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The best CEOs of 2013

2013-12-19 09:45:39

Sydney Finkelstein

Revealing the best chiefs of 2013...

For several years I ve compiled a list of the worst chief executive officers of

the year, leaders who, by virtue of their poor performance, warrant being

called out. Last week I named the worst CEOs of 2013, and this week I turn my

attention, for the first time, to the best.

There are two criteria I considered:

Did the CEO s company experience a significant improvement in performance, as

indicated by its stock price, cash position, market share or other key

financial metrics?

Does the CEO deserve credit for this success, in that he or she actively made

decisions or followed strategies that were related to that success? As was the

case for worst CEOs, it is important to focus on those leaders who stood out by

virtue of what they did, and not because of general economic conditions in a

particular industry or sector.

So, who were the best CEOs of 2013? Scroll through the images above to see the

five best, beginning with No. 5.

Editor s note: The opinions in this piece are those of the author.

(Robert Landau/Corbis)

The fifth-best CEO of 2013

Reed Hastings, the CEO of Neflix, is the comeback kid. Remember the infamous

Qwikster debacle when the company announced it would split its DVD-by-mail

business from its emerging broadband streaming business, raising prices in the

process?

Customers revolted, more than one million strong, and Hastings was roundly

pilloried in the press. I ranked him among the worst CEOs of 2011.

But what a recovery! It helped that the underlying idea for the shift made

sense ordering movies by mail is a very analogue way to make money but

after apologising for how Netflix treated customers, Hastings spearheaded a

renewed focus on execution and innovation at the $22.2bn market capitalisation

company.

In classic Silicon Valley style, the massive data Netflix collects on

customers, in combination with enormous cloud-based resources (powered by

Amazon), has enabled the company to match up availability of videos to

customers in different locations based on past viewing patterns. Media

companies use technology to deliver content. Netflix has become a technology

company that delivers content to customers in original ways.

Hastings is aggressively pushing Netflix into global markets, where it often

faces local copycat competitors that are unlikely to have the same level of

technological sophistication. This powerful growth strategy, when coupled with

an innovative culture that is generating original content like the

Emmy-nominated drama House of Cards , helped account for a tripling of Netflix

s market cap in 2013.

Reed Hastings deserves credit for this turnaround, and is this year s fifth

best CEO of the year.

The fourth-best CEO of 2013

The world of fashion is always looking for what s new and exciting. This year

we can add to that list of cool the CEO behind one of the most explosive growth

stories of 2013: John Idol of Michael Kors.

Idol was part of a team alongside Lawrence Stroll and Silas Chou who

acquired the Michael Kors business in 2003 when it was generating just $20

million in sales. Despite his incredible talent as a designer, Michael Kors the

man had been struggling for some time running his business.

Enter John Idol. He defined the company s value proposition as runway fashion

at accessible prices, a category that placed Michael Kors below the Louis

Vuitton s of the world, but above just about everyone else. He repositioned the

company to pay particular attention to accessories handbags, shoes, watches,

jewellery which tend to get less beaten down by discounting. And he created

two brands: the flagship Michael Kors that commanded the highest prices and the

Michael by Michael Kors brand that brought accessible luxury to a wider

audience.

This new strategy has taken off. Revenues are around $3bn, with $1bn of that

coming from watches. Same-store sales growth hit an unheard of 40%, the number

of Michael Kors stores is growing around the world and the stock is up 4 times

the 2011 IPO price.

Idol is something of a post-modern CEO. His management style: being inclusive,

fighting against silos, open to debate, creating opportunities for new talent

to develop and avoiding complacency.

The third-best CEO of 2013

Pony Ma is the founder and CEO of the Chinese Internet company Tencent. To say

that 2013 has been a good year for him and his firm would be an understatement.

The market valuation of Tencent has skyrocketed to more than $100bn, to

Facebook-like levels, the new mobile platform WeChat has almost tripled its

active users (25% outside of China) and the company appears to be poised for

tremendous growth.

What is especially impressive about the leadership of Pony Ma is the

transformation of the once PC-dominated company to a leading player in mobile.

Two years ago Ma pushed Tencent to develop a new mobile platform from scratch,

shifting more than half of the company s 20,000 employees to work on the

challenge.

