NEW YORK (FORTUNE Magazine) - As a boy, Jeff Bewkes dreamed of becoming "the captain of a small ship. A fast ship," he says now. He'd do "some unconventional thing that leads to a big ship, part of a fleet." He'd face "the inevitable problems [caused by] the misactions of the others. And then ... somehow prevail."

A case of boyhood dreams presaging life? Employees and shareholders of FORTUNE parent Time Warner -- where Bewkes is COO -- may hope so.

Jeff Bewkes, Time Warner

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Other, higher-profile executives have at one time or another been expected to steer this boat -- Steve Case, Bob Pittman, Ted Turner -- and some were surprised when Bewkes emerged as the heir apparent to current CEO Dick Parsons. They shouldn't have been. "Jeff has three qualities that you want in a COO: He's smart, he's sensible, and he has great judgment," says his boss.

After Deerfield, Yale, and Stanford, Bewkes toiled at Sonoma Vineyards and Citibank, then joined Time Inc.'s HBO unit in 1979 as a junior finance executive. By 1995 he had risen to CEO. He helped HBO morph from a pay-movie channel to a mini-studio -- Sex and the City and The Sopranos happened on his watch -- and a major profit center, contributing a reported $1 billion to TWX's $9.7 billion operating income in 2004.

And if you think only yes men get ahead, think again: Bewkes was a vociferous critic of Time Warner (Research)'s merger with AOL and has been known to be so candid that superiors -- both sympathetic and not -- have asked him to zip it.

"I don't want to make somebody uncomfortable by being frank," he says. "But you're trying to find as much transparency as you can. It's an interesting combination to be as open as you can and as loose as you can, but you must make decisions as fast as possible.

"You keep the decisions transparent, and that allows you to correct them, because nobody figures this stuff out in one shot. My theory is iteration: You go, you talk, you act, and you check back on how did it work. You adjust course as you go, and it turns out that's the fastest way to move. So you're always moving and you're always deciding and you're always getting new information. You can actually provoke information by doing things that you can't figure out if you just sit there thinking."