The next generation of high-tech CEOs

May 8, 2008

Nearly 50 percent of high tech enterprise leaders/general managers, the pool from which most CEOs are drawn, have been in their current roles for two years or less and only one in five have been in their positions for five or more years, according to a survey by Spencer Stuart's Technology, Communications & Media Practice.

"Turnover among high tech general managers reflects intense demand for experienced leaders who can drive revenue," said Lee Esler, author of the study and head of Spencer Stuart's Global Computing Systems and Semiconductor practices. "Demand for enterprise leaders with a wide range of skills and a track record of achieving profitable revenue growth who also can navigate new technologies and emerging markets is extraordinary, but the supply is frustratingly small."

Eighty-four percent of executives surveyed said they spend the most time on activities meant to drive revenue growth, by far exceeding any other activity. The second highest activity was strategic planning, followed by communicating with key internal and external stakeholders.

"The leadership bar continues to rise for high tech enterprise leaders," said Jonathan Visbal, practice leader of Spencer Stuart's Global Technology, Communications & Media Practice. "Growth is more difficult to achieve, competition is more intense and scrutiny of business practices more pronounced. These leaders must develop and drive strategy through matrixed organizations and communicate effectively with a broad range of internal and external audiences. It's a tough job, and it won't get easier for those who want to rise to CEO."

General managers ranked three skills as highly essential to their jobs – communications, a strategic mindset and the ability to lead a complex organization. In addition, 51 percent of the executives who responded said they have worked or lived abroad for more than six months and 46 percent cited an "international mindset" as one of the most important competencies for an enterprise leader. "There is no question that a global mindset is critical to business today," Esler added. "These leaders need to be able to understand how to navigate new markets and often manage teams in other regions and time zones."

Given the number of significant marketplace issues that these leaders must manage, they have to prioritize daily. One area in which they do not spend as much time as they would like is talent development. Most survey participants felt they do not spend adequate time on finding and developing their best people. Among respondents, 57 percent indicated that the availability of skilled talent is likely to have the most significant impact on their business during the next 18 months and people-development skills were among the top five most important competencies, yet only 40 percent spend a significant amount of time on attracting and retaining key talent.

"When a general manager rises to CEO, human capital development will become a critical part of the job. It is unfortunate, then, that so few general managers have adequate time to develop talent today," said Esler. "It potentially perpetuates the scarcity of top management talent, and it will make succession all the more difficult for high tech companies."

Other findings:

Nearly 50% have been in their current roles for two years or less; only one in five has been in their positions for five or more years
84% say they spend the most time on activities meant to drive revenue growth, far exceeding any other activity
57% of respondents indicated that the availability of skilled talent is likely to have the most significant impact on their business in the next 18 months, but only 40% spend a significant amount of their time attracting and retaining key talent

About the survey

Spencer Stuart's Technology, Communications & Media Practice surveyed enterprise leaders in technology and communications companies around the world. Nearly 130 presidents, general managers, chief operating officers, executive vice presidents and senior vice presidents participated in the survey. Respondents included executives from semiconductor and hardware companies, IT and business services firms, software, communications providers and equipment companies and digital media companies. Nearly 60 percent of respondents work for companies with revenues greater than $5 billion, and 36 percent run businesses of at least $1 billion. Fifty-eight percent of general managers in the survey have been with their companies five years or more. Forty-nine percent were from sales and marketing backgrounds and 19 percent from operations. Fifty-one percent said they have worked or lived abroad for more than six months, and 46 percent cited an "international mindset" as one of the most important competencies for an enterprise leader role. In addition to the survey, Spencer Stuart consultants interviewed a number of enterprise leaders who spoke about their backgrounds, responsibilities, challenges they face and skills they need to succeed in the role.

Click here for a copy of the study.