From the editor.

Leadership isn't only for the bold, argues Michael Treacy in our cover story; his examples of top leaders head companies that specialize in incremental gains, mining information and market niches and moving into adjacent markets. He sees this "nitty-gritty" strategy, which eschews shoot-for-the-moon ventures, being practiced at top companies like Dell Inc., AIG, Capital One Bank and Airbus SAS. A second leadership article in the cover package by Robert M. Fulmer and Jay A. Conger has some very cogent observations about marrying leadership training with succession planning.

Privacy is a sticky wicket, and new laws have made things increasingly complicated. Writer Gregory Millman takes a broad look at some of the ramifications of these privacy codes and hears from privacy officers and others about how they are scrambling to comply--and to assuage consumers that their companies handle data protectively.

China has been the subject of countless articles in recent months, as companies there went public in the U.S. with considerable fanfare and doubts have surfaced over whether the country's corporate culture, banking system and capital markets are up to the task of sustaining rapid growth. Contributor Ramona Dzinkowski spoke to a prominent international expert, Harvard Prof. Kenneth Rogoff, who offers some compelling thoughts about both the promise and the risk faced by those moving into China.

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Revenue recognition has been a concern for years, both in terms of legitimate difficulties with a complex standard and as a means of perpetrating outright fraud. Companies like Computer Associates and Lucent Technologies have been hit hard by fraud claims in recent months, and the whole area remains ripe for misdoing. But for good corporate citizens, too, revenue recognition has proven a tough subject to master, and one that FASB is revisiting.

Booz Allen Hamilton reports on a study it did on the "Organizational DNA" of business entities. Interestingly, it identified three main finance function traits: 1) Finance was more tightly aligned internally than other support functions, such as human resources, information technology or marketing; 2) It tended to view business challenges in a similar way to senior management; and 3) It tracked more closely with line managers than other key support functions. The result? "Finance has become a place where business strategy, process and information combine and cross-pollinate," Booz Allen says.

Sometimes it's difficult to see how a floundering company can be rescued. Harvey Kibel, cofounder of turnaround firm Kibel Green, uses a closely observed case involving software firm Peregrine Systems to argue that a company that can be "re-visualized" may be taken down the road to salvation.

We also profile the two incoming chairpersons of FEI and FEI Canada--Mary Jo Green and Edward J. Brown, respectively. Both have years of top-level service to FEI and noteworthy ideas on what they'd like to do and like to see happen during their terms in office.

With this issue, the magazine will launch a year-long series of profiles of FEI's technical committees. The idea is to familiarize members with the committees' key topics and the work they do to bring important corporate issues and opinion to rulemaking bodies, legislators and others, in Washington and elsewhere. The series opens with the Committee on Finance and Technology (CFIT).