Innovation

Best-Performing CEOs in the World November 2014

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4thWEB curated content from Harvard Business Review
By Adi Ignatius (see full article)

Leaders for the Long Term

A few years ago I sat down with Starbucks founder Howard Schultz in his Seattle office to discuss the challenges of being a CEO. At one stage I asked whether he felt there was a disconnect between the person he would like to be and the persona he needs to project while running a public company. Serving as a CEO, he said, “has been difficult—and lonely.” Yet he’d found that it was indeed possible to be values-driven while also winning Wall Street’s respect. “But the only ingredient that works in this environment is performance—so we have to perform.”

ceos Schultz has delivered on both fronts. He has become increasingly progressive, speaking out on topics ranging from presidential politics to gay marriage. And though that might make some shareholders cringe (and others applaud), he has resoundingly—and consistently—come through for investors. As a result, Schultz has earned a spot (#54) on our list of the 100 best-performing CEOs in the world. It’s a varied ranking, whose honorees represent 22 nationalities and countless personal values and styles. Another Seattle-based CEO, Amazon founder Jeff Bezos, comes out as #1.

Top 100 The Rankings Best-Performing CEOs in the World November 2014

1 Jeffrey Bezos, Amazon
2 John Martin, Gilead Sciences
3 John Chambers, Cisco Systems
4 David Pyott, Allergan
5 David Simon, Simon Property Group
6 Lars Rebien Sørensen, Novo Nordisk
7 Hugh Grant, Monsanto
8 J. Michael Pearson, Valeant Pharmaceuticals
9 Mark Donegan, Precision Castparts
10 William Doyle, PotashCorp
11 Tadashi Yanai, Fast Retailing
12 David Novak, Yum Brands
13 Michael Wolf, Swedbank
14 Pablo Isla Álvarez de Tejera, Inditex
15 Marc Benioff, Salesforce.com
16 Oscar Gonzalez Rocha, Southern Copper
17 Stephen Wynn, Wynn Resorts
18 James Taiclet Jr., American Tower
19 Elmar Degenhart, Continental
20 George Paz, Express Scripts
21 Tsai Ming-Kai, MediaTek (tie)
21 Paolo Rocca, Tenaris (tie)
23 Reed Hastings, Netflix
24 Ronald Havner Jr., Public Storage
25 Michael Balmuth, Ross Stores
26 Daniel Hajj Aboumrad, América Móvil
27 Debra Cafaro, Ventas
28 James Gallogly, LyondellBasell
29 Christopher Connor, Sherwin-Williams
30 Djalma Bastos de Morais, Cemig
31 Paul Bisaro, Actavis
32 Jon Fredrik Baksaas, Telenor (tie)
32 Renato Alves Vale, CCR (tie)
34 Alexander Cutler, Eaton (tie)
34 Stephen Luczo, Seagate Technology (tie)
36 Gordon Nixon, Royal Bank of Canada
37 Kent Thiry, DaVita
38 H. Lawrence Culp Jr., Danaher
39 Charles Davidson, Noble Energy
40 George Scangos, Biogen Idec
41 Ulf Schneider, Fresenius
42 Dan Dinges, Cabot Oil & Gas
43 Simon Wolfson, Next
44 Michael Ward, CSX
45 Fujio Mitarai, Canon
46 Carlos Alves de Brito, Anheuser-Busch InBev
47 Ed Clark, Toronto-Dominion Bank (tie)
47 Joseph Papa, Perrigo (tie)
49 Philip Pascall, First Quantum
50 John Wren, Omnicom
51 Carol Meyrowitz, TJX
52 Nick Hayek Jr., Swatch
53 John Hammergren, McKesson
54 Howard Schultz, Starbucks (tie)
54 Blake Nordstrom, Nordstrom (tie)
56 Frank Hermance, Ametek
57 Bruce Flatt, Brookfield Asset Management
58 Jeffrey Sprecher, Intercontinental Exchange
59 Wolfgang Reitzle, Linde
60 Robert Iger, Walt Disney
61 Benoît Potier, Air Liquide
62 William Rhodes III, AutoZone
63 Monty Moran, Chipotle Mexican Grill
64 Ajaypal Banga, MasterCard
65 Richard Cousins, Compass Group
66 Terry Lundgren, Macy’s (tie)
66 Benjamin Steinbruch, Companhia Siderúrgica Nacional (tie)
68 Randall Hogan, Pentair
69 Gregory Case, Aon
70 André Desmarais, Power Corporation of Canada (tie)
70 Paul Desmarais Jr., Power Corporation of Canada (tie)
72 Ola Rollén, Hexagon
73 Herbert Hainer, Adidas
74 Lars Rasmussen, Coloplast
75 George Weston, Associated British Foods
76 Mark Parker, Nike
77 David Zaslav, Discovery Communications
78 Ed Heffernan, Alliance Data Systems
79 Peter Rogers, Babcock
80 Gregory Henslee, O’Reilly Automotive
81 Fabrizio Freda, Estée Lauder
82 Scott Saxberg, Crescent Point Energy
83 Tsai Eng-Meng, Want Want China Holdings
84 Eric Wiseman, VF
85 He Guangbei, BOC Hong Kong
86 Gregory Johnson, Franklin Resources (tie)
86 Michael Mussallem, Edwards Lifesciences (tie)
88 Jean-Paul Clozel, Actelion
89 Martin Winterkorn, Volkswagen
90 Kari Henrik Stadigh, Sampo
91 Lars Renström, Alfa Laval
92 Michael Kowalski, Tiffany & Company
93 John Finnegan, Chubb
94 Jacques Aschenbroich, Valeo
95 Jean-Paul Luksic, Antofagasta
96 Edward Matthew Tracy, Sands China
97 Gregory Goodman, Goodman
98 Franck Riboud, Danone
99 Brian Jellison, Roper Industries
100 Willard Oberton, Fastenal

