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CNN Presents: Top 25 Business Leaders
Aired March 13, 2005 - 20:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL LIN, CNN ANCHOR: Good evening. I'm Carol Lin. CNN TOP 25 is next. But first, here's what's happening right now.
The woman hailed as the hostage hero in the capture of the suspect in four Atlanta killings will hold a news conference tonight.
Police say Brian Nichols followed the woman to her apartment and held her captive for several hours. She is expected to tell how she won his confidence and escaped, leading to his arrest.
The news conference is not being broadcast live, but you will see it on tape during a special two-hour edition of LARRY KING LIVE. "Nichols Captured: Inside the Manhunt," with guest host Nancy Grace. Tonight at 9:00 Eastern.
And here in Atlanta, authorities say Brian Nichols could appear in federal court as soon as tomorrow. He is suspected of killing a judge, a court reporter, a deputy and a federal agent. Sources tell CNN he's being held under maximum security at the Atlanta federal penitentiary.
Later, who are the people in the Atlanta area who are mourning after this week's horrific shooting spree? We are going to talk to a friend of court reporter Julie Ann Brandau, one of the victims, at 11:00 Eastern on CNN SUNDAY NIGHT. I will see you then.
More headlines in 30 minutes. But up next, meet the 25 top business leaders covered in 25 years of CNN.
SUSAN LISOVICZ, HOST, CNN'S TOP 25: BUSINESS LEADERS: The men and women behind the money. Twenty-five years and 25 people who changed the face of business in America and around the world.
SHAWN FANNING, NAPSTER FOUNDER: We will keep fighting for Napster and for your right to share music over the Internet.
LISOVICZ: From entrepreneurs to economists, MBAs and renegades.
TED TURNER, FOUNDER, CNN: I just want you to know that I'm really having a ball.
LISOVICZ: To the geeks who saw the future and then owned it.
MICHAEL DELL, FOUNDER, DELL COMPUTER: It seemed like an obvious opportunity to me.
LISOVICZ: We're counting them down and adding up their contributions to the economy and the culture.
Welcome to CNN's TOP 25. I'm Susan Lisovicz, joining you from the floor of the New York Stock Exchange.
This month we take a look at the top leaders in business.
If these walls could talk, they'd probably have a lot to say about the men and women in our countdown.
We turn to the writers of "Fortune" magazine to compile a list of the most influential business leaders and entrepreneurs over CNN's first 25 years.
Twenty-five leaders and 25 years. There's a lot of ground to cover, so let's get right to it.
The man at No. 25 helped Big Blue beat back a bad case of the blues in the 1990s.
Taking over as CEO of IBM on April Fool's Day in 1993 was no joke for Lou Gerstner. The former head of RJR Nabisco had no history with IBM or the tech industry. But this so-called unaffected outsider was exactly what Big Blue needed.
LOU GERSTNER, FORMER CEO, IBM CORP.: What I really learned at IBM was that, if you don't have the culture right, if people don't have the right beliefs, if they don't care about the right things, then it doesn't matter what your strategy is, it just isn't going to work.
LISOVICZ: IBM was reeling. Gerstner revamped management, rewarded teamwork and cut billions in expenses, including more than 35,000 jobs.
JERRY USEEM, SENIOR WRITER, "FORTUNE" MAGAZINE: He basically kind of strips off this whole layer of bureaucracy and stuff, and asks like, what was this company great at doing to begin with?
LISOVICZ: Gerstner stepped down as CEO in 2002, leaving IBM's stock at record highs, gaining more than $40 billion in value, which secured his place in turnaround history.
Music was the driving force behind our business leader at No. 24. But instead of the record store, this entrepreneur went online. David Haffenreffer explains.
DAVID HAFFENREFFER, CNN CORRESPONDENT: In 1999, college freshman Shawn Fanning had an idea. The idea came to him after watching his roommates skip classes and spend hours searching for and downloading obscure rap music on the Internet.
SHAWN FANNING, FOUNDER, NAPSTER, INC.: He'd have his friends over from, you know, high school in his home town every weekend. And we'd see this great music collection, because he was a DJ, and say, you know, how can I - how can I get access to this stuff?
And you could never give them a simple explanation, because, you know, it became this - it was a bit of a, you know, technical voodoo.
HAFFENREFFER: So, Fanning set out to make that process easier. He had no idea at the time the software program he would write would forever change the way music was distributed.
On June 1, 1999, Napster was born. The Napster name was taken from Fanning's own high school nickname, because of his so-called nappy hair.
FANNING: I released an early beta version of the Napster software during the summer, and it spread quickly by word of mouth. It hasn't stopped growing since.
HAFFENREFFER: As the number of users grew, so did interest from the media and, of course, the music industry, which wasn't making any money on all this music being shared on the Internet. Shawn Fanning had sparked a cultural revolution.