Unlike Microsoft, which still hasn t been able to make the transition, and even

Facebook, which has just recently gotten traction in mobile, WeChat is an

unqualified winner. The platform enables sharing of text, photos, and video,

and offers live chat, instant messaging, online gaming and entertainment, and

recently a payment service to support e-commerce.

While there are competitors Line in Japan, Kakao in South Korea, WhatsApp in

the US the fact that Tencent s WeChat has been able to so quickly leapfrog

more specialised companies such as Facebook and Twitter is remarkable. It puts

Ma s company in position for global growth, making Tencent a kind of 2.0

company in China where opportunities outside of the giant home market may

eventually rival and even surpass revenue generated from Chinese customers.

Pony Ma is also a 2.0 leader, humble enough to admit my biggest crisis is that

I don t understand what young people like.

Given what he s done at Tencent, that might be a bit of an overstatement. Pony

Ma is the third-best CEO of 2013.

The second-best CEO if 2013

The grandson of the founder of Toyota, Akio Toyoda started his tenure in 2009

under extremely difficult circumstances: sudden acceleration, product recalls,

the global financial crisis, the Japanese tsunami that disrupted the parts

supply chain and a surging yen.

He didn t always manage this adversity well, being especially slow to confront

the sudden acceleration crisis in the US.

After finally apologising to the US Congress in person, he went to work fixing

Toyota. Like several other of the best CEOs of the year, Toyoda was all about

change. Rather than build reliable cars that nobody disliked, he wanted to sell

exciting cars that people loved. So he decided to test drive each new model and

provide direct feedback in a very non-traditional manner for a Japanese

executive.

He appointed Americans to run North America and Latin America, another first.

He cut bureaucratic layers and has even taken personal responsibility for the

Lexus business. Fighting against bottom-up consensus that is inherently slow,

he s pushed for what he calls fast and flexible decision-making.

Toyoda s biggest strategic move may be TNGA Toyota New Global Architecture

which is based on simultaneous development of multiple vehicle models and

massive use of common modular components. TNGA has the potential to be a game

changer in the automobile industry if it does what it is supposed to do. That

is, control costs on a global scale and enable sharing of engineering

breakthroughs faster than ever before.

Along with all these changes, Akio Toyoda can feel pretty good about 2013.

Market cap is up over 60%, considerably more than Nissan and Honda; profits are

expected to hit a record $17bn; and Toyota is on pace to be the first car maker

to sell 10 million vehicles.

The best CEO of 2013

The best CEO of 2013 is Jeff Bezos, the founder and impresario at Amazon.

This company is in the midst of a super-growth cycle fuelled by innovation,

extraordinary customer focus and a long-term outlook that is highly unusual in

a world of quarterly earnings pressure. Yet Bezos has sold Wall Street on his

long-term play, barely booking any net income while watching Amazon s market

cap increase by around 50% in 2013.

What is Amazon? A cross between package delivery company UPS, the local library

and a giant warehouse, Bezos has created a company that should be boring but is

anything but. Amazon is a cool brand with exceptionally low prices an unusual

combination. Wal-Mart only boasts one of these attributes.

The Bezos innovation formula is continuous. From selling books to selling just

about everything, to creating new products and services like Kindle, Amazon

Prime, original content creation, a giant cloud business, and the plumbing

behind thousands of e-commerce operations, Amazon is ubiquitous.

He is unafraid to experiment, and is especially fond of targeting industries

wedded to history, which includes much of retail. He seems to have a sixth

sense for which businesses are ripe for disruption, one of the most recent

being the apparel industry. Bezos deserves credit for building a giant company

that is as nimble as a start-up.

Bezos is that most unusual of business leaders who combine one part

entrepreneurship, one part cutthroat competitor and one part McKinsey-like

focus on execution. Like Apple s Steve Jobs before him, Bezos is the one

everyone else watches to see what he ll do next. Whether it s promoting drone

delivery of packages on the day before Cyber Monday clearly the PR scoop of

the year or delaying state sales tax collections on online purchases in

exchange for completing in-state distribution centres, Bezos and Amazon find

new ways to win.

The biggest companies are usually the slowest and most vulnerable. Bezos has

built Amazon into a giant company that is quicker and smarter than others.

Jeff Bezos, the best CEO of 2013.