Good management is never one-size-fits-all. That's why BusinessWeek's list of the best managers of the year reflects a variety of skills and strategies that enabled some companies to prosper in 2004 while others sank.
Winning in some cases was simply a matter of good execution. Robert L. Nardelli, chief executive of Home Depot Inc. (HD), boosted efficiency at the No. 2 U.S. retailer and invested in new technology. The result: profit margins above 30%. Henning Kagermann steered German software goliath SAP (SAP) through the tricky waters of the tech marketplace. His focus on holding down costs is one reason why profits are expected to rise by 20% in 2004 over the previous year. And Anne M. Mulcahy of Xerox Corp. (XRX) and Edward D. Breen Jr. of Tyco International Ltd. (TYC) turned around struggling companies.
Other CEOs did well by listening to customers. Joseph M. Tucci of EMC Corp. (EMC) revamped the data-storage giant's product line to reflect desires for less expensive options. His reward: a 34% hike in revenues in the first nine months of 2004. Hyundai Motor Co. CEO Chung Mong Koo, son of the founder, helped boost quality and customer satisfaction. And Jeffrey R. Immelt turned General Electric Co. (GE) into a more nimble, customer-driven company focused on innovation.
One key skill a CEO can supply is the ability to size up the next generation of executives. Such nurturing of leadership made PepsiCo CEO Steven S. Reinemund a standout and enabled Pepsi to tap into new markets. And Philip H. Knight, chairman of Nike Inc. (NKE), took the bold step of hiring an outsider, William Perez, to succeed him as CEO.
Sometimes the best managers are not found in blue-chip boardrooms. John W. Henry, the principal owner of the Boston Red Sox, broke an 86-year championship drought by boosting revenues and emphasizing a quantitative approach to judging players. And Karl Rove was the architect of President George W. Bush's successful reelection campaign, perhaps the biggest management triumph of the year.
There will no doubt be new challenges in 2005. But the lessons offered by these top managers are suited even to tomorrow's business conditions.