Today’s CEO needs to be a jack of all trades

How does a person get to be the boss? What does it take for an ambitious young person starting a career to reach the upper rungs of the corporate world — the CEO’s office, or other jobs that come with words like “chief” or “vice-president” on the office door?

The answer has always included hard work, brains, leadership ability and luck. But in the 21st century, another, less understood attribute seems to be particularly important.

To get a job as a top executive, new evidence shows, it helps greatly to have experience in as many of a business’ functional areas as possible. A person who burrows down for years in, say, the finance department stands less of a chance of reaching a top executive job than a corporate finance specialist who has also spent time in, say, marketing.

Or engineering. Or both of those, plus others.

However, there is still such a thing as too much variety: Switching industries has a negative correlation with corporate success, which may speak to the importance of building relationships and experience within an industry. Switching between companies within an industry neither helps nor hurts in making it to a top job.

These are some of the big findings in a new study of 459,000 one-time management consultants by LinkedIn. Experience in one additional functional area improved a person’s odds of becoming a senior executive as much as three years of extra experience. And working in four different functions had nearly the same impact as getting an MBA from a top-five programme.

Similarly, Burning Glass, a firm that scours millions of job listings to detect labour market trends, has found a surge in demand for what it calls hybrid jobs, incorporating expertise in, for example, both technology and finance. And researchers have found that MBA holders with a variety of experiences get more offers and higher bonuses from investment banks than those with narrower experience.

While some of this might sound intuitive, and top executives have always needed to have grounding in a range of specialities, huge collections of data about individuals have only recently made it possible to analyse in such detail what traits and experiences seem to predict success in the job market.

In effect, the increased ability to collect and analyse such troves of data raises the possibility that in the future we’ll be able to better understand what types of education the workers of the future most need, how companies can best recruit future star performers and how individuals can position themselves to benefit from shifts in what skills the modern economy most rewards.

There is a lot of work to be done to get to that point. But this early evidence suggests that success in the business world isn’t just about brainpower or climbing a linear path to the top, but about accumulating diverse skills and showing an ability to learn about fields outside one’s comfort zone.

“Work used to be much more hierarchical, and in many instances rote,” said Gary Pinkus, McKinsey & Co.’s managing partner for North America. “You could build a nice career within any particular function by taking on more responsibility within that speciality. But if you look at most companies now, work has become incredibly cross-functional.”

Once upon a time, Pinkus said, an operations manager might be laser-focused on making a factory work efficiently. Now to be great at that job — and earn a promotion — that manager had better also understand how the factory’s inventory procedures tie in with the company’s sales and marketing strategy, and any tax laws affecting inventory management, while assuring the reliability of the supply chain.

The manager had better also be adept at using the technology that links all that information together.

Marc Andreessen, the prominent venture capitalist, has gone so far as to call this the “secret formula to becoming a CEO”. The most successful corporate leaders, he wrote, “are almost never the best product visionaries, or the best salespeople, or the best marketing people, or the best finance people, or even the best managers, but they are top 25 per cent in some set of those skills, and then all of a sudden they’re qualified to actually run something important.”

Beyond the results on job functions, the data from LinkedIn shows some trends for which the explanations aren’t completely obvious. For example, former consultants who lived in New York or Los Angeles had higher odds of ending up with a top job than people in other large cities like Washington or Houston.

A former management consultant with 15 years of work experience in six different functions and an MBA from a top school had a 66 per cent chance of becoming a top executive if he lived in New York compared with a 38 per cent chance in Washington.

But regardless of how exactly the cause and effect works and how the consultants analysed might be different from others who weren’t included in the sample, there is evidence that more top jobs in business require an ability to meld knowledge from different fields.

In a 2014 survey of 2,100 chief financial officers by Robert Half Management Resources, 85 per cent said their role had expanded beyond traditional accounting and finance-related work over the preceding three years, most commonly into human resources and information technology.

And two business school professors, Jennifer Merluzzi of Tulane and Damon J. Phillips of Columbia, studied hundreds of graduates of an elite MBA programme who went into investment banking. The people who were specialists received fewer offers and lower starting bonuses than those who had worked across various specialities.

Burning Glass found a 53 per cent rise in the number of openings for hybrid jobs requiring both technological and business acumen from 2011 to 2015, for jobs like product management and marketing analytics.

“The common theme that we see in the jobs that are the fastest-growing and have the highest value for employers and job seekers is this set of jobs that require a mix of skills that don’t tend to ride together in nature,” said Matthew Sigelman, the chief executive of Burning Glass.

There are some parallels with programmes that the biggest companies have long operated to deliberately rotate promising young executives across different divisions, to ensure that as they hit mid-career they have broad experience. The challenge can be to replicate that kind of experience even in a world where few people sign on with a single large employer for decades.

To be a CEO or other top executive, said Guy Berger, an economist at LinkedIn, “you need to understand how the different parts of a company work and how they interact with each other and understand how other people do their job, even if it’s something you don’t know well enough to do yourself.”