How does one become a chief executive officer (CEO)? Is there a certain blueprint to follow in order to attain this prestigious title? What professional and personal traits are necessary for the position? Technically, anyone can fill the chief executive slot, but typically those who have distinguished themselves in some manner and have strong leadership characteristics end up getting the job.
There are no laws stipulating that chief executives must have attended college or that they must have a master's degree. However, very few people make it to the top of the corporate ladder these days without some sort of formal education.
Why is having a formal education so important? There is no simple answer to that question; however, completing university courses does provide one with exposure to a number of disciplines and causes a person to think, interact and share ideas with others, which are valuable experiences for a CEO to have. A degree from an Ivy League school or other top-tier institution is sometimes given even more credence because of the competitiveness that often accompanies such programs.
Some big-name CEOs with degrees from top-tier schools include the following:
- Meg Whitman, former CEO of eBay (Nasdaq:EBAY) – undergraduate degree from Princeton, Master of Business Administration (MBA) from Harvard
- John Bogle, former CEO of The Vanguard Group – undergraduate degree from Princeton
- Roberto Goizueta, former CEO of Coca Cola (NYSE:KO) – undergraduate degree from Yale
Many CEOs have some form of business degree. Note, however, that the degree could be in economics, management, finance or another business-related discipline. Some well-known chief executives, however, dropped out or never went to college:
- Richard Branson, CEO of Virgin Group
- Michael Dell, CEO of Dell Computer (Nasdaq:DELL)
- Barry Diller, CEO of IAC/InterActiveCorp (Nasdaq:IACI)
Having a degree from a top-notch school and an exceptional knowledge of the industry in which the company operates are great qualities to have. However, those qualities in and of themselves don't guarantee that a person will make it to the top of the corporate ladder. Personality traits may also play a role in an individual's ability to attain chief executive status. Typically, CEOs are:
- good communicators, deal makers and managers
- extroverts who are eager to go out on the road and tell their company's story
- able and willing to present a cohesive vision and strategy to employees
- able to garner respect
Jack Welch, former chairman and CEO of General Electric (NYSE:GE) is a great example of an extrovert who was able to garner respect, and who had a vision even as a low-level engineer at General Electric. While there, a higher-up took notice of his abilities, and the rest is history.
Generally speaking, a person must have a great deal of experience in the company's field in order to become CEO. A chief executive's job is to provide vision and a course for the company to navigate, which is difficult to do without extensive experience and a working knowledge of the potential risks and opportunities that lie ahead for the company.
Prior senior-level managerial experience is also generally a must. After all, how can an individual be expected to run a multimillion- or multibillion-dollar company with hundreds or thousands of employees unless he or she has previous experience managing and/or overseeing other employees?
A great example of someone who worked his way up the ranks is, again, Jack Welch. Welch joined General Electric in 1960 as an engineer and worked his way up to vice president and vice chairman before becoming CEO in 1981. By the time he got there, he knew the company and the landscape well. He had also previously held a high-level position.
Another example of a chief executive with a great deal of experience in his field is Eric Schmidt, former CEO of Novell and executive chairman of Google (Nasdaq:GOOG). Schmidt worked in research at Bell Labs early in his career. In addition, he served as chief technology officer at Sun Microsystems. These experiences helped him land his chief executive positions and become the success story he is today.
Then there's Andrea Jung, former CEO of Avon Products (NYSE:AVP). Jung has a sizable amount of experience in retail. After graduating from Princeton, she worked for Bloomingdales, where she was part of the management trainee program. From there, she also worked at Neiman Marcus, another high-end outfit where she served as executive vice president. When she finally came to Avon, she started as a consultant and then moved up to chief operating officer (COO) before finally landing the chief executive position.
Anne Mulcahy, former CEO of Xerox (NYSE:XRX), is another great of example of someone with a significant amount of experience in her field. In the mid-1970s, she started as a sales representative. She later worked as a vice president in human resources before climbing to senior vice president. All told, it was about 25 years before she became a chief executive - by that time, she knew the business extremely well.
The Bottom Line
Although some individuals are born leaders, most are made. Becoming a chief executive typically takes years of hard work. Extensive experience in the company's field is desirable and some companies tend to prefer those with degrees from upper-tier schools. Finally, those that have worked their way up from a low level within the organization may have an advantage, as they arguably know the company better than any outsider ever could.