ALAN LIGHT, EDITOR-IN-CHIEF, TRACKS MAGAZINE: I think the timing helped. I think the technology was inevitable.
But I don't think there's any question it helped that is was this kid. And that, how could you really say that multi-billion-dollar record industry was going to get taken down by, you know, this college kid from Boston is really this huge threat to all of these executives?
HAFFENREFFER: The hard rock group Metallica led the charge against Fanning and Napster, after hearing one of its songs on the radio that hadn't even been released yet.
LARS ULRICH, BAND MEMBER, METALLICA: There were six works in progress available. And basically, radio stations were downloading it, playing it on the air. And the song wasn't even done yet.
And that was sort of like - that was the straw.
HAFFENREFFER: And while Ulrich and the recording studios pressed hard against Napster, Fanning was elevated to rock star status, becoming a hero for a generation of music lovers.
CRAIG KILBORN, TELEVISION PERSONALITY: Nice shirt.
FANNING: You like it? You like it? Actually, a friend of mine shared it with me.
HAFFENREFFER: Although Napster was eventually shut down, Fanning has no regrets.
FANNING: It was really amazing, because I had somewhat of a limited view of the world. I'd grown up in Massachusetts, barely left the state.
And so, but I was able to affect people's lives all over the world.
HAFFENREFFER: Not to mention affecting the entire music industry, which is still trying to bend to its customers' changing desires.
The Napster name also lives on. A legal reincarnation of the service is fighting to be relevant in the fast-growing digital music world.
As for Fanning, he's co-founded Snocap, a service designed to bridge the royalties gap between music labels and music file-sharing programs.
LISOVICZ: At No. 23, Enron's Ken Lay, whose company collapsed in a massive accounting scandal.
KENNETH LAY, FORMER CHAIRMAN & CEO, ENRON: As CEO of the company, I accept responsibility for Enron's collapse. However, that does not mean I knew everything that happened at Enron, and I firmly reject any notion that I engaged in any wrongful or criminal activity.
LISOVICZ: The scandal drove the energy giant into what was at the time the largest bankruptcy in U.S. history, with a loss of more than $60 billion in stock value, causing millions of investors to lose their savings.
Lay has been criminally charged and is awaiting trial.
Out of the Enron mess came congressional hearings and reform - safeguards designed to ensure there would never be another Enron.
BETH FENNER, ASSISTANT MANAGING EDITOR, "FORTUNE" MAGAZINE: CEOs can no longer say, you know, I don't know about those numbers. That was somebody else's job. It's the CEO's responsibility.
LISOVICZ: The American who trained post-World War II Japanese executives in quality management drives into No. 22.
W. Edwards Deming became famous for his 14 points to improve company management through quality and teambuilding.
FENNER: W. Edwards Deming was sort of the epitome of the quality movement. His big insight was, if you have a manufacturing line, nobody knows how that line works better than the workers on that line. And they need to have the power to shut down the line at any moment if they see a quality mistake.
LISOVICZ: Japan soon became a force to be reckoned with.
W. EDWARDS DEMING, INFLUENTIAL BUSINESS CONSULTANT: As you improve quality, your costs go down. So they were able to capture the markets through better quality at lower cost, lower price.
American management does not know that. LISOVICZ: The quality control theories that Deming used in Japan were instituted in the U.S. in the 1980s, also with positive results.
Reporting in at 21, she was once considered the most powerful woman in America. The late Katharine Graham's pen was a mighty sword.
Taking over as publisher of the "Washington Post" after her husband died in 1963, she helped change the course of U.S. history. Her young reporters, Woodward and Bernstein, uncovered the Watergate scandal, which led to the resignation of President Nixon.
KATHARINE GRAHAM, PUBLISHER, "WASHINGTON POST": He had this dark underside to him that's come out in the tapes, and that came out in his work (ph) performance in Watergate.
LISOVICZ: Graham did it all at a time when most women were home taking care of the children - paving the way for other women to lead successful companies.
Coming up, the man behind the swoosh. How he just did it.
PHIL KNIGHT, CO-FOUNDER & CHAIRMAN, NIKE: I just tried to do the best I could, and let the chips fall where they may.
LISOVICZ: Then he made the mouse a mighty force, from Main Street USA to Wall Street NYC.
That's still ahead on CNN's TOP 25.
LISOVICZ: He's the Knight of Nike. A man who developed the shoe and made the brand an icon.
Larry Smith takes a look at how the competition is still running to keep up with No. 20.
LARRY SMITH, CNN SPORTS ANCHOR: You've cheered on his athlete endorsers, watched his commercials and probably even stood in his shoes, at least once.
He's Nike chairman and co-founder, Phil Knight, one of the greatest entrepreneurs in American history.
PHIL KNIGHT, CHAIRMAN & CO-FOUNDER, NIKE: I think hard work matters. And I think having a passion for what you do matters. I think you need at least those two ingredients, and maybe a little luck.
