Chief Sales Executives

Regardless of economic background or social status, anyone can become president. Or so generations of hopeful parents have optimistically informed their children. Today, they might say the same about another lofty executive position: CEO.

Sure, there are still plenty of the standard-issue CEOs who went the MBA route to become head financial honcho. And unquestionably, with today’s rapidly changing markets, accelerated globalization and competitive pressures at unprecedented highs, the CEO must have a firm grasp on the numbers side of the business. But that’s no longer enough. To lead a global organization in the treacherous 21st century marketplace, the CEO must frequently be the top-selling dog as well.

SANDY WEILL

Take the example of Citicorp’s Sanford “Sandy” Weill, one high-profile financial industry CEO who wasn’t born with a silver stock ticker in his nursery. The son of Polish-Jewish immigrants, Weill was the first member of his family to graduate college. Afterwards, in 1955, he got his start on Wall Street – literally – as a $35-a-week messenger for the brokerage firm Bear Stearns.

Five years later Weill and three friends pooled their limited funds to open their own house. There Weill’s acquisitive nature surfaced as he grew the firm by buying up much larger companies, typically ones with significant name recognition. Fortune Magazine has said that Weill is to businesses what Imelda Marcos was to shoes. During its 25-year existence, Weill’s firm went through many transformations and names, not to mention partners, but kept growing the entire time, so that by 1981 he was able to sell the company – then called Shearson Loeb Rhoades – to American Express for just under $1 billion.

In making this deal Weill had an eye on jumping to the front of the line to become the next American Express CEO, but within a few years he realized that personal and professional conflicts with then-CEO James D. Robinson would preclude that possibility. Tired of playing a role he referred to as “Deputy Dog,” in 1985 he quit, at age 52, signaling the death knell of his career, or so many industry experts believed.

But someone forgot to tell the irrepressible Weill. By the next year he was at it again, this time investing $7 million of his own money to take over Commercial Credit, a consumer loan company, and beginning to buy up troubled players. In the following few years he would take ownership of Gulf Insurance, Primerica Corporation, Drexel Burnham Lambert’s retail brokerage outlets, and a 27 percent stake in Travelers Insurance. With an irony so delicious he can probably still taste it, in 1993 Weill reacquired his old Shearson brokerage from American Express.

Most recently, in 1998 Weill’s company, then called Travelers Group, merged with Citicorp to create a “financial supermarket” capable of offering customers of all types nearly every financial service possible, including banking, insurance, investment services, asset management and many more. Weill then beat out Citicorp’s CEO John Reed to emerge atop the new entity they’d created, Citigroup, with 110,800 salespeople in the U.S.

Throughout the entire growth period, Weill maintained profitability and delivered results. In the past 10 years his shareholders have enjoyed an average annual total return of 40.8 percent, a record no company of a comparable size can match.

One part of Weill’s success stems from his extraordinary ability to motivate. After taking over ailing companies with downcast and dispirited work forces, he cuts away all the fat (down to the bone, if necessary), then inspired the rest to get back on track, sometimes seemingly by sheer force of will. He has prominently displayed in his office a plaque identifying him as a “Professional Busybody.”

And it’s true that Weill is not the type of leader to hunker down in his office poring over reports. Instead, he prefers to get out and glad-hand, chatting up the work force. He also exhibits both hands-on and hands-off tendencies. As long as they’re performing up to expectations he’ll generally leave his managers alone to run their own divisions. At the same time, he loathes surprises and insists on being kept up-to-date on everything that’s going on in every corner of the corporation. “I didn’t know” is not an acceptable excuse for a situation gone awry. With operations in 101 countries, staying informed has become a formidable task. But in concert with his attention to detail, Weill also exhibits an almost superhuman capacity for storing and recalling business information.

“I do like to have various sources of information,” Weill says, adding that “you learn more” when you open yourself up to a range of opinions. “This company is too big to micromanage,” he continues, “but it’s not so big that you can’t know what’s going on.”

Weill’s other key attribute is loyalty. In the Travelers Group days he used to compel senior officers to swear a so-called “blood oath” that they would not sell their stock while they remained with the company. Histrionics aside, the loyalty avenue runs both ways, and Weill still surrounds himself with many of the associates he worked with during the Shearson days.

