(FORTUNE Magazine) – GEE WHIZ, you say to yourself: Just how hard is it to run one of those big FORTUNE 500 companies? Let's ask F. Ross Johnson, 58, the boss at RJR Nabisco Inc., the multibillion-dollar food and cigarette behemoth that ranks 19th among the 500. Given the strength of the company's brands -- Oreo cookies, Ritz crackers, and Winston cigarettes -- says Ross, ''you could put your crazy old aunt in and run it for a while.'' To some the company may look as if Auntie is already in charge. Johnson reorganizes RJR Nabisco so often that businesses ricochet around the company like billiard balls. He specializes in taking break shots at neatly racked old cultures and replacing them with an organizational mix of turbulence, vigilance, and guts. In three overhauls, he sent 2,650 corpocrats back to line jobs or out into the wilderness. The saying among the survivors: Nobody has a job at RJR, only a current assignment. Surprisingly enough, RJR executives seem to love it. Not so much for the money, though they get plenty of that, as for the sting of battle. So far, at least, they have been following a winner. Johnson, for example, reduced legendary Procter & Gamble to a whining loser in the Great Cookie War of 1983-86, teaching lessons to marketers everywhere. This accountant from Manitoba also has ideas of his own about the always crucial matter of deploying corporate assets. RJR's fat cash cow is the cigarette business. & Johnson is milking her hard, but he is also giving her a big bucket of oats. He is introducing a new product that may cost him a billion. Risky? Sure, he says: ''It's a lot goddamn harder to launch a new cigarette than to go borrow at the bank and buy what somebody made 20 years ago. But what the hell. That's what we're here for.'' If all his gambles succeed, he may be known not just as America's toughest marketing man, but also as its best. In eight years of corporate Pac-Man, Johnson's companies were swallowed twice by bigger players, but each time he emerged to run them. Top executives of acquired companies tend to get the boot, or an offer they cannot refuse. Johnson is the striking exception. He merged Standard Brands into Nabisco in 1981 and was in charge of the combined Nabisco Brands when he sold it to R.J. Reynolds in 1985 for $4.9 billion. That was followed by what is now a signature event: his stunning grab of the CEO spot at RJR Nabisco, which he followed by spiriting the shorn corporate staff -- he reduced their numbers from 1,000 to about 350 -- out of tobacco town Winston-Salem, North Carolina, to neutral Atlanta. The move capped Johnson's reputation as an ultimate corporate master blaster. The desired result of Johnson's frenzy is a simplified management process, a worthy goal. He figures that with fewer people and procedures to gum up the works, a company can make the most of its powerful brands. Instead of investing in corporate staff, Johnson prefers to spend money making his products the lowest-cost producers, tuning their distribution systems until they hum, inventing products, advertising their message, and chewing up the competition. At RJR Nabisco, Johnson, after turmoil only somewhat less memorable than the first battle of Atlanta, has combined two consumer companies' weirdly unmatched businesses and vastly different management philosophies. At the time of the merger, the two companies were running more than 50 businesses and paying nearly 4,300 corporate staff people to keep track of things. Since then, RJR Nabisco has sold more than 30 operations that logged $2.5 billion in sales; the treasury deployed the proceeds to reel in the $1.6 billion in preferred stock that financed the merger, plus another 25 million common shares, maneuvers that boosted return on equity to an enviable 20%. IN MAY, RJR Nabisco reorganized Del Monte Corp. for the fourth time, reuniting two major businesses, fresh fruit and canned goods, that were last separated in 1986. Says Robert J. Carbonell, 61, chief of Del Monte and vice chairman of RJR Nabisco: ''If something isn't working, we're prepared to move 180 degrees in a hurry.'' The company broke Nabisco Brands into four operating divisions in June, and will force 1,600 employees with staff positions to pay their way in one of the operations or beat it. Says H. John Greeniaus, 43, head of Nabisco Brands Inc.: ''The idea really stems from Ross's philosophy that businesses should be legitimate freestanding units.''