How do you measure a CEO’s worth? We decided to approach the task scientifically, basing the ranking on hard data, not on reputation or anecdote. Specifically, we looked at the increase in total shareholder return and market capitalization.

How We Calculated the Rankings
We also focused on long-term—or at least longish-term—results. Our rankings consider the performance of active CEOs over their entire stints, and we’ve included only those who have been in their jobs for at least two years. (The median term for all the CEOs we studied is seven years.)

The top CEOs have undeniably been effective. The top 50, on average, have delivered total shareholder returns of 1,350% (adjusted for exchange-rate movements) during their time on the job. That translates into an annual return of 26.2%. Adjusting for industry effects, average total shareholder returns for the top 50 are 1,161%, and for country effects, 1,087%.

We acknowledge, of course, that being a good CEO is about far more than just investment performance. Leading a company and creating value depend on many skills that are hard to measure—strategic vision, authenticity, long-term planning. And investors certainly aren’t the only stakeholders that need tending to; the best-run companies connect effectively with customers, employees, and the communities where they operate.

But we want this ranking to be as objective as possible, so we’ve put a premium on what we can measure precisely. Someday, we hope that there will be equally concrete ways to account for “intangibles”—environmental impact, employee satisfaction, customer engagement—so that we can confidently add that data to the formula. Until then we can only supplement this list with parallel data that tries to track some of these “softer” attributes.

Along those lines, we asked the Reputation Institute, a reputation management consultancy, to rank our top 100 CEOs in terms of these other skills—work environment, citizenship, governance, leadership, and so on. The results suggest, I’m afraid, that doing well doesn’t correlate much at this stage with doing good. That said, a few superstars scored high across the board, including Bezos, who, despite Amazon’s well-publicized entanglements with publishers and authors, was #4 on the Reputation Institute list. (Schultz finished in the middle of the pack.)

What else do we know about the CEOs on this list? Most are men—only two women, Debra Cafaro of Ventas and Carol Meyrowitz of TJX, made the top 100—and the median age is 59. (This is similar to what we see in the entire group studied, in which 3% of CEOs were female and the median age was 58.)

