Secrets of top CEOs

It’s great if you have a mentor, someone higher up in your company who understands the bureaucracy and can help you grow into your job. But what happens when you make it to the top? Who are your mentors then?

Nobody, usually.

Dave Murphy SF Chronicle

That may explain why so many chief executive officers stumble or stagger or take a swan dive. They don’t have mentors anymore, and the most insecure bosses often won’t ask underlings for advice, figuring (wrongly) that it shows weakness instead of strength.

Fortunately, those who want to learn from the best can find good profiles of seven top bosses in Jeffrey A. Krames’ "What the Best CEOs Know." The book offers strategic lessons for anyone who is in upper management — or wants to get there.

One anecdote describes how Microsoft didn’t make the Internet a priority in the mid-1990s, and an employee who noticed its widespread usage at Cornell University sounded the alarm. Because Microsoft encourages ideas from all levels, Bill Gates eventually saw the memo and heard comments from others in support of it.

"Gates was both appropriately humble and flexible," Krames writes. "He took those messages very seriously, and he organized several company retreats in 1994 and 1995 to respond to them. By the end of 1995, the company had a new top priority, and the Internet was defining the future of the company."

Southwest Airlines’ Herb Kelleher has an unusual approach to salaries. He pays rank-and-filers above the industry average, but managers get less than their counterparts at other companies. Southwest tries to make up for it with stock options.

The model seems to be working. The airline industry has nearly collapsed over the past two years, but Southwest’s profits keep going up. And having those nice profits usually make stock options pretty attractive.

Kelleher understands that one of the biggest reasons for employee grumbling is overpaid managers. When a company has to make budget cuts, employees turn cynical if they see managers with padded salaries seemingly oblivious to the chaos.

But Southwest’s culture goes beyond salaries, as the book explains.

"Southwest has achieved some extraordinary things in the area of employee relationships," Krames writes. "Its pilots, for example, agreed to freeze their salaries for five years, taking their chances with stock options instead.

"When another employee group, which had effectively voted itself out of a union a few years earlier, began feeling vulnerable, Kelleher responded by issuing a personal contract — signed by Kelleher himself — to each of those employees."

Another part of Kelleher’s strategy is to have no more than four layers of management between the CEO and frontline managers, encouraging people in the field to make decisions.

Let’s see . . . Southwest pays employees well and makes it clear through actions rather than managementspeak that it appreciates and trusts its workers.

And the company succeeds where others fail. What a shock.

http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2003/08/09/BU251347.DTL&type=business