Even in the early days when we weren't selling close to $1 million, we thought that we would be very competitive in this business. And the thought that we wouldn't be really didn't occur.
SMITH: Using a waffle iron to make its first rubber soles as early as 1970, Nike revolutionized the sports world by signing superstar endorsers and creating ad campaigns that were as popular as the athletes themselves.
Knight merged sports with American pop culture, while making the Nike swoosh one of the most recognized symbols worldwide.
JOHN MCENROE, PROFESSIONAL TENNIS PLAYER: I think he realized the impact that a personality or someone that kids looked up to, that they could really take advantage of that. I mean, he was way ahead of the curve on that.
SMITH: From selling shoes out of the trunk of his car in the mid-'60s to massive retail outlets called NikeTown, Knight has spent the past four decades running after customers - and running to the bank.
The 67-year-old's net worth is estimated to be worth more than $7 billion.
CHARLES BARKLEY, TNT NBA ANALYST: He is the most normal, down- to-earth guy with a billion dollars I've ever seen in my life. He's just a nice man.
SMITH: But the former track athlete at the University of Oregon has had his critics. Nike came under fire in the 1990s, its reputation stained by allegations that it used sweatshop labor in Asian factories.
Nike responded by voluntarily creating a code of conduct meant to improve working conditions.
Knight stepped down as CEO of the $12 billion conglomerate last year, but remains its chairman and an integral part of the company.
After all, nobody expects the man who told the world to "just do it," to just sit down.
KNIGHT: As an old business professor said to me, the only time you must not fail is the last time you try.
LISOVICZ: Making an investment at No. 19, Peter Lynch, who led the Fidelity Magellan Fund to 13 straight years of record returns. A stake of $1,000 in 1977, when Lynch joined the fund, was worth some $28,000 by the time he left, in 1990.
FENNER: He had this great combination of charisma. The ordinary guy could relate to him. He was a good communicator. And he had just an amazing golden touch.
LISOVICZ: Lynch advised investors to watch what's hot on Main Street, not Wall Street, and to weather the ups and downs of stock investing calmly.
PETER LYNCH, INVESTMENT MANAGER, FIDELITY MAGELLAN FUND: In January in Minnesota when it's below zero no one is scared. They understand it's going to be cold in January in Minnesota. You should understand the market's going to go down.
LISOVICZ: Michael Eisner ran, quite literally, a Mickey Mouse operation for years, and lands at 18 on our list.
Under the guidance of Eisner, Disney went from an ailing company to a multimedia powerhouse, with revenues topping $25 billion.
FENNER: Michael Eisner realized that to compete against other big media companies, Disney would have to get big. He was very aggressive in opening theme parks, merchandising.
The Cap Cities/ABC purchase, though, was probably the key thing. It gave him a bigger reach with movies. It gave him a foothold in television.
LISOVICZ: But Eisner's ride as CEO has had plenty of bumps. His power struggle with Michael Ovitz resulted in Disney paying him a $140 million severance package. And last year, Eisner lost his title as chairman after 45 percent of shareholders expressed no confidence.
But since then, Disney has delivered on its promise to grow earnings more than 50 percent, and the stock has seen a double-digit rise in value.
No. 17, the godfather of the virtual bookstore. Jeff Bezos, the founder and CEO of Amazon.com, pioneered online commerce.
JEFF BEZOS, FOUNDER & CEO, AMAZON.COM: In everything we do, we want to make sure it's the best that we can do for the customer, and that they won't, can't go somewhere else and get a better experience.
LISOVICZ: Bezos started his store-without-walls in 1994, when Internet commerce was still in its infancy. He took on some of the biggest retail giants and survived the dot-com downfall, all before turning a profit.
DANIEL ROTH, SENIOR EDITOR, "FORTUNE" MAGAZINE: Bezos' particular genius was realizing that logistics and warehousing and incredibly powerful software that would help him with shipping was what was going to set Amazon apart from the competition.
LISOVICZ: Amazon now also sells music, electronics, sporting goods and more. Amazon.com's revenues increased more than 30 percent last year, with net income of more than $588 million.
UNIDENTIFIED MALE: (UNINTELLIGIBLE), how you doing, baby?
UNIDENTIFIED MALE: Good.
LISOVICZ: A chairman who took his company on a happy flight to the top.
And captain outrageous, the mouth of the south. An offbeat genius who took a chance on cable. There's more to come on CNN's TOP 25.
LISOVICZ: eBay's Meg Whitman has prospered in the male-dominated tech industry by creating a vibrant community of online buyers and sellers.
Renay San Miguel has her story.
FENNER: You don't need bricks-and-mortar stores. You don't need a warehouse. We're going to put people in touch with each other.
She has her customers do her work for her.