Thirteen CEOs are of nationalities that differ from their companies’. (Though it’s still not a global market for CEOs, that figure is more than double what it was in the 2013 version of this ranking.)

And while the top 100 have each experienced their own unique journeys to success, there do seem to be two preferred pathways. Over a quarter of the CEOs have MBAs, and nearly as many had studied engineering.

We also looked at CEO pay, to see how that related to performance. To do so, we worked with Equilar, a company that collects information on compensation, to tally the most recent pay packages for the top 100. These elite CEOs are very well paid, as are most CEOs. But on average the executives on our list receive more of every form of compensation than their peers do.

Disney’s Bob Iger, #60 on our list, is the highest paid among our 100, with a total package of $34.3 million. That doesn’t make him the world’s best-paid CEO. In fact, according to Equilar, 13 CEOs earned more, led by Charif Souki of U.S. gas developer Cheniere Energy, whose 2013 compensation totaled $141.9 million.

So what’s the ultimate takeaway from this ranking? In many ways, Bezos’s place atop the list says it all. Here’s a CEO who has frequently underperformed in the short term while continuing to make big bets on the future. Amazon often reports quarterly losses, even as sales continue to rise. And though the company is subject, like many firms, to dramatic share-price swings, Amazon and Bezos have a long-term track record of delivering shareholder value that is second to none.

Why Engineers Make Great Leaders

Twenty-four of HBR’s 100 best-performing CEOs have undergraduate or graduate degrees in engineering, compared with 29 who have MBAs. (Eight CEOs have both degrees.) At technology or science-based companies, it’s not a big surprise to find an engineer at the helm. But engineers thrive at the top of other kinds of firms, too: Examples include Carlos Alves de Brito of brewing giant Anheuser-Busch InBev, Jeffrey Sprecher of the financial services firm Intercontinental Exchange, and Kari Stadigh of the insurance company Sampo.

What makes an engineering degree useful to people leading a business? “Studying engineering gives someone a practical, pragmatic orientation,” says Nitin Nohria, the dean of Harvard Business School, who holds an undergraduate degree in chemical engineering from the Indian Institute of Technology, Bombay. “Engineering is about what works, and it breeds in you an ethos of building things that work—whether it’s a machine or a structure or an organization. Engineering also teaches you to try to do things efficiently and eloquently, with reliable outcomes, and with a margin of safety. It makes you think about costs versus performance. These are principles that can be deeply important when you think about organizations.”

Executive recruiter James Citrin, after examining the list’s numbers, notes an interesting trend: CEOs who were hired into firms as outsiders were more likely to have an engineering degree than insiders who were promoted into the job. “That connects with my experience,” says Citrin, who leads Spencer Stuart’s North American CEO practice. “When boards are making decisions, and they know it’s riskier going outside, it often gives them comfort if a candidate has studied engineering.” Why? Citrin says engineers excel at “architectural thinking” and logical problem solving. The only downside of an engineering background, Citrin says: It might be a small strike against a candidate who wants to lead a company in a creative field such as fashion or advertising.

How They Stack Up on Pay

One of the downsides of a global CEO ranking is that it’s difficult to offer a comprehensive comparison of these leaders’ pay, because countries require different levels of transparency with executive compensation. With help from the compensation analysis firm Equilar, we compiled pay data on 68 of our top 100 CEOs. (The remaining 32 are based in countries that lack public data on executive pay.)

This is a small segment of this article. To see the full article click here.

Random Acts of Progress

Social Business and the Growth of Shared Value [Infographic]

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In some of our more recent articles, we’ve been writing about Social Business ROI and the five stages of Social Media Engagement. And that enterprises typically achieve highly desirable social business outcomes through shared value.

We recently came accross this Infographic that helps illustrate the growth of shared value while deftly highlighting our social enterprise roots.

