Reuben Mark, Colgate-Palmolive
Mark, 63, has an MBA from Harvard Business School. Other than that, he shares little with the popular conception of a CEO. He's not a strapping former athlete. He sometimes pulls his hair back in a ponytail. When he travels overseas, which is often, since Colgate (CL ) operates in 218 countries and gets 75% of its sales from outside the U.S., it's not on a corporate jet. He likes to curse, hates publicity, and doesn't play golf. He rode a motorcycle when he was younger and now hunts game birds such as Colombian doves. Sheila Wellington, president of women's advocate Catalyst, recalls bumping into him one evening on the street in Manhattan: he looked anything but the CEO in his weather-beaten parka. "He wants his company to be the superstar, not him," she says.
The way he runs Colgate is different, too. Although he assiduously courts institutional investors--Colgate's five biggest shareholders control 20% of its stock--he holds in great disdain many of the things Wall Street loves most. His record of meeting or beating quarterly earnings estimates is near perfect, but he doesn't go in for radical business moves. At the company's annual meeting in May, Mark played dramatic classical music before announcing several mundane changes. The point was to mock Wall Street's calls for a "needle-moving event."
Since Mark took over 18 years ago, Colgate has made only two large acquisitions and has exited numerous businesses where it was not a leader. The company relies heavily on new products, but Mark deliberately does not stray out of four core areas of expertise: oral care, personal care, household cleaners, and pet food. That focus paid off in 1998 when, in the coup of his career, he pushed Colgate toothpaste past long-term rival Crest in the U.S.
Mark has effected major business improvements over his tenure by focusing intensely on incremental business improvement. He's obsessed with profitability and has increased Colgate's gross profit margin to 55.1% in 2001, a steady climb from 47.9% in 1995. His goal is to reach 60% by 2008. That kind of control over costs has helped Colgate record higher profits without increasing the price of a tube of toothpaste in the U.S. in the past decade.
Searching for savings as well as better quality, Mark unified all of his advertising with one agency in 1996, Young & Rubicam Inc. Since then, the company has cut the number of commercials shot by more than a quarter and reduced the number of offices creating ads from some 100 to fewer than a dozen. But that doesn't mean Colgate isn't concentrating just as sharply on marketing. Twice a year, Y&R execs spend two days in Colgate's Manhattan headquarters, where they review their ads with Mark and other executives. It's an amazing level of involvement for a CEO of a $9 billion company. "I've never heard of it before or since," says Y&R chief marketing officer Craig Middleton.
Still, Mark has his challenges. Revenue has grown only 1.4% annually over the past five years, depressed partly by currency exchange fluctuations. And continuing to cut costs from an already lean operation will be tough. It's also unclear who his successor will be, though Mark has said there are several internal candidates. For now, though, Mark is the standard-bearer of his industry.
By Nanette Byrnes, with John A. Byrne in NewYork, Cliff Edwards and Louise Lee in San Mateo, Calif., Stanley Holmes in Seattle, and Joann Muller in Milwaukee