The ideal career path may be: reaching the top of the corporate world, then taking time off for family when your kids need you most, and then jumping back into a primo job at a top-tier global company.

Impossible in this dreadful economy? Here’s someone who’s done it. Remember Jeanne Jackson? At Gap (GPS) in the 90s, she built Banana Republic and then went to help Wal-Mart (WMT) take Walmart.com from start-up stage. But after leaving Wal-Mart seven years ago, Jackson was out of the big game, except for board gigs at McDonald’s (MCD), Nordstrom (JWN), and Nike (NKE).

She’s back. Actually, I follow these Most Powerful Women (and Jackson was one, on our annual list a decade ago), but the announcement four months ago that she landed at Nike–as President, Direct to Consumer, reporting to the CEO–was so low-key that I’d missed it. A few days ago, I spotted Jackson’s name and Nike title on the participant list for our upcoming Fortune Most Powerful Women Summit. I popped her an email. We talked yesterday.

“I made a commitment to my family,” Jackson, 57, told me, explaining why she had dropped out for so long. Since 2001, when she joined the Nike board, Jackson actually had talked on and off with chairman Phil Knight and CEO Mark Parker about joining the company. But not until this year, when her son graduated from high school and her daughter accepted an internship in London, at Burberry, did she decide to jump.

She didn’t think the jump would be to Nike first thing. “I thought I’d do something related to private equity,” says Jackson, who has been quietly running her own private equity/consulting business, MSP Capital, out of Newport Beach, California for the past several years. She expected one of the companies she backed “would speak to me.” But nothing did. (Along with “some spectacular failures,” she says, she scored a couple of hits, including Pure Digital, which sells the Flip camera and recently was acquired by Cisco.)

As the global economy tanked, she felt ever more drawn to the thing that she has focused on throughout her career: strong brands. Says Jackson, who was at Disney (DIS) and Victoria’s Secret early on: “In this economy, consumers default to strong brands.” Now, in this new role that Nike CEO Parker created for her, she oversees the company’s global retail holdings. That includes some 3,500 franchised Nike stores, more than 600 wholly-owned Nike and Cole Haan stores, and five e-commerce sites. Some $3 billion in revenues annually travels through these “direct to consumer” channels.

And despite the global meltdown, Nike is performing well. Revenues reached $19.2 billion in the year ended May 31. Profits fell 21% after five years of 20%+ annual growth, but investors have stayed with the stock: It’s up nearly 40% in five years, while the S&P has dropped 20%. The world’s largest athletic shoe and apparel marketer, Nike has smartly reduced spending and layers of management, while selectively adding key talent like Jackson.

Of course, she’s contending with the retail slowdown–Nike too has cut new-store expansion. But in some ways, Jackson is returning to the sort of thing she did inside Gap and Wal-Mart: playing entrepreneur inside a corporation. Last week, she opened the first Hurley/Converse/Nike store, in Orange County, California. The Hurley brand is for surfers and skateboarders and other cool kids. Converse, she says, has particularly broad appeal–from high school kids to musicians to “my mother-in-law, who is 87 years old and wears Converse.”

The family dynamic–usually a complication when executives, especially women, return to big jobs–is alright for Jackson. At least until her son heads off to SMU this fall, she’s commuting from California to Oregon, where Nike is based. Husband Doug, a retired airline pilot, is flexible and always has been. “I could take any job and he would just relocate,” Jackson says. (He has his own passion: cars. He owns the Batmobile–one of four built in 1966 for Batman on TV.)

Jackson, meanwhile, has simplified her business extracurriculars. She quit the boards of Nordstrom and Harrah’s Entertainment, as well as Nike. The one board she’s staying on: McDonald’s. After all, you can never get enough lessons in smart retailing.

Billy Mays was here at Fortune in early April, after a story about the pitchman appeared in the magazine. (The writer, Brian O’Keefe, penned this tribute to Mays today.) I sat in on the session and took away a few nuggets of wisdom from the guy who earned his fame pitching OxiClean stain remover (”Powered by the air you breathe!”) and ImpactGel in-soles (”It’s like walking on a cloud of air!”).

1. “Know the questions in your customer’s mind.” Answer them as she is thinking of them.
2. “You’ve gotta work with the heckler in your crowd.” Use him to draw others in.
3. “People will step toward you if you step back.” Again, pull the crowd closer to keep them engaged.
4. “Pull out your own wallet.” This will inspire them to do the same. If you nod your head, they will too.
5. “Most of the good advertising is annoying.” When it comes to you, Billy, we prefer “captivating.”

