What does it take to ascend to the CEO position at one of the 100 largest U.S. firms? More specifically, where do CEOs come from—the schools, the functions, and the work experiences?
To provide insight on these questions, I conducted research, with the help of Wilkerson Anthony, a research assistant from the University of Virginia, on the Fortune 100 (F100) CEOs to identify several factors associated with their career paths: undergraduate schools, undergraduate degrees, graduate schools graduate degrees, educational majors, functional emphasis, the number of years at their current company (at which they are CEO), and the companies that produce more CEOs (see methodology below). In this article, I focus on one of these factors: the tenure of the F100 CEOs. Over the next few weeks, I will publish additional articles that focus on the other attributes of F100 CEOs. For insight on the undergraduate institutions the F100 graduated from, see here. You will most likely be surprised.
F100 CEOs: Longevity of Experience
A recent study found that most (75%) Millennials believe job-hopping is good for their careers. However, this thinking is flawed for individuals who may be interested in leading a large company. Surprisingly, I found in my analysis that most F100 CEOs had an extensive amount of experience at their current F100 company. They did not job hop and tended to spend years, if not decades, at one company. The pattern is clear—to run a large, often global, multi-division, complex operation, significant experience across different divisions within the firm appears to be a near necessity.
Four out of five of the F100 CEOs have worked at their company for more than 10 years, nearly two-thirds (61%) have worked there for more than 20 years. Over one-third (35%) have worked at their firm for 30 or more years and 9% for 40+ years. The recent news that GE went outside of their firm to find the next CEO is rare among the largest firms. Having significant knowledge of the firm through years, if not decades of experience, appears to be a prerequisite for most of the F100.
As an example, Mary Barra, Chair and CEO of General Motors Company, started working for GM at 18 as a co-op student. She held a number of engineering and administrative positions, including managing a plant. She held roles in Global Manufacturing and Engineering, Global Human Resources and then became the EVP of Global Product Development. Her role later expanded to include Global Purchasing and Supply Chain.
At the largest firms, company experience is even longer, with the average of the CEOs from the top 10 Fortune firms having roughly 30 years of experience. As an example, Doug McMillon, current President and CEO of Walmart, started at the firm in 1984 as an hourly summer associate in their distribution center while pursuing his MBA. After school, he rejoined the company as an assistant manager before moving to merchandising. He ultimately served in senior leadership roles “in all of Walmart’s business segments.” (See here for McMillon’s biography.)
For additional insight on Fortune 100 CEO career paths, see the following: the undergraduate institutions they attended, the graduate schools they attended, the number of companies they have worked for, the early-career firms at which they worked, the undergraduate degrees they earned, and the early-career functions in which they chose to work.
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To learn about the undergraduate institutions of the F100 CEOs, see here.
Methodology: To identify CEO information, a number of information sources were used: 1) Bloomberg, 2) Company websites, 3) Company proxy statements, 4) press releases, 5) Wikipedia, among others. While most of the information was accessible, there were 10 occasions where the data was unavailable or conflicted across resources. In such cases, the CEO was excluded from the total CEO count in the statistic calculated if unavailable/inconsistent. Additionally, some firms were acquired and the CEO transitioned to the acquiring firm. In such cases, the CEO’s tenure at the current firm was calculated starting at the time of the merger/acquisition. The CEOs were identified in September 2018 and the research was conducted in winter 2018/2019. A special thanks to Wilkerson Anthony, an outstanding research assistant with whom I worked from 2014-2019, who helped source and code the information. Also, thanks to Tyla Gallegos who created the data images.
