Welcome to the Club!

Once upon a time, the CEO of a high profile company had a rather standard profile. He was a man (always) in his late 50's or early 60's. Usually, he wore a dark suit, white shirt and, of course, a tie. He belonged to a luncheon club and a country club, and he wangled invitations to play golf at Augusta and Cypress Point. He had been with his company, or his industry, for most of his life. He occasionally went to Washington, regularly attended his trade conventions, served on several outside boards, and sat on many a dais. As a CEO, he was a proud member of the "CEO Club" where he obeyed the unwritten rules of its exclusive franchise.

Oh, there were exceptions to be sure. The offbeat maverick, the inventive entrepreneur, the rebellious son--but they were highly individualistic and usually did not reproduce themselves. The traditional members of the Club tolerated and were bemused by these exceptions.

Now, as any reader of this magazine for CEOs knows, CEOs have not only evolutionized, they have revolutionized. The measure of a high profile company is no longer sales, assets, or number of employees; it is market value of the stock.

There is no typical or standard CEO. He may be a she, may be less than 30 years old, may be a minority, may be a foreigner, may be a refugee from IBM, AT&T, or McKinsey, may be someone who looks and acts in a radically different way from the traditional CEO Club members--and, in truth, probably wouldn't join the Club if offered an engraved invitation.

With these new CEOs, many established practices are going by the boards. Standard Operating Practice is now freestyle. Modes of communication and organization are as informal as dress and grooming codes. Long-standing relationships with customers, distributors, retailers, suppliers, and service agencies are subject to jarring shifts. Company loyalty is measured most expressively by the quantity of stock options and the amount of potential gains.

Some of the changes being wrought by the new CEOs have been meritorious. The emphasis upon quality, cost reduction, innovation, speed in developing and marketing new products and services, creative financing techniques, global positioning--these have been key ingredients of our economic surge in the last 10 years. I give much credit to the CEOs of those progressive companies who created these tangible advances.

Speaking for myself, couldn't care less if the old CEO Club fades away or loses most of its synthetic luster. It was too small, too discriminatory, and too loosely defined to justify its continued existence. But the old CEO Club did stand for some pretty good things. A certain dignity of office. An increasing adherence to better codes of ethics and improving corporate governance. A sense of service to company and industry that translated itself into a special type of loyalty. These factors are a wonderful inheritance that should not be allowed to perish.

Could there ever be a melding between these two opposite groups of CEOs? Can the new CEOs switch from worshipping relatively short-term revenue growth to a long-term policy of producing a profitable return on assets invested--and can they administer the required change in their organizations and procedures?

These questions provoke others. What will be the credentials of the CEO of the next decade? What will he need to know, what experience must he have, what particular talents and qualities of leadership will be needed?

I think we can already see the answers to these questions beginning to appear. Each of the 10 nominees for Chief Executive of the Year 2000 have produced good enough corporate numbers to justify nomination and election. But nearly all of them have a swashbuckling flavor to their personal styles that would make them at home in any new gathering of CEOs.

I suspect that American corporations will be better off for the provocative CEO exposures we have seen and for some of the positive lessons we have learned in recent years, The CEOs of the next decade are with us today and they are equally at home on the Internet and in their global boardrooms. We have a long way to go--and there will be many individual CEOs who cannot make the transition.

Formerly the CEO of E&M. Schaefer (1972-1977), Robert W. Lear is chairman of CE's advisory board. He taught at Columbia Business School, where he was executive-in-residence until June, 1999. He has been a director of many companies and is on the advisory boards of five small firms. He is a partner of Lear, Yavitz & Associates corporate governance consultants.