Gone is the culture of promoting newly minted CEOs, straight out of business school with a vague business plan to launch a dot-com company. Gone, too, are the charismatic corporate leaders such as GE's Jack Welch and Vivendi's Jean-Marie Messier who became personalities in their own right at they expanded their business empires far beyond what the companies were initially set to do, and burned badly as a result. Instead, investor interest has turned to seek out the more cautious and reliable, chief executives who are prepared to lead for the long haul.
"During the stock market boom, we couldn't interest anyone, we weren't fashionable enough," said L'Oreal's CEO Lindsay Owen-Jones. "We weren't an internet company, and it wasn't sexy. ... We couldn't get people excited. "
No longer. Times have changed since then, however, with the tech-heavy Nasdaq stock market losing nearly three-quarters of its value since its peak in March 2000, and the Paris-based cosmetics manufacturer is now one of the most solid and highly-priced companies on the European exchange.
The L'Oreal CEO was one of the dozens of corporate leaders speaking at Fortune magazine's annual 3-day forum on the global economy, and unlike past conferences when information technology-related company executives were the most celebrated, speakers at this year's meeting were largely drawn from the manufacturing sector.
And much as individual investors have become wary of charismatic -- and often greedy -- business leaders such as WorldCom's Bernie Ebbers, fellow CEOs too have repeatedly expressed their disdain for flamboyant and aggressive chief executives.
Instead, speakers repeatedly pointed out the value of leaders who know the company they head from the ground up, plodding their way steadily to the top, rather than talking their way into it. In short, market appetite has increased for the tortoise, rather than the hare, in the race.
"I've been at Xerox for 26 years ... and it really helps to know the company," said Anne Mulcahy, who was tapped as CEO last year, having started her career with the photocopying group as a field sales representative.
Similarly, Home Depot's founder and Managing Director Kenneth Langone emphasized the importance of keeping a pulse on what is happening at the grass-root level, by visiting the company's stores nationwide regularly and having town hall meetings to have face-to-face discussions with employees across the board.
As for Owen-Jones, who had been with L'Oreal since 1969, he stated that he would not ask any employee to do unless he knew he could do it himself.
Others, such as Carlos Ghosn who took over the reins of Japanese carmaker Nissan three years ago, started his career as an engineer for French tire manufacturer Michelin, and accordingly stressed the need for solid knowledge about the industry in order to succeed as a credible leader.
"It's important to have someone (as CEO) who can see the company from the kitchen...such as hiring the best from the suppliers, who know exactly what the company's weak points are," Ghosn said. He himself had turned around a hemorrhaging company into the black, as he shut down loss-making companies and slashed jobs, which has resulted in Nissan shares nearly doubling in value since 1999 whilst the Nikkei average has steadily declined amid a continued economic downturn.
CEOs also cautioned against the culture of greed that spread across the United States, from Wall Street brokers to families barely scraping by, in the late 1990s.
"What's not going to happen is getting rich quickly...by bottom-fishing," L'Oreal's Owen-Jones said, pointing out that one major reason for the collapse of the stock market was because investors were eager to pick up shares that could potentially double or more in a matter of months.
"Stocks are cheap for a reason," Owen-Jones added, noting that there was still a desire amongst investors to seek out bargains that would rapidly soar in price, far beyond initial market expectations.
The three-day Fortune forum in Washington concludes Wednesday.
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