“I believe, this is my own marketing philosophy, that you degrade your brand value if you’re saying, this is not worth but half. At some point people go, ‘I guess it’s not really worth what they charge.’ ”

– Rick Hendrie, senior vice president for marketing at Uno Chicago Grill, in Wednesday’s New York Times. Uno Chicago Grill, currently offering a $9.99 pizza meal deal, is embroiled in a discount showdown with competing chain restaurants like Ruby Tuesday (RT) and DineEquity’s (DIN) Applebee’s. But even if the chains, which grew rapidly in recent years, can ride out this economic storm, they may find they’ve done irreparable damage to their pricing power. –Jessica Shambora

by Patricia Sellers

There aren’t many hero CEOs anymore. So it’s remarkable that two of the most admired chiefs have announced their retirement within the past three weeks.

First came Anne Mulcahy, who saved Xerox (XRX) from near-bankruptcy.

Now comes the news that Procter & Gamble (PG) CEO A. G. Lafley is stepping down after reviving that consumer giant and doubling its size to $83.5 billion in less than a decade. Like Mulcahy, Lafley earned his leadership chops out of crisis, led with a quiet charisma, had a clear focus, and constantly communicated.

Not a coincidence that they both succeeded. Those are the things you need to do to be a great leader.

Even people who have followed Lafley’s career hardly remember how terrible things were in June 2000, when Lafley was plucked out of the beauty business to lead a company in crisis. He detailed the mess well in a Harvard Business Review piece this past May: “The company had announced that it would not meet its projected third-quarter earnings, and the stock price plummeted from $86 to $60 in one day…The price dropped another 11% during the week my appointment was announced. A number of factors had contributed to the mess we were in, chief among them an overly ambitious organizational transformation in which we tried to change too much too fast…But our biggest problem in the summer of 2000 was not the loss of $85 billion in market capitalization. It was a crisis of confidence.”

Lafley is too diplomatic to name his problematic predecessors, but I’ll tell you who they were because I knew them all: CEOs Ed Artzt and Durk Jager were as hard-driving as leaders come — and intimidating too. They knew how to line up followers. But inspire the troops to become leaders? They struggled to do that. And another CEO in between the Artzt and Jager regimes, John Pepper, was well-liked but not tough enough.

So P&G had lurched through leaders who just weren’t right—until Lafley surprised everyone. He understood the power of a consistent message. His mantra for nine years: “The consumer is boss.”

Diligently and methodically, he spread the word that P&G had to focus on big brands, big markets, and big customers. He said that P&G, to win with powerful discounters, must slash costs and reinvest savings in marketing and product design.

Focusing on those things, Lafley became the best organic-growth guy in the consumer-products industry. In a 2004 Fortune story about P&G’s innovation drive, I quoted him: “Organic growth is more valuable because it comes from your core competencies. Organic growth exercises your innovation muscle. It is a muscle. If you use it, it gets stronger.”

He drove innovation by reaching outside for ideas — an alien concept for promote-from-within P&G. Shamelessly, he used hokey terms to communicate: “Connect and develop” was his term for partnerships with outsiders who might  be more creative than the folks at P&G.

Here’s the key: P&G employees understood Lafley’s mission. The company’s results proved that. By driving innovation in age-old brands like Tide and Crest and Olay, P&G outperforming rivals like Unilever (UL) and Colgate-Palmolive (CL).

But even as Lafley declared that acquisitions are risky, he didn’t shy away from them completely. “When we acquire, we acquire to build the core,” he told me in 2005. He bought Wella and Clairol to expand P&G’s beauty business. And as P&G grew to be a top player in personal care, he bought Gillette for $57 billion in 2005. That acquisition added five billion-dollar brands — Gillette, Oral-B, Braun, Duracell, and Mach3 — to P&G’s stable of 16. Last year, annual sales of Gillette Fusion topped $1 billion, and today P&G claims 23 billion-dollar brands.

Lafley has been contemplating retirement for a while. As the global crisis hit and P&G’s growth around the world slowed, the board urged him to stay on. Fortune has been saying for a long while that COO Bob McDonald, a 29-year P&G veteran who is a West Point grad and U.S. Army captain, had the edge. Insiders says he played a key role in the Gillette acquisition. The other contender was Susan Arnold, a 29-year veteran who drove P&G’s high-margin beauty business to $20 billion in sales and went on to oversee all of P&G’s brands; she quit in March one day after her 55th birthday, clearing the way. (Speaking of birthdays, McDonald turns 56 on June 20, one week after Lafley celebrates turning 62.)

Now with P&G’s stock trading at $52.63, down from its high of $74.67 at the end of 2007, McDonald has his own recovery to pull off. But in terms of confidence in leadership, the new boss has nowhere near the turnaround challenge that Lafley did.

