CEO for a Global Fortune 100 Company

While I understand that much has been written, argued and debated regarding this topic, I'll appreciate your experiences, view-points, suggestions and comments.

(1) What are the experiences required to qualify for a CEO at a billion dollar global enterprise? What are the "must have" functional expertise to be at the hot seat? How important is it to have a global exposure? What kind of achievements are looked upon when considering their credentials? An elaborate answer would be of immense help.

(2) What are the thoughts that come to the mind of the Chairperson, Shareholders and Board of Directors when they look at a candidate for the CEO position at a Fortune 100 Company?

(3) Most of the CEOs are hired internally. When and why does the Directors look for an external candidate? Why would they prefer a candidate who is new to the organizational culture, challenges, business(es), processes, ...?

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Comments (18)

Aug 12, 2014 - 5:25pm

It has to do with finance. The truth of the matter is; there is no right answer to his question. Becoming a CEO for a billion dollar enterprise has more factors involved than getting recruited for an IB analyst gig. Your school, and your background matters to an extent, but your performance, and your connections are what will ultimately determine your worth. Some CEOS start working in the same company, and work their way up; others are recruited by companies for their problem solving abilities (Marissa Mayer, Hubert Joly) but there is no "must have" list.

I think- therefore I fuck
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Aug 12, 2014 - 6:10pm

Why don't you shake off the lazy and go ready some CEO bios.

The answer is that there is no right answer. Careers aren't linear, so there is no secret formula.

"Better to remain silent and be thought a fool than to speak out and remove all doubt." --Abraham Lincoln
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Aug 18, 2014 - 4:06pm

OkComputer:

Why don't you shake off the lazy and go ready some CEO bios.

The answer is that there is no right answer. Careers aren't linear, so there is no secret formula.

=1. Also agree with @"Dingdong08" that Jobs or Ellison are atypical.

Winners bring a bigger bag than you do. I have a degree in meritocracy.
Aug 13, 2014 - 1:11pm

hmmm. Let me list some of the renown CEOs. Do add to it, if you can recall some of the great names. I'd love to hear them, especially the ones who are known for their turn-around management/success

Apple's Steve Jobs, IBM's Louis V Gerstner, Yahoo!'s Marissa Mayer, Carlson's Hubert Joly (as suggested by "worklikemachine") and Oracle's Larry Ellison.

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Best Response
Aug 13, 2014 - 2:27pm

There's just far too much variation to say there's a single path to, or skill set(s) needed to be, a CEO at any company, F100/500/1000 or private companies. School doesn't really matter other than it may have gotten the person into a good career track out of undergrad or grad school. Look at the F500 list's CEO's and check out where they went to school. It's all over the place and not just concentrated at Ivies or similar schools. Wall Street and MBB consulting (maybe big law also) are probably the only fields where top schools are so concentrated. Don't get me wrong, you're not going to see community college guys for the most part but not everyone went to Harvard and there's a good chance you'll see state schools, especially when the companies are in that state. Maybe they started in consulting or banking but not necessarily.

CEO's typically work their way up in a company and see many different aspects of the company but can come from a finance, marketing, or operational background role. It depends on what the company concentrates on. For example P&G is a rock star marketing machine so they'll probably lean towards guys with marketing backgrounds who work their way up the executive ranks. A more manufacturing or logistics based company may lean towards guys with deep experience in operations because they need to understand that to run the company. A hospital group will probably lean towards an M.D. with an MBA.

In today's world you'll most likely need to have international experience but the company will see to it that you gain some international experience when you hit a certain level. I have a friend who's being groomed for the c-suite at a very large software company (we're around 40 to get the idea of his experience level) and a few years ago the company sent him to Asia and next up he'll probably be in Europe, then head back to the States. That doesn't mean he comes back at 42 and is in the c-suite and probably has 10 years before that could become a reality if it ever does, but the company purposefully sent him abroad to develop those skills.

