White-collar climb: today's CEOs may be younger, better-schooled and more well-rounded. but succeeding in the top job still takes real experience - 2003 Route to the Top - related article: CEOs Are Getting Younger Each Year

Chief Executive, The, March, 2003 by Catherine Fredman

'A complex, complicated job has gotten more complex and more complicated." That's Ed Liddy's opinion of how the role of the CEO has changed, but the words of the chairman and chief executive of All-State Insurance could easily be echoed by any of his colleagues in corner offices across the country.

It's not just the business environment that has changed, although the prosperous years of the 1990s now seem like a shimmering mirage when viewed from the gritty trenches of a stagnant economy, a slumping stock market and threats of war. It's also that the competitive landscape has become a harsh and unfriendly place in which companies that bloomed under the twin benefits of globalization and technology now find themselves buffeted.

The zeitgeist surrounding corporate America is shifting, too. CEOs once feted on the cover of national magazines are fighting criminal charges of fraud. Public opinion has declared open season on corporate chieftains in general.

Meanwhile, inside corporate conference rooms, activist shareholders and independent boards of directors are showing less tolerance than ever for mediocre performance and no tolerance at all for poor results. "The trigger is pulled earlier," notes Tom Neff, U.S. chairman of Spencer Stuart. In fact, according to a national study of influential business stakeholders by Burson-Marsteller, today's CEO has an average of only five earnings quarters to prove him- or herself. Under the circumstances, it's not surprising that another Burson-Marsteller and Wirthlin Worldwide study found that more than half (54 percent) of 160 Fortune 1000 senior executives surveyed said that they would turn down the CEO position, a refusal rate double that of a year ago.

"It's a whole new world and a whole new job," comments Bettina Whyte, a restructuring specialist and crisis manager with AlixPartners. "It's very tough, there's no two ways about that."

It's a job being performed by a whole new crop of CEOs. Although, according to Challenger, Gray & Christmas, the number of CEOs who left office in 2002 was significantly down from the high water mark of 1,106 in 2000 and 929 in 2001, some 749 spots still opened up in the corner office in 2002--more than two desks emptying every business day. The result: Nearly 20 percent of all Fortune 700 CEOs have been in their current position for one year or less.

So who is stepping up to the plate these days--and, more importantly, what does it take to deliver the goods? According to the annual Chief Executive/Spencer Stuart study of Fortune 700 CEOs, today's new leaders are a different breed from 10--and even five --years ago.

Many of the trends identified in last year's "Route to the Top" survey have only solidified. CEOs are taking office at an ever-younger age after having amassed general managerial experience in a broad range of functions and disciplines, although finance and operations trump sales and marketing. The number of chief executives who have an M.B.A. degree continues to rise. Thirty-six percent of Fortune 700 CEOs brandish a graduate business degree -- more than a fifth of them coming from Harvard (although fewer CEOs have undergraduate degrees from the Ivy League).

At the same time, there's a sense that, as Chris Lofgren, the new CEO of Schneider National, says, "Function is a whole lot more important than form." Search committees are placing renewed emphasis on skills that have yet to be quantified on surveys but whose impact nonetheless shows up on balance sheets. Operational experience, a proven ability to negotiate strategic alliances, liquidity management and being able to build a working relationship with boards of directors--these are resume items that are regaining importance.

In addition, today's new breed of CEO shares character attributes that will never show up on a resume but are critically important to the future of a company. Such intangible assets include the ability to listen and learn, impeccable ethics, even a certain empathy. Grandstanding and celebrity are out; humility and credibility are in. "My first 100 days are all about listening and learning," remarked Paul Pressler in his first interview after taking the top job at Gap in September. "The last thing you'll get from me is a grand vision in the first 100 days. You need to give yourself time to be a sponge.

After the glistening chimera of the dot-corn bubble, the stomach-sinking accounting scandals and the burgeoning bankruptcies, there's a return to fundamentals. Chief among them is a redefinition of leadership. Forget flowery words or magic formulas crafted by corporate communications wizards. "When you boil leadership down to its common traits, it's the ability to get people to work towards a common goal," says Peter Crist, president of Crist Associates, an executive search firm. The results of this year's survey provide an indication of the skills new leaders will need to achieve those goals in an increasingly complex and demanding environment.

Age: Prime time comes earlier