What it takes: Common characteristics of top CEOs
In 1996, Dr Elisabeth Marx conducted a study, analyzing the backgrounds of the CEOs of the FTSE 100 Companies. In 2007, Dr Marx also explored the CEO profiles of the Fortune 100 Index, allowing for the first time a transatlantic comparison of top business leaders. This study provides a compelling snapshot of the top CEO’s in Mexico and compares the results to those obtained by Dr Marx.
These Chief Executives populate the financial and social pages of newspapers and magazines in the country. They make decisions that routinely affect millions of people, influencing economic, social and environmental outcomes. So who are they today and who will they be tomorrow? What are their common characteristics and how are those characteristics changing?
As the country continues to change rapidly, what is already defining the new breed of CEO’s in Mexico?
Two numbers are presented for Mexico’s CEO’s in order to identify current trends. We show the totals and have also isolated the numbers for the newest CEO’s: A group of 47 with 5 years or less on the job.
In the past few years we have seen dramatic market and economic driven changes in the strategic direction of many organizations. The great recession and the intense competition have forced many companies to focus on vertical industries in order increase their level of innovation as well as product and market expertise. This
has brought consolidation in many industries and a need toincrease global reach in order to achieve the volumes required to provide competitive prices. These changes have shifted the focus from regions to industries demanding executive talent with specific industry and product expertise that can perform across borders. There are already instances o foreign companies in the Expansion 500 that no longer have a country managing director and instead have leaders for specific business units reporting directly into regional or global heads.
Let’s look at how these broad trends are reflected in the results of the study and how they translate into current and future talent and leadership requirements for executives in Mexico.
The term globalization has been thrown around for decades but it has never applied as much as it has in recent years as organizations become more focused and specialized within a specific industry or product and reach beyond their traditional regions of business. Just looking at the numbers can be a bit misleading. One can assume that the increase in foreign nationals running the Expansion 100 companies is a sign of Mexican nationals losing control. However it is clear that the new breed of CEO’s and executives in Mexico are better prepared and better educated in a global environment than ever before. 54% of the newest CEOs have performed assignments outside of Mexico and 53% hold Master’s degrees from institutions outside of Mexico.
Executives who have been successful in international assignments have usually excelled in understanding the environment, leading visionary change, leading results and mastering complex business problems. Competencies that coupled with already acquired industry expertise translate into a small learning curve and quick results.
Senior executives are a more diverse group than ever before and the impact goes beyond the leadership teams. Middle managers and staff members are being exposed to global management techniques, metric driven environments and matrix organizations that are preparing them to be the next generation of leaders in or outside of Mexico.
Increased focus on key industry and market expertise
One of the most surprising trends is an increase of CEOs in Mexico that are being promoted from within the company with great importance given to company culture, industry specific experience and the leadership skills that are acquired while working abroad. It is important to note that internal promotions don’t necessarily mean internal to Mexico or the region.
The study performed in 2007 by Dr Elisabeth Marx suggests that:
”… the FTSE 100 Companies in the UK and Fortune 100 Companies in the US take a very different approach to CEO selection. Whereas Fortune 100 Companies seem to value wisdom, develop better internal grooming and succession planning and have higher educated CEOs, FTSE 100 Companies put greater focus on international experience, welcome foreign talent and give ‘young guns’ a chance”
Our results suggest that the Expansion 100 companies share a bit of both with a high value on wisdom as evidenced by an average tenure higher than both the Fortune 100 and the FTSE 100 and strong internal grooming and succession planning that begins early and includes elite foreign education and opportunities to gain international experience.
The Expansion 100 companies have more Super CEOs (45 and younger) than both the Fortune 100 and the FTSE 100 put together but they have been well groomed and prepared for succession.
The number of CEOs that are members of the controlling families of the Expansion 100 is declining. In some cases it’s just a consequence of a business being sold or merged with an international conglomerate and others are simply handing the keys to the kingdom to professional management with family members maintaining a strong presence in the board room.
There is no denying that advanced degrees from foreign institutions play a big role in the development of the new breed of CEO’s. 60% of the newest CEOs hold Master’s degrees or PhDs from foreign universities. The surprising trend is the rise of the PhD educated CEO. All of the CEOs with a PhD are part of the newest CEOs group.
Women on the rise
Perhaps the common trait between the US, England and Mexico is the one that we can brag the least about. A very small number of Women occupy the top job.
In Mexico only Nicole Reich (Scotiabank Inverlat), Carmina Abad (Metlife) and Grace D. Lieblein (General Motors) make the distinguished list in the Expansion 100 but Paula Santilli (PepsiCo Beverages) is not too far behind. Women are on the rise and while the numbers remain very low the trend is positive. All four were internally promoted and all four have extensive international experience with strong ties to Latin America.
Preparing for the future
The motivation behind the research presented in this article is part of our role as a leadership advisory firm providing senior-level executive search and leadership consulting services, including succession planning, executive assessment and development, talent retention management, transition consulting for newly appointed executives, and M&A human capital integration consulting. For almost 60 years, we have focused on quality service and built strong leadership teams through our relationships with clients and individuals worldwide.
Jose Ruiz is Principal and Executive Recruiter in Heidrick & Struggles. You can share your views of this article or aything related to leadership or executive search at: email@example.comHeidrick & Struggles International, Inc., (Nasdaq:HSII) is the leadership advisory firm providing senior-level executive search and leadership consulting services, including succession planning, executive assessment and development, talent retention management, transition consulting for newly appointed executives, and M&A human capital integration consulting. For almost 60 years, we have focused on quality service and built strong leadership teams through our relationships with clients and individuals worldwide. Today, Heidrick & Struggles’ leadership experts operate from principal business centers in North America, Latin America, Europe and Asia Pacific. For more information about Heidrick & Struggles, please visit www.heidrick.com