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BusinessWeek: January 10, 2000 |
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Editorials
The Best Managers: What It Takes In the Internet Age, it should not be a surprise that BUSINESS WEEK's list of the top 25 managers leans toward the leaders of technology-related businesses (page 60). From Steve Case of America Online to Bernie Ebbers of MCI WorldCom to Chris Gent of Vodafone AirTouch, about half of BUSINESS WEEK's top managers come from information technology and telecom companies around the globe. These are all businesses that have prospered in cutthroat industries where it is far too easy to fall permanently behind. Moreover, in an era when companies with mountains of red ink are rewarded with enormous stock valuations, most of these managers run companies that have been demonstrably successful in terms of profits in recent years. But the executives in the Top 25 share another trait: adaptability. For example, Kenneth L. Lay, CEO of Enron Corp., was able to prod the utility to quickly move to take advantage of the opportunities offered by energy deregulation. CEO Yun Jong Yong of Samsung Electronics Co. restructured the Korean giant to adjust to the new realities of competition in the aftermath of Asia's financial crisis. And Case was able to implement a series of strategic shifts to keep America Online growing--and profitable--in a rapidly changing online market while many of its rivals fell by the wayside. Indeed, adaptability may turn out to be one of the key traits needed in the next couple of years, especially at fast-growing technology companies. The skills needed to ride the boom may not be the same ones that are valuable when a business or industry starts to mature. This is a critical lesson for the Internet startups. Right now, the most successful executives at dot.com companies are those who can build market share as quickly as possible in a highly unpredictable and fast-moving environment. As the Christmas retailing season shows, this may mean cutting prices and selling as many products as possible at a loss. Managers who can do well in such a situation may excel in the early go-go years of e-businesses. But when it is time for the transition to profitability, a very different set of strengths may be needed--and only some managers may be able to adapt. Similarly, some executives today have prospered by their ability to wheel and deal in consolidating industries. Such skills work well in the greatest merger and acquisition boom in history. But when the M&A frenzy slows, as it inevitably will, a different set of skills will prove essential. Going into the 21st century, corporate boards and investors must judge managers on more than simply how well their companies or their stocks are performing today. In particular, equity prices, which in ordinary times may be an excellent indicator for the performance of managers, may today reflect the fervor of the market rather than a clear-sighted appraisal of corporate values. The one truth is that the economy will continue to change--which makes the ability to adapt to changing environments one of the most valuable management skills of all. | |
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