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That's another way of saying that, après Bush I, the vision thing isn't enough on its own.

That's another way of saying that, après Bush I, the vision thing isn't enough on its own.

Consider the difficulties of a number of the companies profiled in this month's issue. When Kent Kresa took over as CEO of Northrop Grumman Corp. in 1990, the defense contractor had just lost a major weapons program and was on the edge of extinction. Recognizing that the company would have to grow, and fast, Kresa has since engineered 16 acquisitions worth $28.3 billion. The spree made Northrop the No. 2 supplier to the Pentagon.

That ought to be a good position, with defense spending taking off as the U.S. fights terrorism and prepares for a possible war against Iraq. But as Northrop investors learned last month, when the company reported an unexpected $59 million third-quarter loss, managing this defense colossus (whose employee ranks have tripled in the past two years alone) may be harder than assembling it. In early November North-rop's share price was at $96, down from $126 in September. Senior Editor Steven Brull, author of "War Footings" (see related story), says that "building the new Northrop Grumman required a creative strategy and persistence, but running such a huge operation effectively is likely to be much tougher to pull off."

Northrop Grumman and Kresa accurately foresaw the world they were building for. That can't be said for many executives in the financial services arena. During the 1990s acquiring money management firms was all the rage; the thought was that these operations would provide a steady, annuitylike stream of earnings to help offset the more volatile revenues of their brokerage and investment banking businesses. Predictably, fund managers became overpriced. Less obvious, in retrospect, was that their stunning business fundamentals depended, like so many things, on the bull market. With today's wretched markets, their appeal has dimmed.

As this month's special report on the effects of the bear market on money managers shows ("Hard Times"), yesterday's visionaries must struggle with today's glum realities. Each asset manager in our four stories has to cope with punishing markets, stingy investors, failed business models and demanding regulators. That's hardly what they were prepared for just a few years ago.