(FORTUNE Magazine) – HE WAS an ascending star at the Treasury Department under Nixon when Watergate took the sparkle out of politics for him. Now he runs a big Texas steel company. She was a sometime war protester on campus in the old days, vaguely considering a writing career. Now, as president of the publishing empire her father founded, she seasons her conversation with canons of corporate strategy. As a fresh-faced Army lieutenant in Vietnam he spent ten months processing the remains of U.S. soldiers killed in action. Tag 'em and bag 'em, the GIs used to say by way of job description. He now heads the fifth-largest U.S. airline. Members of the baby-boom generation are just beginning to take command of major U.S. companies, some because they worked their way up fast, others because their families control the business. During the next decade they will be followed by so many more top executives who came of age during the turmoil of the recent past that their generation will inevitably determine the direction of American corporations for years to come. There is cause for optimism about the future, based on FORTUNE's conversations with eight company chiefs in their late 30s to early 40s. Their arrival probably does not signal a radical change in the way companies do business. Resourceful, dedicated, determined to succeed, these are the kind of people who have been winners since cave-man days. As the 1960s melted into the 1980s, muddled idealism has given way to tougher, more pragmatic attitudes among most men and women of their generation. Besides, with so many baby- boomers to choose from, corporations have been able to nurture and promote the more conservative candidates with whom older managers feel most comfortable. Whatever the reason, these boomer bosses are advancing many of the management principles favored by their immediate predecessors. They believe in hard work and copious market research. As acquisitors they are cautious, preferring properties closely related to core businesses. Comfortable with well-considered risks, they demonstrate considerable entrepreneurial flair as well as an eagerness to embrace new technologies. They labor to push responsibility down the chain of command; they also can be coldblooded about reducing costs and eliminating jobs. Yet despite their surprising moderation in most matters, these young executives are distinct from their forebears, particularly in matters of style. They are unusually flexible and spontaneous as managers, instinctively egalitarian and suspicious of hierarchy. ONE EXECUTIVE who exemplifies the generation's risk-taking spirit is William Howard Beasley III. He took his chance three years ago, when he gave up the presidency of Northwest Industries, a Chicago conglomerate that made Fruit of the Loom underwear. He chose instead to become chief executive of Dallas-based Lone Star Technologies Inc., a severely ailing manufacturer of steel pipe for the oil industry that had been part of Northwest. Says the intense Beasley: ''I wanted to take a problem that everyone said couldn't be solved and see what could be done with it.'' Beasley, now 41, has always entertained unconventional ideas. As an economics major at Duke, he says, he became a civil libertarian who regards First Amendment rights as absolute. After earning an interdisciplinary doctorate in finance, management, and law at the University of Texas, he landed in Washington in 1971 as special assistant to John Connally, then Secretary of the Treasury. He worked on the Lockheed and Conrail bailouts and served on the Cost of Living Council during the wage and price freezes of the early 1970s -- heady stuff for an ambitious man in his 20s. Then came Watergate. Beasley wasn't involved, but he was deeply affected by the downfall of others. ''I saw so many fine people get caught up in the excitement, and I saw it destroy their lives,'' he recalls. ''I left government very much a cynic.'' He quit politics at 29, joining Ben Heineman, the chairman of Northwest, as personal assistant. Heineman, who had met Beasley in Washington, sent him to clean up a mess at Velsicol Corp., a chemicals subsidiary. Velsicol had mistakenly mixed a highly toxic flame retardant with some of its cattle feed, touching off a noxious conflagration of lawsuits and publicity. Beasley, who had participated in Earth Day back in 1969 and still considers himself an environmentalist, fired the staffers he felt had been lax and hired several former government regulators. ''I told our people that we wanted to behave as a model for other corporations,'' he says. After righting Velsicol, Beasley hastened up the corporate ladder at Northwest, becoming president and chief operating officer at 37. The crunch came a year later, when Chicago takeover artist William Farley acquired Northwest. Beasley turned down Farley's offer to stay on as president. Instead he joined Lone Star, which Farley had decided to spin off to shareholders. Lone Star had lost $10 million on revenues of $450 million the year before. Turning it around while the oil industry in Texas remained severely depressed would be a more arduous task than Farley wanted to take on, but Beasley warmed to the challenge. His determination is paying off. While competitors were failing, Beasley was forcing Lone Star back toward profitability, cutting employment a drastic 68% while producing just as much drilling pipe as before. He commanded employees' attention by threatening to shut down the company, then solicited their suggestions about how to keep it open. Fixated on cost