The CEO need to be an MBA?

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December 6, 2007

As technology changes like quickly and globalization matter come to a boil, the role of leadership in firms have come under the scanner. obviously, the concept of leadership in an era of global connectivity means that the top job not only has to make sure profits for all shareholders, it has to fix problems, tap new markets, bring hurtful edge ideas to the table, and lead cross-cultural teams.

The person has to be fervent, sympathetic, sharp and inspirational at the same time. A couple of weeks ago, if you have been subsequent our page one ticker, you would know that in the Forbes’ 400, the first MBA CEO was one whose company ranked 22 on the list. Which means that 21 of the world’s best corporation don’t have CEOs who have MBAs on their resume?

So what gives? MBA’s are losing some relevance as they become more and more ‘easy’ to obtain. With the proliferation of chance to get this credential we are seeing it as more of a nice to have but not a stand out obligation. Intensify the argument, the CEO search firm: “An MBA degree is useful but not necessarily a important factor, the most stressed upon areas are previous experience and leadership abilities”.

As India Inc obtain younger, however, things are changing. In the current scenario, MBA is almost a necessary requirement, if not must. Only in some core or manufacturing division where they are looking for CEO’s with age profile 50 + years, this may not be a precondition factor.”

Then there is the setting of a yardstick MBAs not only offer more to a company but also they require less, in that their need for basic.

Also, an MBA from a good institute means a recognized career path and network to bank upon. More and more senior managerial are opting for executive MBAs from foreign universities these days if you were to hire a CEO from outside, for instance, there is a lot of discontent amongst the team. If the person has an MBA degree from a top-rung B-school means that the person is gung ho, has experience and hence a good candidate.

At present, in the world of cross domain movement, one might think that the task of nominating a CEO will be all the more difficult, however, its not so. Experts hold different opinion about the importance of sectoral information. a number of are of the view so as to domain knowledge at CEO level is not as important as at operational level as there are sure components in the agenda that remains the same across domains.

“Domain knowledge is a great advantage,” says Raghuvanshi , “but given the reality of a marketplace when CEO talent is in receipt of scarce, other issues are given importance.” Adds Agrawal: “In fact bringing talent on or after outside the industry has its added benefit as the person comes in with fresh ideas, is not biases, open to ideas and reenergizes the whole system.”

That said and done, however, one cannot rule out the importance of domain information when it come to certain exact industries. “What is critical is a keen business and strategic sense which can be relevant in any division. However, areas involving R&D require populace with more technical sense than any other sector,” say Pravin Tatavarti, MD, Allegis India, the recruitment major.

The requirements vary between different genre of companies. Though some requirements remain the same, there are some difference when it comes to big scale and a start-up . While a big company might look intended for some one who can assemble the resources in the right direction, an SME or a start-up looks for a person who can create these resources. “The core elements,” says Shantilal, can be the same.

“One of the key differences however lies in the mindsets & characteristics of the people they hire. For example in a establish, they hire people who be more flexible and entrepreneurial, whereas for a big and stable business, the people they hire be likely to be able to work in an environment where there are complex internal matrices.”

The current league of CEOs is younger, savvier and has harnessed their ability in a more rapidly changing environment. There is a desire intended for diversity, more openness for non-industry specific candidates, says Matthews and also more openness for more junior candidates.

Today’s CEO’s mindsets are very different from those of yesterday. “They see the need to position their organizations as “global companies” rather than “US-centric” or “Europe-centric” companies,” says Shantilal.

Once the ideal candidate has been identified, the bait is out. Many companies are prepared to shell out more anywhere talent is limited, where the skills set are place and where there is a very strategic appointment. “judge on or subsequent to knowledge company are willing to ‘case out’ more when: they have realized how much this vacancy is in fact costing them,” he add But, that’s another story.

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