Organizations looking for new CEOs typically prefer to hire individuals with a depth of experience and who have been CEOs at other companies. A recent study has determined that this is not always the wisest course of action.
Researchers Burak Koyuncu and Monica Hamori have found that the average return on assets for CEOs who have transitioned from one CEO position to another was 48 percent lower than for those who had no prior CEO experience. New CEOs performed better if they had worked in a broader variety of positions before taking the helm.
The potential pitfall of hiring experienced CEOs is that they may bring into a new organization fixed assumptions about how tasks should be done. They try to apply old solutions to new problems. They may lack an understanding of the new company’s culture, its markets and its employees. According to the researchers, “The greater the opportunity for acculturation, the greater the chance the company can avoid falling into the CEO experience trap.”
Women are often overlooked for high-level positions. In fact, only 4.5 percent of Fortune 1000 CEO positions are occupied by women. This trend is gradually changing with successful new leaders like Sheryl Sandberg of Facebook. Her book “Lean In” describes the special challenges women face as they move up the corporate ladder.
More than half of the business students at CSU Stanislaus are women, and in an effort to encourage its female students to believe in themselves and to reach higher, CSU Stanislaus holds an annual Women’s Leadership Forum. This year, the focus was on developing tomorrow’s leaders. Four successful women CEOs or presidents talked to students about their career paths and their tips for success.
The panelists were: Sharon Silva, president and CEO of the Turlock Chamber of Commerce; Lynn Dickerson, CEO of the Gallo Center for the Arts; Martha Connor, president and CEO of DirectLine Technologies; and Bev Finley, past CEO of the Stanislaus Medical Center. All four had very diverse career paths, but they all were strong women who had overcome any challenges that were put in front of them. They believed in themselves.
Connor explained that what best prepared her for leadership was the development of her critical thinking skills. She explained that being a successful CEO means that you need to be a good problem solver. She also emphasized that it is important to have a great mentor. A mentor could be a boss, a colleague or friend. A good mentor needs to be positive and accessible — only a phone call away.
What do I tell my business students who want to be CEOs someday? Finish your undergraduate degree and then think about a MBA. Believe in yourself. Learn from your mistakes and pick yourself back up. Set goals. Pay your dues — it may take years. Be disciplined. Always do your best work. Keep aiming higher!