An 18-Hole Character Test

No boardroom meeting can provide the insight into a CEO's nature that a round of golf can

Shortly after 9 on a hot, humidmorning, Stan O'Neal was pounding balls on the driving range of the Golf Club of Purchase (N.Y.) The chairman and chief executive of Merrill Lynch (MER ) hit a drive and watched the ball bounce beyond the 250-yard marker. He studied the shot and then patiently teed up another. After a dozen more balls, he turned to me--his guest for the day--and announced he was going to take some practice putts before we headed out.

Over the next four hours we talked about our families, the economy, and politics. We engaged in friendly competition that left me with a much lighter wallet. Most of all, we had fun. O'Neal, 53, is often described as a robot in an expensive suit, an unemotional man who fired thousands of employees shortly after September 11 and dispatched his rivals at Merrill in quick succession. Yet by the time the final putt dropped, I realized I had seen a side of O'Neal that entirely contradicted his reputation. He was engaging, inspirational, and genuinely interested in the people around him. Unlike many CEOs I've met, he treated his caddie with the utmost respect and spoke affectionately about employees.

This is the ultimate benefit of mixing business and golf: the chance to really get to know someone. No boardroom meeting can produce the same insight that comes from the solitude of a private club, the friendly competition of a $5 nassau, or uninterrupted time walking along velvety fairways. For certain, plenty of deals have been crafted on the greens of America's elite clubs. Why else would companies spend millions on initiation fees, membership dues, and hospitality tents? But golf's true benefit is what it teaches you about people:

1. IS THIS PERSON HONEST? One prominent CEO told me a story about a former boss who made it a habit to cheat on the course. He witnessed this during a match the two won. Afterward, my confidant decided he could never continue working for someone who acted so dishonestly, and he quit. A few years later, as it turned out, an accounting scandal forced his old company into bankruptcy under the watch of the cheating CEO.

2. HOW PASSIONATE IS THIS PERSON? If you ever get to see Bill Gross play golf, you'll understand why he is such a successful investor. The chief investment officer at bond behemoth Pimco is not a great golfer. But he is an ardent one. Gross, 63, takes every shot in a serious and measured way. He studies the game and pores over his scorecard after each round. He even calculates the number of greens he has to hit in regulation in order to break 80.

Gross compares the sport to his professional life. "Golf teaches me to contain my frustration," he says. "On any trading day, I might be losing millions of dollars. I'll go home at night and regroup. It's like moving to the next tee."

3. DOES THIS PERSON KNOW HOW TO HAVE FUN? There is one man whom everyone in business seems to pick as a dream golf partner. No, it's not Tiger Woods. Berkshire Hathaway (BRK ) chief Warren Buffett doesn't play much golf these days, but he has no shortage of invitations. The reason: People have a genuinely great time playing with him.

Former General Electric (GE ) Chairman Jack Welch once commented about being in a foursome with Buffett and Bill Gates. Buffett parred the first hole, Gates declared him winner of the match, then they finished the round. The two had a standing bet that whoever scored the first par would automatically win. The lesson is that both men understand the camaraderie of the game is more important than the competition.

4. IS THIS THE RIGHT PERSON FOR THE JOB? Gerry Roche, a prominent executive recruiter with Heidrick & Struggles International (HSII ), combines much of his work with golf because he sees the game as a litmus test of character. On one occasion, he was caught on the course during a lightning storm. Fleeing to a nearby shelter, he found himself sitting on a bench with Lou Gerstner, then-CEO of RJR Nabisco. The two had never met. Roche was taken by Gerstner's direct (read: brash) style. Soon after, Roche recruited Gerstner to be CEO of IBM (IBM ).

5. IS THIS PERSON A GOOD LISTENER? Many executives like to hear themselves talk. The best ones also listen to and appreciate what others are saying.

During my round with Merrill's O'Neal, he asked me a lot of questions about myself. He solicited my thoughts about some of his managers. He also talked with me candidly about overcoming stereotypes. By the end of the round he so inspired me with a comment that golf and life were about "infinite possibilities" that I not only changed my opinion of O'Neal but I went back to my office and decided to quit my job. A few months later I started my own business.

Adapted from Deals on the Green: Lessons on Business and Golf from America's Top Executives, by David Rynecki, by arrangement with Portfolio, a member of Penguin Group (USA) Inc. Copyright © David Rynecki, 2007.

By David Rynecki

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