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The Education of Fortune 100 CEOs: An Update for 2011

In an article titled “Do You Need An Ivy League Degree to Rise to the Top in Business”, dated September 14, 2009, I made observations on a recently released report of the educational background of Fortune 100 CEOs. That report has now been revised, and it is obvious that there has been much upheaval in the upper echelons of business over the past year. Twelve percent of companies on the 2011 list are new, and stalwarts like Motorola, Phillip Morris and Macy’s are nowhere to be seen. But in terms of education, the CEOs from the new companies, and new CEO’s of other Fortune 100 companies, have much in common with those who made the list last year.

Interesting facts for the 2011 Fortune 100 CEOs include the following:
• 18 CEOs have an Ivy League undergraduate education
• 9 CEOs have an undergraduate degrees from a foreign institution
• 63% of CEOs have an advanced degree of some kind
• 11% of CEOs have a JD
• 36% of CEOs have an MBA

It is impossible to identify trends from only two years worth of data. However, I stand by the conclusion that I drew from my September, 2009, analysis:

The quality of education does make a difference to someone’s ability to become a CEO of a Fortune 100 company. But the data suggests that a smart person can get a quality education just about anywhere. Perhaps the secret to success is both simpler, but also more difficult to achieve: To reach the top, you obviously need to be a great leader, with vision and drive. But you also need good mentors and the foresight to be in the right place at the right time. What you don’t have to have is an Ivy League degree.

How Can I Transition From a Career in Law to Business?

Q. After six years in corporate law, I have decided to go into business. I’m having a hard time getting my foot in the door. What do you advise?

A. The old adage that law is good preparation for any career may be true, but a legal background is not an obvious advantage to a hiring manager who’s looking for a track record in a particular industry and may think you’ll be too expensive! You have to go out of your way to make the case why the employer should hire you.

Does the way you’re presenting yourself shout out “law”? If it does, consider a “functional” resume format that allows you to demonstrate, for example, your management, financial, and strategic planning skills. You’ll still need to list your employment history, but it will come at the end of your resume, where it will be secondary to your relevant experience.

Use your cover letter to articulate why you want the advertised position, and downplay your desire to exit the legal profession. Make it easy for the employer to see how the skills you’ve developed can add value. Your volunteer work on boards of directors or organizing philanthropic events for your PTA association may be more relevant than your legal work.

Your applications will always be more successful if you have a champion in the organization who can endorse your candidacy. Build your base of professional colleagues online and through associations. Request informational interviews with executives to better understand a particular business and what it takes to be successful.

You may identify “competence gaps”—a lack of key knowledge or skills that make you less competitive than other candidates. If this is the case, consider the interim step of becoming an in-house counsel. Many lawyers have found this an excellent step towards senior management.

Do You Need An Ivy League Degree to Rise to the Top in Business?

Thousands of high school seniors will apply to Ivy League universities this fall. For most, receiving a fat acceptance package is considered equivalent to winning the financial and career lottery. Rejection, however nicely expressed, is cause for huge disappointment—even despair. But how important is it to get into an Ivy if you want to reach the highest echelons of business? A new survey of the educational background of Fortune 100 CEOs suggests it may be much less important than you might think.

Consider the following data points from the Fortune 100 CEO survey:

  • Thirteen CEOs received their undergraduate degrees from Ivy League institutions. But fourteen received their degrees from international colleges and universities. Not one Fortune 100 CEO graduated from Brown, Columbia or Princeton.
  • Five CEOs graduated from Harvard, but another five graduated with an undergraduate degree from a British university.
  • Ten Fortune 100 CEOs did receive a graduate degree from Harvard. No other institution came close.

Given the data, it is hard to make the case for going to any particular undergraduate college or university. So do the Fortune 100 CEOs have any educational characteristics in common? Unfortunately, there is no information available about activities while in college, or GPA. What we do know, however, is that 85% of the Fortune 100 CEOs for whom information is available, majored at the undergraduate level in one of four areas: Engineering, Business Administration, Economics/Finance and Accounting. All these areas have a strong quantitative bias. The remaining 15%, studied in a wide variety of areas from history to geology or biology. Two thirds of the CEOs obtained an advanced degree, with about a third of the Fortune 100 choosing to complete an MBA.