cutting, he even ripped up company-owned railroad tracks and made them into pipe. As business improved, he began paying cash bonuses for superior performance. Lone Star edged into the black last year for the first time since 1982 and earned $1.1 million in this year's first quarter. ANOTHER INDUSTRY where the timid do not survive is the airlines. Chief Executive Steven Rothmeier, 41, has taken some big risks to guide NWA Inc., owner of Northwest Airlines, through the industry's brutal shakeout. A quiet, thoughtful man, he considers his tour as a graves-registration officer in Vietnam's Tuy Hoa province valuable training for his managerial career. Says he: ''It was really a case of leadership development and mental toughness that no one could ever get in another environment.'' That clenched-jawed attitude served Rothmeier well as he rose through the executive ranks at Northwest. (The airline is no kin to Northwest Industries, which Farley renamed Fruit of the Loom.) The Minnesota-based airline had long been known for its penny-pinching, damn-'em-all management. Its debt seldom rose above 10% of total capital. One former chairman is remembered for taking the doors off stalls in the men's toilets at headquarters to prevent dawdling. By 1985 Northwest clearly needed a different sort of boss: someone nimble, entrepreneurial, unafraid of a calculated risk. Deregulation and the merger fever it caused had so changed the airline game that Northwest's survival as an independent was threatened. Rothmeier, then 39, a graduate of Notre Dame and the University of Chicago's business school, had proved himself as an able analyst of route structures and a gifted dealmaker. The airline's No. 2 executive since 1982, he was the logical choice. The new CEO quickly bought Republic Airlines and half of TWA's computerized- reservations system. He also greatly increased marketing budgets. In the process he allowed his company's debt to loft up to 34% of total capital -- still well below the industry average. Says Rothmeier: ''I've tried to focus on understanding the risk-return relationship. If there is considerable risk, there must be considerable return.'' ) So far the returns have justified his risks. When United Airlines moved in on Northwest's lucrative Asian business, for example, Rothmeier fought back with heavy advertising and an upgraded Pacific fleet. He maintained the airline's share of the Asian market, a major contributor to the relatively handsome $103 million NWA earned last year. BY FAR the most famous entrepreneur among the boomer bosses is Joseph Canion, 43, co-founder and chief executive of Compaq Computer Corp., one of the fastest-rising startups of the decade. Tall, imperturbable ''Rod'' Canion was pursuing a doctorate in electrical engineering at the University of Houston in the late 1960s when he decided to take a break. He found a job designing computer printers for Texas Instruments and was so smitten with the industry he never returned for his degree. As he explains reverentially in his soft Texas twang, ''The real world is dirty, and things don't work like the equations say. But a computer screws up only when you tell it to do the wrong thing.'' After 13 years at Texas Instruments, Canion, by then a middle manager, got fed up and quit. He was frustrated by all the bureaucracy and paperwork -- and he had a better idea. Along with some TI colleagues, he set out to build personal computers that were compatible with IBM's industry-standard equipment, but technologically superior. By forcing engineers and marketers to work as partners, he expected to speed up the development process enough to ship new models up to nine months earlier than similar products from IBM, a long lead by the PC industry's cranked-up standards. Talk about success. Compaq's sales hit $111 million in 1983, its first full year of operation. Last year, with revenues of $1.2 billion, it ranked No. 282 on the FORTUNE 500. Canion continues to make bold, contrarian moves. He placed a big bet against Big Blue after IBM announced its long-awaited new generation of powerful personal computers, the PS/2 line. The PS/2s rely on a little- understood technology called the ''Micro Channel.'' Instead of racing to incorporate the new gizmo into his products, he decided to stick with the older industry standard, which is not compatible with PS/2. He claims Compaq's machines perform as well as PS/2s without alterations. So far customers, delighted to avoid laborious and costly conversions to the new format, seem convinced. Sales of Canion's old-style machines are soaring. THE YOUNG LEADERS demonstrate skill at the craft of cost cutting. Whether pruning corporate staff or scrapping entire divisions, the boomer bosses seem comfortable making the tough choices. Two have been through retrenchments in recent years. The first is Robert W. Decherd, 37, who inherited control of his family's publishing empire after his father died in 1972. He had barely graduated from Harvard when he joined A.H. Belo Corp., owner of the Dallas Morning News and five TV stations. The company's fortunes depend largely on the Texas economy, where it makes 70% of its sales; Texas was in an economic funk, and so was Belo. The company was also facing a competitive challenge from the Times Mirror Co., powerhouse publisher of the Los Angeles Times. The West Coast company had bought the Dallas Times Herald in 1970 and was spending money freely on improvements. Decherd, who had learned the editorial side of the newspaper trade as president of the Harvard Crimson, saw no choice but to