Alongside the justified focus on diversity social mobility, it is instructive to understand some of the other dynamics behind the rise to senior leadership, and to see how the path to CEO has changed over the decades.
Research from Monika Hamori and Rocio Bonet at IE Business School and Peter Cappelli at The Wharton School compared leaders in the top ten roles at each of the Fortune 100 companies over the past 30 years. Their latest research points up some interesting observations since the earlier studies:
- Sharp decline in ‘lifers’, those who have spent their entire career with one company.
- Large increase in rapidly progressing young executives who spend less time with any one employer.
- More diversity – some 11% of the leading executives with US organizations have a first degree from outside the US, although the companies with the highest proportions of such executives are disproportionately based on the East and West coasts of the US.
- More women working in executive roles, although they are usually in the second tier positions, as opposed to the very top jobs. There are still 17 of the Fortune 100 that have no women in their top 10 roles.
- Financial institutions recruiting more top executives from outside than they did in 2001, an obvious legacy of the 2008 recession. Having been hit the hardest, they needed to restructure, and external CEOs made sense, while more stable businesses (Procter & Gamble or UPS, for example) continued to promote leaders from within their ranks.
- The recession had a slowing effect in that leaders were reluctant to seek new opportunities and companies held on to executives for longer.
- Career growth has also been affected by the recession, with the age of leaders and the amount of time they take to reach the top increasing. The 2011 executives took on average almost a year longer to get to senior level than their 2001 predecessors.
- The profile of organizations has changed, with fewer heavy industry and energy companies, and many more healthcare and retail companies.
- Leaders’ educational levels have risen over the past three decades, with around 65% holding graduate degrees (62% in 2001 and 46% in 1980). And the Ivy League colleges dominate, with 36% of C-suite executives holding MBAs from likes of Columbia, Harvard, Yale and Wharton.
Based on the findings from this research, these are some of the things we need to be aware in the race to the top:
- Getting to the very top tier takes you along a different path to those settling at lower executive roles such as divisional or functional heads, or VPs. Patience is required – the study found that for top tier executives time to the top increased, because although they had been on a faster track from the start, they held more jobs on their way up, acquiring essential skills in general management and leadership, as opposed to working in functional silos.
- Specialists get there quicker but they still need generalist skills. As Monika Hamori explains: “Managers with a narrow specialist background in law, HR, or finance get to the top quicker, but if you want to get to the very top you still need to be a generalist”.
- Top tier education for top tier jobs. The research illustrates how education counts, with top executives in the Fortune 100 coming predominantly from Ivy League universities. An interesting observation is that such candidates are more likely to be recruited from outside the organization than promoted from within.
- Look at the characteristics of your target corporation. Hamori expands: “For your career advancement, it matters a great deal what type of organization you join. For example, you may have a faster ascent at younger companies where you’ll grab the top post at a younger age. Google executives are the youngest in the dataset. At the same time, older companies may have more established promotion ladders and it may therefore take longer to ascend those.” Hewlett Packard’s executive team in 2011 had an average age of 58 while for Google that figure was 46.
More established organizations make for not only a lengthier climb to the top, but also a difficult nut to crack if you are an outsider, as Hamori explains: “Corporations that were already among the largest ones in the 1970s (the era of the company-led ‘organization man’), still tend to promote a large number of their senior executives from the inside. They are much less likely to take outsider executives than organizations that did not have established talent management systems in the organization man era.