The Secret: How To Become A Fortune 500 CEO
July 11, 2013-
By Steve Tappin
Chief Executive, Xinfu, Host BBC CEO Guru & Founder, World Of CEOs
Being a Fortune 500 CEO is a privilege and one of the amazing jobs you could ever wish for. It’s also one of the hardest to get, and even harder to do well. Fans of the movie ‘Top Gun’ will remember that only 1 in 100 makes it as an elite naval fighter pilot. In the corporate world, those odds shrink to 1 in 100,000 in major company.
If you want it for the money, prestige and the power, you’re doing it for the wrong reasons and will probably not make it. If the ambition is too much around you, then it’s hard to bring an organization with you. So what is the right fuel? Top CEO Steve Jobs put it as follows:
“We don’t don’t get a chance to do that many things, and every one should be really excellent. Because this is our life. Life is brief, and then you die, you know? We’ve all chosen to do this with our lives. So it’d better be damn good.”
In the corporate world, the CEO job is the ultimate prize. Yet the key to actually getting it is to focus first on becoming an outstanding leader. If you’re in your 20s and 30s, this means committing to a leadership apprenticeship, where you actively seek out as many rich business, life and leadership experiences as you can. Then, by the time you do get that CEO role, you’ll be ready to nail it.
My life’s mission has been to find a better way for CEOs to lead. In doing that, I’ve coached over 500 CEOs, and interviewed thousands of current and aspiring CEOs in the US, Europe and China. The optimal path to becoming a Fortune 500 CEO has changed over the past few decades… here are the 10 secrets which I believe will maximize your chances of becoming one yourself:
(1) Ignore Your Parents; Forget Today’s MBA
Don’t follow your parents’ advice, because although they want what’s best for you, they are typically more conservative. Advice to get a decent education, get a profession, and work for an already well-established and well-known company is rooted in the old world of work. The “job for life” philosophy is also dead, and employers expect you to move faster and get broader experience than people did in the past. Education is important, so get as much of it as you can, as early as you can. However, don’t do an MBA while it’s a Master Of Business Administration. To change my view, it would take better courses to emerge, like an MBL or Master Of Business Leadership. The only exception to this approach is if you are trying to build a network of potential backers for your business idea.
(2) Take more risks in your 20s and early 30s
“It’s a really bad idea to have a rigid life plan,” says Lord John Browne, former CEO of BP, adding “get your hands dirty, and take risks. It’s generally better to do it early.”
You may be very clear early on that you wish to head down the entrepreneur’s path of setting up your own business, but if you choose to go down the deceptively “safer” corporate path, be sure to inject it with your own healthy dose of risk. James Bilefield, President, Digital, at Condé Nast International, argues that now is the time to seize the “adventurous” option: “Every time I’ve moved company, people have thought me mad. I’ve left successful positions with great prospects for riskier options because I get frustrated if things aren’t moving fast. The key thing is to keep life fun and not to get bored. Get out there and take risks.”
Fail fast and fail early. According to Archie Norman, failure not only makes you a better leader, it also makes him more likely to hire you: “By the time it comes to 35, if it’s all gone swimmingly and it’s all pulled through, and you have been mentored by the chief executive and been on programs, that’s fine, but it’s a bit of case unproven.”
Lord Browne told me: “It’s dangerous when a person or a company says that things are so good that they don’t want to do anything or change anything; that’s the time to check out and do it again… The downside risk is lower than you think at any point in your life.”
(3) Dare to go into startups early
There’s also never been a better time to join or create a startup. In doing so, you gain a real-world, accelerated experience of far more elements than you are exposed to in a corporation. On the business side, you get a sense of the challenge of building a brand, marketing, and trying to sell a product to people who don’t know your company. You are likely to recruit people and engage with multiple stakeholders, and probably take early responsibility. So get in on the ground floor of what’s next, rather than wasting your early career in a fading, established, branded giant.
If the startup goes well, it creates so many more experiences. As you grapple with the challenges of growth, you have an opportunity to create serious value. It can also associate you with a killer endorsement: e.g. “I was involved at an early-stage in Google.”
Even if it goes badly, you will gain an first-hand appreciation of what can make a business fail. You’ll realize how important managing cashflow is to any business venture, and how hard it is to get investors to trust you with capital. You are likely to face failure, and the hard reality of relationships going sour with people you trusted. These are all valuable lessons to take with you into your next business venture and into rest of your career.
(4) Work under a great leader as part of a “fast stable”
In the corporate world right now, we have a small number of highly regarded leaders. They include Virgin’s Richard Branson, Cisco’s John Chambers, Diageo’s Paul Walsh, Alibaba’s Jack Ma and Ford’s Alan Mulally. Such iconic figures often set up “fast stables”, with great people around them. What makes their companies fast stables is that you can go there early on in your career to gain hyperspace experience, with great people around you doing the same.