spend heavily himself. At once calculating and youthfully exuberant, he took the high road in his battle with Times Mirror, recruiting talented writers and editors and emphasizing quality coverage and a more liberal editorial line. Then he flogged the paper's increasingly upscale demographics to advertisers. The strategy much improved the paper and drove Times Mirror out of town. That victory helped, but Belo was still strapped. Decherd became president in 1985 and chief executive two years later. Once in power, he paid dearly for the years of spending. He cut the waste at Belo, and then had to cut some more. Decherd got rid of 20% of the staff at his Dallas TV station and 7% at the newspaper in 1986. Last year he reduced his corporate staff by one-third. Decherd scorns such executive perks as corporate jets and limos. Says he: ''I think we have our egos well in check.'' Decherd is good, but he is not a miracle worker: Belo's earnings will probably remain flat or even decline as long as the Texas economy languishes. ANOTHER publishing scion, Christie Hefner, 35, president of Playboy Enterprises, also inherited a top job at an awkward time. A participant in the antiwar movement as a Brandeis undergraduate, she had spent a year reporting for the moderately leftist Boston Phoenix newspaper before accepting her father's offer to join the family business. A bright, personable woman with a sober attitude about her work, she spent seven years in a series of middle- management jobs before getting the presidency in 1982. Hugh Hefner, 62, $ Christie's famous father, controls 71% of the company and remains chief executive. It was a rough time to assume operating control. The corporation lost $52 million the year she became president. It had lost the licenses to run its highly profitable gambling operations in Britain, and its U.S. clubs were flopping. Most ominously, Playboy magazine's mammary-mad readers had been defecting in droves, some to sexually explicit videocasettes. Circulation had plunged to 4.5 million, down 35% from the 1972 peak. Hefner looks pained as she recalls those dark days: ''We had practically no cash, no other businesses to fall back on, and the stock was in the cellar. Maybe the word crisis is an exaggeration, but not by much.'' She brought debt down fast by dumping the company's losers, which also included resort hotels and book publishing. She cut out some of her father's sybaritic indulgences, including the Big Bunny DC-9 jetliner and the 69-room Chicago mansion. Selling just two of Dad's paintings, a de Kooning and a Jackson Pollock, brought in a much needed $4.4 million. She also got rid of redundant management layers. ''I did it because it would cut costs,'' she says, ''but also because it would bring the people who are making the decisions closer to the people who are implementing them.'' Trying to increase cash flow, Hefner focused on two businesses: starting a videocassette unit specializing in mildly sexy fare and revitalizing a unit that licenses the Playboy name and Bunny logo for use on everything from golf gloves to garter belts. Both have been modest winners. But the magazine is still the overwhelming cash producer, and its circulation is still slipping, to about 3.7 million recently. Restoring its lost luster is Hefner's No. 1 goal. She hopes to bring Playboy into the mainstream by emphasizing more newsy, topical material. As an example, she cites last year's attention-getting coverage (and uncoverage) of Jessica Hahn, the woman whose tales of born-again sexual misconduct sparked the first televangelism scandal. Says Hefner: ''It's not just pictures of good-looking women, you know?'' Advertisers, at least, are taking the magazine more seriously as readers increasingly subscribe to Playboy instead of picking it up at newsstands. That enabled advertisers to get a firmer fix on the magazine's demographics. Overall, Hefner's efforts have brightened the company's prospects. Earnings last year amounted to only $11 million on revenues of $162 million, but that beats a $62 million loss in 1986. Profits are up again so far this year, and Playboy's fiscal hutch seems to be in order. NEW TECHNOLOGY has been critical to the careers of two of the boomer bosses. Richard L. Sharp, 41, chief executive of Circuit City Stores, has used his technological expertise to guide one of the nation's fastest-growing retail chains. Under Sharp, Circuit City, which sells video equipment, stereos, and appliances, has consistently boosted sales at more than twice the retail industry's average, opening major new markets each year. In 1987 the Richmond- based company earned $50.4 million on revenues of $1.4 billion, a good performance for that business. Sharp is a cool, obviously competent professional with a passion for computers. He dropped out of the University of Virginia to work with the machines, first in the U.S. Air Force. At 27 he founded a consulting firm that developed customized minicomputer systems for businesses. In that capacity he sold Circuit City, then an inconsequential discount chain, a point-of-sale system to speed customer transactions. The relationship deepened, and Sharp came aboard as an executive vice president in 1982. He rose to chief executive four years later. The CEO has made sure that Circuit City's highly computerized sales and distribution systems rank among the most efficient in U.S. retailing. Customers in the gigantic, 30,000-square-foot stores are served by salespeople who punch up transactions on terminals dotted around the floor. The system provides an