Change has done RJR Nabisco good. It stands as a stripped-down marketing machine with a phalanx of bulletproof brands such as Oreo, Ritz, Del Monte, Planters, Life Savers, Camel, Winston, and Salem. Analysts forecast 20% to 25% earnings per share growth for RJR Nabisco this year and about 18% to 20% annually for the next three; earnings should reach $1.4 billion in 1988, while sales will increase $1 billion to $16.7 billion. That's about an 8% increase, none too shabby considering that the tobacco market is declining and the biscuit trade is flat as a cracker. THE OLD cookie monster, now called Nabisco Biscuit, is setting market share records monthly in biscuits and crackers. Nabisco Foods' basket of products is sort of a you-must-remember-this course in American social history. The names include Fleischmann's margarine and Royal gelatin from the Standard Brands days, A.1. steak sauce from R.J. Reynolds, and Shredded Wheat and Milk-Bone dog biscuits from Nabisco. Though few products are stars, most are big players in small niches -- dog snacks for instance -- that pump out gross profit margins above 50%. Overall, RJR Nabisco's food business earns almost 10%, pretax, vs. 6% to 8% for the rest of the industry. For all its profitability, the food company is not nearly the money spinner that tobacco is. RJR's pretax profit margin on its domestic cigarette business is 29%. But the food business gives Johnson a highly profitable place to put the tobacco cash. He goes out of his way to point out that on an after-tax basis, food represents 40% of the company's earnings. In fact, analysts hailed the union of Reynolds and Nabisco as a perfect fit -- each sold consumer packaged goods, but had no overlapping products. Their operating strategies were polar opposites, however. Nabisco thought hard about strategy questions such as competitive advantage: its buying clout as the industry's biggest flour customer, for example, or the distribution efficiencies of a full line of cookies, and the plump margins commanded by a proprietary product such as cholesterol-free Egg Beaters. RJR ran like a conglomerate. In addition to the tobacco business, the company controlled operations as disparate as Heublein's liquor, Kentucky Fried Chicken, mail-order fruit sellers Harry & David Inc., and Canada Dry Beverages. Reynolds also owned Del Monte Corp., whose properties included Hawaiian Punch, Grey Poupon Dijon mustard, and the Patio and Morton frozen- food lines. The Reynolds businesses had little in common with each other in manufacturing, sales, or distribution. The union of R.J. Reynolds and Nabisco also presented a spectacular clash of corporate cultures: RJR's staff-oriented, conglomerate-style management warring with Nabisco's freewheeling, decentralized model. At RJR, Southern gentility was the style. Meetings invariably started with talk of family or fishing. ''That takes 20 minutes in Winston-Salem,'' says a former executive. ''The Nabisco people didn't have 20 minutes for the whole meeting.'' RJR's small-town, take-care-of-the-people roots fostered a large staff, which made life difficult for line managers. ''The element of control was stifling. You spent more time reporting to a system,'' says Carbonell, now at Del Monte and one of Johnson's old friends from Standard Brands. RJR had elaborate procedures for decision-making that required signoffs for everything on the high-cost side of changing a light bulb. The personnel department had 87 policies, vs. ten guidelines today. The culture that emerged from the combination obviously wasn't Reynolds's, but it isn't Nabisco's either. It comes from Standard Brands. Johnson joined Standard Brands' Canadian subsidiary as an executive vice president in 1971. A graduate of the University of Manitoba, where he studied accounting, he had learned marketing at Canadian GE and retailer T. Eaton Co. He moved to Standard Brands' New York City headquarters in 1973 as senior vice president responsible for international operations. His keen prairie eye for gopher holes on a balance sheet moved him ahead fast. In 1975 he became president. That year Standard Brands had $2 billion in revenues and $121 million in pretax earnings, half of which came from a high-fructose corn sweetener business. IN THE FIRST MONTHS after Johnson took over as chief executive in 1976, the price of sugar dropped from 61 cents to 13 cents, wiping out the high-fructose corn syrup market and