bills. We estimate
these improvements will reduce electricity
demand by 1,400 megawatts, and put us
on a path to get 20 percent or more of
our energy from renewable resources by
2020
We believe diversity isn’t only about
race or gender. It’s about understanding
and embracing the unique differences,
talents and perspectives of employees,
customers and suppliers. We believe that
a commitment to diversity is a commitment
to the success of our business... Through
our Supplier Diversity Initiative, we seek
relationships with businesses that are
small, owned by women, or minorities
and/or do business in the HUB Zone
The SmartCurrents program is DTE
Energy’s contribution to the nation’s Smart
Grid, which uses the latest technologies
across the country’s electric system
to allow consumers to make choices
that save them money and improve the
environment
About DTE Energy
An integrated energy company, providing gas
and electric utility services to 2.7 million Michigan
homes and businesses, and energy-related services
to businesses and industries nationwide. The
largest operating subsidiaries are Detroit Edison
and MichCon. Together, these regulated utility
companies provide electric and/or gas services to
more than three million residential, business and
industrial customers throughout Michigan. Non utility
business include Coal, rail, pipeline, gas storage,
energy trading, gas production, biomass, and other
power and industrial projects.
63
CEO Awards
Lessons from the Most Respected CEOs
Selecting the right executive is probably the single
most important decision any company can make.
While most companies have a formal list of CEO’s
selection criteria, they often misplace the weight of
each criterion when evaluating individual candidates.
Typically, companies engage an executive search
firm and rely on it to find the right person. Many times
this does not result in the success that the company
anticipates. Most executive search firms will send
only what they consider “safe” candidates for the
company to accept. Usually, the focus is placed
on criteria such as cultural fit, years of industry
experience and education. While these are helpful
indicators of the candidate’s abilities, our research
findings has taught us that many of the criteria used
to qualify the candidates are less important than
what the company or the recruiters think.
Top CEOs come from many diverse personal,
educational and professional backgrounds. After
researching more than 1,000 CEOs of global
companies, and looking at their educational and
professional backgrounds, we came to the conclusion
that selecting a successful CEO boils down to three
criteria; the candidate’s decision-making abilities,
leadership skills, and personality strengths. All other
factors are less important and in some cases proven
irrelevant, as demonstrated by the list.
The CEO’s Critical Success Factors
A strong multi-dimensional decision-making
ability is critical to enable the CEO to navigate the
continuously changing internal and external forces in
a complex and uncertain competitive environment.
The CEO constantly evaluates and chooses
between alternative strategic and tactical courses of
actions, while considering the decision constraints
and potential risks. Our decade-long research is
full of examples of CEOs who were brought from
outside the company, outside the industry, and
sometimes even outside the country. Their results
were far superior to their predecessors, who had
64
all the relevant business, operational and cultural
information.
Leadership ability is critical to the execution of the
strategy. The CEO must be able to balance and
influence the complex organizational relationships
and sometimes conflicting stakeholders’ interests.
Relationship management with the board,
government, public, clients, employees and their
power centers is a key difference between a
successful and unsuccessful implementation of the
business strategy. None of the researched CEOs
could have succeeded or scaled their growth to
a global level without acquiring and aligning the
strong support of their professional networks,
business partners and executive teams. Almost all
CEOs attribute their success to hiring, developing or
motivating top talents. Our research has examples
of some of the most brilliant CEOs who failed due to
their lack of relationship management skills or due
to a strong opposing political environment.
Personality strengths such as ambition, drive,
resilience, and the ability of the executive candidate
to manage extremely heavy workloads and stress
are critical for the CEO success. Leading a business
organization is a highly competitive and demanding
race. The scope of work, scale of responsibility,
information overload, and number of demanding
relationships can be overwhelming. Most CEOs
perform well during good business conditions. Few
