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Many managers have never before had to shrink their operations or workforces drastically. Now, as they struggle to weather the storm of recession, they risk making what the author says is a common mistake: assuming that they will have to make the tough initial decision but can leave it to others to carry out. Long experience at Corning, Quest Diagnostics, Masonite International, and Accellent taught Freeman the benefits of what he calls a "soft hands" approach, which involves ensuring that employees, customers, suppliers, and communities are treated with consideration and compassion. Such behavior is simply good business. He offers four commonsensical - but frequently ignored - principles. Treat employees with dignity, fairness, and respect. Tell them why they're losing their jobs, what you will do to help them cope, and what you'll need from them during the transition. Communicate fully and often, be visible and personal, and honor company commitments. Treat your customers and suppliers like valued partners. Keep them informed, consider their needs, maintain your focus on quality, and take pains to transfer the business smoothly. Manage the layoff or closure like a project. Appoint an experienced, full-time project leader and a strong team. Define stages of the process, establish criteria for passing through them, and conduct regular reviews. Use judgment and, if necessary, fight back. Don't be pushed by Wall Street or others to move so quickly that the organization ends up suffering. The shutdown of a Corning plant in Indiana, the merger of Quest with SmithKline Beecham Clinical Labs, and the closure of an Accellent factory in Tennessee illustrate successful outcomes of a soft-hands approach.

The literature on CEO succession planning is nearly unanimous in its advice: Begin early, look first inside your company for exceptional talent, see that candidates gain experience in all aspects of the business, and help candidates develop the skills they will need in the top job. It all makes sense and sounds pretty straightforward. Nevertheless, the list of CEOs who last no more than a few years on the job continues to grow. Implicit in many, if not all, of these unceremonious departures is the absence of an effective CEO succession plan. The problem is, most boards simply don't want to talk about CEO succession: Why rock the boat when things are going well? Why risk offending the current CEO? Meanwhile, most CEOs can't imagine that anyone could adequately replace them. In this article, Kenneth W. Freeman, the retired CEO of Quest Diagnostics, discusses his own recent handoff experience (Surya N. Mohapatra became chief executive in May 2004) and offers his approach to succession planning. He says it falls squarely on the incumbent CEO to put ego aside and initiate and actively manage the process of selecting and grooming a successor. Aggressive succession planning is one of the best ways for CEOs to ensure the long-term health of the company, he says. Plus, thinking early and often about a successor will likely improve the chief executive's performance during his tenure. Freeman advocates the textbook rules for succession planning but adds to that list a few more that apply specifically to the incumbent CEO: Insist that the board become engaged in succession planning, look for a successor who is different from you, and make the successor's success your own. After all, Freeman argues, the CEO's true legacy is determined by what happens after he leaves the corner office.

When does it make sense for companies to grow from within? When is it better to gain new capabilities or access to markets by merging with or acquiring other companies? When should you sacrifice the bottom line to nurture the top line? In a thought-provoking series of essays, five executives--Kenneth Freeman of Quest Diagnostics, George Nolen of Siemens USA, John Tyson of Tyson Foods, Kenneth Lewis of Bank of America, and Robert Greifeld of NASDAQ--describe how they have approached top-line growth in various leadership roles throughout their careers. They write candidly about their struggles and successes along the way, relaying growth strategies as diverse as the companies and industries they represent. The leaders' different tactics have almost everything to do with their companies' particular strengths, weaknesses, and needs. Freeman, for instance, emphasizes the importance of knowing when to put on the brakes. When he first became CEO of Quest, he froze acquisitions for a few years so the company could focus on internal processes and "earn the right to grow." But for Greifeld, it's all about innovation, which "shakes up competitive stasis and propels even mature businesses forward." The executives agree, though, that companies can grow (even profitably) by distinguishing their offerings from those of other organizations.