Today Weill hasn’t lost his wandering eye. “We’re in the acquisition business” is the frequent catch phrase at Citigroup, and the company now has set its sights on emerging international markets. Banks in the UK and Poland have recently come into the fold, as well as the European American Bank of Long Island, which he snapped up for less than $2 billion (how could he say no?). The last few years have seen Weill running through airports and passports alike, as he’s made a busybody of himself at nearly every port Citigroup now calls home. In 1999 he and his wife of 40-plus years renewed their vows in India – with Weill decked out in a Nehru jacket.

But building a far-flung empire is one thing; ruling it is another. Weill’s greatest internal challenge today may be persuading Citigroup’s diverse divisions to work together to cross-sell one another’s products. In order to promote such harmony, Weill agreed to establish weekly meetings of all senior executives. The meetings have become so popular that out-of-town executives call in to make sure they don’t miss anything. The jury’s still out on how well cross-selling will succeed at Citigroup, but few are betting against Weill. Not as long as he keeps on acquiring and the company retains the mantra he’s always lived by: “Make your numbers; do what you’ve promised; work together; think shareholder value.”

MAURICE GREENBERG

Citigroup is certainly making the most of its worldwide opportunities, but when you talk about companies that first saw the “glow” in globalization, Maurice Greenberg’s AIG has to be at or near the top of the list.

Since its founding in Shanghai in 1919 as a two-clerk insurance agency, American International Group has always lived up to its middle name, even after moving across the Pacific back to the U.S. By the time Greenberg arrived in 1960 to develop its overseas accident and health business, AIG already had branches in 75 countries including Western Europe, the Middle East, North Africa and Australia. Seven years later, the ambitious and driven WWII veteran was named CEO, only the second in company history.

In the subsequent 35 years Greenberg has built AIG into the leading American insurance firm and the premier underwriter of commercial and industrial insurance. Fortune calls the company’s 19 percent annual earnings growth over that period “sensational.”

Two long-term business strategies have dominated Greenberg’s tenure. First, unlike many insurers that make money by investing customer payments and accepting losses from underwriting, AIG insists on making the underwriting operations profitable as well. Premiums must therefore exceed the amount the company is liable for when claims are made.

Second is the international angle. Soon after assuming the reins in 1960, Greenberg expanded operations in Southeast Asia and Japan and, long before the end of the Cold War, AIG had set up joint ventures in communist-ruled Hungary, Poland, Yugoslavia and Romania. Recent investments have brought Russia, other former Soviet republics, India and Vietnam into the AIG fold.

Guiding AIG’s success abroad is Greenberg’s understanding of a principle travelers seeking a good time have always known: The best bet is to get in with the locals. Greenberg views AIG as a collection of villages with chiefs who are granted the right to run their villages as they see fit – as long as they hit bottom-line numbers. And the local hires don’t always stay local. The company’s head of worldwide life insurance operations, Edmund Tse, was hired out of the University of Hong Kong in 1961 and is now an AIG director.

As a result, AIG’s policies tend to reflect uniquely local realities and opportunities. In politically unstable Uzbekistan, AIG offers foreign joint ventures the opportunity to buy “political-risk” insurance. It’s difficult to imagine some of the more staid insurance houses offering coverage for kidnapping, product tampering or the public disgrace of a well-known corporate official. Yet these are all highly profitable avenues for AIG.

When asked to describe Greenberg’s personality, associates often come up with such adjectives as tireless, demanding, tenacious and driven. No one knows the insurance industry better, and despite a far-flung empire of more than 300 divisions operating in 130 countries, Greenberg monitors nearly every dollar, yen, euro or bhat that enters or exits company coffers. To keep informed, Greenberg books 50 hours or so on his fall calendar each year to hold budget meetings with as many as 25 different operating units. The units come bearing a business plan book that Greenberg will arrive having digested in full, and he will be prepared with a spate of pointed questions.

Despite the meetings’ appearance of a criminal interrogation, absent only the exposed light bulb hanging from the ceiling, Greenberg’s intent in these meetings is not to browbeat. His real priorities are innovation and creative thinking. And AIG has the results to show it. Fifteen years ago, anticipating the softening of core underwriting businesses, Greenberg went in search of new revenue sources. When the softening took place as he had predicted, AIG was protected with its new derivatives operation, commodity and currency trading interests, a startup credit-card affiliate in the Philippines, and even a division which leases planes to carriers around the globe.