Executives also can work their way up through the ranks and become CEO or be recruited from the outside. It completely depends on the situation of that company at that exact moment. Maybe a single guy's been groomed for years to take over for the CEO, the company's doing well and the CEO retires. He's in. Maybe the company's doing poorly and they want new blood (Yahoo and Mayer). Sometimes a ridiculous amount of talent becomes available at once because a CEO retires and they pick one of a few candidates from within. The guys who don't get the top job know it's not opening up anytime soon so it's expected they'll leave. See GE when Welch left. Immelt became CEO, McNerney went to 3M->Boeing (overall good) and Nardelli went to HD then Chrysler (not so good).

I don't know if Jobs and Ellison are good examples of the typical anything. I respect the hell out of them but they founded companies and ended up also being very good at running the companies (although Jobs had his Apple hiatus). They're so far outside the standard deviation that it's only worth looking at them as unique examples of people.

Aug 13, 2014 - 10:08pm

That's because service industries require credentials almost as much as they require intelligence (and often the types of people those industries attract are people who like to talk about where they went to high school 20 years later).

Large enterprises are led by mostly people who work their way up and demonstrate talent in multiple verticals. Using big oil as an example, if you' are under 40 and have had the same job for more than a few years, you are not on the path to success. The feedback loop is also very long. It will likely be a decade before you realize whether you are on the high road or the low road. And it takes politicking and it takes a degree of luck, certainly

But one thing bankers (of all levels) overlook in those types of jobs is power. A top ~20 exec at a F100 company has it in spades. A banker doesn't. An MD at Goldman may have money and may be a BSD in the office and at the country club - but his decisions impact very few people and his "kingdom" is more like a tiny fiefdom. He can only say "fuck you" AFTER he hangs up the phone. That exec says it before...and got to the golf course way earlier.

Aug 14, 2014 - 11:51am

"Dingdong08"

Now, I'm going to take a deep dive.

(1) International Experience: I don't think residing in a foreign nation and working there for 3-5 years is something the Board of Directors/Shareholders/Investors would be interested in. Many B-Schools offer international placements which enable the students to gain global exposure. Years back, one of the articles I read states that before you gain experience in developed nations, you should work in any of the BRIC nations, especially in product launch, pricing strategy and go-to-market. So, my questions now firms up to -

(i) What kind of international assignments are favorable? What kind of leadership experiences are needed? Everybody talks about turn-around success, building teams, launching brands, revenue growth, increasing shareholder value and so on. Some even go down the road to become an entrepreneur and sell her company after making it a multi-million dollar baby. How important are these successes?

(ii) You mentioned -

"I have a friend who's being groomed for the c-suite at a very large software company (we're around 40 to get the idea of his experience level) and a few years ago the company sent him to Asia and next up he'll probably be in Europe, then head back to the States. That doesn't mean he comes back at 42 and is in the c-suite and probably has 10 years before that could become a reality if it ever does, but the company purposefully sent him abroad to develop those skills."

----------> When the company was grooming your friend for the C-Suite, what kind of assignment was he in? Sending him to Asia and Europe, and then bringing him back to US means the company wanted him to work on assignments with multi-faceted challenges in a diversified cultural environment. What talent or skill set (including functional) were they grooming him on? Have we got any idea about the kind of responsibility he was been entrusted upon? I'm just trying to understand the company's mindset when they groom people for the hot seat.

(2) How about the Corporate Governance part?

(3) There are a lot of firms who boast of preparing candidates for the hot seat. Are they REALLY worth it?