most of his company's profit. Earnings estimates dropped from more than $4 a share to $2.40, and Johnson, frantic, held a press conference to talk about a turnaround. ''The boy wonder arrives, and we go down to nothing,'' he says. ''If earnings had dropped to $2.35, I would have been gone.'' Profits ended up at $2.42, but he eventually dumped the sweetener business anyway. Johnson has demonstrated an uncanny ability to get the top hand on the bat. First, at Standard Brands, the board kicked CEO Henry Weigl upstairs to pave the way for Johnson. After merging Standard Brands into Nabisco to form Nabisco Brands in 1981, Johnson took over the CEO's job from Robert Schaeberle, who was 61 and had planned to retire at 65. WHEN JOHNSON and company descended on Nabisco, it was as if Hell's Angels merged with the Rotary Club. The Standard Brands organization was a risk- driven, no-guts-no-glory outfit that had to scramble for every dime given its ragtag lineup of mediocre liquor brands and fourth-rate grocery items. As one observer described it, all the Standard Branders seemed to be divorced guys who wore loafers, while the Nabisco crew were family types in lace-up shoes and suits. Johnson says the image of an overly ambitious underling is exaggerated. At Nabisco he reported to Schaeberle for three years, and by most accounts the two were a great team and remain good friends. Following the Nabisco Brands- RJR merger in July, Johnson took the No. 2 spot behind CEO J. Tylee Wilson, but says he was in charge by August. Eight months later Wilson was fishing and Johnson was preparing to move the company he was now running to Atlanta. Johnson says he never made a grab for Wilson's job: ''I was ready to move on. I wanted the RJR-Nabisco deal to be the best merger, and it was,'' says Johnson. ''I told Ty the day I became a pain in the ass, goodbye and no hard feelings. I did not nefariously plot to bump Ty out. He and I never had a problem. Frankly, the board said, 'Hey, Ross . . .' '' Old RJR hands say it was more complicated than that. Wilson had few friends on the board. When the opportunity arrived to dump him, the board did. ''Well, they got me,'' Wilson said, after the meeting.

Johnson believed fervently that each Reynolds company needed to get big or get lost. That's why he quickly peddled Kentucky Fried Chicken to PepsiCo, owner of two other food chains, Pizza Hut and Taco Bell. Canada Dry got the gate because it was hopelessly behind Coke and Pepsi. In 1987, Johnson stunned Wall Street by selling Heublein to Grand Metropolitan, the British spirits, food, and hotel conglomerate, just ten days after buying Almaden Vineyards. Both deals fit the Johnson logic. He had acquired the California wine company to enlarge Heublein. But he recognized that a liquor company without a major Scotch brand was like a baseball team without a shortstop. The cost of filling this gap was likely to be huge, so he jumped at the $1.2 billion that Grand Met dangled. According to an observer, he presented the offer to the board on a single sheet of paper. The first thing Johnson peddled at Del Monte was a new lease in San Francisco on quarters for a 1,200-person staff. Although Del Monte was profitable overall, earnings were illusory in such businesses as frozen food because the costs of some acquisitions were not reflected in the overhead. When these costs were fully accounted for, the putative earnings turned into a $20 million loss. Johnson launched the frozen entrees ''like a rocket'' to ConAgra, big in that business and ready to buy. Says Johnson, who thinks both buyer and seller were right: ''Every frozen-foods business I ever got I sold.'' IF JOHNSON is a predator, he is an amusing one. Outrageously candid, he angered some city fathers in Atlanta by advising them not to mistake RJR Nabisco for a major corporate benefactor. Says he: ''I told them I can't support every organization from the United Way to the Seven Jolly Girls Athletic Club Beanbag competition. If it pisses them off, I can't help that.'' Johnson once directed that the occupants of two of the company's New Jersey buildings switch offices, fully aware that one building was much bigger than the other. Needless to say, neither group got too comfortable in their new digs. Last year he stunned the managers at the Planters-Life Savers division by packing them off from New Jersey to Winston-Salem to become part of the tobacco group. Even some senior