When Robert J. Nardelli and James W. McNerney lost the horse race to succeed Jack Welch as head of General Electric Co. (GE), the two men had very different reactions. McNerney immediately swallowed his disappointment and told Welch that he had picked a great guy in Jeffrey R. Immelt. A devastated Nardelli pressed Welch to know why he didn't get the job. Didn't he have the best numbers? What did Immelt have on him? Why wasn't he the guy? The bitterness was palpable, say insiders.
Both moved on to lead underperforming companies. McNerney, 57, jumped to 3M Co. (MMM) and then Boeing Co. (BA). An angry Nardelli stormed into the top job at Home Depot Inc. (HD). Both received big pay packages and delivered impressive numbers. But that's where the similarities end. While McNerney nurtured an environment of respect at his companies, Nardelli's tenure was marked by callousness and heavy-handedness. In the end, he couldn't even entertain a symbolic pay cut imposed by his board. "Being mean is so last millennium," says advertising guru Linda Kaplan Thaler, who co-wrote The Power of Nice.
Consider how the former GE rivals approached their new jobs. Nardelli arrived at Home Depot full of bombast, standing up at one meeting to say "you guys don't know how to run a f---ing business," according to a former senior executive at Home Depot. In contrast, McNerney spent his first six months at Boeing talking to employees to better understand the businesses. He didn't yell or publicly humiliate anyone. And though the aerospace giant was reeling from a binge of corporate misconduct, McNerney didn't stuff the top ranks with his GE pals--as Nardelli did. He called for teamwork and heaped credit on shunned CEO contender Alan Mulally. A modern-day Dale Carnegie, he even remembers low-level staffers' names. "Jim's problems have been as tough, or tougher, than the ones that Bob had to face," says a former GE peer. "But he has tried to solve them in a much more pleasant way. The guy is loved over there at Boeing--and that's got to make a difference."
With likability a buzzword among CEO headhunters, it can make all the difference. Nardelli clearly cared about Home Depot. When it came to measures like profitability, his push was paying off. What he neglected was the touchy-feely stuff: the enthusiasm of his people, a sense of humility before his board, the care and feeding of his shareholders. It all seems so soft and irrelevant, until the injured egos decide to fight back.
By Diane Brady