RENAY SAN MIGUEL, CNN HEADLINE NEWS ANCHOR: She is Meg Whitman, CEO of the virtual flea market/online garage sale/e-commerce phenomenon known as eBay. But you know you're a phenomenon when you make headlines for stories other than your quarterly earnings reports.
ADAM COHEN, "NEW YORK TIMES": You have something you want to sell and you want to go on the Internet. It's not a question. You go to eBay.
SAN MIGUEL: That's why one guy rented space on his forehead. An entire town put itself up for sale. One man sold his vote.
That's in addition to electronics, cars, PEZ dispensers, Beanie Babies - whatever can be bought and sold. Within reason, of course.
COHEN: It's the millions of people who buy and sell on eBay. Those are her constituents.
SAN MIGUEL: Adam Cohen of "The New York Times," has written a book about Whitman and the eBay story, "The Perfect Store." He says eBay was a classic dot-com startup that outgrew the business experience of its founders.
COHEN: It really needed a professional manager. And they did a search and they found Meg Whitman.
SAN MIGUEL: Who went to college at Princeton, got an MBA at Harvard, and then gained her management experience at big traditional companies like Procter & Gamble, FTD, Hasbro and Walt Disney.
The woman responsible for marketing Mr. Potato Head and Stride Rite shoes now had to hit the ground running in the dot-com world.
COHEN: What Meg had to do was strike a very careful balance. She had to professionalize the company and actually take it public, which she did. But at the same time, she had to retain eBay's quirkiness and informality that is crucial to keeping its members, its community happy. SAN MIGUEL: It was a quality that California State Comptroller Steve Westly saw when, as one of eBay's early executives, he helped hire Whitman to be its new president.
STEVE WESTLY, CALIFORNIA STATE COMPTROLLER: I think what people like is, she's razor sharp, she's incredibly outgoing, friendly and upbeat. But more than anything, I think especially compared to so many of the CEOs in corporate America, Meg is down to earth.
SAN MIGUEL: And that comes in handy when you're trying to run the biggest antique store or flea market on earth.
A lot of other dot-coms try to get into the e-commerce or auction space. They spend a lot of money doing it, promising profitability all the while.
They're not here anymore. eBay still is, although it did face its share of potentially fatal challenges. eBay's success attracts hackers, who use the company logo in fake e-mails to steal personal information. And four years ago, technical problems took the entire site offline for a day.
UNIDENTIFIED FEMALE: She helped them through that sort of potential PR disaster. She smoothed it out.
And, again, she was very human about it. She didn't deny it. She went out there, said, hey, we have this problem. We're going to fix it. Thank you so much for being patient with us. We're all over it.
LISOVICZ: Sometimes being a good business leader is all about finding the right people to help you realize your vision.
Jim Clark is one of those leaders. He's No. 15.
JIM CLARK, BUSINESS LEADER: When I look at the best CEOs I have known, they've got a set of skills I don't have. And my best skill is being able to recognize their skills, so that I can hire them to run a company.
LISOVICZ: Restless entrepreneur Jim Clark had his hand in creating three separate billion-dollar companies - Silicon Graphics, Healtheon and then Netscape.
ROTH: Jim Clark is another one of these guys who's always looking around the corner and thinks that he sees what the next big thing is.
LISOVICZ: The co-founder of Netscape helped create the world's first widely marketed Web browser, opening the Internet to anyone with a PC and a phone line.
Clark made history taking Netscape public before it turned a profit, setting off the Internet IPO boom of the 1990s, and taking on Microsoft in an all-out browser war. Netscape is now part of Time Warner, the parent company of CNN.
The father of CNN lands at No. 14.
TED TURNER, FOUNDER, CNN: I dedicate the news channel for America - the Cable News Network.
LISOVICZ: Ted Turner was cable when cable wasn't cool.
TURNER: I must be doing something right.
FENNER: He really changed the way news is gathered and disseminated. Before Ted Turner thought, you know, we can do a 24- hour network and have it go everywhere and be a - this new thing called cable.
LISOVICZ: He created a media empire, rivaling the Big Three.
Turner changed TV and is trying to change the world, pledging $1 billion to the United Nations.
At lucky 13, who needs to carry cash?
USEEM: John Reed is the man who changed the way you get your money and you spend your money.
Reed is one of the first people to see the potential in credit cards, that Americans basically are a nation of spenders.
LISOVICZ: As chairman and CEO of Citibank, Citicorp and eventually Citigroup, Reed made electronic banking comfortable and commonplace, and enabled every American to charge it.
The junk bond king cashes in at 12. Michael Milken, who was an executive with Drexel Burnham Lambert, earned hundreds of millions of dollars trading high-yield junk bonds, transformed corporate takeovers.
USEEM: What he invents is a whole new method of financing, without which none of the corporate raids, the takeovers of the '80s could have happened.