Of course we know that many businesses were very social long before social businesses were referred to as such; and long before social media/social networks came into existence. The new social paradigm, from a business PoV, is really the way that enterprises have reorganized and restructured their business around the social experience. Sounds simple enough but this is quite a profound change in the way that most enterprises operate with their customers and stakeholders (employees, suppliers, stockholders, etc.). It will be interesting to see how enterprises continue to restructure around the continuing social experience evolution. In the meantime, when you look into the background of what goes into the “social business movement,” the threads reach back a long way, giving social businesses far more momentum and much deeper roots than many people realize.

Haydn Shaughnessy, who helped put this Infographic together, describes the three included social strands, as follows.

#1 Technology — Has been pushing businesses towards greater openness and collaboration for a decade. It has its roots in open source, reaching back to the early 1990s.

#2 Marketing — Since the 1990s, marketers have been trying to go social, first with loyalty programs and now with social media.

#3 And then there’s the pure strand: The Social Enterprise — is reflected in good corporate social responsibility. That reaches back to the old mutuals, organizations that did pretty well through the recession.

The implications are that companies need to think more broadly about their social business strategies, and not just confine themselves to doing social media in the enterprise. In essence, they need to look at what additional rewards employees and customers might be looking for, in return for participation with brands. The added reward we call “shared value,” indicating that in a world where the “share” is king (not “content”), sharing has to have tangible value.

Scroll down to see all the strands of social business as they’re evolved over the past thirty years.

Social Business and the Growth of Shared Value

Infographic Source: Global Dawn

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Please share your thoughts about Social Business and/or Shared Value (or any other comments or thoughts you might have) in the comments section below.

Random Acts of Progress

Top 3 Picks: Best Social Media Infographics

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Here’s Stephen Paul’s Top 3 picks from the latest round of Social Media Infographics. Say what you will about the tidal wave that is social media: it’s over-hyped, a fad halfway through its 15 minutes, that surely won’t be around in a few years’ time.

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Here’s Stephen Paul’s Top 3 picks from the latest round of Social Media Infographics.

First Up Infographic. Say what you will about the tidal wave that is social media:

it’s over-hyped, a fad halfway through its 15 minutes, that surely won’t be around in a few years’ time. But take a look at the Infographic below – the steep curve of the user growth rate in all age ranges and demographics, and the continuing pervasiveness of social media into every facet of work, play and life in general. It’s hard to argue that social media hasn’t changed forever how we interact and connect online. See for yourself. Here’s the Infographic:

Social Media Growth Infographic
Source: The Growth of Social Media: An Infographic


Next up Infographic. Small businesses are becoming savvier about social media.

And, increasingly, smaller-scale operations are turning to Facebook, Twitter, LinkedIn, and other social media channels for promotions, customer acquisition, and sales leads. An impressive 75 percent of small businesses now have a presence on a social media site. Interestingly, 27 percent of small businesses are on Facebook, while 18 percent reside on LinkedIn, and just 7 percent use Twitter. This new data comes from CrowdSpring, a Web design firm that crowdsources all of its projects and that created the new Infographic below. Probably the most revealing social media stat here: 64 percent of Twitter users are more likely to buy the brands they follow or for which they’re a fan, compared with 51 percent of Facebook users. Here’s the full breakdown on usage at the top social media spots:

Small Business and Social Media Infographic
Source: Crowdsourced Logo and Graphic Design by crowdSPRING


Last up Social Media Infographic. From hurricanes and floods to earthquakes and wildfires, natural disasters affect the United States every year.

When it comes to being prepared for a disaster there are a number of basic items to include in your emergency kit, like water, food and a battery-powered or hand crank radio. However, armed with your smartphone and a knowledge of social media, you can be better prepared for an emergency situation. Here’s the Infographic:

Infographic - In Case of Emergency Use Social Media
Source: Visual.ly

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What’s your favorite Social Media Infographic or thoughts? You can share your comments below.

Random Acts of Progress

5 Social Media Marketing Tips to Increase User Engagement

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If you keep up with social media marketing news, you already know that if Facebook were a country, its 800 million users would make it the third most populous nation in the world. And, besides being the largest social network in the world (by far), it’s now the most popular website in the U.S., consistently beating out Google for the top spot.