Asked by Best’s Review to describe the secret behind AIG’s success, Greenberg fell back on the notion of granting people autonomy. “Part of our culture is that you build people with independence, who are thinking people intellectually and who don’t need to have their hands held day-to-day in order to make decisions,” he said. “We build from within a group of people, with a common goal and common objectives, that’s almost self-cleansing. It’s not for everybody.”

Despite such a succinct description from the CEO, many Wall Street analysts have chosen to give up trying to account for the company’s seemingly unstoppable growth. Lacking his eye for detail, they simply trust that by the sheer force of Greenberg’s personality, his capacity to stay one step ahead of the curve and perhaps a sprinkling of fairy dust, the AIG CEO will keep the wheels turning and earning. At least they can rest assured that he has no plans to leave any time soon. When asked about the prospect of change at the top at AIG, the 76-year-old Greenberg dismisses those thoughts immediately.

“I feel good,” he says. “I like what I do, and I haven’t had another job offer.”

DAVID KOMANSKY

Like Sandy Weill, David Komansky worked his way up. When he began his career with Merrill Lynch in 1968 as an entry-level $650-a-month sales rep, the working-class kid from the Bronx could scarcely have imagined that within 30 years he would be running the legendary brokerage house, which according to its listing in the 2001 Selling Power 500 has 19,000 salespeople in the U.S.

How did Komansky make it to CEO? First, by being a terrific salesman. A self-described “back-slapping, gregarious person,” Komansky joined Merrill Lynch after interviewing with 11 Wall Street firms and took to the brokerage business immediately.

“It was as though this industry was made for me,” he once said. “I had always liked an electric, highly charged life and being with other people, and all those ingredients were present.”

After seven years as a broker, with a proven record of sales success, Komansky took the job of branch manager. Then in 1981 he was promoted again, this time becoming the youngest regional director in company history. He proved incredibly precocious at the Midwest division, rapidly turning Merrill’s worst performing region into its best producer. Komansky has said that the successful turnaround in the Midwest gave his confidence – as well as his career – a real boost.

From there Komansky was put in charge of real estate and instructed to decide within 12 months whether the firm should stay in the property business or sell the division. He opted to sell. Soon thereafter the real estate market caved in, and the Komansky star at Merrill Lynch was burnished anew.

Actors are taught, when offered a role, to always say yes to casting agents: “Can you ride a horse?” “I grew up on a dude ranch.”

“Can you swing on a trapeze?” “I toured with Ringling Brothers for 10 years.”

“Can you breakdance?” “I taught Michael Jackson the Moonwalk.”

Komansky understood the principle at work, so when, after a stint as national sales manager, he was asked to head up capital markets, he knew enough to say yes. “I knew as much about the institution equity business as flying a rocket ship,” he once said, “but I wasn’t going to say no.”

With temporary stops during the ’90s as VP for the company’s debt markets division and later as president and COO, in 1996 Komansky succeeded Dan Tully and assumed the reins at Merrill Lynch as CEO. Since then he has helped steward the company through five tumultuous years in the financial world, during a period including the Asian meltdown, the tech-stock boom and bust, and the aftermath of the September 11 tragedy. Through it all Komansky has steadily increased Merrill Lynch’s global presence while remaining focused on one unifying goal – pursuing the impossible.

“We have to be the best at everything we do, everywhere we do it,” he explains. “Pure excellence is probably nonachievable, but it is a marvelous goal, because it forces you to reach higher and higher. The organization has to keep reinventing itself, to drive itself to the edge of the envelope. The day you say, ‘We are number one – isn’t that great?’ is the day you are sure to be number two.”

Komansky’s commitment to being the best has contributed to Merrill Lynch’s aggressive acquisition campaign in Asia, as well as to the bold decision in 1999 to accept online stock trading, a move that transferred substantial business away from the company’s army of brokers.

But no single business move – regardless how bold – could compare to the management crisis Komansky and all of Wall Street faced on September 11. Though the company and its headquarters across the street from the World Trade Center complex were lucky to escape nearly unscathed, 9,000 of the company’s 68,200 employees were temporarily displaced, and much of the company was in disarray. Despite a bad back, Komansky led a parade of Merrill Lynch people up Manhattan’s West Side Highway as the towers collapsed behind them.