LISOVICZ: By 1990, he was convicted on federal securities fraud charges, and charged $200 million in fines. He served less than two years in prison, and was banned for life from stock trading.
MICHAEL MILKEN, FORMER JUNK BOND KING: I'm a human being. I've made mistakes like everyone else. I didn't know those mistakes were criminal.
LISOVICZ: Now using some of the $100-plus million he was allowed to keep, the prostate cancer survivor is a full-time philanthropist, and the largest private donor to prostate cancer research.
We're still counting down the top business leaders of the past 25 years, on our way to the brainy billionaire at No. 1. UNIDENTIFIED MALE: This is a guy who may know more than you about any individual thing you're saying, and maybe every individual thing you're saying.
LISOVICZ: But first, a businessman with roots in the Ozarks, whose simple ways changed the way retailers work in America.
Stay tuned to CNN's TOP 25.
LISOVICZ: Welcome back to CNN's TOP 25. We're counting down the top business leaders of the past quarter century.
I'm Susan Lisovicz, and we're more than half-way to No. 1.
Now it's No. 11 - a look at a man whose outside-the-box approach to business has everyone asking, what's inside?
Hungarian immigrant and Holocaust survivor Andy Grove, known for his unconventional thinking, imagination and integrity.
As the head of Intel, a company he co-founded in 1968, Grove played an important role in the evolution of modern computing. Intel introduced the world's first microprocessor in 1971, and 22 years later launched the legendary Pentium chip.
ROTH: Andy Grove came up with the genius idea to make consumers want to have a certain microprocessor in their computer. He put marketing to something that before only engineers and computer builders and the ultimate geeks cared about.
LISOVICZ: Intel's revenue topped $34 billion last year, and no wonder. Its chips are used in more than 80 percent of the PCs on the planet.
At No. 10, the iconic 1980s corporate raider. Carl Icahn earned that title after his hostile takeover of TWA in 1985.
JERRY USEEM, SENIOR WRITER, FORTUNE: Ask Carl Icahn if he was a corporate raider and he will get extremely mad. He says, look, I actually ran TWA. I operated things. But he did get into that position by using the techniques of the raider.
LISOVICZ: Icahn also made $800 million selling Nabisco and targeting such companies as Texaco and Marvel Comics. Icahn is one of the few raiders of his time to have built a massive fortune, $5 billion plus in his case with staying power. Recently, Icahn made $250 million on ImClone shares which he bought the very day that Martha Stewart sold hers.
When he talks, the world's financial community listens. Federal Reserve Chairman Alan Greenspan has had his eye on America's bottom line for more than 17 years. Kathleen Hays takes a closer look at a man whose decisions and language are the subject of endless scrutiny.
KATHLEEN HAYS, CNN CORRESPONDENT (voice-over): Alan Greenspan doesn't run a "Fortune" 500 company or move billions of dollars around on Wall Street. His paycheck by CEO standards is chump change, $180,000 a year. But he has a power no CEO can match. Greenspan is the man who moves interest rates.
YRA HARRIS, CHICAGO MER EXCHANGE: There's a history that when the Fed chairman, especially this Fed chairman speaks, markets move.
PETER YASTROW, CHICAGO MERC EXCHANGE: Even my mother in Florida knows that Mr. Greenspan has been raising rates 25 basis points per meeting.
HAYS: The Fed raises rates when it's worried inflation might get out of control and cuts rates when it fears the economy might be heading for a recession. These rate moves really hit home, from mortgages to small business loans to big stock market moves.
STEVE BECKNER, AUTHOR, "BACK FROM THE BRINK: THE GREENSPAN YEARS": When they get things right as by and large they have, the economy does fairly well and we have price stability and economic stability.
HAYS: Right now Greenspan sounds confident.
ALAN GREENSPAN, FEDERAL RESERVE CHAIRMAN: All told, the economy seems to have entered 2005 expanding at a reasonably good pace with inflation and inflation expectations well anchored.
HAYS: But Greenspan got off to a rocky start when he took over the inflation fight from another legend, Paul Volcker. On October 19, 1987, two months after he was appointed Fed chairman by President Ronald Reagan, the stock market lost 500 points in a single devastating session. Greenspan quickly stepped in to backstop the market, cutting interest rates and pumping up the money supply. But not even the man known as the maestro could avoid two recessions, one in 1990 after Iraq invaded Kuwait and another in 2001, after the September 11 attacks.
In 1996, in the midst of the Internet craze, Greenspan tried to take some air out of the tech stock bubble.
GREENSPAN: But how do we know when irrational exuberance has unduly escalated asset values?
HAYS: The stock market fell but only temporarily. The bull run continued until the end of the decade. Many say Greenspan's policies were key to creating the economic boom of the 1990s, the longest expansion in peace time history.
Now interest rates have fallen to levels not since the late 1950s, a boon to homeowners and to corporate America. Yellow Roadway CEO says this has helped his company grow.