managers wish Johnson would stop shuffling his management deck so often. Insiders call the plush 21st floor of RJR Nabisco's headquarters in Atlanta the fraternity house. It's where Johnson and about 25 advisers meet to direct strategy. Many are members of the so-called Standard Brands Mafia, including Carbonell and Edward J. Robinson, the chief financial officer. Only four come from Reynolds. Although the office accommodations are formal, Johnson's style is casual: popping into Carbonell's office to discuss buying back stock, taking quick phone calls from the operating chiefs, or throwing ideas around over the communal lunch table in the executive dining room. JOHNSON VALUES managers who can respond as quickly as he does, and pays them accordingly. Last year the average pay of his top 30 executives was about $435,000, which includes bonuses. Says Andrew Barrett, vice president for personnel: ''If he told me tomorrow, 'I want you to do this,' I would not get high brownie marks if I said I'd like a week to think about it.'' Greeniaus and Peter N. Rogers, now head of the biscuit group, have swapped jobs twice. William B. McKnight just switched jobs with Ellen R. Marram, who was running the grocery operation. McKnight will find the territory familiar; he ran the division from 1982 to 1986, before switching with Rogers. At the corporate level Carbonell recently moved for the third time in a year. He explains: ''Ross and I hadn't seen each other for a week. We were on our way to California, and he said, 'I've been thinking. We've done the job in Atlanta, we restructured the corporate staff, we're well established. I don't need you anymore.' '' Startled, Carbonell cut Johnson off. ''Are you firing me or asking me to resign?'' he asked. ''Shut up and listen,'' said Johnson. ''I want you to pull Del Monte together.'' By the time the plane landed, the fruit company, which had undergone three reorganizations since the merger, was about to undergo another. So far, Del Monte has moved headquarters from San Francisco to Miami and cut its 1,200-person staff in half. The tobacco business was particularly top heavy. ''People went from the operations to quote corporate, but they took their jobs with them,'' says Edward A. Horrigan Jr., head of the tobacco subsidiary. In the reorganization, Johnson sent 400 members of the corporate staff down to the operating company to fend for themselves. Then he pulled the company out of Winston-Salem. The operating people were so glad to see him go, Johnson says, ''they would have paid our way to Atlanta.'' The new chief of Reynolds Tobacco USA, Dolph Von Arx, 53, further unbundled the bureaucracy. He shocked his minions by eliminating weekly status reports and staff meetings. Says he: ''Some of them continued to report to me weekly for several months. Now everyone's fallen into line, and we simply have more time for things that are going to benefit the business.'' For all its call-it-as-you-see-it style, RJR Nabisco is run literally by the book when it comes to financial controls. Each of 173 unit managers prepares a monthly report that is forwarded up the chain. Division presidents like Von Arx get a green book with information on his area; the board of directors a blue one with a corporate summary; and Johnson a more detailed red one that outlines the problem areas in each reporting unit. The reports, developed by Johnson at Standard Brands, are used to track such balance sheet items as receivables, inventories, and cash flow -- critical indicators on the state of the business. Newcomers welcome the books about as much as a tax audit. ''Initially people didn't like the report,'' says Robinson cheerfully. ''It says nothing nice about anyone.'' Though the after-the-fact reports are grueling, the planning process follows Johnson's dictum: ''flexible and fleet of foot.'' Says Greeniaus, chief of Nabisco: ''If I want to move $10 million around in advertising expenditures today, I don't need approval.'' Nabisco's senior executives do not formally sign off on each unit's business plan. They won't even look at next year's programs until this fall and won't present them to corporate until next January -- essentially too late to change them for the first quarter. ''We run the business on a continuum,'' says Rogers, of the biscuit company. ''We don't have an annual, formalized, fill-in-the-forms, put-things-in-boxes session, which is soul-destroying and numbing.''

