8 CEOs with Staying Power
The average tenure for a CEO in the U.S. holds is just over 8 years, which makes the enduring careers of corporate chiefs such as Reed Hastings, Rupert Murdoch and Larry Ellison all the more impressive. The chances of a company surviving 50 years are dauntingly slim. In fact, data from the U.S. Department of Labor shows that, of all private sector businesses started in 1994, only 24.6 percent were still in business sixteen years later in 2010.
March 17 2014 by ChiefExecutive.net
Bruce Kennedy of MSN Money has observed that, “being a company’s chief executive officer can be a very mixed blessing. Along with the power comes not only the burden of responsibility, but the realization that, in most cases, your position at the top depends on ensuring continued profit growth, prosperity and achievement.”
Jim Collins (author of Built to Last and Good to Great) said that the biggest mistake CEOs make is to see no evil: “The key sign – the litmus test – is whether you begin to explain away the brutal facts rather than confront the brutal facts head on.” Facing the brutal facts implies the need for change, and great companies are always anticipating, training employees to be ready, and performing a real service when they can help customers see coming market shifts, industry trends or the potential impacts of new technologies.
Sam Palmisano once told Forbes about the price of missing the indicators of change when, for example, in the 1990s, IBM nearly went bankrupt: “IBM invented the PC but viewed it incorrectly. Unlike Intel and Microsoft, we didn’t see it as a platform.”
“In almost every example, these eight CEOs run companies that have performed over time,” Tom Sapporito, chairman and CEO of RHR International told Chief Executive. “More importantly, they were adept at seeing, as well as responding, to changes and opportunities critical to the success of these companies. CEOs who succeed over long periods of time have demonstrated the agility, both intellectually and personally, required to manage in complex changing environments.”
“The length of CEOs’ terms often correlates with their level of success,” Dr. Leslie Gaines-Ross, with the global public relations firm Weber Shandwick, told MSN Money. A study by Weber Shandwick noted that, in North America, the average tenure of a departing CEO was eight and a half years – compared to six and a half years for European CEOs and four years, three months for CEOs in the Asia Pacific.
Given those figures, here are eight CEOs Bruce Kennedy calls “remarkable – not only for their accomplishments, but for also holding on to their jobs for a decade or, in some cases, much longer.”
Reed Hastings, Netflix
The Boston native co-founded Netflix (NFLX) in 1997, and has been its CEO since September of 1998.
From its start with DVD-by-mail rentals, the company is now an international video streaming service that also produces some of its own programming – including critically-acclaimed series such as “Arrested Development,” “Hemlock Grove” and “House of Cards.” Hastings did take a lot of heat in 2011 over pricing changes and a plan to spin out a DVD service, but shares have soared since the fall of 2012 and trade near record highs today.
“It’s up to Netflix to harness the power of the Internet better and faster than other people,” Hastings said in an interview last year, “to provide a great consumer experience.”
Jeff Bezos, Amazon.com
A long-time tinkerer, devoted “Trekkie” and proud nerd, Bezos founded Amazon (AMZN) as an online book-selling business in 1994.
He became its CEO in May of 1996. The company went public in 1997 and has since become one of the world’s leading e-commerce platforms, with a worldwide customer base of 225 million, that has made Bezos a multi-billionaire. He recently bought The Washington Post for $250 million.
“I would define Amazon by our big ideas,” Bezos said on “60 Minutes” last year, “which are customer centricity, putting the customer at the center of everything we do, invention. We like to pioneer, we like to explore, we like to go down dark alleys and see what’s on the other side.
Dan Amos, Aflac
Amos’ family founded the American Family Life Assurance Company of Columbus, Georgia, in the 1950s.
He became company president in 1973 and CEO in 1990. Aflac (AFL) is the largest provider of supplemental insurance in the U.S., and also has a large presence in Japan.
Amos was also the driving inspiration behind the company’s popular and quirky Aflac duck commercials – which has given the company international name recognition.
Edward Rust, State Farm
CEO since 1985, Rust’s father and grandfather were also the company’s chief executives. State Farm is currently the top home and car insurer in the U.S., and is ranked 43 on the Fortune 500 list of largest companies.
Rupert Murdoch, 21st Century Fox
The son of a famous Australian journalist and publisher, Murdoch became founder and CEO of News Corp. in 1979. The company evolved into the world’s largest media conglomerate before being split into two separate, publicly traded companies in 2013.
The core business, consisting of the more profitable broadcasting and entertainment divisions, was renamed 21st Century Fox (FOX). The lagging publishing division, which includes HarperCollins and The Wall Street Journal, was spun off as a new, distinct News Corp. (NWS) through a stock split. Murdoch stayed on as CEO of 21st Century Fox and serves as executive chairman of News Corp.
Despite numerous scandals, corporate and personal, Murdoch, an American citizen since the 1980s, has remained in charge of his empire.
Warren Buffett, Berkshire Hathaway
The legendary value investor became Berkshire Hathaway’s (BRK.A) chief executive in 1970. The son of a stock broker-turned-congressman, Buffett transformed Berkshire Hathaway from a faltering textile manufacturer into a renowned holding company.
“One of the dumbest things was to make a textile company the base of other things we bought or invested in,” Buffett said in a recent interview.
But Berkshire Hathaway has since expanded to include a wide spectrum of businesses — including some major food, insurance, apparel, media, rail and furniture companies.
Larry Ellison, Oracle
Ellison founded Oracle (ORCL) in June of 1977, and has been its CEO from the start. One of the richest men on the planet, he’s known for living large.
He collects airplanes, yachts, homes and currently owns most of the Hawaiian island of Lanai. He’s also known for sinking huge amounts of money into Team Oracle USA’s successful defense of America’s Cup in 2013.
“Someone once asked me if it’s worth $100 million to win the America’s Cup,” Ellison said in a documentary about the competition. “It’s certainly not worth $100 million to lose the America’s Cup.”
Roger Penske, Penske Corp.
The Indy and NASCAR legend also tops the list of longest-serving CEOs. Penske founded the Penske Corporation (PAG) and became its chief executive in 1969.
He turned a car dealership and truck-leasing business into a company with $19 billion in revenues – and subsidiaries in the retail automotive, manufacturing and professional motor sports sectors.
His Team Penske racing group, meanwhile, has been called the “New York Yankees of motor sports,” with 15 Indianapolis 500 wins and dozens of other national championships.