Aug 18, 2014 - 5:14pm

Like I said, there are too many and varied routes to ascend to the CEO of any company, F100, 1000 or just a larger private company for anyone to say this is the absolute, best and/or only way to go about it. @"DickFuld"'s comments are accurate. Other than briefly stepping into operational roles, I've always been on the investing side in the lower MM of PE so these are just observations I've seen from doing deals with F500 co's and having friends at them:

1. International experience: it's not so much that a Board is going to look at a candidate and start ejaculating because a candidate spent 4 years working in Singapore 10 years ago but for large companies (leave aside financial firms, they're unique) with operations all over the world, having international experience has helped, and is becoming more critical, to advance within them. Does the lack of international mean someone's never going to advance? No, and like I said the routes are varied and many, but it's a more important factor now. It's also a way for someone to run an international division and essentially be the CEO/President for APAC or EMEA before they're considered for the top job back at HQ. Having lived abroad and doing a lot of business in other countries, simply being immersed in another culture and seeing their way of doing business helps to make you realize, and not just intellectually realize but truly know, that business is done differently in other areas of the world. I'm not saying one is good and one is bad, they're just different and you have to be able to understand that.

Regarding BRIC's vs anywhere else, I don't think that matters. Maybe it will in the future, but living in a BRIC country can not be easy and I don't think it's important. I've been to the I&C a lot and can say that living in India would be a pretty tough experience if you're from a Western developed country and China would be tough culturally and have a language barrier (amongst many reasons). Brazil would actually be cool but you'd have to fluent in Portuguese, and I'd be afraid I'd get stuck behind the front lines in Russia. And I'd actually not start a career in a developing country because those countries tend to have a very unique way of doing business and it will be tough to not pass paper bags full of RMB around if that was the first way you saw business operate.

I'm sure turning around a division would be great but if the company's doing well, driving growth in a healthy division would be just as good. Whatever you do specifically, you have to excel at it and stand out, domestically or internationally, and you probably won't be in the position to say that "Our underwear division in APAC x J is losing market share and revenue, can I go there for 3-5 years and clean up the mess?"

(ii) Regarding my friend? I have no real idea. Looking at LinkedIn, he was head of strategy & planning for APAC & J and I saw he just had a group compliance officer role added. Another friend at a major CPG co was a senior brand manager for their euro HQ (US based), then was made Sr. Marketing Director when he came back.

I could list off a few more friends and their titles who are probably candidates for the c-suite and are being brought up the ranks but they're by no means guaranteed to get there. Becoming a c-level at any company is exceedingly difficult at any company, let alone F100 or 500's. There are so many factors to take into account that just being good and following the career track you think is correct is nowhere near enough. Luck, politicking, timing, etc are all just as important and somewhat your of your hands.

2) Corporate governance? No idea specifically. You just pick that stuff up as you go along from what I've seen in other people and how I've learned it myself. If a person can't figure that out they're getting nowhere near senior management even.

3) Companies can prepare employees and put them into the position to advance to the c-level but like I said, it's very, very tough to make it to the top in these massive organizations. Just because an individual is identified as a top performer at let's say 28 and the company wants to put him into a track to have the possibility to make it to or near the top, there are only 100 CEO's in the F100. That's 100 people out of 310MM people in the US. Pretty shitty odds.

Aug 14, 2014 - 3:05pm

1. Make a lot of money for your firm, ideally in the primary profit driver of your firm
2. Everyone needs to respect you...if they either like you or fear you, that's another critical component
3. The persons understands how to motivate people
4. The board wants to know you can be trusted to drive the business to the next level, so they want you to have vision and be able to execute. This should have been demonstrated in #1
5. Usually, you should be seen as the low risk choice that others will work for as should be understood from #2

Aug 14, 2014 - 4:27pm

Agree with everything said above.
I'll just add that working for McKinsey should be your top priority if you want to become a CEO one day.
It's absolutely not a requirement but a lot of people understate the power of that brand.
Just look at McKinsey alumni and you'll see what I mean, there isn't another company that score that well in grooming CEOs.
Now thinking that you would just have to do 4 or 5 years at McKinsey to become a CEO would be pipe dream, but statistically it's your best shot.

Aug 18, 2014 - 7:30pm

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