How to become a CEO

Busi­ness and hier­ar­chies might change, but as Matthias Kip­ping, author of the just-pub­lished book Defin­ing Man­age­ment, notes “there’s always some­one who needs to be at the top”, explain­ing per­haps why the chief executive’s role is just as cov­et­ed as ever.

How­ev­er, with the chal­lenges chief exec­u­tives face arguably at their great­est, is the route up the cor­po­rate tree chang­ing too? Do aspir­ing chief exec­u­tives real­ly need to climb all the branch­es from the bot­tom up, or can those in adja­cent trees more eas­i­ly swing across and from a younger age?

The new path

Dis­count­ing small busi­ness entre­pre­neurs, who are chief exec­u­tives by default, evi­dence does indi­cate the chang­ing nature of the role, to be more social media-dri­ven and brand-ambas­sado­r­i­al in nature, is widen­ing the scope of those who can apply.

Exec­u­tive search firm Hei­drick & Strug­gles found the pro­por­tion of Euro­pean chief exec­u­tives with a mar­ket­ing back­ground grew from 15 per cent to 21 per cent between 2011 and 2015. Dave Lewis, Tesco’s chief exec­u­tive, was Unilever’s mar­keter respon­si­ble for Dove’s Real Beau­ty cam­paign, while Sainsbury’s chief exec­u­tive Mike Coupe is for­mer Tesco mar­ket­ing direc­tor.

While age has stayed more sta­t­ic – half of all chief exec­u­tives glob­al­ly are in their 50s, accord­ing to Cap­i­tal IQ – the UK now has more chief exec­u­tives aged under 40 than Italy, Ger­many and France.

“CEOs are a broad bunch, but there’s an appre­ci­a­tion they no longer need to ‘serve their time’ like they used to,” says Bren­da Trenow­den, for­mer man­ag­ing direc­tor of Lloyds Bank­ing Group. “Nowa­days, being at one com­pa­ny all your life could work against you. They need broad­er expe­ri­ence. They have to be bet­ter com­mu­ni­ca­tors, more attuned to dif­fer­ent groups, grasp tech­nol­o­gy bet­ter and be more agile.”

Michael Bar­ring­ton Hib­bert, founder and chief exec­u­tive of head­hunters Bar­ring­ton Hib­bert Asso­ciates, says: “The net is being cast wider. Inter­na­tion­al expe­ri­ence is much more high­ly regard­ed due to the glob­al nature of the role, as is hav­ing a deep appre­ci­a­tion of dif­fer­ent cul­tures and speak­ing more than one lan­guage. Being a CEO now is like being a politi­cian – the skills are chang­ing.”

And it’s this more con­sul­ta­tive, lis­ten­ing aspect to the role that Ms Trenow­den argues could spell the biggest change of all by open­ing up the chief exec­u­tive role to more women.

Ms Trenow­den is also glob­al chair­woman of the 30% Club, which cam­paigns for more exec­u­tive diver­si­ty. Cur­rent­ly only 4 per cent of For­tune 500 com­pa­nies have female chief exec­u­tives and there are just sev­en in FTSE 100 firms. But she’s clear the evolv­ing chief exec­u­tive role will show­case female tal­ent. “There’s no sin­gle CEO pro­file any­more, but build­ing teams, col­lab­o­rat­ing and lis­ten­ing to more voic­es are lead­er­ship traits that will make women more vis­i­ble,” she says.

It’s a view Angela Mid­dle­ton, chief exec­u­tive of Mid­dle­ton Mur­ray, one of the largest appren­tice­ship and train­ing providers in the UK, sup­ports. She says: “CEOs aren’t man­agers; they are lead­ers and strate­gists. While the role encom­pass­es many things, if you can’t put a team togeth­er, CEOs are in trou­ble. It’s the most cru­cial task.”

Is the route to the top really open to all?

“It’s not yet quite so sim­ple,” says Mr Bar­ring­ton Hib­bert. “CEO choice is down to what strat­e­gy needs pur­su­ing at that par­tic­u­lar time. It can favour want­i­ng a steady hand just as much as new blood,” he says.

“Share­hold­er approval still depends on track record. The trans­for­ma­tion Tid­jane Thi­am did as CEO at Pru­den­tial is what got him his cur­rent CEO job at Cred­it Suisse. By com­par­i­son, Microsoft has nev­er recruit­ed a CEO from the out­side.”

One chief exec­u­tive who knows what it’s like to reach the top for the spe­cif­ic skills the organ­i­sa­tion want­ed at that time is Stephen Robert­son, chief exec­u­tive of the Big Issue Foun­da­tion. He began his career sell­ing records at Our Price, but switched to the char­i­ty sec­tor, to apply his retail nous there, even­tu­al­ly grow­ing Shelter’s char­i­ty shop port­fo­lio.

Mr Robert­son says hard finan­cial suc­cess got him noticed by a head­hunter. “It was all about what I’d demon­strat­ed,” he reflects. “Com­mer­cial­i­ty mat­tered. Yes, a CEO is about rela­tion­ship build­ing, but it’s hard to demon­strate this at inter­view, so finan­cial back­ground has sway. Hir­ers want to remove the spec­u­la­tive ele­ment that tak­ing on a CEO can be.”

