Career Knowledge
New Career Paths to the Top

Peter CapelliHow do executives make their way to the C suite? A study by Wharton Professor Peter Cappelli and colleague Monika Hamori examined changes in the career paths of top executives of Fortune 100 firms in 1980 and 2001. They found top executives of these firms were, on average, more than 4 years younger in 2001 and advanced 4 years more quickly into their roles than their counterparts in 1980. The executives in 2001 moved from company to company more, but also took fewer jobs on their way to the top. There were more women in the executive suite in 2001, and fewer executives were educated at Ivy League institutions.

What are some of the insights from the study for managers charting their own career paths? While career paths continue to be diverse and personal, a few general implications of the study include:

  • Finance is the preferred track to the C suite: While research suggests that marketing was the dominant path to the executive suite prior to the 1970s, finance became the dominant path in the 1980s and was even more so by 2001. This is a reflection of the growing influence of the investor community on corporate leadership.

  • Academy companies may be on their way out: While some executives may still begin and end their careers at "academy companies" —firms such as Procter & Gamble or General Electric that provide strong career development and advancement opportunities —such companies are becoming more rare with an increasingly fluid workforce.  Advancement in these companies also is slower, making these firms a great place to start. Younger companies often offer greater opportunities for more rapid advancement but higher uncertainty —your career could be derailed by restructuring or other disruptions.

  • Consider starting small: While executives made it to the top more quickly on average in 2001 than in 1980, the gaps between steps in the career ladder were larger. This meant that while executives held fewer jobs on the way to the top, large companies were likely to hire from outside to fill positions. A better strategy might be to do well in a small company, with P&L responsibility, and then move to a job at a larger one.  With executives from younger companies getting to the top more quickly, we may see a reversal in the typical flow of executives from the large "academy companies" to smaller companies. In the future, more top executives of large firms may come from small companies or entrepreneurial ventures.

  • Know when to move on: The odds of advancement decline the longer you are in a given job. Cappelli and Hamori recommend asking two questions: First, have you been here longer than others in this job? Second, if you were not already an employee, would you invest your human capital in this company? Their study, however, did not conclude that executives should jump from company to company to get ahead. In fact, in 2001, executives who stayed at the same company for their entire careers got to the top as quickly as their career-hopping colleagues. (In general, however, fewer executives are spending their careers in one company, so the results may reflect the fact that those who advance in these firms choose to stay put.)

  • Women are scarce but advance faster: It is no surprise that the research found that fewer women were in the C suite than men. While women accounted for only 11 percent of the most senior positions of the Fortune 100 in 2001, this is an increase from zero in 1980. Those women who made it to the top advanced more quickly and at a younger age than their male colleagues. In mid-tier positions (such as senior vice president), women disproportionately outnumbered men, although they were outnumbered by men in lower-tier executive positions.

  • Post-graduate education is more important: Graduate training in business, especially the MBA degree, has become more important in accessing the best entry-level corporate jobs. The study found an increase in MBA and law degrees among top executives in 2001. Elite undergraduate education, however, appears to be less important in making it to the top. Between 1980 and 2001, there was a decline of 30 percent in top executives with Ivy League undergraduate degrees and a 50-percent increase in those from public schools, which may be an indication of a shift in corporate practice.

While the study did not explicitly look at executive education, Cappelli said the changes in company development and career tracks could make it more important. "Employees can't rely on their employer to provide them with the kind of learning opportunities and training that was popular a generation ago," he said. "That makes these programs more useful."

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