New Leaders, New Agenda

These six leaders stepped into their top jobs at a time of enormous challenge. Here’s what each of them has to say about their approach to passing today’s tough test and setting the agenda for the future.

From: Issue 58 | May 2002, Page 52 By: Alison Overholt

Who: Gary Kusin

Title: CEO, Kinko’s Inc.
Home Base: Dallas, Texas

As an entrepreneur myself, I knew that the best thing to do was to go straight to the front lines to learn what makes this place tick. During my first six months, I went into every single one of our 24 markets in the United States, visited more than 200 stores, and met with more than 2,500 team members. I knew that our team members could tell me what the company needed to do in order to keep evolving.

The most important thing I heard was that our customers have changed. We used to be viewed as a simple corner copy shop. What became clear to me as I talked with people in our stores was that customers are now looking more for ongoing business partners. They don’t just need a quick turnaround copy job in the middle of the night. They want to know that they can partner with us to get digital solutions for bigger jobs. Right now, the biggest service we can sell is confidence: the ability to listen to our customers, to understand their problems, and to apply our knowledge to come up with creative solutions.

When you hit a recession as we did in my first few months here, you need to do a lot of different things all at once. I focused on listening to and learning from our team members — that’s what leadership is all about. But I also had to focus on doing things to preserve our top and bottom lines. What this has shown me is that as far as running a tight operation is concerned, it’s always good to play very defensively. When things are good, people become lax. So we’ve taken this opportunity to get buttoned down. Then, even if the economy lifts — recession or no recession — we will not lose that focus.

Gary Kusin joined global document-solutions giant Kinko’s as CEO in August 2001. A self-described serial entrepreneur, Kusin cofounded the successful consumer-software company Babbage’s Inc., which went public in 1988 then merged with a competitor in 1994 to become NeoStar Retail Group. Kusin then cofounded Laura Mercier Cosmetics, a high-end makeup line, which he sold to Neiman Marcus in 1998. Following the sale of Laura Mercier, and until being named the new CEO of Kinko’s, Kusin served as CEO of executive office-suites corporation HQ Global Workplaces.

Who: Susan Lyne

Title: President, ABC Entertainment
Home Base: New York and Los Angeles

Whenever someone comes into a new position of management, there is an opportunity to break old habits. As president of ABC Entertainment, my top priority is getting the younger creative people at the network to feel comfortable speaking up. In general, the TV industry is very quick to blame and very slow to celebrate the work and the people behind it.

In the past, the impulse here has been to pick up pilots that management loved — things that were just plain well written. But as I’ve reviewed our lineup, I’ve realized that we can’t be that diffuse anymore. We need to find the gaps in our schedule, identify categories of viewers that we’re missing, and force everyone to address those needs as we read the material coming in.

ABC has a great tradition and a great history. We do have a real challenge ahead of us right now: We haven’t launched a big new franchise since The Practice, and that was six years ago. This is still a young network — we’re only 50 years old. It wasn’t so long ago that this was a startup company, built extremely well and based on a few basic tenets: Bring great family programming to masses of Americans but occasionally take risks in both subject matter and program formatting.

It’s important to remind everybody of our great tradition while also sending the message that having a little bit of startup mentality will make us all work harder and be more excited about the task at hand.

Susan Lyne took the reins at ABC Entertainment in January 2002. Prior to accepting the position, she was responsible for ABC’s TV movies and miniseries division, where she managed the network’s relationship with Oprah Winfrey’s company, Harpo Films, and helped develop the Oprah Winfrey Presents television movies for the network. Lyne also helped launch the movie magazine Premiere and served as its editor in chief for almost nine years. She has also been the managing editor for New Times and the Village Voice .

Who: Alfred Chuang

Title: CEO, BEA Systems Inc.
Home Base: San Jose, California

If you can believe it, we planned for our CEO transition to take place in the Windows on the World. Then September 11 came. I can’t even begin to describe the psychology of the company at that point. We lost employees; one man was in one of the airplanes that hit the World Trade Center. It was very difficult to return to work.

Add to that the change in the economy. I’ve lived in San Francisco since the 1970s — this is my fourth recession in the Valley. But this is different. We’ve never had a bubble this big. We really went nuts. Even now, I think a lot of people still refuse to believe that the bubble has burst.

In the wake of both of those changes, my job as BEA’s CEO is to recalibrate the madness into reality. It is my responsibility to ask, "Okay, what do we have to do to maintain the best conditions for our employees and shareholders?" The obvious first step is cost trimming. Next, I believe we can refocus by increasing communication within the company. In fast-growth times, it’s easy to hear the message that we’re doing fine. But in a difficult economy, people need to hear what we’re working on, what we want to leverage, and what management thinks about where we’re heading.

I’ve institutionalized an all-company Webcast every six to eight weeks to meet this need. With about one-third of our employees outside the United States, Web technology and email help us to answer questions and get the message out. Managers also walk around the office more often, talking to individuals, especially about their careers. We have been talking to them about longer-term trajectories. In the Bay Area, people have had career horizons of 9 to 12 months, when it needs to be 3 to 5 years. I believe that if people can see where we’re going, if I can give them concrete metrics for where we want to head, then that will help us get through.

