(FORTUNE Magazine) – One day in September, when I was visiting analyst Mary Meeker at Morgan Stanley, she planted a seed: "There's going to be a story about traditional companies that miss the Internet revolution," said the so-called Queen of the Net, once an obscure, old-economy analyst who followed stocks like Coke. "Watch over the next year. Count the CEOs who fall."

We've watched--and they've fallen. For every chief of an old-line giant who doesn't "get it" (more about them later), there are others who possess that essential insight but fail in the execution, pushing too hard too fast.

This is the main problem at Procter & Gamble--the root of the terrible earnings surprise and the plunge of $36 billion in market value. Dead set on shaking up the company since he took over in January 1999, CEO Durk Jager has levied more change on P&G than its people can handle. "He's been moving too quickly," says Deutsche Banc Alex. Brown analyst Andrew Shore. "Durk grasps the future, but he's trying to adapt the entire company to a Silicon Valley model--all about speed and new products and acquisitions to get revenue growth. This isn't the technology industry. Speed can't be the most important thing."

While Wall Streeters grumble about the "Durk discount" on P&G stock, Jager's job probably isn't in danger--yet. But observers say that with one more misstep--on top of the profit shortfall and his recent failed efforts to buy drug giants American Home Products and Warner-Lambert--he'll be gone. There's precedent here. Similar mistakes, such as setting unrealistic targets, pushing growth at any cost, pursuing ill-fated acquisitions, cost two other CEOs their jobs: Coca-Cola's Doug Ivester and Mattel's Jill Barad. Says Ram Charan, who advises FORTUNE 500 CEOs: "Many of today's leaders have gotten carried away with BHAG--big, hairy, audacious goals--because they think they'll attract investor attention. Failure usually comes from executing poorly on those goals."

At least Jager understands the need for change. Most old-economy CEOs are moving too slowly. Who would have thought that Nike's Phil Knight, the renegade who used the Beatles' "Revolution" to promote his global brand, would himself miss the revolution? In the past few years, Knight has missed major trends, like skateboarder and snowboarder fashions, and has been late to the Internet. At 62, he's dragging his feet on finding a successor--living, it seems, by the old Nike slogan, "There is no finish line."

It's a common mistake. Many of the stewards of big, old brands have rested on their icons. Xerox's Rick Thoman has the right vision--to make the copier company a tech-solutions provider--but he isn't inspiring enough to galvanize his management. George Fisher didn't redirect Kodak quickly enough in the face of global, digital competition. Avon's board eased out CEO Charlie Perrin in November. His successor, Andrea Jung, is pledging to expand Avon more aggressively, but she needs to resolve an awful dilemma: What do you do with a 115-year-old direct-sales system when the Internet makes Avon ladies obsolete? Jung is standing by the ladies, saying Internet sales will be "incremental"--some 5% of the total in the next few years. The stock is up a bit since she took over but off 42% since its year-ago high.

Whatever they do, these brand leaders have a fundamental problem: In the early '90s they globalized. In the mid-'90s they economized. Today, confronting sluggish demand for their old-line goods, they're out of big ideas. So the stocks are reeling. "It's like Jonestown," says Prudential analyst John McMillin, who has followed major food companies like Kellogg and Heinz for 19 years. His stocks are down 34% in the past two years, vs. a 34% rise in the S&P 400 (and a 180% increase for the Nasdaq). "Stock options are underwater. Managers are leaving to go to dot-coms. You see major reductions in premier companies like Unilever, which is eliminating 25,000 jobs."

At Philip Morris, the stock has sunk so far that paying executives with options doesn't work anymore. To stem the brain drain, CEO Geoff Bible is shifting to cash bonuses and restricted stock awards. At P&G, the talent drought is a large and looming problem. A career start at Procter used to be the gold seal. Not anymore. Jager notes that 60% of last year's graduates of Stanford Business School went to work at companies with 50 people or less.

Amid all the agony and carnage, one ancient brand king is ever hot: 108-year-old General Electric. It isn't so much Jack Welch's brilliant goal setting (requiring that GE be No. 1 or No. 2 in each of its businesses) as his intense, unmatched execution ("fix, close, or sell") that has made GE thrive. Welch shifted GE into services in the past decade. His obsession now: the Internet. He'll probably conquer it. GE is America's most profitable and admired company because the boss knows how to mix change and discipline. Two decades after GE first pitched "We bring good things to life," the promise still rings true.

--Patricia Sellers