NABISCO NOW RUNS by firehouse management: Not much seems to happen, but when someone smells smoke, all hands come running. The alarm clanged recently when Kellogg invaded the part of the adult cereal market dominated by Nabisco's Shredded Wheat brand. Although Shredded Wheat's market share is only 5% of the total, it is, thanks to aging baby-boomers, both lucrative and growing. When Kellogg launched its major assault, replete with coupons worth 75 cents, half the price of its new entry, Nutri Grain Biscuits, Nabisco counterattacked with coupons of its own. Nabisco has temporarily shredded Shredded Wheat's profits, but is holding its share. When P&G launched the cookie war -- introducing its Duncan Hines brand of ''soft'' cookies that were meant to feel and taste as if they were home- baked -- the combination of Standard Brands' aggressiveness and Nabisco's business execution synchronized perfectly. ''We became much more of a marketing company,'' says James O. Welch, vice chairman of RJR Nabisco. Within days of P&G's launch, Nabisco lowered earnings projections by $50 million, unthinkable in the past, and put the extra money into advertising and promoting its Almost Home soft-cookie brand. ''We wanted to mass overwhelming firepower from the word one. We weren't out to stop them, we were out to crush them,'' he says. P&G is claiming in court that Nabisco used illegal weapons in the battle, that its agents hornswoggled the cookie recipe from a subcontractor. The case is tied up in pretrial maneuvering. Meanwhile, soft-cookie sales are falling, and P&G is the biggest loser. The Cincinnati company wrote off nearly $500 million in assets last year, and its market share is a crummy 1%. Says McKnight: ''I believe to this day that had it not been for that merger, the cookie wars may very well have come out in a much different way.'' Nabisco, with nearly half the market in cookies and crackers and at least twice the profitability of its nearest competitor, has never been in a stronger position. The company's top managers say that the sales force is too good to let them screw up the business. Nabisco's cookies are store-door items: delivered directly to supermarkets and other outlets by combination driver-salespersons who make sure that Nabisco gets every inch of shelf space it can. Last summer the company launched 18 new products in a single promotional blitz. For the year, sales of Nabisco's cookies increased nearly 7%, while total cookie sales shrank 1%; crackers increased 11% in a flat market. The horses pulling that wagon have such familiar names as Oreo and Ritz. Nabisco's use of line extensions rather than new products has earned it a reputation for being unimaginative. The company denies the charge, naturally. ''You will not see us do frivolous line extensions,'' says Greeniaus. ''We've had internal debates as to what an Oreo is. We have a very clear idea.'' It is not, it was decided, a chocolate milk. GREENIAUS EXPLAINS that Nabisco prefers to think of its new creations as franchise extensions rather than line extensions. The typical line extension, he says, gives consumers an either-or choice -- Coke or Cherry Coke -- but doesn't add much to a company's incremental sales. Nabisco's franchise extensions go after additional sales by trying to match eating patterns. For example, the original Oreo, two fudge wafers held together by a cream center, is an eat-at-home cookie, while Big Stuff, an oversize version, is positioned as a snack, munched on the go. The individually wrapped single-serve product is sold in convenience stores and vending machines, where packaged cookies haven't done as well. The latest version, fudge-covered Oreos, are designed to entice grownups with a sinfully rich treat. The company says adult women (go on, admit it) are the biggest candy consumers. The sales growth of all varieties of Oreos came to nearly $163 million over the past three years, more than P&G's entire soft-cookie business. NABISCO'S NEWEST extension is something called Ritz Bits. A miniversion of the original, the coin-size wafer is described by executives as a hand-to- mouth snack cracker, as opposed to regular Ritz, whose mission is to act as a platform for pate and other toppers. The semantics sound awfully silly, but the company this year is going to sell nearly $100 million worth of the little buggers without putting off the Ritz. RJR Nabisco plans $4 billion in capital spending over the next several years, mostly to reinforce its position as a low-cost cookie producer. The company already has that honor by virtue of its buying power in commodities. ''We are going to go from art to science,'' says Carbonell, a biochemist. Most huge commercial cookie companies must rely on actual bakers. Quaint as that may sound, old-fashioned