Alfred Chuang is cofounder of BEA Systems Inc. and became president and CEO in October 2001. Prior to taking on this role, he was chief operating officer and president of business operations. Over the seven years since the company’s founding, Chuang has been chief technology officer in addition to managing BEA’s global operations, which include engineering, product development, marketing, sales, services, finance, corporate development, and human resources. Chuang holds a bachelor’s degree in computer science from the University of San Francisco and is also a nine-year veteran of Sun Microsystems, where he met his BEA cofounders.

Who: Shirley M. Tilghman

Title: President, Princeton University
Home Base: Princeton, New Jersey

When I became president of Princeton, two issues took priority. First, I had to replace a number of people who had announced that they were retiring. Second, I had to learn about areas of the university that were unfamiliar to me — departments that are essential, such as human resources, but that are often invisible to the faculty.

The key is being truly interested in listening. In my weekly meals or meetings with students, I sense a profound change in the way they think of their futures. There was a headiness before, where now there is deep anxiety. At the same time, I applaud the heightened interest in public service and nonprofit work that is replacing the tendency to run off to Wall Street to make money.

My science background helps me bring good analytical skills to the job. Science is a life of problem solving; being a president is too. Thinking about a problem, laying it out, being good with numbers — these are all skills that translate well. The huge difference is that as a scientist, the best strategy is to focus on a single thing. Then you burrow into the problem and go as deep as possible. To be a successful president, you have to do exactly the opposite. You don’t have the time to burrow because the agenda is so enormous. You rely much more on others to do the background work for you — and you end up with what a scientist would consider highly digested material.

Shirley M. Tilghman became president of Princeton University in June 2001, after serving for 15 years on the faculty as the Howard A. Prior professor of the life sciences. She has also been an investigator at the Howard Hughes Medical Institute and has served as an adjunct professor of biochemistry at the University of Medicine and Dentistry of New Jersey-Robert Wood Johnson Medical School. Tilghman is the founding director of Princeton’s Lewis-Sigler Institute for Integrative Genomics and is a founding member of the National Advisory Council of the Human Genome Project Initiative for the National Institutes of Health.

Who: Ron Sargent

Title: CEO, Staples Inc.
Home Base: Framingham, Massachusetts

On my first day as CEO, I put on the black pants, black shoes, and red shirt that our associates wear and headed to our Brighton store. We opened the very first Staples store in Brighton, Massachusetts in 1986, and by going there, I tried to rally the Staples troops around a concept that I call "Back to Brighton." It’s a symbolic message to the members of our organization that we’re going to improve service and refocus on our core customer base: the small-business customer.

The economic slowdown has caused Staples to reexamine every aspect of its business. Over the years, we started catering to the more casual customer. But that’s not where the money is, and that’s not what we’re really good at. Now we’ve stopped carrying about 600 items that appealed to the casual customer and added 650 to 700 items that appeal to the small-business customer instead. We’ve improved the quality of the merchandise we offer, because businesses have different needs than the casual consumer. Instead of advertising as much in the Sunday circulars, which businesses don’t respond to, we put more into direct marketing, upgraded our Web site, and doubled our direct-sales force in four months. We took the money that we originally put into advertising and reinvested it in training for our associates, and we added more staff to our stores to provide better service. These are important changes. In some ways, I’m not sure we would have looked in the mirror so carefully if not for the slowed economy.

Ron Sargent made the transition from chief operating officer of Staples to chief executive officer in February 2002. He has been with the company since 1989, first as regional vice president of operations and later as president and COO in charge of worldwide operations, supply-chain management, merchandising, and marketing. From 1991 to 1994, Sargent also headed Staples Direct, the company’s direct-delivery business.

Who: James F. Parker

Title: CEO, Southwest Airlines
Home Base: Dallas, Texas

After September 11, we had no idea when we’d be allowed to resume operations or how drastic the impact of those events would be on our business. Our first focus was on gathering and conserving our resources — particularly our cash — in a way that would protect our business. We had to make some decisions very promptly: We had a $180 million profit-sharing payment due on September 14. Because of our limited resources, we had a tough time deciding whether to fund it. In the end, we chose to pay it out, because it was the right thing to do for our employees.

Next on the agenda was deciding not to furlough any employees and to protect all employee jobs. We have a lot of people who have worked hard for more than 30 years so that they can have job security in hard times. It would have been breaking faith with our employees if our first reaction was to cut jobs. Cutting jobs should be the last thing a company does rather than the first thing. But we did declare an immediate hiring freeze and cut capital spending across the board. We halted discretionary projects, including the expansion of our headquarters building. We also told Boeing that we needed to defer our next airplane deliveries, even though they were scheduled for the following week.

My definition of leadership didn’t change over the course of those first few months as CEO. And I continue to have great respect and appreciation for the jobs that our people do. We’re in the customer-service business, and in that business, your employees are the most valuable asset you have.

James F. Parker became CEO of Southwest Airlines in June 2001. He has been at Southwest since 1986, concurrently holding the positions of vice president and general counsel. Before joining Southwest, Parker was an attorney at the law firm Oppenheimer, Rosenberg, Kelleher, and Wheatley Inc., which was partly owned by outgoing Southwest CEO Herb Kelleher. Parker also served as assistant attorney general of Texas.

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