Not so long ago, the path to the C suite seemed to be relatively well defined: study business, economics or engineering at university before joining a division of large firm, perhaps after a stint at a top management consultancy. Work your way up within the organisation over many decades, developing leadership skills and cross functional management. For a few individuals that were consistently talented and driven (with a sprinkling of good fortune along the way), the coveted corner office was the prize.
Nowadays, not so much – or at least not in the digital and tech space. The CEO role in these industries have come to signify something different – less king of the corporate jungle, more inspirational leader of a tech unicorn. Emphasis is placed on managing a company across geographies, as business becomes increasingly globalised. And traits like agility, innovation and leadership are more valued than tenure or specific functional experience.
“the chance to be a founder or CEO of an early stage venture is creating new types of executive”
Demise of the corporation?
The number of UK tech start-ups doubled in number in the 6 months following the Brexit vote, and the number of new businesses has increased by 55% to 5.4 million from 2000 to 2015. Although largely driven by a rise in self-employment, this can be partially explained by a move away from corporate careers and more towards entrepreneurship. Tech and online businesses are often more scalable than traditional industries, with lower barriers to entry, so the chance to be a founder or CEO of an early stage venture is creating new types of executive.
What makes a tech CEO?
But what makes a successful tech CEO? (aspiring CEOs, take note). To start with, although the CEO doesn’t necessarily need to be the ‘technical genius’, she must have a solid understanding of the tech and the product. But a CEO needs more than just knowing the tech. Mark Josephson, CEO of link management platform Bitly, argues that the most important characteristic of a tech CEO is a deep, unwavering dedication to the product or company vision; “CEOs should lead the company in being passionate about what they are selling or trying to achieve. Without passion, you won’t be able to convince investors that you have what it takes to grow the business or persuade customers that your product is right for them”. The ability to communicate this vision effectively is critical – to potential hires, current employees, investors, and customers. Especially in earlier stage ventures, the ability to build a successful organisationthat works – through hiring the right people and creating a winning culture where employees live by the mission – is a key ingredient of success. Research by the Harvard Business Review found that C-level jobs in general have shifted toward business acumen and ‘softer leadership skills’, such as communication, collaboration and strategic thinking.
Different paths to success
As the world of business has shifted, CEO’s jobs have become more complex, faced with navigating digital transformation and fast moving technological changes as well as the international context. Does this mean that CEO’s are taking a different path to success? Sort of.
“product management is becoming an increasingly common background for tech CEOs”
Perhaps surprisingly, for the largest firms, longevity is still valued. In a sample of 220 of the largest US companies, only11% of CEOs were appointed as external candidates, meaning that most had already been working at the firm for some years. Finance or operations were popular routes, with 31% of CEO’s having held the CFO post. However McKinsey have found that product management is becoming an increasingly common background for tech CEOs, due to the increased focus on data management. Silicon Valley heavyweights like Marissa Mayer (CEO of Yahoo), Sundar Pichai (CEO of Google / Alphabet) and Satya Nadella (CEO of Microsoft) all came from product management backgrounds.
Within the start-up scene, there’s a perception that tech CEOs are t-shirt and jeans clad mid 20s whippersnappers. Yet according to America’s Kauffman Foundation, the average and median age of US-born tech founders is 39, with twice as many over 50 than under 25 – many had come from diverse backgrounds including both corporate entrepreneurship. Take Reed Hastings, Netflix’s CEO: he was 37 when he launched the popular online streaming service.