BILL ZOLLARS, CEO, YELLOW ROADWAY: It's made it possible for us to invest in expanding our business and new technology on a fairly consistent basis. If interest rates had been out of control, it would have been much more difficult for us to make those investments.
HAYS: Greenspan's critics say he has played politics, supporting Republican causes like the tax cuts of President Bush's first term and the partial privatization of Social Security the White House is pushing now. Admirers say it will tough to fill his shoes.
UNIDENTIFIED MALE: I would have to say that he will go down in history as the greatest central banker.
LISOVICZ: Logging in at number eight, Michael Dell. Dell launched the company from his University of Texas dorm room.
MICHAEL DELL, DELL COMPUTER: The idea essentially was to sell computers directly to the end user without the mark up of the dealer, have a lower level of inventory and a high level of service.
LISOVICZ: Dell became the youngest CEO in history to earn a spot on the "Fortune" 500 list in 1992. He's since built Dell into one of the most profitable companies in the world, earning over $2.6 billion last year.
DANIEL ROTH, SENIOR EDITOR, FORTUNE: Michael Dell's influence really goes way outside of PCs. He has learned that efficiency rules and in this case, Dell can basically turn anything that has standardized parts into a commodity.
LISOVICZ: Dell's legion of loyal Dellionaires have reaped the rewards of the company's ever increasing stock price. The boss himself has just been named number one in the "Fortune" poll of 1,500 top executives.
Fasten your safety belts and make sure your seat is in the upright and locked position because the next person on our list has been causing turbulence in the airline industry for decades. Chris Huntington takes a look at the unconventional CEO at number seven.
CHRIS HUNTINGTON, CNN CORRESPONDENT (voice-over): Herb Kelleher loves to laugh, especially with his employees. They are his top priority.
HERB KELLEHER: If you treat your employees well, they'll treat the customers well and if they treat the customers well, the customers will come back and that's what makes your shareholders happy.
HUNTINGTON: And that's exactly what's happened. Southwest Airlines is now worth more than the next seven U.S. carriers combined. It's been profitable for 32 consecutive years and has never laid off anyone.
KELLEHER: I'm most proud of I think of the fact that Southwest Airlines has never had an involuntary furlough. We could have made more profits during recession, but that's a very short term approach to things as far as I'm concerned.
HUNTINGTON: Kelleher and a law client conceived Southwest Airlines in 1966 on a cocktail napkin. After battling rivals in court for five years, Southwest finally took off in 1971 with four planes to three cities in Texas, no frills, no assigned seats, just low prices and plenty of fun. Southwest now flies more passengers than any other U.S. airline using the same business, hire for attitude, fly one type of jet, the Boeing 737 and avoid congested airports.
NANCY KOEHN, HARVARD BUSINESS SCHOOL: Herb Kelleher did something with his colleagues that no other airline has really done. He Said from the beginning, we're going to put people at the forefront of the story.
HUNTINGTON: Southwest headquarters is a shrine to that commitment. Thousands of family pictures and mementos with Kelleher, the party starter in chief (ph) and relentless competitor leading the way. Kelleher, who prefers cigarettes and bourbon to working out, once challenged another company's CEO to an arm wrestling match to settle a dispute over rights to a marketing slogan.
UNIDENTIFIED MALE: It makes you want to come back to work tomorrow and do it again.
UNIDENTIFIED FEMALE: It's a family atmosphere here.
HUNTINGTON: The code at Southwest, do whatever it takes, from tidying up the terminal to turning around aircraft. (UNINTELLIGIBLE) for 20 minutes. This plane came from Houston and is now headed for Albuquerque, didn't quite make 20 minutes, but they're out in less than half an hour.
UNIDENTIFIED FEMALE: because your planes never make money ever, sitting on the ground.
HUNTINGTON: to launching a lounge act. The former American Airlines chief Robert Crandall sees a serious side.
BOB CRANDALL, RETIRED CHAIRMAN, AMERICAN AIRLINES: The fact is, Southwest has always been (UNINTELLIGIBLE) so Herb, in addition to being a very good lawyer and something of a showman, also paid careful attention to the detail.
HUNTINGTON: Kelleher, now 74 has backed off from day to day operations. He jokes that he makes the office coffee. In fact, he's charting Southwest's future. He sees more consolidation in the industry and says he's wary of other low-cost carriers such as Jet Blue. But he is not worried about his legacy.
KELLEHER: Southwest Airlines can withstand any challenge that it has from any carrier, I don't care which one it is.
HUNTINGTON: And Herb Kelleher has been right about that for more than 30 years. (END VIDEOTAPE)
LISOVICZ: We're closing in on number one. Do you think you know who it is? Here's another hint. He calls computer software magical but first, another wizard of business, the man behind the minivan and a makeover in Detroit. That's ahead as we continue our countdown on CNN's tops 25.