One of the classic fast stables was set up by Archie Norman, who performed such a strong turnaround at UK supermarket Asda, that in 1999 it was acquired by Walmart for $11bn. He attracted and groomed a whole new generation of CEO talent, who themselves went on lead FTSE 100 companies in the UK. These people include Justin King (now at Sainsbury’s), Richard Baker (now chairman of Virgin Active), and Andy Hornby (who, like Richard, led Alliance Boots). Reflecting on what it’s like inside the stable, Archie says: “It will be tough at times, but will take you through the hoop. You want leaders to have come through a variety of different situations who have known failure, who have felt the fire.” If you have the opportunity to work for a similar leader today, as they shake up and transform an industry, then this “CEO apprenticeship” experience is one of the best learnings you can get.
A big priority at the start of your career is to learn the basic technical skills of business as quickly as possible and to find some of your personal limits. An alternative fast stable play is to join a professional services firm. Of these, strategy consulting and global operations consulting firms offer an even stronger background than a quick spell qualifying as an accountant. Like investment banks, consultancies can give you exposure to CEOs and some of their most important problems very quickly, as well as broad cross-industry experience. They also put you under pressure to perform from the get-go.
Brent Hoberman, co-founder of Lastminute.com, consciously took this route: “In my mind, I always knew I wanted to set up my own business. But I went into consulting first for a couple of years to give me an experience base. It also gave me the ability to simplify complex problems and build business models.”
(5) Go global early
If you’re going to go global in your career, then go where the growth is. This means looking to emerging markets – start with the “BRIC” countries of Brazil, Russia, India and China, and then consider the “Next Eleven” (N-11), identified by Goldman Sachs and economist Jim O’Neill as having the highest growth potential. The N-11 include Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, Philippines, Turkey, South Korea, and Vietnam.
So maybe not Iran, but of the above options, I would go for China. It offers unprecedented opportunities – the most populous country in the world, and predicted to become the largest economy. It also presents an aspiring leader with the biggest challenges. To master China, and to understand the difference in history and philosophy, you have to go in and build trust and connection in a country where people are often suspicious, and weighed down by the trauma of their past collective experiences. You also ideally have to do Mandarin.
A learning experience like this brings both joy and personal challenge. Yet, if you can master China, then you have a good chance of being able to make it anywhere. As Frank Brown, dean of Paris-based business school INSEAD, says: “It’s about not going from the US or the UK to Australia for a six-month pub crawl, but going to Tokyo, Beijing, or São Paulo, really experiencing a different culture and trying to get by in a different language. It’s about understanding that things there are much, much different.”
Build up a true global portfolio of experience. Urban pollution aside, how great would it be to have gone and worked in and “breathed the air” in San Francisco, London, Beijing, Rio and Frankfurt, all by the time you’re 30?
(6) Act Like The CEO Today By Applying The 30:30:30:10 Rule
Your first priority in any job is to deliver on your specific responsibilities and objectives. Then comes a massive – yet often overlooked – opportunity to mark yourself out as a future leader. If you can do your basic job well in just 30% of your allotted working hours, then that frees up the rest for the real work.
Dedicate 30% of your remaining time to deepening relationships with your peers, and connecting with and working with the leaders in your organization. Then, critically, you can spend 30% of your time with the CEO’s hat on – thinking about future growth opportunities, and how you could take the company and the CEO to the next level. That still leaves 10% of your working life to have fun!
(7) Boldly Seek Out Leadership Experiences
(a) Business Leadership
The key to business leadership is to learn all the different skills you learn to build sustainable value. Key to getting anywhere near to becoming CEO of a major business will be your success at taking responsibility for driving performance and operations, in a number of significant profit-and-loss accounts. Take direct accountability for business units in the major geographies most fundamental to current and future success, such as the US, China or South-East Asia. Likewise, take ownership of key elements of the company’s growth agenda – ideally a mix of acquisitions, partnerships, new ventures, and key game-changing or future-proofing projects. This will give you an understanding of how to drive super-growth in the future.
Also seek out business leadership opportunities in a number of different contexts, including high growth, steady growth, businesses held under differing ownership models or in turnaround situations. And as the world becomes more multipolar and business comes to interact with wider constituencies than previously, make sure you’ve had the opportunity to interface directly with a range of stakeholders such as shareholders, regulatory bodies and politicians and lobbyists.
Like with picking winning countries, when you’re choosing which industries to work in, stack the odds in your favor by going where the growth and future opportunities are likely to be. Growth industries mean disruption and innovation, and, as Michael Dell said, “learning to thrive in an era of constant change is a competitive advantage that every business leader has to embrace.”
(b) Personal leadership
For most CEOs today, personal leadership is their Achilles’ heel. Many of them are professional managers rather then true leaders. They have the hard skills, but many of them lack the soft skills required to do the job really well.
As a 21st century leader, you should work to build trust and connections with people across cultures. You need to be able to articulate the ambition in your head, including your deeper aspirations and your dream, so that people can believe in you and get behind you. Create an environment where people within an organization can perform at their best, thrive and feel like they can walk on water.
