Looking for a CEO? Look for early career signs of 'leadership without portfolio.'(Cover Story).

• Author: Bruce, Harry J.

Governance scholars agree that one of the corporate board's core duties is to select a chief executive officer who will provide the company with the new leadership it needs.

But that's easier said than done. Even veteran headhunters can have trouble learning exactly what an executive contributed to the bottom line in previous assignments with other companies. And while everyone agrees that a CEO ought to display leadership, definitions of leadership keep proliferating as fresh leadership titles pile up in the bookstores. So when directors search for a leader, what exactly should they look for?

I suggest they look for something called leadership without portfolio. I came up with that expression after reviewing the careers of many successful CEOs and realizing that their rise to the top wasn't as mysterious as might be assumed. Their records showed that very early in their careers, well before they had acquired any substantial measure of formal power or authority, they already were taking initiative, risking their careers and involving not only their subordinates but also their superiors in innovative projects of their own devising for which they had no explicit authority. Here are four examples.

Harry Gray. The corporate world knows and respects this Georgia native and highly decorated World War II veteran as the retired chairman and CEO of United Technologies Corp. How many people know, however, that Gray first emerged as a business leader in his second job, when he joined Greyvan Lines, the Chicago-based household moving and storage subsidiary of Greyhound Lines?

On taking his new position in 1951, Gray was puzzled to note that Greyvan was assessing warehouse charges based on how many square feet of floor space a customer's goods occupied. Yet the operative figure, as he saw it, should have been cubic capacity. If Greyvan were to begin costing and charging based on three dimensions instead of two, Gray reasoned, revenues would improve dramatically. Pushing firmly but diplomatically for his innovation, Gray was able to overturn a historic, industry-wide practice. The results were as he had hoped: Greyvan's bottom line began improving immediately.

Gray's approach represented a fresh rethinking - and redoing - of a conventional, unquestioned procedure that had become so endemic to an entire industry that only a confident outsider could grasp its fundamental absurdity. In trusting his viewpoint and influencing his superiors to embrace it...