Social Media Marketing

If you keep up with social media marketing news, you already know that if Facebook were a country, its 800 million users would make it the third most populous nation in the world. And, besides being the largest social network in the world (by far), it’s now the most popular website in the U.S., consistently beating out Google for the top spot.

However, just because Facebook is the country’s stickiest site doesn’t necessarily mean that your Facebook page has any “stick” to it at all. How do you connect with your customers on Facebook, get them to engage and keep them coming back for more? Here are five social media marketing tips for increasing user engagement on your Facebook page.

Social Media Marketing Tip #1: Pick the low-hanging fruit first

Whenever you’re trying to improve your social media marketing, consider starting with the low-hanging fruit – the changes that you can make right away that offer a big return. When it comes to increasing user engagement on your Facebook page, the low-hanging fruit includes:

  • Respond to questions and comments right away
  • Post regularly
  • Run a poll, a quiz, a contest
  • Change your Facebook URL to something easy to remember (i.e., don’t allow your URL to stay as “http://Facebook.com/My-Company-Name/String-of-impossibly-long-numbers/”)

Social Media Marketing Tip #2: Time your posts to reach more users

We’ve found that big brands who post Facebook content outside of business hours have 20% more user engagement than brands who only post during the work day. And there are a number of social media marketing studies that concur with this.

Facebook user engagement for big brands peaks at three points each day: 7am EST, 5pm EST, and 11pm EST. In other words, user engagement peaks before people go to work, after they get off work, and just before bed time. If you post during the work day, there’s a good chance you’re missing out on your social media marketing user engagement windows.

However, different markets peak at different times. The entertainment industry peaks over the weekend – times when people might check out a movie or a concert. For the media industry, Mondays are weak, but the other weekdays are strong. Auto and retail brands see the most engagement on Sundays; healthcare, beauty, travel/hospitality, and fashion all peak on Thursday; and the business and finance industries peak on Wednesdays and Thursdays. If your business falls into one of these industries, post your content on days when user engagement is already naturally high.

Social Media Marketing Tip #3: Short ‘n sweet (except for URLs)

Posts of 80 characters or less – shorter than a long Twitter post – generate the most user engagement. However, when you include a full-length URL, as opposed to a bit.ly or tinyurl, people are three times more likely to click on it.

Along the same lines, if you want a post to generate more user engagement, ask them to respond to a simple question at the end of the post, such as “What new widget would you like XYZ Company to produce?” Do not put the question at the beginning of the post or buried somewhere in the middle – it is far less likely to be seen.

Social Media Marketing Tip #4: Get out of sell mode

Too many businesses still don’t understand that Facebook is about interaction; a Facebook page is not a newspaper advertisement and it’s not even a company website. If all your posts are sales-oriented — “Check out our sale!”, “Look at our new products!”, “Did you know we just got our fall items in?!” — very few people are going to comment on it, like it, or share it.

From a business perspective, Facebook is less like a sales meeting with a prospective new client and more like a networking meeting where you have a chance to meet contacts and build relationships. To be effective at social media marketing, instead of constantly talking about your products, throw in an occasional picture of a colleague’s new puppy or a bit of industry news from a website that’s not your own.

Social Media Marketing Tip #5: Ask for content in a compelling way

You might remember what poor Domino’s went through a few years ago when a couple of not-thinking-straight employees posted a video on YouTube demonstrating how to cough on, sneeze on, and otherwise molest an innocent pizza before shipping it out to the customer.

[youlist vid=”OhBmWxQpedI” width=”400″ height=”300″]

The video went viral, but Domino’s handled it well. One of their innovative responses was to fight fire with fire: They encouraged customers to send in photos and videos of the delicious pizzas they had received from Domino’s. The best entries would win $500 gift certificates. Dominoes leveraged social media marketing skillfully.

In the same way, consider following Domino’s lead and holding a video contest or photo contest on your Facebook page. Make the contest prize something worth competing for, then watch the content and social engagement pour in.

These are just five social media marketing tips to get your creative juices flowing when it comes to increasing user engagement on your Facebook page.

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