LISOVICZ: Number one on our list is just minutes away, but before we move on, let's look back at numbers 11 through seven. At 11, the man inside Intel, Andy Grove. Number 10, iconic corporate raider Carl Icahn, Alan Greenspan flexes his financial muscle at nine on our list. And eight, computer entrepreneur Michael Dell. And landing solidly at number seven, Herb Kelleher of Southwest Airlines.
Our countdown continues with the business leader who made an upstart computer company fruitful and far reaching. The man at the core of Apple Computer lands at number six. Steve Jobs, along with Apple co-founder Steve Wozniak, revolutionized computers in the early 1980s with the release of the Apple II, the very first personal computer. Jobs left the company in 1985 only to return as CEO 12 years later for the pay of just $1 a year. Since then, Apple has increased sales with strong marketing and the redesign of the Mac.
ROTH: Steve Jobs has been so successful at Apple because he has never left his vision. He believes that what he sees for the future is going to be the future.
LISOVICZ: But the design visionary has also scored big with the iPod, which is revolutionizing the music industry.
Leading the drive at number five, Lee Iacocca, the celebrity CEO that brought us the K car and the mini van. As head of Chrysler, he battled a growing trend toward Japanese imports. He staved off bankruptcy. While earning his $1 salary, he streamlined the car maker, got loan guarantees from the government and brought Chrysler back from the brink.
LEE IACOCCA: It doesn't matter much what you leave behind. It's what you had a hand in starting.
LISOVICZ: Iacocca became well known for appearing in more than 60 commercials and writing a best selling autobiography at a time when most CEOs were simply names, not faces.
The oracle of Omaha extols his wisdom at number four. The most successful investor in the world is Warren E. Buffett, a frugal genius who's always invested for the long haul.
USEEM: Buffett's philosophy is that you're not just buying a piece of paper. You're buying a piece of a company. You have to believe in that company. His ideal holding period is forever.
LISOVICZ: As CEO of Berkshire Hathaway, Buffett has amassed more than $40 billion for knowing when to buy and when to sell and he's taken many investors along for the ride. Shares of Berkshire Hathaway sold at $8 in 1962 and now go for more than $90,000 a share.
Jack Welch turns the lights on at number three. When Welch became CEO of General Electric in 1981, its market value was $12 billion. When he left 20 years later, the company was worth about $280 billion. A personable, persistent and demanding leader, Welch created his own kind of management style, one that eliminated bureaucracy, waste and unproductive employees.
USEEM: With the name neutron Jack, as in a neutron bomb, buildings are left standing but the people are gone.
LISOVICZ: According to Welch's book, GE had 411,000 employees in 1980 and under 300,000 just five years later. Welch left GE in 2001 with more than a nest egg. His $8 million a year retirement package is the stuff CEO dreams are made of.
Wal-Mart changed business and the American landscape with a retail store that struck a chord with its every day low prices. But to understand the company, you must look to the man behind the phenomenon. Here's Allan Chernoff with the story of number two, Sam Walton.
ALLAN CHERNOFF, CNN CORRESPONDENT (voice-over): On July 2nd, 1962, 44-year old Samuel Moore Walton opened his first Wal-Mart discount store in Rogers, Arkansas. With only 25 associates as Walt had called them, the story in Rogers was a fraction of the size of a modern Wal-Mart, yet it did $1 million in sales that year and a new era began in American retailing.
Walton, a simple man from a dust bowl depression upbringing, had a simple formula, big stores in small towns. He brought discount prices to rural America, but in the process, Wal-Mart dismantled the businesses that had built those small towns by under pricing nearly everyone.
UNIDENTIFIED MALE: The best thing we've got going for us is the support of our people in the stores, in the warehouses, our associates.
CHERNOFF: But Walton had other things going for him as well. He was an early adopter of profit sharing and introduced the concept of check-out counters at one location in the store. Sam Walton revolutionized the world of retailing by giving customers exactly what they wanted, the lowest price possible. Even though he squeezed his mark ups, Walton was able to earn more by selling more and he loved making his customers happy. He walked the aisles of Wal-Mart greeting shoppers with open arms and open ears.
Walton was also the first to adopt advanced technology for inventory control, which completely changed the way manufacturers sell their products. In 1970, Sam took the company public on Wall Street. Fourteen years later, he returned to Wall Street to make good on a bet that he made with his associates.
SAM WALTON, FOUNDER WAL-MART: I wagered with them a year and a half ago, that in the year 1983, they never could possibly achieve a better than 8 percent net profit corporately.
CHERNOFF: They did and 65-year old Walton danced, yes, danced the hula on Wall Street. Walton became America's richest man, a title he did not embrace. He drove a Ford pick up truck, shared rooms with executives on business trips and got his hair cut at the local barber shop. The honors and accolades poured in.