can do well in stressful times. Even less are able to
shine during a crisis.
The research of the “Most Respected CEOs” has
taught us new and important lessons. The following
is a partial list of the research findings that challenged
the many common misconceptions about the ideal
CEO’s personal and professional profiles.
1. Culture or social background does not matter as
much as most companies think. Carlos Ghosn,
CEO of Nissan Motor, and one of the most
2.
3.
4.
5.
6.
7.
8.
9.
successful CEOs of all time, proved that you
do not need to know the culture or speak the
language to run one of the largest companies
in the world. Possessing the right leadership
skills can turn around a foreign company with
a foreign culture in a foreign country. It is worth
noting that when Ghosn took the CEO position
at Nissan he did not even speak Japanese.
The profile of David Blair, CEO of Catalyst Health
Inc taught us that age and years of experience
do not matter as much as most companies think.
David is one of several examples of young CEOs
who led their companies to very high growth
levels. Catalyst is one of the fastest growing
companies with 1,000 employees producing
more than 3 billion dollars in revenues.
Paul Diaz, CEO of Kindred Healthcare Inc,
Robert Dutkowsky the CEO of Tech Data,
and several others taught us that the CEO’s
academic education does not matter as much
as the recruiters think. On the other hand, the
CEO’s professional training and experiential
development is critical to the success of the
CEO and the company. Contrary to popular
views, most successful CEOs did not graduate
from Ivy League universities; many of them
do not have MBA degrees. Some of the most
successful CEOs have law, technical, physics,
or HR education.
Christopher Connor, CEO of The SherwinWilliams Company, and John Wren, CEO of
Omnicom, taught us that hiring top talent is the
ultimate competitive advantage.
John Stumpf, CEO of Wells Fargo & Company,
taught us that a CEO who admits mistakes and
does not sugarcoat or omit bad news is a CEO
to trust.
Joseph Saunders, CEO of Visa Inc., taught us
that advocacy and lobbying are critical to the
success of the company in a changing regulatory
environment.
Robert Dutkowsky, CEO of Tech Data
Corporation, taught us that having good mentors
at work is critical to the performance of the
executive and the company.
The success of David Simon, CEO of Simon
Property Group, is attributed to his ability to
identify and negotiate M&A opportunities as a
growth strategy.
Eric Schmidt, CEO of Google Inc, taught us that
every day brings new challenges. The CEO’s
job is to keep things focused.
10.We believe the success of Tony F. Earley, CEO
of DTE Energy, is attributed in a substantial part
to his professional and government network.
11. Jeffrey Joerres, CEO of Manpower Inc, taught
us that it is critical for the CEO to get out of his
office and meet people face to face. The CEO
must stay connected with his people so that
they know where the challenges lie within the
organization.
12.The lesson we learned from Matt Rubel, CEO
of Collective Brands, Inc., is that the business
strategy, regardless of the economic climate, is
to remain focused on the consumers.They hold
the key to any retailer or brand success.
13.Michael Dan, CEO of Brinks Inc, taught us that
the three top skills needed for a CEO are focus,
communication skills, and stress management.
14.The success of Timothy Manganello, CEO of
BorgWarner Inc, is based on his strategy to seek
technology as a competitive advantage and his
ability to think and act in a global framework. This
enabled him to diversify the company’s portfolio
of investors, products and markets which was
the key to overcome the worst U.S. economic
crisis to hit the auto industry.
15.Mike Morris, CEO of American Electric
Power (AEP), taught us that motivation and
encouragement is the best way to get things
done through your people.
16.The most important lesson any executive can
learn from Steve Jobs, CEO of Apple Inc., is
that innovation leadership is the best value
creation strategy. He also taught us that the
most successful CEO is not the one who makes
fewer mistakes, but the one who quickly learns
from them and moves on.
17.Muhammad Yunus, CEO of Grameen Bank,
taught us that the greatest challenge of the CEO
is to change the mindset of the stakeholders,
because mindsets play strange tricks on
people.
About CEO Awards.
CEO Awards is a partnership project with the
International Institute of Management. IIM is a
management best practices research and education
institute. IIM provides CEO and executive support
services, strategic planning retreats and custom
corporate training courses for the Global Fortune
1000 companies and governments. To learn more,
please visit www.iim-edu.org
65

CEO Awards - CEO Best Practices - Most

Transcription

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