Second annual route to the top: on the cusp of change - survey on CEO career path - includes profiles of CEOs

Chief Executive, The, Jan-Feb, 1997 by Tom Neff, Dayton Ogden, Barbara Ettore

Which are the attributes that can make - or break - a CEO today? As the competitive landscape continues to evolve, a new breed of executive is taking the lead in the race for that spacious comer office.

Corporate leaders today are a far cry from the deskbound strategists of decades past. These days find the average CEO puddle-hopping across the Atlantic to scout out strategic alliances and e-mailing corporate headquarters from Tokyo. The modern CEO is a visionary forward-thinking leader, as comfortable analyzing new technologies as he is brainstorming in the boardroom, as at ease communicating with his employees as he is presenting financials to shareholders.

* Though traditional attributes like financial acumen and strategic thinking remain prerequisites for the post, shifts in the corporate environment have refocused the responsibilities of the contemporary CEO. And, along with changes in the role itself, have come new paths to making the grade. A background that encompasses international exposure, cross-industry experience, and high visibility roles is more essential than ever, as is demonstrated ability to stimulate top-line growth - a much-preferred alternative to the played-out route of slashing costs to boost the bottom line.

* To chart the up-hill trek traveled by today's top-level executives, we tapped into the results of a survey of Fortune 500 company CEOs co-sponsored by Spencer Stuart and Chief Executive magazine. Taken as a whole, the survey findings reveal a CEO straight out of central casting - 58 years old and with an average of 23 years at his current company and six years in the CEO post. The overwhelming majority are company-loyal long-timers with industry-specific knowledge. But a closer examination of the data, coupled with our collective experience during more than 40 years of matching candidates to our corporate clients' wish lists yield some clear trends in the career paths of our nation's corporate leaders.

THEN AND NOW

Comparing the backgrounds of those relatively new to the position (in place five or fewer years) to those well-established in the role (11 or more years) shows that the more recent appointees are far more likely to have global market experience. Almost two-thirds of the relative newcomers reported international experience, as compared to approximately one-third of the well-established, with 40 percent of the shorter-termed CEOs having lived abroad, as compared to 24 percent of those with longer tenure. As globalization gains momentum, companies are placing greater stock in foreign market experience, although the importance of international exposure varies greatly by both industry and region. At certain firms, where some degree of international exposure was viewed as helpful five years ago, actual on-the-ground experience in different parts of the world is now a weighty asset; while European market experience was most prized five years ago, today Asia-Pacific exposure is seen as added value.

If experience abroad is a plus, how about experience at an outside industry? More than half of survey respondents have been at their current company for more than 20 years and a full one-third are 30-year-plus veterans, indicating that the inside track is still a proven route to the winner's circle. Only 16 percent reported changing industries to move into the CEO slot. Yet our CEO search clients are more receptive than ever to considering outside contenders - some are actually unwilling to look at a candidate who has only been with one company. And the door has also opened for executives from different industries. As evidenced by Mark Willes, who jumped from General Mills to Times Mirror in 1995, those who have operated in different environments and seen different ways of tackling problems and issues are increasingly being seen as desirable candidates who can bring a fresh approach to a different industry. In some industries, a dearth of appropriate candidates within the field drives willingness to search for a solution from outside.

According to survey results, a cross-industry background seems most common in large organizations, with 44 percent of CEO respondents from larger companies (annual revenue of $6 billion to $10 billion) hired from outside industry positions. For smaller companies (under $2 billion in annual revenue), less in the spotlight in terms of institutional investors and less affected by globalization, only 16 percent of CEOs were lured from outside. Company size also plays a part in how the essential skills of the CEO role are viewed. Respondents at larger companies rate leadership, integrity, and strategic thinking ability as most essential, while those heading smaller finns put greater stock in industry knowledge, interpersonal skills, and a proven track record.

From our experience, interpersonal skills are, in fact, gaining weight in the equation. Gone are the days when a company's most vital assets are tallied on inventory sheets or characterized by plant and machinery. Savvy CEOs realize that human capital - employees driven to excellence and creativity - is the real key to success. Furthermore, today's CEO acts as a bridge between employees and the company's stake-holders, who include investors, customers, and suppliers. As such, he must be more leader than manager, demonstrating skill in both building morale and heightening corporate reputation.