GEORGE H. W. BUSH, FORMER PRESIDENT OF THE UNITED STATES: I salute you sir for your vision and I am proud to give you your nation's highest civilian (UNINTELLIGIBLE).
CHERNOFF: Walton gave credit to his associates for the company's success.
WALTON: We're all lucky (UNINTELLIGIBLE) and I hope we can keep it going (UNINTELLIGIBLE).
CHERNOFF: Walton died from bone cancer in 1992. He left his fortune to his wife Helen and their four children, Rob, John, Jim and Alice. Together they control roughly 39 percent of Wal-Mart stock in a family partnership. Hard work and dedication paid off for Sam Walton, whose legacy lives on today in the aisles of Wal-Mart around the world.
LISOVICZ: We finally reached the top of our list, the most influential business leader of the past 25 years. Do you know who it is? We'll tell you next on CNN's top 25 business leaders.
LISOVICZ: He's been called the geek that will inherit the earth, rich, powerful and plugged in. The man who has influenced business the most over the past 25 years, Bill Gates, co-founder and chairman of Microsoft.
Bill Gates didn't invent the computer, but his genius at computer programming brought computers into our lives and he says this is the just the beginning.
BILL GATES, MICROSOFT: The world is still very inefficient and software can improve that, whether it's at work or at home.
LISOVICZ: A science whiz kid, Gates wrote his first software program to play tic tac toe with his friend when he was just 13. After he read this 1975 cover story in "Popular Electronics," Gates dropped out of Harvard so he and childhood friend Paul Allen could start a company to write software for microprocessors, Microsoft. And Microsoft retained the licensing rights to those programs.
STEPHEN LEVY, SENIOR WRITER, NEWSWEEK: So as a result, people built computers, they worked on Microsoft's operating system and it was Microsoft that became the biggest company out of the micro computer age, not IBM.
LISOVICZ: Today, Microsoft employs 57,000 workers, operates in 85 countries and generates $37 billion in revenue annually and no one has benefited more than Gates, who had become the richest man in the world after Microsoft went public. Investors became rich too. One share of Microsoft purchased for $21 at its 1986 stock market debut, is today worth about $7,000. The man synonymous with Microsoft is known as relentlessly competitive, even at home. Ever the scientist, here's his response to reports that his wife Melinda beats him at some board games.
GATES: Jigsaw and not crossword.
LISOVICZ: OK, is she better?
GATES: At jigsaw yeah, there's data to suggest she is, but not crosswords.
LISOVICZ: But admirers say Gates doesn't tolerate yes people.
NATHAN MYHRVOLD, FMR CHIEF TECHNOLOGY OFFICER, MICROSOFT: (UNINTELLIGIBLE) and be prepared to back it up, but if they back it up, he'll completely accept it.
LISOVICZ: More difficult for Gates to accept are the charges made by competitors and the government.
JOEL KLEIN, U.S. ASST ATTORNEY GENERAL: The department is committed to putting an end to Microsoft's widespread and persistent abuse of its monopoly power.
LISOVICZ: Microsoft and the government reached an antitrust settlement in 2002 after years of legal wrangling. Gates says Microsoft has helped the tech industry, not hurt it and continues to provide a valuable service.
GATES: The customers respond to the quality of the software. I don't think people pick their software based on some government thing. They pick it on what helps them get the job done.
LISOVICZ: Many analysts say Microsoft's task now is to find a new engine of growth. Like its sprawling campus, Microsoft is branching out. The world's leading software company is competing against Sony in gaming, against Apple in music, against Nokia in mobile devices and against Google in search.
Microsoft's chapter two coincides with changes in Gates own life.
GATES: I'm very excited about medicine, making sure everybody gets the best medicine.
LISOVICZ: Gates has taken on a new title, the world's most generous philanthropist. The Bill and Melinda Gates Foundation, with an endowment of $29 billion, tackles global health and education. GATES: I decided I really owed it to the world at large to take those resources and make sure that doctors, who could use medical advances, were making the world more equitable.
LISOVICZ: Gates was knighted by the queen this month for his contributions in technology and philanthropy. This October he turns 50 and retirement is on the horizon.
GATES: I'm not going to be the chief software architect when I get to be 60 or anything like that. There's a point at which somebody else ought to take on the challenge.
LISOVICZ: In the meantime, the former boy wonder says he learns how to improve the PC from watching his own three children play.
GATES: My oldest is eight. She browses the web, sometimes run into funny pop ups. She thought she'd won a contest the other day and I had to explain to her, no, that was just something trying to get you to click on it. So she's a little smarter about that.
LISOVICZ: Bill Gates and beyond. CNN is ready to follow the business leaders on the next 25 years. That does it for this edition of CNN's top 25. Be sure to tune in next month, when we look at the top technological breakthroughs of the past 25 years. I'm Susan Lisovicz at the New York Stock Exchange. Thanks for joining us.
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