The year 2002 will surely be remembered as the annus horribilis of business. It was a time of tumult and reassessment, high drama and low comedy. Corporate crime and greed were spectacularly exposed in companies that had once been praised, run by executives who had once been trusted. It was the year Enron set new lows in corporate ethics, while WorldCom broke records for the size of its bankruptcy. It was also the year we learned the Rigas family may have defrauded Adelphia Communications of some $1 billion, Bernie Ebbers borrowed $408 million from WorldCom, and Samuel Waksal urged his daughter and father to trade on inside information he gave them about ImClone Systems Inc. Andrew Fastow, ex-chief financial officer at Enron, faces no fewer than 78 felony charges. The outside auditors and the supposedly independent directors? They pleaded ignorance.
Chief executives seemed startled by the ridicule, distrust, and outright contempt they faced. At the same time, they had to contend with an economy that edged ever-so-slowly toward a recovery but kept falling short. If ever there was a year to examine the many ways in which managers succeed--and fail--this was it.
The best executives responded by providing more information about company operations to dispel suspicions and then they got back to work. Some--Andrea Jung at Avon (AVP), A.G. Lafley at Procter & Gamble (PG), and Robert Tillman at Lowe's (LOW)--even managed to excel, despite the extremely trying conditions. Others, however, such as Jack Greenberg, the abruptly replaced head of McDonald's (MCD), and Jean-Marie Messier, the ex-chief of Vivendi Universal (V), were unable to outrun their problems. They were not alone: We've included more than a dozen new executives who have taken over major companies in 2002.
In a year as turbulent as this one, we decided to take a new approach to our annual wrap-up of the year's best managers. Along with the best, we've also looked closely at the worst executives, the fallen, the indicted (and those under fire), and managers to watch in the year to come. Many of the names are familiar. Last year, for example, we called Dennis Kozlowski one of the best managers of 2001, citing his ability to lead Tyco International (TYC) through a recession that flattened most of its counterparts. What we didn't see was that the company was struggling to keep up appearances as investigators were eyeing Kozlowski. Now you can find him in the section called Perp Walk. Two years ago we praised Sandy Weill at Citigroup (C) for making the huge financial firm his own, elbowing out his co-chief executive and installing his numbers-obsessed loyalists in key positions. With Citi enmeshed in almost every scandal to hit Wall Street in 2002, we named Weill one of the worst.
BusinessWeek surveyed its staff of some 144 writers and editors in New York and in 21 bureaus around the world to decide whose performance should be lauded and whose deserved a different kind of renown. We figured it was the best way to commemorate the year just past--and to look ahead to the one just beginning.