Does the quality of education make a difference to someone’s ability to become a CEO of a Fortune 100 company? Absolutely. But the data suggests that a smart person can get a quality education just about anywhere. Perhaps the secret to success is both simpler, but also more difficult to achieve: To reach the top, you obviously need to be a great leader, with vision and drive. But you also need good mentors and the foresight to be in the right place at the right time. What you don’t have to have is an Ivy League degree.

Finding a Job in 2009: A Current Applicant Perspective

There are dire warnings about the employment market for 2009 grads, but what’s the real situation for current job applicants, and how can you make yourself more attractive to employers? Sheila Curran talks with Kesav Mohan, a 2009 graduate of Duke Law School, about law, consulting and entrepreneurship.

Sheila Curran (SC): Many people have predicted that graduates of undergraduate, graduate and professional schools will have a hard time finding work in 2009.  You’re going to be graduating next May with a law degree and have been looking for work.  On a scale of 1 to 10, with 10 being the most difficult time, how bad is the employment situation looking for new grads?

Kesav Mohan (KM): Sadly, I would put the situation at about a 7. The legal field tends to be among the “safest” professions – law students are usually pretty comfortable with their job prospects. Unfortunately, the lack of business activity means that law firms are getting less work. Which means they are hiring less. So I would say that a 7 is pretty accurate.

SC: What kind of work have you been considering?

KM: Law firms and consulting. I’m also launching a new product under my company: cashbackautomator.com. It’s getting some pretty good reviews.

SC: I know you have a good offer to join a law firm. How have things been progressing on the consulting front?

KM: Unfortunately, I didn’t get a consulting job. I made it to the last couple rounds of a couple firms. I was told that if it had been last year, I would have made it farther in the process.

While consulting firms have gone through the motions of hiring, they actually are severely cutting back on how many new hires they take on. The reasons are that they are seeing a lot less attrition from the firms, they are expecting to get less work, and they are seeing a flood of candidates from MBA and undergraduate schools. These candidates tend to be people who had ibanking or other finance jobs, and are now shifting their applications over.

SC: You were successful in getting interviews. Why do you think companies were interested in you?

KM: Bar none, it was the diversity of my experiences. I’ve been fortunate to do a lot of varied things – from traveling around the world to owning my own company.

I think it’s important to note that people were more impressed by my “initiative” experiences than anything else. What did I start? Who did it help? What challenges did I face? Any job I have applied for has been impressed by the fact that I’ve sweated to transition so many things from the idea stage to reality.

Ultimately, you need to have a story. I think the biggest mistake that candidates make is not putting themselves in their interviewers’ shoes. Take a look at your resume with a critical eye. Is there anything there that makes you special or standout? If not, you better go find something. And don’t do it right before your interview. Build your life experiences early and often.

There are tons of kids who come from good schools. Or get good grades. Or do [enter typical activity here]. But ultimately, an interviewer has to pick. So the question is – what have you done that is memorable? I’m lucky to have a lot of stories – worked in prisons in South Africa, lived in Ireland, etc.

SC: What insight can you share with candidates interested in consulting positions?

KM: Prepare. You really need to prepare. Get the consulting books and go to as many practice interviews as possible. Frankly, I did a ton…but still didn’t do enough.

Also spend a lot of time doing math in your head. Learn how to round numbers. You will be impressive if you can get the answer to a numbers problem quickly.

SC: What about general job search advice for a deteriorating economy–for undergrads as well as graduate and professional students?

KM: Two things.

First, this is an excellent time to start a business. People always worry about access to capital. But the flip side to a bad economy is that there is a ton of skilled available labor and cheap resources. Good people are willing to work at lower prices, and people are selling a ton of goods.

Second, build a diverse skill set. Start thinking about how to learn skills you wouldn’t normally consider. There are still a ton of jobs out there – but they want people who can do “X”. They more you can prove to employers that you don’t need training to do a particular task, the better.