Top leaders have found a way to lead in what is known as a fellowship. Rather than there being a single CEO who insists on signing off every move, this is about a tightly-bonded fellowship of remarkable leaders operating together. The CEO brings in and develops a trusted inner core, encourages frank debate, and devolves decision-making. With deep trust and a shared dream established, the organization can go at hyper-speed. True corporate fellowships are still very rare – there was one at Nokia & Infosys in the 90s, and more recently at Google – and people still talk today about the magic experience it was. As an aspiring CEO honing your personal leadership skills, you job is first to become part of a fellowship, and then to get used to leading one.
(8) Have A Personal North Star And Go on Global Walkabouts
Do you have a cause or just an ambition? Over time, as you rack up these varied experiences and assets, your career mission will emerge and become clearer. As you define your “North Star”, your career becomes less about a list of roles, and more about a set of themes. As Tiger Airways CEO Tony Davis says, instead of a fixed plan, “you need a thread to your life”.
My mission became clear when I was at ICI in my twenties. It was the biggest and most prestigious company in Europe, and yet I couldn’t believe how much self-interest and office politics still got in the way. This is when I became convinced that there must be a better way to run companies. This cause has guided my quest for over 25 years, and later enabled me to form my CEO confidant and coaching business, Xinfu.
I call what happened next my “global walkabouts”. My first one happened at 35, with a sense that I didn’t understand the personal leadership and the human system enough. I spent two years on a quest to meet the best 200 people in the area of human development. I met neuroscientists, psychologists, physiologists, and spiritual teachers, trying to find the best in the world in each of these fields, so that I could develop my own system.
Then, in 2008, I interviewed 200 chief executives for my first book, ‘The Secrets Of CEOs’, and my quest then was to find out how the top CEOs balance business, leadership and life. My last walkabout came in 2011, for a follow-up book ‘Dream To Last’, where I met 200 Chinese CEOs in a fascinating journey to work out the Chinese Way. Each of these global walkabouts shifted my mindset, beliefs about leadership and really moved me along with the mission.
So, how clear’s your North Star, and what would be your two or three walkabouts?
(9) Build and nurture your personal brand and network
CEOs have been slow to adopt social media, slow to realize that the whole world has changed, and slow to create a personal brand that magnifies them across a global network. Into the void, there’s now something of a gold rush taking place, where, as an up-and-coming leader, you can build a brand in months, rather than years or decades.
Your personal brand should be based on the delivery of value and ideally you become a talent magnet. Aim to be the thought leader in your industry or niche. As you build your followership, you may question whether there is any real value in the many peripheral – and sometimes superficial – personal and professional acquaintances that such networking efforts may bring you. Reid Hoffman, founder of LinkedIn and author of ‘The Startup Of You’, argues that there is, citing research that that your “weak ties” are the glue in your professional networks, and are actually more likely than your close “allies” to refer you to your next job opportunity.
One word of warning. Social media makes everything more transparent, and just as you can build a personal brand, you can lose it. Think before you tweet. As Frits van Paasschen, CEO of Starwood Hotels & Resorts, warns, “what happens in Vegas, stays on YouTube.”
(10) Celebrate your successes and have a life
Ruthlessly single-minded in the pursuit of your objectives and quick to identify the next one as soon as you have achieved a goal? This ability to prioritize and deliver is a strength to develop early in your career. However, as your build dream career, please be sure to put time aside to celebrate the magic moments. As Richard Branson reminded me: “At Virgin, we not only know how to work hard, we know how to party hard!”
These 10 secrets come with a CEO health warning. Be careful what you wish for. Being CEO can be the best job in the world or it can seriously overwhelm you and damage your health, mind, body and spirit, as well as stress your personal relationships with loved ones.
The happiest CEOs I’ve met are those who have managed either to build strong boundaries between their work and home lives, so that home refreshes them for work and work does not impinge on home; or those who have fully integrated their work and their personal lives and do not see a massive tension between the two. Set the right foundations in your early years: go out with your friends and enjoy life. If you can’t manage your work-life balance in your 20s, you won’t stand a chance later in life as personal and professional obligations get bigger.
Over to you
After the financial crash, the corporate world is resetting – there’s a new breed of global CEOs needed now and you could be one of them. As children, we dream about changing the world. A Fortune 500 CEO’s job is one of those special opportunities where you truly can. Whether you ultimately become a CEO or not, follow this path of lifelong leadership apprentice and you’re going to do something fantastic. Good luck.
These are my 10 secrets, but I don’t pretend that my way is the only way to the top. I would love to hear more about your personal thoughts and experiences in the comments section below. Also do follow me here on LinkedIn to get weekly updates on how to become a better leader.
By Steve Tappin
Chief Executive, Xinfu, Host BBC CEO Guru & Founder, World Of CEOs