Shaken but undaunted, Komansky rallied the troops, making quick decisions on the fly about relocating people and offices while reassuring employees and the investment community about the company’s – and the nation’s – resilience. Whether in a time of crisis or not, he notes, the leader’s ongoing challenge is to spur others on to greater achievement.

“The more demanding you are, the more people will do,” he says. “I am convinced human beings are capable of doing things they never dream of – and sometimes all you have to do is ask. This firm is going to come back. This place did not get to be what it is by having a bunch of pussycats here.”

MICHAEL DELL

Some generals make great strategists. Others are more effective on the front lines, leading soldiers into battle. Few do both things well. The same is true of CEOs. Yet the one CEO who other top executives most frequently recognize as the complete package is Michael Dell, head of the Texas-based PC powerhouse. In recognition of this fact, last year Chief Executive magazine named Dell its CEO of the Year. He is the youngest ever to receive the honor.

Unlike so many of his peers in the tech industry, Dell did not stumble upon a brilliant business idea while messing around with computer code or during the down time between Star Trek conventions. Practically since birth, he has demonstrated the heart – and head – of an opportunistic entrepreneur. At age 12 he parlayed an interest in stamp collecting into a mail-order business that netted $2,000. He used the money to purchase his first computer, at age 16. He then turned his attention to selling new subscriptions to his hometown paper, the Houston Post. Recognizing newlyweds as a good prospect base, Dell obtained lists of marriage license applicants from the local courthouse, then put the computer to work churning out personalized letters with subscription offers. The effort made him enough money for another major purchase to make nearly any American teenager envious: a BMW.

Despite his parents’ ambitions for their son to become a doctor, during his first year at the University of Texas Dell skipped many of his pre-med classes in order to spend more time in the dorm assembling and selling computers he’d built from remaindered IBM PCs. The senior Dells soon discovered the budding enterprise and persuaded young Michael to finish the school year in earnest. He agreed that if the business proved unsustainable during the following summer he would quit the computer business to focus on his studies.

The UT registrar’s office is still waiting for his return. In the month prior to the school year’s start he sold $180,000 worth of computers. He then obtained an Austin storefront and set about revolutionizing the way computers are sold. His innovative “direct selling” approach was simple: take orders, assemble computers to customers’ precise specifications and ship them within a matter of days. Inventory? What inventory? By eliminating dealers and other middlemen and incorporating the least expensive available technologies into the machines, Dell could offer lower prices than anyone else. Between 1984 and 1992, company sales mushroomed from $6 million to $2 billion.

Today, with the demise of so many onetime tech superstars, continuous growth has left Dell standing as one of the few remaining new-economy poster boys. But there’s more to the Dell success story than just-in-time order processing and supply chain management. Financial acumen and market savvy aside, Michael Dell is also a terrific leader and motivator.

For one thing, he’s extremely competitive. Despite the soft-spoken exterior, he’s a cutthroat competitor and market share predator. He used to tell employees that his daughter’s first words were “Daddy, kill Compaq. Daddy, kill IBM.” That competitive streak helps focus his keen eye on exploiting opportunities, like competitors’ high margins.

“High margins are sort of a paradox,” he has said. “You look at a business and say, ‘Gee, you have high margins.’ A lot of people say that’s good. But in this case, it’s not good. Because if you have high margins, that means you have this big, soft underbelly. That’s what we live for. That’s what we consider to be fun.”

Dell’s competitive spirit infuses the entire company. To choose just one particularly telling example, in 1992 the company called a special Saturday morning meeting to respond to a competitor’s decision to cut PC prices. The company’s 3,000 employees arrived in army fatigues and would not quiet down for 20 minutes. Such things don’t tend to happen at IBM.

Another reason Dell’s management style is so admired is that his ego does not require the constant feeding required by so many CEOs. As a result, when the company missteps, executives can focus their attention on stemming the bleeding, rather than taking cover or throwing good money after bad. When the company violated its core business strategy of direct sales by entering the retail market, Dell looked at the profit and loss statements that showed the retail sales were hemorrhaging money and got out immediately. This despite the fact that at the time retail outlets accounted for 10 percent of company sales. Or in 1993, when the company made an ill-advised foray into the notebook computer market, Dell soon realized the company had acted in error and withdrew.