Kesav Mohan biography:

Kesav graduated from Duke University in 2004 with a self-designed major in Global Justice. He was fortunate to win the George J. Mitchell Scholarship to spend one year in Ireland completing his Masters in International Relations at Dublin City University. He then won the ELI Fellowship, where he spent one year working for non-profits in five different countries: Dubai, Venezuela, Canada, USA, and Ireland. He recently created CashbackAutomator.com.

How can I get a job in finance in 2009?

Question:  I really want to go into finance when I graduate next year.  I know the situation is bad, but there have to be some jobs available.  How can I make myself more competitive?

Answer: To get the inside scoop on jobs in finance, Sheila Curran asked an expert, Dr. Emma Rasiel of Duke University, for her opinion.  In this article, Dr. Rasiel shares insights and essential strategies for graduating seniors.

•••

Sheila Curran: We’ve heard a great deal about problems in the banking industry which are anticipated to continue in 2009.  How has that affected opportunities for new college grads, particularly in the highly-coveted investment banking positions?

Emma Rasiel: Unquestionably the number of available investment banking jobs will be much smaller.  The investment banking industry, and more generally the economy, are expected to continue to contract over the next several months.  Along with these changes come inevitable layoffs at all levels of the financial industry.  While the banks are expected to continue to hire new college grads, they will inevitably hire significantly fewer.

Sheila Curran: Which students still have a shot of being hired this year? What characterizes their background, experience or skills?

Emma Rasiel: Students will need to demonstrate more clearly than ever their genuine and longstanding interest in finance, as well as evidence of considerable preparation. In order to get interviews, students’ resumes will need to indicate academic excellence in a quantitative/analytical field of study, relevant extra-curriculars, and ideally some finance-related work experience.  The era of “taking a chance” on a student with limited relevant background/coursework/experience is over. 

Sheila Curran: Are there areas within investment banks that are easier to enter than others?

Emma Rasiel: As always, the banks will hire more students for Banking and Sales & Trading than for other areas (such as asset management or research).  But I think that the supply of available jobs in all of these areas will have shrunk.

Sheila Curran: If students have the required background and experience, how can they separate themselves from the pack and get the job?

Emma Rasiel: Take the time to read the Wall Street Journal every day and follow the significant stories so that you can talk intelligently about them in interviews.  Try to get an understanding of what has been happening over the last few months, and ways in which it has affected the industry.  There are almost daily stories about the credit/liquidity problem in the news media—read broadly on these, and start to develop your own view of what went wrong.  Some possible explanations include:

  • Greenspan’s loose interest rate policy in the first few years of this decade, following the dot-com boom and bust.
  • The erroneous belief across both Wall Street and Main Street that house prices would always go up.  
  • Predatory lending practices
  • Political short-sightedness in urging Freddie and Fannie to broaden their range of what is “acceptable” borrower income and documentation for a home loan
  • Advances in financial technology, permitting ever more complex and opaque financial securities.
  • Lack of accountability at each level of the lending-securitizing-investing chain.

An ability to talk intelligently about all of these issues, and even better, to have a view on which were essential precursors vs mere exacerbators, will give students the wherewithal to differentiate themselves in interviews.

Sheila Curran: What advice do you have for sophomores and juniors who are hoping to join investment banks after graduation?

Spread your net far more widely than just “traditional” investment banking!  The number of available jobs in the “big banks” has shrunk considerably, but there are other finance jobs out there, in which you can learn similar skills and still get your career off to a great start. Think about mid-market investment banks, private equity, asset management, hedge funds.  It will be harder to find jobs in these institutions, since they are less likely to recruit on campus, so you may have to do your own primary research:

  • Who are they?
  • Where are they located?
  • What is the application process?
  • What skills/experience are they looking for?

On the plus side, students who are willing to go to this extra effort will then clearly differentiate themselves from students who simply wait for these firms to show up on campus—if they do so at all.

Dr. Emma Rasiel is a Professor in the Economics Department at Duke University, as well as the Associate Director of Undergraduate Studies. Professor Rasiel completed her PhD in finance at the Fuqua School of Business, Duke University, in 2003. Prior to beginning the PhD program, she spent seven years at Goldman Sachs, including five years in London as a bond options trader. She holds an MBA from the Wharton School, University of Pennsylvania, and an MA in Mathematics from Oxford University.