“We need to see ourselves and conduct ourselves not as Goliath, but as David—not as a giant, but as a nimble and innovative competitor in every market.”

– Wal-Mart (WMT) CEO Mike Duke at Friday’s annual meeting for shareholders and employees in Fayetteville.  Fortune’s Suzanne Kapner attended the gathering, which given Wal-Mart’s success in this economy, was more of a celebration. Actor Ben Stiller emceed a program with surprise performances from Miley Cyrus and Smokey Robinson at the University of Arkansas’ Bud Walton Arena. (Click here for the full transcript of Duke’s remarks.)

Skeptics doubt the behemoth retailer can maintain this momentum once the economy turns around, but Duke predicts a permanent shift in consumer behavior. “We are not going back. This is important because the mindset of our customers is not going back…our customers will stay with us when this economy turns around and they have more discretionary money to spend.” To keep growing, says Duke, Wal-Mart will aspire to be nimble like David, not Goliath. A promising strategy considering its the one founder Sam Walton followed in making Wal-Mart a household name, saying “The bigger Wal-Mart gets, the more essential it is that we think small. Because that’s exactly how we’ve become a huge corporation—by not acting like one.” –Jessica Shambora

New York City is second fiddle to Silicon Valley when it comes to tech start-ups. But one intriguing new Internet company is about to launch here in Manhattan in two weeks.

Have you heard about Hunch? This morning at a Women in Media breakfast, I ran into Caterina Fake, the  entrepreneur best known for co-founding Flickr and selling it to Yahoo (YHOO). Last time I saw her was at the home of Sheryl Sandberg, Facebook’s COO, in Silicon Valley. As I’ve written, Sandberg frequently hosts tech’s rising-star women for soirees with guest speakers.

Hunch was just a glimmer of an idea back then. It was going to be site for consumers to use to help them make decisions. But, Fake (left) told me today, she hadn’t a clue about what it would look like or how it would be used.

Now she knows. She describes Hunch as a mix of a “decision tree” and a “Magic 8 Ball.” (Remember the toy black ball that told you your fate and fortune when you were a kid?) On Hunch, you type in a question like…

What car should I buy?…

What’s wrong with my pet?…

Should I write a novel?

And Hunch responds by asking you questions. You click Yes or No in response to each one, and eventually you arrive at an answer. Fake says that she and her colleagues worked to make Hunch fun, like a game, so people stay on the site for a while.

What will visitors use Hunch for most often — career advice? Food tips? Shopping savvy? Fake doesn’t know. That’s part of the excitement of launching a new venture, she says.

This breakfast, part of Internet Week in New York, included lots of high achievers, who have jumped from traditional companies to the digital space. There was Betsy Morgan, who left CBS (CBS) to be CEO of the Huffington Post. And Susan Lyne, ex-Disney (DIS) and Martha Stewart Living Omnimedia (MSO), who is now CEO of Gilt Groupe. You wouldn’t think that this online fashion-brand merchant would have a Gooogle-like growth trajectory, but it does in its first two years. Watch for Lyne to broaden the platform  beyond high-end clothes and accessories.

It was a kick to see Eileen Naughton, who was, in the mid-’90s, general manager of Fortune and later president of Time magazine. She spent 16 years at Time Inc. (TWX), got squeezed out in 2005, and landed on her feet. Actually, she landed at Google (GOOG), where she’s now director of digital platforms. Her purview includes YouTube and DoubleClick.

Naughton echoed the other women at the breakfast, who said that New York City needs more engineering and tech talent to compete with Silicon Valley. “The best place to get engineering talent right now is investment banking,” Naughton said.

That’s a silver lining of the recession: tremendous talent, looking for new employment. Another silver lining is attractive real estate prices. Another tech entrepreneur, SheFinds Media CEO Michelle Madhok, told the group that she just rented 1,000 square feet for new offices and scored a deal: $22 per square foot. That’s about 40% lower than a year ago.

“You can always do what you should do if you’re willing to put in the time and energy to develop a new set of skills. If you only extend into places where your skill sets serve you, your skills will become outmoded.”

- Amazon.com (AMZN) CEO Jeff Bezos in “Amazon’s Next Revolution,” the Fortune cover story that hits newsstands today. My colleague Jeff O’Brien uses Bezos’ newest big venture, the Kindle, to get inside the brain of this durable entrepreneur who has an overriding sense of adventure, an unusual attraction to non-linear growth, and a perpetual willingness to fail. “The thing that allows for all the teams to come together after a failure is the recognition that this is just a first failure [for the project],” Bezos says. “After every failure, we ask ourselves, ‘Do we still believe in the vision?’ If we have conviction, that gives us energy to pursue [another] approach.”