up-to-the-moment inventory of merchandise. The company's automated distribution centers, located within a day's drive of the stores they serve, can reliably replenish stocks within 24 hours. Says he: ''You can't sell it if you don't have it.'' Such systems enabled the company to gain the customer loyalty and control over costs that have propelled its growth. Since Sharp became CEO, Circuit City has entered 11 new markets, including Los Angeles and Atlanta. For the past four years profits have grown at a compound rate of 36% annually. THERE MAY BE no more active apostle of technological change than Jim P. Manzi, 36, chief executive of Lotus Development Corp. of Cambridge, Massachusetts. Manzi, a slight, thoughtful man, took a circuitous route to leadership of the rapidly growing software company. He studied classics at Colgate, served as an editorial assistant at William F. Buckley Jr.'s National Review magazine, picked up a master's degree in economics at Tufts, and became a management consultant with McKinsey & Co. He was assigned to a team working for Lotus, and eventually joined the company. Manzi took over as president from Lotus founder Mitch Kapor in 1984, when sales, particularly of the 1-2-3 spreadsheet program, were taking off. The company was surging so fast that the G-forces were threatening to crush Lotus's delicate management structures. The urgent need to address that problem gave the consultant an edge over the company's techies. Controlling the explosive growth still engages most of Manzi's energy. He likes to quote the naturalist Edward Abbey: ''Growth for growth's sake is the ideology of the cancer cell.'' He can always find time to proselytize about how companies can improve their performance with computer systems. Annoyed by complaints that huge investments in computers can fail to boost productivity, Manzi retorts that no one has figured out a way to assess properly the gains created by computer technology. Says Manzi: ''It ain't in the pretty charts, it ain't in the graphics. But the quality of thinking improves because people have time to do other stuff, and there is more and better information for them to use to make better decisions. Using old methodologies to think about productivity really doesn't cut it.'' Manzi encourages Lotus employees to work with the new programs their development people produce. Right now about 200 workers are experimenting with a program called Notes that allows members of a group to share text and graphic information. Purpose: to stimulate communications within large companies. FLEXIBILITY is a generational trait best demonstrated by Jeffrey H. Coors, 43, head of his family's Colorado-based brewery business. Trained as a chemical engineer at Cornell, he spent years working in line jobs such as research and quality control before 1985, when he took charge of the enterprise his great-grandfather had founded. By then Adolph Coors Co. was suffering from its reputation as a bastion of arch-conservatism. Young Coors's father and uncle, proprietors for decades, were blunt-talking right-wingers with a knack for alienating potential customers. Their extremism had inspired a long boycott of the beer by AFL-CIO members and a variety of minority groups, among others. The elder Coors brothers had replaced 1,500 unionized workers who walked out in the midst of contract negotiations. Among the issues: workers' refusal to submit to lie-detector tests and personal searches. In a strict economic sense, the boycott probably had been little more than an annoyance for years. Coors continued to be a dominant brand west of the Mississippi, where union influence was slight and minority opposition largely ineffective. But the industry was changing fast, as market leaders Anheuser- Busch and Miller gained share and weaker brands went under. By the time Jeff Coors, a man of reflective, almost ascetic manner and appearance, became president, the company was committed to a strategy of expanding nationwide. Says Jeff Coors: ''Growth has probably become essential to long-term survival. In the beer industry, nobody has been successful at treading water.'' But the boycott was an obstacle. Jeff Coors and his more outgoing brother Peter, now 41 and head of the brewing division, set out to end it. They believed the company had to polish its image before it could penetrate heavily unionized areas along the Eastern seaboard. Even before Jeff became boss, he and his brother pushed the company to meet with minority groups; they later met with union representatives. In 1987 Coors reached an agreement that ended the boycott. The deal with the unions permits organizing efforts and elections. The minority groups relented after the company promised to spend $675 million over five years on contracts with black and Hispanic firms and on donations to various charities. Coors, a moderate Republican, clearly intends to be more conciliatory and less controversial than his predecessors. ''It was never a matter of screaming and pounding the table,'' says he. YOU CAN ALMOST always spot the headquarters of a baby-boomer boss by the irreverent touches -- the Persons' Room sign on the lavatory outside Hefner's office, say, or the Pee Wee Herman doll adorning a desk at Lotus. But while they delight in their own new style, these executives are acquiring patina. On the wall of Beasley's boardroom hang signed photos of his mentors in Washington and Chicago: Heineman, George Shultz, William Simon, Arthur Burns. A generation that once seemed to lack a sense of history has by now lived through quite a lot of it.