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Published: May 30, 2014
 / Summer 2014 / Issue 75

 
 

The Lives and Times of the CEO

From 100 years back to a quarter century ahead, the evolution of the chief executive officer.

Imagine a chilly mid-November afternoon in 1914, shortly following the outbreak of World War I. The place: a sumptuous fifth-floor salon in the new Beaux Arts Renaissance Hotel in Chicago. The salon’s electric lamps have just been turned on. The room is decorated with red velvet couches, a long mahogany table, and deep Persian carpets. A fire crackles in the marble fireplace.

Imagine, too, that the early captains of industry have gathered in this room for cigars, bourbon, and a discussion of the most pressing issues facing their companies: the establishment of the first central bank in the United States, the need to transport goods more quickly via the Pennsylvania and Union Pacific Railroads, the desire to bring more of Edison’s electricity into their plants, the implications of the war for manufacturing opportunities, and the whisperings about new government regulations that would limit the hiring of children under 14.


The Ceo Time Machine: Where Do You Belong?

Complete the questionnaire and discover the point in time when you may be a good fit to lead.

But rather than focusing immediately on these things, the men in the room are arguing with slim, pale-eyed, 51-year-old Henry Ford, who stands with his back turned to them as he squints out the window at the setting sun.

“You’re paying your assembly-line workers a minimum—a minimum!—of $5 a day!” raves John Rockefeller, waving his arms. “That’s more than twice what the average assembly-line workers make. And you’re sending them home after only eight hours!”

“You’re mad, Henry,” mutters Julius Rosenwald, the head of Sears, Roebuck & Company. “You’ll drive Ford Motor Company straight out of business with this decision.”

“John’s right, Henry,” says Firestone Tire and Rubber Company founder Harvey Firestone, as he lights his cigar. “We cannot begin to fathom how you—you, of all people, who have single-handedly opened new frontiers of this country with your mass production of automobiles—can believe it wise to share half of your $25 million in profits with your workers.”

“Especially when the unemployment rate is 15 percent!” huffs Gillette’s Frank J. Fahey, with a swallow of his bourbon. “Droves of people are immigrating to the United States each day. All of us are faced with an ample supply of able-bodied men all willing to take whatever jobs and at whatever pay they can find in our companies.”

Ford has so far listened politely without reply. He slips his hand inside his coat pocket and pulls out his gold pocket watch. Flicking the cover open with his thumb, he notes that they have been dressing him down for nearly an hour. He slides his watch back into place, takes a deep breath, and spins on his heel to face his fellow moguls.

“Answer me honestly, Frank,” Ford says, fixing him with a stare. “How do you expect men to be able to purchase your Gillette razors if they don’t have money to afford them? Or you, John—how do you think Standard Oil will make a profit if only a handful of people can afford to drive Model T cars?”

Ford walks slowly to the roaring fireplace. “Gentlemen, the way I see it, we all want the same thing. We all want to sell more of our goods, services, and products to the public, so that our companies can make more money. Correct?”

 
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Resources

  1. Strategy&’s 2013 Chief Executive Study: The full report and data analysis of this year’s study.
  2. PwC’s 17th Annual Global CEO Survey: Fit for the Future (PwC.com, Jan. 2014). The latest PwC Annual Global CEO Survey shows that the changes CEOs are making within their organizations now have less to do with sheltering from economic headwinds and more to do with preparing for the future.
  3. Ken Favaro, Per-Ola Karlsson, and Gary L. Neilson, “Captains in Disruption,” s+b, Summer 2013: How CEOs can anticipate the worst, plan a response, and navigate to advantage.
  4. Jon Katzenbach and DeAnne Aguirre, “Culture and the Chief Executive,” s+b, Summer 2013: CEOs are stepping up to a new role, as leaders of their company’s thinking and behavior.
  5. Theodore Kinni, “Rita Gunther McGrath on the End of Competitive Advantage,” s+b, Spring 2014: The Columbia Business School professor says the era of sustainable competitive advantage is being replaced by an age of flexibility.
  6. The Right Time to Separate the CEO and Chairman Roles,” s+b, Apr. 12, 2013: When performance is flagging, splitting the top jobs could well make sense—otherwise, don’t rock the boat.
  7. For more thought leadership on this topic, see the s+b website at: strategy-business.com/strategy_and_leadership.
 
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