Thomas Golisano of Paychex had repeated on the list in 1993-1996 for four years in a row before missing last year. Impressively, our fifth CEO is also the holder of this year's top ranking on the CEO Performance Ranking, a measure of how well the company has performed adjusted for its size. As we go to press, news reports indicate that this CEO will step down in May 1998 but will remain with the company as chairman. Grove has served as CEO for 11 years. Coincidentally, last year's number one in the CEO Performance Ranking, Joseph Costello of Cadence Design Systems, also left his firm last fall to join the well-financed Knowledge Universe, a young educational software company, where he serves as vice chairman.
Cadence continues to prosper.
In March 1998, Kim Edwards, CEO of Iomega for 4 years and this year's number one in the CEO 100 Index, resigned following two quarters of disappointing earnings as excess inventories build. Kim transformed a static, relatively small company with mature products that was suffering losses, into a dynamic growth company. These events focused attention on the differences between those CEOs who stay at the top for a long time and those who only appear once. Another way to think about this is as the performance of a company that is providing goods or services for which there is a rapidly-growing demand, with superior performance for customers that frequently permits premium pricing, efficiency in operations that brings costs down while the company grows so that profit margins can expand, which is able to innovate through several cycles of expansion by providing newer products and services that build logically on its past success, and which takes no risks that backfired in a large enough way to derail progress. When we look just at the five consecutive repeaters, the importance of the CEO Performance Index becomes apparent.