“I try to take the emotion out of decisions and just look at the facts and be rational about things,” he said. “It sounds easy looking back because it was clearly the right decision, but it was trying for us. If you got wrapped up in the emotion of, ‘Oh my God, what are we going to do if we don’t have notebooks?’ you might have come to a different decision.”

Now that he’s been named CEO of the Year, become the richest man in Texas and seen his company’s annual revenues balloon up to $32 billion, however, the critics are saying that Michael Dell can’t take his company to the next level. The direct-sales model won’t work overseas, competition in the server markets is very different than in the PC business, the company’s become too big to maintain its capacity for responding quickly to changing tastes and needs – Dell has heard them all before. Yet he remains skeptical about the skeptics.

“At various points in our history we’ve had varying degrees of skepticism on whether or not our model will work on the next thing,” he says. “At one point people said, ‘Gee, can you do this in the business market? Can you do it in Europe? Can you do it with servers? Can you do it with notebooks? It remains to be seen how far we can take this.”

MARTHA STEWART

Michael Dell is unquestionably one of the most high-profile CEOs in the U.S. But he doesn’t have two best-selling eponymous magazines, more than 10 million books sold, a television show, a syndicated advice column, a radio show, numerous mail-order catalogs, a signature line of household goods at Kmart and the envy of nearly every homeowner, amateur chef and gardener in the country. That distinction belongs exclusively to the CEO whose name has become synonymous with exquisite taste and the unattainable ideal in the domestic arts: Martha Stewart.

Far from some mere figurehead who’s trotted out by handlers for photo sessions while other, wiser heads take care of the business of running the business, Stewart has directed every minute detail on her path to building the “cult of Martha” into a billion-dollar empire.

Many of the early steps on that path have become well-known elements of the Martha Stewart lore: a suburban childhood in Nutley, NJ; modeling gigs through high school, college and afterwards; buying and renovating the showplace home in Westport, CT; opening a catering business in 1976; publication of her first book, Entertaining, in 1982; and the unprecedented success that followed.

What many don’t know is that before making one book sale, Stewart had already proven her selling chops. Married in 1961, she began investing some wedding-present money in the stock market. In the mid-1960s, as a new mother, Stewart decided to try her hand in Manhattan as a stockbroker, her father-in-law’s profession. She excelled at the small firm of Monness, Williams and Sidel, at one point earning $135,000 a year – a healthy paycheck more than thirty years ago, particularly for a woman in the testosterone-laden securities industry.

Any questions about Stewart’s business acumen were answered on October 19, 1999, the day she went to sleep $763 million richer than when she awoke. No, she didn’t cater a joint birthday party for Bill Gates and the Sultan of Brunei. That was the date of the initial public offering of stock in Martha Stewart Living Omnimedia.

As with nearly any woman who has achieved business success, Stewart has acquired no shortage of critics along the way. But even the naysayers admit that the one-woman cottage industry understands her audience. She recognizes the power of the ideal, whether customers could ever hope to measure up themselves.

“Having something to dream about is very important to most people. My books are dream books to look at,” she once admitted, “but they’re practical. Women can take the recipes, the ideas, and use them every day, because what I’m giving them is not a fantasy but a reality that looks like a fantasy.”

As the dream has grown, managing the empire has begun to outstrip even Stewart’s legendary energy and overseeing capacity. Make no mistake, she still keeps up the same pace as ever – sleeping only four hours a night, conducting meetings all day interspersed with conference calls, photo shoots and reviewing copy, then returning to one of her homes to plant bare-root roses, mull cider or sharpen garden shears.

But while she unquestionably still commands the Martha Stewart Living Omnimedia ship (she owns 60 percent of the stock and 96 percent of the votes), she no longer does it all herself. Not every word in Martha Stewart Living has been scrutinized by Martha herself, for example. She also recognizes that effective delegation to capable people is what will ensure the company’s continued success and growth – but only so long as it still reflects the tastes, idiosyncrasies and unique stamp that have made her the most powerful one-woman brand in America.

“I’d rather be writing the books, cooking the pies, making the meringue wedding cakes,” she admits, “but now I have to do it by offering guidance and planning. I have imbued this company with a tremendous amount of my spirit and my artistic philosophy. So much that emerges here now is a combination of that and other people’s creativity.”