FROM THE EDITOR

September 1 1989 by Chief Executive


Peter Drucker recently observed that the 1,000 richest people-everyone from the Sultan of Brunei to Ron Perelman and Henry Kravis-may get extraordinary notoriety as media celebs, but economically they are irrelevant. Combined, they couldn’t cover the capital needs of any major industry for more than a few months. Contrast this with the fact that at the turn of the century a pledge by J.P. Morgan to buy a stock would stop a financial panic in its tracks. Just as business figures grace the covers of People and the comings and goings of CEOs are reported in the gossip columns of newspapers, the tycoon of fictional lore, isn’t what he used to be.

In his place is a new CEO, one who understands that management is about people. It’s not a bag of tricks or a bundle of clever analytical techniques taught in business school. It’s about integrating human beings and harnessing their skills and dedication to perform efforts upon which all our livelihoods depend.

If one listens carefully today to what chief executives think is important, one sees this sea-change in attitudes. For example, at our customer satisfaction roundtable held in Chicago, Brunswick‘s Jack Reichert and ex-Bell & Howell CEO, Don Frey exchanged views over the importance of shareholders vs. customers. Frey was testing Reichert’s commitment to his customer satisfaction strategy by probing the Brunswick chief as to where his principle duties lay. Reichert didn’t dissemble. Customers come before shareholders, because without them there is no company and nothing shareholders have that’s worth sharing. Harley-Davidson’s Richard Teerlink, a financial man by training, remarked that profits should not necessarily be a company’s first priority. If a company produces a product or service that satisfies its customers, the company will be rewarded accordingly. Sounds positively Japanese. Somehow I cannot imagine Harold Geneen or Reginald Jones saying this.

While feting Ford’s Don Petersen at New York‘s Metropolitan Club last July (See 1989 Chief Executive of the Year Dinner, p. 22) it was revealing to hear him talk about the transformation of Ford. The only meaningful judgments about a company come from outside the organization. Inside there are only costs.

Attending to what the customer thinks is important is what joins both outgoing Chief Executive of the Year (1988) Bill Marriott with his successor Don Petersen. In the photo nearby, Marriott is congratulated by Petersen after receiving a “lifecast” portrait. The scuplture, created by artist Willa Shalit, and made possible by the Touch Foundation, a non-profit organization assisting the blind, is traditionally given to outgoing chief executives of the year.