Kindle competition is coming fast and furious. Google (GOOG) intends to enable publishers to sell digital books direct to consumers, according to the New York Times. The Google retail program would allow consumers to read books on any Internet device.

For now at least, I’m content with my Kindle 2. The e-books are cheap, at $9.99 or less. Though the Fortune cover story suggests that a profit-building model, perhaps ads, will likely come.

by Patricia Sellers

You might call Al Koch the world’s biggest trash collector. As bankrupt General Motors (GM) splits into two parts — New GM, containing Chevrolet, Cadillac, Buick, and GMC, and Old GM, containing designated bad assets such as Pontiac, Saturn, Hummer, Saab — Koch is the hired gun who’s supposed to create value from that latter lot.

Bringing “New GM” out of bankruptcy will be difficult enough. Why would anyone take the tougher slog at “Old GM”?

This is what Koch does — the toughest turnarounds. He’s vice chairman at restructuring consultancy AlixPartners, which works on saving sick comapnies globally but has been a Detroit mainstay for decades. AlixPartners’ clients have included DeLorean’s creditors in 1984, Detroit (the city itself) in 1994, and Kmart in 2002.

Koch, now 67 and a 14-year veteran of the firm, has served as interim CEO of crippled companies such as video-game distributor Handleman (HDLM) and manufactured-home builder Champion Enterprises (CHB). But his most memorable job was at Kmart in 2002. Kmart was the largest retail restructuring in history and, as it turned out, one of AlixPartner’s big successes.

As Kmart’s interim CFO through its bankruptcy, Koch got lucky. When I interviewed him in late 2005 for a story about investor Eddie Lampert, he said that he and his restructuring-expert colleagues had never heard of this young investor who had swooped in and bought Kmart bonds at 40 cents on the dollar. “To most people, Kmart looked like a pile of trash,” Koch said. “We were told that this hedge fund guy had bought a huge portion of Kmart and wanted to get it out of bankruptcy fast.”

Lampert pressed Koch and the other restructuring pros, who were earning $10-20 million a month during Kmart’s bankruptcy, to exit Chapter 11 quickly. Lampert argued that neither customers nor management talent would be attracted to a bankrupt Kmart. The company emerged from bankruptcy in May 2003, a year ahead of schedule. Lampert, who had invested some $800 million for a 54% ownership stake, merged Kmart with Sears two years later to form Sears Holdings (SHLD).

Old GM won’t be as smooth or as quick as Kmart was. As my colleague Alex Taylor notes, “new GM” will have an incentive — from the U.S. government, new owner of a 60% stake –  to exit Chapter 11 rapidly, possibly in 60 to 90 days. The Old GM restructuring, meanwhile, could take years.

As Old GM’s chief restructuring officer, Koch will be negotating separation agreements with New GM and commandeering efforts to unload or liquidate those dud brands such as Saturn and Hummer.

His influence could turn out to be broader than his marching orders designate. After all, he’s worked with GM several times over the years. These past few months, he’s helped negotiate the sale of New GM assets to the government. Now he’s reporting to CEO Fritz Henderson and to GM’s board as well. As a guy who lives and dies by finding value in junk, Koch surely won’t take his shot at making history lightly.

“At the end of a day the performance of a company like Kraft has everything to do with the quality of the people that we have in the key roles and so I spend most of my time worrying about whether that’s the case, making sure…we have the right people in the right places, that they have the resources that they need to get the job done.”

– Kraft (KFT) CEO Irene Rosenfeld in a recent interview with NPR’s Marketplace. Today Kraft reported first-quarter profits were up 10% over last year. It was the one bright spot in a sea of bad quarterly earnings news from companies with top women from Fortune’s Most Powerful Women list.  Avon (AVP), whose chief is Andrea Jung, and Archer Daniels Midland (ADM), led by CEO Pat Woertz, suffered steep profit drops of 36% and 98% respectively. The announcement from Disney (DIS)–where Anne Sweeney is president of the Disney-ABC Television Group–was also dismal: net income plunged 46% to $613 billion from $1.13 billion a year ago. While Rosenfeld pays lip service to the importance of people, cost cuts and price increases are credited with Kraft’s standout performance this time around. –Jessica Shambora

“Business is essentially like a neighbor in your community, only it happens to be a very wealthy neighbor.”

–Jerry Greenfield, founder of Ben & Jerry’s ice cream with Ben Cohen. Unilever bought their business and has preserved the founders’ socially responsible approach. And today is just one example of how Ben & Jerry’s continues to be a good neighbor: It’s Free Cone day! I recommend Chocolate Macadamia. It’s made with sustainably-sourced macadamias & Fair Trade-certified cocoa & vanilla. And it’s delicious.–Jessica Shambora