Title: CEO, Staples Inc.
Home Base: Framingham, Massachusetts
On my first day as CEO, I put on the black pants, black shoes, and red shirt that our associates wear and headed to our Brighton store. We opened the very first Staples store in Brighton, Massachusetts in 1986, and by going there, I tried to rally the Staples troops around a concept that I call "Back to Brighton." It's a symbolic message to the members of our organization that we're going to improve service and refocus on our core customer base: the small-business customer.
The economic slowdown has caused Staples to reexamine every aspect of its business. Over the years, we started catering to the more casual customer. But that's not where the money is, and that's not what we're really good at. Now we've stopped carrying about 600 items that appealed to the casual customer and added 650 to 700 items that appeal to the small-business customer instead. We've improved the quality of the merchandise we offer, because businesses have different needs than the casual consumer. Instead of advertising as much in the Sunday circulars, which businesses don't respond to, we put more into direct marketing, upgraded our Web site, and doubled our direct-sales force in four months. We took the money that we originally put into advertising and reinvested it in training for our associates, and we added more staff to our stores to provide better service. These are important changes. In some ways, I'm not sure we would have looked in the mirror so carefully if not for the slowed economy.
Ron Sargent made the transition from chief operating officer of Staples to chief executive officer in February 2002. He has been with the company since 1989, first as regional vice president of operations and later as president and COO in charge of worldwide operations, supply-chain management, merchandising, and marketing. From 1991 to 1994, Sargent also headed Staples Direct, the company's direct-delivery business.
Title: CEO, Southwest Airlines
Home Base: Dallas, Texas
After September 11, we had no idea when we'd be allowed to resume operations or how drastic the impact of those events would be on our business. Our first focus was on gathering and conserving our resources -- particularly our cash -- in a way that would protect our business. We had to make some decisions very promptly: We had a $180 million profit-sharing payment due on September 14. Because of our limited resources, we had a tough time deciding whether to fund it. In the end, we chose to pay it out, because it was the right thing to do for our employees.
Next on the agenda was deciding not to furlough any employees and to protect all employee jobs. We have a lot of people who have worked hard for more than 30 years so that they can have job security in hard times. It would have been breaking faith with our employees if our first reaction was to cut jobs. Cutting jobs should be the last thing a company does rather than the first thing. But we did declare an immediate hiring freeze and cut capital spending across the board. We halted discretionary projects, including the expansion of our headquarters building. We also told Boeing that we needed to defer our next airplane deliveries, even though they were scheduled for the following week.
My definition of leadership didn't change over the course of those first few months as CEO. And I continue to have great respect and appreciation for the jobs that our people do. We're in the customer-service business, and in that business, your employees are the most valuable asset you have.
James F. Parker became CEO of Southwest Airlines in June 2001. He has been at Southwest since 1986, concurrently holding the positions of vice president and general counsel. Before joining Southwest, Parker was an attorney at the law firm Oppenheimer, Rosenberg, Kelleher, and Wheatley Inc., which was partly owned by outgoing Southwest CEO Herb Kelleher. Parker also served as assistant attorney general of Texas.
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