techniques make for greater variation in quality and less efficiency in production. In a new $600 million bakery now under construction, computerized process controllers will guarantee that the recipes are followed precisely, while sensors along the production line will make continuous adjustments in oven temperatures and line speeds to ensure nearly 100% consistency and quality. ''We're going to make Xerox copies,'' says Carbonell. Each baking line in the new plant will produce one product. Only Nabisco has so much volume that it can dedicate one line to Premium Crackers, for instance, 24 hours a day, seven days a week. In most process industries, changing from one product line to another is the most time-consuming, least efficient part of production. Nabisco's one-line, one-product setup will knock at least 15% off production costs. While the food business is stable, the tobacco business is under a cloud. Powerful antismoking groups and the U.S. Surgeon General have turned smokers into pariahs, relegated to their own sections of restaurants, forbidden their ; pleasures on airline flights of two hours or less. After a string of victories in the courts, the tobacco industry lost its first case in June, when a federal jury in New Jersey awarded Antonio Cipollone $400,000 in damages associated with his wife's death from lung cancer. The jury found that the Liggett Group wrongly implied cigarettes were safe in advertising before 1966, the year warning labels were required by law. The landmark case is likely to encourage more suits, but the tobacco companies doubt these claims will interfere with their profitability. The size of the Cipollone award was small, and the court dismissed charges that tobacco companies had conspired to suppress evidence that smoking was dangerous. Even if the decision leads to more federal legislation -- a total ban on airline smoking, for example, or the end of cigarette advertising in print media -- the tobacco industry is sanguine. Smokers would light up after a flight, and an end to magazine and newspaper advertising would mean lower costs and hence more profit. JOHNSON IS TAKING a superaggressive, highly innovative stand against the cigarette censors. Later this year RJR will introduce a nearly smokeless cigarette, which goes by the code name Spa. (The company has not announced the official brand name, and rival Lorillard owns the trademark for cigarettes called Spa.) A smoker lights RJR's new cigarette just like any other. But a carbon heat source at the tip of the cigarette, not the tobacco, burns. The heat generates warm air that passes through the tobacco and then through a capsule that contains tobacco extract, glycerin, water, and flavorings. RJR says that the smoke looks and tastes like ordinary cigarette smoke as it is inhaled. But since it is a vapor, it disappears into the air as it is exhaled. Spa produces almost no sidestream smoke to offend -- some say endanger -- nonsmokers nearby. The new cigarette has about the same levels of tar and nicotine (0.8 milligrams) as a Winston Light. R.J. Reynolds Tobacco Co., as the cigarette unit is now called, burns with intensity over the Spa project. The smokeless wonder promises to be the biggest cigarette launch ever. The company developed a new manufacturing process to roll the weed and invested $125 million for development and equipment. Advertising, promotion, inventory, and distribution costs will easily treble that figure. Johnson sounds optimistic: ''It's a risk, but we look at it as a contained risk. So you've got a billion dollars. And let's say it's an Armageddon, and aside from the article saying Johnson is an asshole, we can say, 'Okay, by '92 if it hits what we think it's going to hit, we really will have semi-revolutionized the business.' '' The target of the revolution is Philip Morris, which controls 38% of the domestic tobacco market, vs. Reynolds's 33%. RJR hopes Spa will keep the Marlboro man, who represents the world's best-selling cigarette, from galloping away with more business. ''If we didn't introduce Spa, Marlboro would keep going up, and we'd be in a more difficult No. 2 position,'' says Johnson. For instance, its dominant position allows Marlboro to outspend Winston, RJR's top gun, $93 million to $38 million on U.S. advertising. Although RJR is cagey about its goals, Johnson has visions of Spa gaining a five-point market share in a business where a new product is considered a success with one point. Each point is worth over $100 million in revenues. The hope is that lots of curious smokers, nonsmokers, and more significantly ex- smokers will try the product. But how many will use it more than once? Says Johnson: ''If I had nine people who hated it and one that loved it, we're dancing, eh?''

