Douglas Oberhelman, CEO, Caterpillar

JP Donlon, Editor-in-Chief, Chief Executive Magazine

Caterpillar is one of Americea’s greatest success stories in overseas markets—largely due to the way Oberhelman orchestrates his senior leadership team. Learn how to adapt his strategies to your own firm.  

Concurrent Roundtables
Expert moderated interactive discussion to delve deeper into key issues.

Building a Capability for Breakthrough Innovation

Thought Leader: Cary Pappas, President & CEO, FedEx TechConnect
Even when top management recognizes the importance of breakthrough innovation there is often a lack of understanding in the investment and organizational skill set required. Many assume that additional investment in R&D, for example, leads to increasing amounts of innovation. Several professors at Rensselaer Polytechnic Institute studied this and found no relationship between R&D expenditure as a percent of sales and innovativeness. In fact, R&D as a percent of sales was consistently unrelated to sales growth, margins and stockholder returns. However, innovation, particularly breakthrough innovation—the introduction of something new to the marketplace— was directly related to sales growth and profitability. Those firms that were particularly good, the RPI professors found, had in place a system for discovery, incubation, and acceleration. Applying what is generally known about continuing operations to managing business innovation is often a big mistake, they found. The innovation function requires a distinct set of disciplines. This roundtable discussion will examine the distinct challenges of building an organizational capability for breakthrough innovation. Not every business will necessarily compete on the basis of its innovativeness, but every company should understand the transformative value of such a competency as a value generator.

Where Is the Board?

CEO self-preservation demands that the CEO and the Board have a clear understanding of current risks, trade-offs and stewardship challenges that are becoming increasingly toxic today.
This year alone CEO-Board tensions have taken a terrible toll of companies not normally associated with sudden risk-eruption syndrome (SRES). Suspicious payments to Asian partners triggered the fall of Andrea Jung as CEO of Avon Products, and while no one blames her directly, Wall Street has been critical of her continued presence on the company board. Chesapeake Energy CEO Aubrey McClendon’s involvement in certain dealings raised tensions with that company’s board which continue to play out in news reports. Payments as much as $24 million by Wal-Mart de Mexico created deep fissures between its CEO Mike Duke and the Wal-Mart board causing a number of executives to leave the company and a reputational black eye for a company that prided itself for its ethical standards. Best Buy Brian Dunn was forced out after it was learned that he had an “inappropriate” relationship with a Best Buy subordinate. When it was learned that co-founder Richard Schultz knew about this well beforehand but did not inform the board, he was forced out as well. Neither Duke Energy’s CEO Jim Rogers or its board covered themselves with glory over the sudden dismissal of Progress Energy chief Bill Johnson within hours of the merger being consummated. And for good measure Jamie Dimon had a fair amount of egg on his face—not to mention JPMorgan Chase’s board—when it was learned that the so-called London whale trader’s $2 billion loss later turned into $5 billion— and possibly more. Risks are everywhere and the trade-off in tensions can surface in unexpected places. What can a CEO do to minimize and control such situations? How can boards protect the interests of their companies as well as help the CEO manage through such an environment? These and other questions will be examined in this roundtable’s discussion with a view towards outlining likely scenarios and appropriate responses for business leaders and boards alike.

Bob Grabill, CEO, Chief Executive Network

Bring your specific challenges to CEO peers in confidential, small group meetings facilitated by experts.  Over 22 years, Chief Executive Network has pioneered a unique, highly-efficient meeting format that accelerates results and provides clarity based on relevant, real-world peer experiences.