December 1 1995 by JP Donlon
I once was asked to speak to a Conference Board group in
The first clip was the British actor’s legendary “once more unto the breach” scene from Henry V; the second was the conspiracy speech from Richard III in which the cunning Yorkist plots some involuntary “re-engineering” for the ruling Lancasterians who stand between him and the English throne. Most business leaders, of course, are neither as heroic nor as diabolical as either of these Shakespearian figures. (And with a few exceptions, no chief is as glamorous as the youthful Larry Olivier, but, hey, this was Hollywood!)
These two very different archetypes came to mind during the preparation of our first annual “Route To The Top” feature, which appears in this issue. The consulting firm Management Practice Inc. looks into the backgrounds of the CEOs of major U.S. industrial companies and highlights a number of trends in how people rise to the top job.
Shakespearian kings and modern CEOs may not appear to have much in common, but it is interesting that past performance isn’t always a great predictor of future potential. As a young boy, Henry V was considered a feckless youth, whose father thought him unworthy of succeeding him. Richard III, on the other hand, was considered by historians to have been a capable administrator, who, had he succeeded to the throne peacefully, probably would have been a great ruler.
Similarly, as the Bard of Avon likely would agree, different times call for different skill sets among leaders. During the 1970s, one of many golden ages of conglomerates, the financially trained CEO was all the rage. Harold Geneen at ITT and Royal Little at Textron were pre-eminent financial re-engineers, and both represented the CEO archetype of their time. Today, no self-respecting CEO admits to running a conglomerate, let alone managing one in the grand seigneur style of a Harold Geneen.
Although I would hesitate to use the “Route To The Top” results for their predictive value, it is nonetheless interesting to see that more corporate chief executives have technical or operational backgrounds, and that these specialities are edging out other generalized backgrounds such as legal, finance, administration, or marketing. A CEO appointed in 1995 is not only more operationally oriented, but he (and more often than before, she) is slightly younger than the general average, 54 years old versus almost 57. In addition, experts estimate that CEO tenure has decreased from roughly 10 years to seven.
The shorter life expectancy at the top was addressed by our associate editor, Lorri Grube, in her article “CEOs At Risk” in our November issue. Having tracked the comings and goings of chief executives in our “Transitions” page, we reckoned she already had her finger on the pulse of what appears to be the shortening life cycle of the CEO position. Senior Editor Frances Nuelle worked closely with MPI in coordinating the “Route To The Top” feature.
Thinking of conglomerates, and leadership success, how can one overlook GE’s Jack Welch, another leader whose ascension to the top job didn’t appear all that certain to his contemporaries when he was nominated over a half dozen more “qualified executives” to succeed Reg Jones? I happened to be with him at a small reception at New York’s Stern School of Business when a student asked him what he thought his job was. (She wanted to know what she had to do to become a future GE chief.) “My job is really quite simple,” he deadpanned. “I try to find good ideas, exaggerate them, and spread them around the company.” Oh, is that what it really takes?