The Top 25 Managers of the Year

If there was ever a year in which executives could really distinguish themselves, this was it. Recession, terrorism, war: What didn't go wrong in 2001? Companies already hurt by the sluggish global economy had to contend with the eerie consumer retreat that took place in America after the September 11 attacks. Back in June, executives complained they had "no visibility" on the timing of a recovery; by October, some in the airline and insurance business were hoping the government would see fit to bail them out. Crisis management took on new meaning. It did little good for chief executives to boast about their prospects or deny their mistakes. No one, not investors, not board members, certainly not employees or consumers, was in the mood for that. It was a year to be utterly realistic.

That's not to say the best executives weren't also gutsy, contrarian, or just plain stubborn. Richard S. Fuld Jr., the head of investment bank Lehman Brothers Inc. (LEH

), hasn't laid off a soul, even though his rivals have let go of thousands to cut costs. Richard B. Priory, CEO of Duke Energy Corp. (DUK

), was the first to sign a big deal after September 11: He agreed to acquire a Canadian natural gas company for $8.5 billion. The day after the U.S. began its military campaign in Afghanistan, Howard D. Schultz, the founder of Starbucks Corp. (SBUX

), went ahead with an initial public offering in Japan.

To choose the year's 25 Top Managers, BusinessWeek surveyed its staff of some 160 writers and editors in New York and in 22 bureaus around the world. Then we culled that list for the truly outstanding leaders. Some, such as Louis V. Gerstner Jr. at IBM (IBM

) and Hiroyuki Yoshino of Honda Motor Co. (HMC

), earned a place because of their smart strategic decisions. Gerstner, who will retire later this year, changed IBM's business model to focus more on selling services than hardware. It's now the envy of the computer industry. Yoshino also managed an important shift in the direction of his company. Once known mostly for its compact sedans, Honda now produces minivans and sport-utility vehicles. The new models have become so popular in the U.S. that dealers have waiting lists for them. Forget about 0% financing for these vehicles. That's given Honda a market capitalization of nearly $39 billion, bigger than that of troubled Ford Motor Co.

Another top performer, Tyco International Ltd. (TYC

), now has a market value of $114 billion--more than Ford (F

), General Motors (GM

), and DaimlerChrysler (DCX

) combined--thanks to the relentless dealmaking and lean operating style of CEO L. Dennis Kozlowski. In general, though, stock prices were not the best way to measure an executive's performance in 2001.

In some cases, it made more sense to look at how an executive managed innovation. For example, Steven A. Ballmer, CEO of Microsoft Corp. (MSFT

), oversaw the introduction of more major products in 2001--from Windows XP to the Xbox game console--than in any other year. Reuben Mark, who has run Colgate-Palmolive Co. (CL

) since 1984, has been determined to get new merchandise to markets around the world as quickly as possible. Although Colgate sells brands of soap and toothpaste that are decades old, more than a third of its revenues come from goods introduced in just the past five years. And at online auction site eBay Inc. (EBAY

), Margaret C. Whitman continually responds to users' requests for new categories and features. Now, eBay even offers fixed-price items for sale.

While some of our managers, such as Colgate's Mark, rarely appear in public, others put themselves right out there. John Browne of BP PLC (BP

) is a modern-day oil baron and industry pacesetter who also talks about the dangers of global warming. And Oprah Winfrey, whose television show and magazine are still drawing converts, presided over a memorial service in New York's Yankee Stadium attended by 20,000 people. Sure, Winfrey is comfortable in front of a big audience: She has 26 million viewers in the U.S. alone. But we like to think that any of this year's top managers could have stood next to Mayor Rudolph W. Giuliani and still looked good.

Corrections and Clarifications

In "The top 25 managers of the year" (Cover Story, Jan. 14), the first name of the president and chief executive of Canon Inc. was misspelled. He is Fujio Mitarai.