TOBACCO'S MANY FOES contend that RJR's introduction of a ''safe'' or ''safer'' cigarette is a de facto admission that cigarettes are unsafe. The company's general counsel Harold L. Henderson dismisses the idea: ''This product wasn't something that somebody said, 'Gee, there's something we could have done 30 years ago and now we're going to do it.' '' Taking a novel line of attack, the American Medical Association has petitioned the Food and Drug Administration to declare RJR's new product a drug. The FDA will probably not rule for six months or so, but an agency spokesman points out that the FDA by law has no authority over tobacco products unless manufacturers make health claims. In its traditional cigarette businesses, RJR is turning its marketing guns toward young, blue-collar adult smokers. Now six of ten new smokers try Marlboro first, a figure RJR would like to alter, and only half of them switch later to a different brand. RJR wants to rope in the strays with new images. The Winston version is ''real people'': painters and telephone linemen, who are portrayed in dramatic closeups. Camel's 75-year-old symbol, a dromedary known as Old Joe, is being rejuvenated into a hip cartoon character for such magazines as Rolling Stone. To keep smokers loyal to RJR brands, the company - is running a million-dollar sweepstakes that gives buyers a better chance of winning with each pack of Winston, Salem, or Camel they buy. The sweeps have brought in over 150,000 entries a week, twice the predicted number. Even though the U.S. market seems to be in terminal decline, RJR can continue to earn tons of money from cigarettes. The company's $2 billion investment in its newest facility in Tobaccoville, North Carolina, and a renovation of older plants in North Carolina will make it the lowest-cost manufacturer in the world. In Tobaccoville, for instance, productivity has picked up 45% to 50% over the older plants, and rejects have decreased 20%. With cigarette sales in the U.S. cooling, both RJR and Philip Morris have been moving abroad, gaining sales at the expense of such multinationals as BAT Industries. Last year RJR increased unit sales 10% internationally, and it expects to do the same this year. In Asia, the fastest-growing tobacco market, menthol cigarettes are popular, and RJR's Salem brand shot up 40% last year, making it the world's best-selling menthol. With the drop in the dollar, the company is exporting like mad. Last year the international business turned in the highest operating profits in the company. Can any chief executive be in a more difficult position than one whose company sells a product considered to be deadly to persons possessing lungs and hearts? ''I've been through a lot of pressure in my life. That's what you're paid to take,'' says Johnson. He deflected some of the pressure in April when he fired Saatchi & Saatchi DFS, a Nabisco advertising agency, for creating antismoking ads for Northwest Airlines. In handling the smoking issue, Johnson says, ''I think we really have come to the best conclusion that we could come to on Spa.'' Reynolds's chief Horrigan, a battle-weary tobacco warrior, is grateful for the help: ''The biggest cheerleader we have for this new product is Ross Johnson, and I need him as a cheerleader if we're going to invest in this brand the way we are planning.'' SO HERE COMES Manitoba's most famous export, Ross Johnson. Along with a few other food industry executives, notably Anthony O'Reilly of H.J. Heinz, who happens to hail from Ireland, he has been shoving the noses of his managers up against the window of the future. In the process these executives are learning to advertise, distribute, manufacture, promote, and extend ancient brands in a way that turns nostalgia into an advanced weapon. This is an industry where ! growth isn't available for the asking. Maintaining the status quo gets you zilch, but not maintaining it gets you killed. A dedicated food man like Ross Johnson might one day sell the tobacco business. But only after he has used its fantastic profits to build an even mightier food giant. In the short term most financial analysts expect a big acquisition. The company has looked over Tropicana and other Beatrice companies, but passed them up because Johnson refuses to pay the high prices food companies now command. Of course, in this company that could change quickly. ''How quickly?'' a reporter asked an executive at the beginning of an interview. ''You got two hours?'' came the reply.

CHART: NOT AVAILABLE CREDIT: SOURCE: WHEAT FIRST SECURITIES/FORTUNE ESTIMATES LISA BOGDAN (3) CAPTION: With twice the market share of its nearest rivals in cookies and crackers, RJR Nabisco can outspend them in advertising. It still lags behind Philip Morris in tobacco. DESCRIPTION: Three charts: 1987 market shares for cookies, crackers, cigarettes; Three photographs: Oreo cookie, cracker, cigarettes.

CHART: INVESTOR'S SNAPSHOT RJR Nabisco SALES $16.1 BILLION (latest four quarters) CHANGE FROM YEAR EARLIER UP 5.8%

NET PROFIT $1.3 BILLION CHANGE UP 17%

RETURN ON COMMON STOCKHOLDER'S EQUITY 21% FIVE-YEAR AVERAGE 20%

STOCK PRICE RANGE (last 12 months) $34.50- $71.13

RECENT SHARE PRICE $46.63

PRICE/EARNINGS MULTIPLE 9

TOTAL RETURN TO INVESTORS (12 months to 6/17) -11%