Single-Company CEOs, Where Are You?

In some ways, the C-suite at the nation’s largest firms hasn’t changed over the last 40-plus years. In 1980, the average CEO was 55 years old, with about 28 years of work experience—no different from today.

But where the big boss spent those years has changed dramatically. According to a new analysis of Fortune 100 firms, only 19% of modern CEOs have spent their entire tenure at just one firm, a precipitous drop from 44% back in 1980. This figure doesn’t surprise some experts, but does raise the issue of how much of a learning curve the new leaders may have—and how much time they will spend trying to get there. “There’s so much disruption going on that boards are looking for a fresh set of eyes,” says John Long, North America retail sector leader in Korn Ferry’s Retail and Consumer practices. Among large retailers, Long can think of only one recently appointed CEO who’s spent most of their career with their company.

In a sense, a CEO’s career path tracks with most everyone else’s. For workers age 25 and over, the average tenure for men is slightly more than 5 years, and for women slightly less, according to the US Bureau of Labor Statistics. The percentage of employees who’ve worked for the same employer for 10 years or longer also has declined gradually across gender and age groups. Experts say that many employees, rather than gain experience rotating through different parts of a single company, have switched employers instead.

Two other factors have played large roles in the increasing scarcity of single-firm CEOs. First, boards have become more appreciative of outside CEOs’ diverse experiences, says Tierney Remick, vice chairman and co-leader of Korn Ferry’s Global Board and CEO practice. Directors want to hire CEOs who have successfully navigated challenging business environments, completed mergers, or expanded a business into new markets—all things in which an internal hire may not have experience, depending on their firm’s circumstances.

The second factor is more practical: A firm may not be around indefinitely, at least in its original form, which can cut tenures short, whether of executives or other workers. “So many organizations have changed, evolved, been merged or sold, or divested many divisions, all of which has made it less possible for an executive to stay, be as successful, and find the work as interesting,” Remick says.

Experts caution that as outsider CEOs try to learn their new company, they can stumble. “It can take a new CEO a year just to learn where to get coffee and park a car,” says David Vied, global sector leader of Korn Ferry’s Medical Devices and Diagnostics practice. More seriously, a new boss requires time not only to learn the organization, but also to build trusting relationships with employees at all levels. Outsider CEOs might be tempted to just throw money at issues when spending might not be the most effective option. “They can’t exact their will without writing checks,” Vied says.

Instead of bringing in an outsider CEO, some boards, recognizing that they need fresh talent and perspective, might recruit and groom executives one or two levels below the top position. For their part, outsider executives, whether they are brought in at the CEO level or slightly below, have to find the right balance, Remick says. They must bring new thinking to the organization without creating unnecessary conflict, tension, or misalignment. “Adaptability is key,” she says.

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