Good managers know how to cut: They trim costs, reengineer, and restructure. Great managers know how to grow: They realize you can't shrink your way to greatness. In 1995, the best managers in the world grew their way to greatness.
The men and women of BUSINESS WEEK's Top 25 Managers of the Year--Americans, Europeans, Asians--all rode the tiger of growth to spectacular success. In a global economy of vast technological change, intense competition, and political upheaval, these managers cranked out annual increases of 20%, 30%, sometimes even 40% in profits and sales--while other corporate "titans" were still trimming their sails and eking out marginal gains.
What did it take for an executive to make it into BUSINESS WEEK's Top 25? Begin with product innovation--the hot strategy of the year for managers who had already wrung out their corporate inefficiencies. When the bureaucratic layers are gone, when the marginal competencies are dumped, the only strategic assets left to corporations are the products they sell in the global marketplace. This was proved in 1995, when the most reliable path to fast growth was to bring out new products adored by lots of consumers.
Riding the technological currents was the favorite tactic used by managers in bringing out their innovations in 1995. But managers also had to take risks, especially the risk of cannibalizing old models with new products. There was new software for personal computers and the Internet, color copier/printers for the home office, and even new first-class seats that fold out into beds. All were smash hits.
BUSINESS WEEK's top managers used corporate alliances to drive their growth. American and European managers divvied up the incredibly successful DBS launch--direct broadcast satellite transmission of TV and stereo music. A French-owned company built the 12-inch satellite dishes for the home, and the Americans developed the satellites and software to close the loop. Nearly two million homes in the U.S. now have DBS. This global cooperation generated tremendous growth for all concerned. So did alliances between industries: One software giant linked up with a corporation running a TV network to provide new information products over the wire.
Top managers used globalization strategies wisely to boost growth. Asian territories outside Japan proved once again to be the fastest-growing markets in the world in 1995. Every smart manager wanted a bigger piece of the Asian pie. Some succeeded, as did one investment banker who was able to cut a deal enabling his firm to do business inside China. Another American manager reversed strategy and revitalized his heavy capital equipment company by focusing on new opportunities in Europe.
Then there were Asian managers using the global markets to move outside their region into other parts of the world. One computer maker divided his operation into 21 smaller companies so that each could list on the stock market where it did most of its business.
Of course, reengineering remained important as a catalyst for growth for some top managers. One new Japanese manager quietly restructured ingrown business practices of his company and led it to a projected doubling of net profit and a record year. An American continued to reshape a traditional defense-base conglomerate into a tough market-oriented competitor.
How did BUSINESS WEEK come up with its Top 25 Managers of the Year? The magazine polled its 220 editors around the world, including its large foreign bureau system, the largest of any global business magazine. The methodology was deceptively simple: screening the financial figures, questioning the best analytical minds, and talking to the leading corporate managers around the world. The bureaus asked: Who was the best in 1995? Here's the collective reply.
ROBERT AYLING British Airways MIKE ARMSTRONG Hughes Electronics ANA BOTIN Banco Santander CASEY COWELL US Robotics GEORGE DAVID United Technologies MICHAEL EISNER Walt Disney GEORGE FISHER Kodak WILLIAM AND VICTOR FUNG Li & Fung ANDREW GROVE Intel GERALD GREENWALD United Airlines RALPH LARSEN Johnson & Johnson JAN LESCHLY SmithKline Beecham JOHN MACK Morgan Stanley ARTHUR MARTINEZ Sears Roebuck SCOTT McNEALY Sun Microsystems PAUL O'NEILL Alcoa BERND PICHETSRIEDER BMW LEW PLATT AND RICHARD BELLUZZO HP ALAIN PRESTAT Thomson Multimedia JEAN-PIERRE ROSSO Case TADASHI SEKIZAWA Fujitsu STAN SHIH Acer WILLIAM SIART First Interstate Bank WILLIAM STEERE Pfizer PATTI STONESIFER Microsoft