Times have changed for would-be CEOs. In the old days, it counted for a lot if you gradually worked your way up to the top of an organization. And it helped to be male, with an Ivy League pedigree. Today, though, according to findings published online at Knowledge@Wharton, "Today's executives are younger, more likely to be female, and less likely to have Ivy League educations. They get to the executive suite faster than ever, hold fewer jobs along the way, spend about five years less in their current organization before being promoted, and are more likely to be hired from the outside."
When business professors Peter Cappelli and Monika Hamori compared executives from the Fortune 100 of 1980 with those of 2001, they noted that women had made considerable progress -- although they still have a lot of ground to gain. While they found no women at all in Fortune 100 top management in 1980, they said 11% of the 2001 list's top managers were female. "Compared to men, the women executives are younger (47 vs. 52), move into executive positions faster (21 years vs. 25 years), and are less likely to be lifetime employees (32% vs. 47%)," the researchers said.
When companies experience scandals or other internal problems, it can be important to hire a bigwig from outside the organization. The researchers cited Tyco
Another noted trend is an increased focus on "skills and capabilities" over other qualifications such as degrees. The study noted EDS
Here are some other notable findings from the report:
- People who can promote themselves effectively tend to get ahead.
- The changes in the makeup of the Fortune 100 over just 20 years is noteworthy, with manufacturing firms making up just 1% of the list in 2001, down from 17% in 1980, and financial services companies skyrocketing from 0% to almost 17%. The change serves as a valuable reminder of how we should never take for granted that certain companies and industries will always maintain their dominance.
- Organizational charts are getting flatter, with the ranks of vice presidents swelling and CEOs, chairpeople, and executive vice presidents thinning out.
- Your hope of advancement varies by the kind of firm you're in. Fast-growing firms tend to promote people more often, while younger firms tend to have the flattest hierarchies and to seek outside talent more.
- There's opportunity in chaos. "In both 1980 and 2001, executives reached the top more quickly in industries that were undergoing structural change," the report stated. "In 2001, for instance, the steel industry offered one of the fastest paths to the top (just over 23 years)." As companies show various top people to the door, they need more.
- Whereas the most-traveled path to the top used to be via marketing and human resources departments, as well as consulting, the best track today appears to be through finance.
So take notes, ambitious Fool. And perhaps pay attention to the bigwigs whom the firms you're invested in hire. They're increasingly hired to get certain jobs done -- look into their past and check their progress to see how they do.
Longtime Fool contributor Selena Maranjian does not own shares of any companies mentioned in this article. She attended Wharton, only now to learn that it might not offer much of an edge in becoming a CEO. Rats.