It’s per­haps not sur­pris­ing that a head for fig­ures is still a trait most chief exec­u­tives share. Accord­ing to 2016 research by recruit­ment firm Robert Half, more than 50 per cent of FTSE 100 heads have a finance, account­ing or finan­cial ser­vices back­ground and 25 per cent are ex-accoun­tants.

Even when chief exec­u­tives appear to be left-field choic­es, there are often clear rea­sons they’ve been picked. Rus­sell Long­muir is chief exec­u­tive of the British Qual­i­ty Foun­da­tion (BQF). On paper he typ­i­fies the open­ing up of the chief exec­u­tive role. He’s ex-con­sul­tan­cy – KPMG and IBM – and wasn’t an inter­nal can­di­date being groomed for the role.

But he says: “My back­ground is pro­fes­sion­al ser­vices and BQF is effec­tive­ly a busi­ness-to-busi­ness ser­vices organ­i­sa­tion. When I went for the job, there were oth­er peo­ple with spe­cif­ic ISO-com­pli­ance and head of qual­i­ty back­grounds, but at the point I joined, the strat­e­gy for BQF was ser­vice to mem­bers, which my back­ground has been all about.”

Rise of the meritocracy

It’s worth not­ing that even those with a pedi­gree of chief exec­u­tive-ships behind them are still ner­vous about their suit­abil­i­ty. When it comes to FTSE 250-lev­el roles, Mr Bar­ring­ton Hib­bert still argues hold­ing an MBA from a respect­ed busi­ness school mat­ters, while get­ting a chief oper­at­ing offi­cer role – some­thing he calls the “CEO-des­ig­nate” – is also a good bet.

Ms Trenow­den agrees. She says: “For any aspir­ing CEOs, espe­cial­ly females, being in line of sight is as much the route to the top as any­thing else and that means get­ting on to exec boards, then mov­ing up from there.”

She con­tends that Ali­son Brit­tain, chief exec­u­tive at Whit­bread, made the seem­ing­ly impos­si­ble jump from bank­ing pre­cise­ly because of her retail bank­ing exper­tise, but also her board­room pres­ence over a 20-year peri­od.

But, if any­thing has changed, per­haps it’s that mer­i­toc­ra­cy is bet­ter applied and that poten­tial chief exec­u­tives will be giv­en a shot, just as long as they don’t want it too fast. “I joined as a con­sul­tant, was noticed, got giv­en train­ing and then moved up, and got noticed some more,” says Oliv­er Har­ris, chief exec­u­tive of resource solu­tions at Robert Wal­ters, of his 16-year route to the top.

“Being bru­tal­ly hon­est, I didn’t think I’d be CEO, but mov­ing up to team-leader roles, MD roles and exec­u­tive roles grad­u­al­ly gave me respon­si­bil­i­ty. I’m a firm believ­er that the role is chang­ing. Nowa­days if you’re a CEO with a tra­di­tion­al out­look, you’ll be left behind.”

Arguably diver­si­ty of think­ing will be the skillset cur­rent and future chief exec­u­tives will need more than any­thing. It’s a skillset that implies age, gen­der and old-school net­works will become less impor­tant.

“Once you’re a CEO, you can’t bluff it,” says Mr Robert­son. “Some see this as a need for expe­ri­ence, but I have a more pos­i­tive view. Younger peo­ple want to make a dif­fer­ence and from an ear­li­er age. To me, that they are ‘both­ered’ is a good thing. Being both­ered will come to define the best CEOs of the future.”

Profile of a career CEO

Mark Goldring, chief exec­u­tive at Oxfam, could be con­sid­ered a career chief exec­u­tive. This is his third post, hav­ing pre­vi­ous­ly been chief exec­u­tive at Men­cap and VSO.

But, despite his envi­able expe­ri­ence, he admits he was con­vinced he’d be next for the chop at every round of inter­view­ing for Oxfam. “I always felt some­one would expose what I didn’t know or that they’d find some­one bet­ter,” he says.

What he was con­fi­dent about though was his track record prov­ing he’d coped with chief exec­u­tive jobs with an ever-larg­er scope each time, even though for both Men­cap and Oxfam he was an exter­nal can­di­date.

“At VSO, I was already there. I joined as a vol­un­teer. At the time it was more impor­tant I knew about the detailed oper­a­tional side rather than being a ‘leader’,” he says. “For the next two CEO jobs though, I’ve been appoint­ed for being able to deliv­er a vision.

“Mov­ing to Men­cap was tough­est for me. I knew lit­tle about dis­abil­i­ty, but I was using my ‘run­ning-an-organ­i­sa­tion’ skills. The learn­ing curve was phe­nom­e­nal.

“Char­i­ties do tend to recruit more out­side CEOs, per­haps because they have a greater sense of fair­ness and trans­paren­cy, and look hard­er at people’s skills more close­ly. But the role of the CEO is def­i­nite­ly chang­ing. It’s about deliv­er­ing a pur­pose and con­tin­u­al­ly rein­vent­ing to remain rel­e­vant. A CEO is the cus­to­di­an of the vision, vital­i­ty and health of a busi­ness.”