Editor's Page -- A Higher Standard

It's a tough time to talk about business leadership, much less single out a few executives who exemplify the concept, what with the alleged chicanery of previously heralded executives exposed in the news recently -- but that's exactly what this issue features. We do this now because it's the perfect opportunity to join the current discussion about leadership and what kind of leaders we want running our companies. Specifically, it's a chance for IndustryWeek to reiterate its belief that an executive's leadership ability cannot be judged solely by quarterly financial metrics and the resulting stock price. It's a conviction that IW has held for as long as I can recall and, most significantly, promoted throughout the late '90s when, let's face it, few people cared how our business leaders were beating their quarterly estimates. That's when the general consensus zeroed in on short-term financial performance as the only scorecard by which to determine executives' performances. It's when executive pay became linked with stock performance to put their financial rewards at a risk on par with other shareholders. Near the end, it's when rumors of a company "managing the numbers" were met with a shrug, a wink and a nod by other business leaders, analysts, shareholders and the media. During this time, however, IW's measure of success continued to include an executive's ability to not only grow revenue, increase profit and drive the stock price, but to do so over the long term while also contributing to society, giving employees a fair deal and being good environmental stewards. IndustryWeek's Best-Manufacturing Companies feature, previously called the 100 Best-Managed Companies, published in the August issues from 1996 to 2001, serves as the most prominent example of this. Yet the Best-Managed Companies' selection process led to a discovery that, in retrospect, should not seem as surprising as it did then: Few companies are the best at all of our criteria. Rather, they excel at a few, rank pretty well on others and, in a few cases, demonstrate significant shortcomings on one standard. I recall wrangling over whether we should publish the winners' imperfections, lest readers think we weren't aware of them. We decided to stick with IW's traditional mission of celebrating what companies do well rather than their faults. We reasoned that our readers know we're not out to catch criminals, expose ethical lapses or even spotlight the inevitable errors company leaders make. We decided that the practices we write about implicitly define what we believe to be bad practices. Now, as the debate rages about how to fix a system gone awry, IW continues to highlight executive leadership best practices that disdain a short-term financial focus that ignores serving the community and employee stakeholders as well as the long-term shareholder. It's a high standard, but a worthy one to strive for. We hope you agree. Patricia Panchak is IW's editor-in-chief. She is based in Cleveland.