May 29, 2025 • 19 mins
For decades, General Electric — the conglomerate known for making everything from trains to microwaves — was also known for churning out executives. Time spent at the company’s Crotonville campus was seen as the gold standard for leadership training in Corporate America. But as GE has lost its luster, a new CEO pipeline has emerged.
On today’s Big Take podcast, Bloomberg work and management reporter Matt Boyle joins host David Gura to share what he’s discovered about where tomorrow's CEOs are learning to lead — and what it means for global business.
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Speaker 1 (00:00):
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:08):
General Electric. GE made headlines back in twenty twenty two
when it decided to close Crotonville, it storied corporate campus
in New York's Hudson Valley. In its heyday, GE was
known for making well almost everything, from trains to microwaves.
It also had a reputation for making good managers who
(00:29):
took classes in leadership at that Crotonville office park, and
many of them eventually left GE to run other companies.
Speaker 3 (00:37):
GE for years was the training ground, the original CEO factory.
Speaker 2 (00:43):
Matt Boyle covers work and management for Bloomberg, and he
says Crotonville was legendary.
Speaker 3 (00:49):
It was just sort of the sprawling facility upstate, just
not far from the city where you would go and
it wouldn't just be like a one day leadership seminar
like a lot of companies would do where you might
get a guest speaker from Harvard Business.
Speaker 1 (01:02):
School to a trust fall.
Speaker 3 (01:04):
Yeah, you would stay there. You would stay there for
days and days, and you know, you would of course
also learn the ins and outs of like some of gees,
you know, like their six sigma black belts, you know,
management techniques, then you would hear from management professor.
Speaker 2 (01:18):
If you're a fan of the sitcom Thirty Rock, all
of this may sound familiar. One of the main characters,
Jack Doneghie, the brassy network boss played by Alec Baldwin,
had climbed to the top of GE's corporate ladder. I'm
giving the keynote address of the company's six Sigma Retreat
to Move Forward in Croton On Hudson.
Speaker 1 (01:36):
Oh, is that like a corporate retreat?
Speaker 2 (01:39):
Doneghie is so nervous about that speech. He makes Liz Lemon,
Tina Fey's character, go with him.
Speaker 3 (01:45):
Lemon.
Speaker 2 (01:45):
The Retreat to Move Forward is a global meeting of
GE's best and brightest.
Speaker 1 (01:49):
Careers are made there.
Speaker 2 (01:52):
It's no wonder Jack Doneghie was anxious. GE's training center
was where the company put managers through their paces.
Speaker 3 (02:00):
Your weaknesses would be identified, they would be worked on,
you know, really hammering home if your weakness was in
financial statements or on the finance side, if your weakness
was on marketing, they would work on those and they
would just churn through hundreds of people.
Speaker 2 (02:14):
That rigorous training made those GE managers attractive to other
companies when they were looking for new leadership and by
virtue of how big GE was and how much it did,
those trainees had broad experience.
Speaker 3 (02:28):
They were conglomerates, so you could work in you know,
jet engines, you could work in GE Capital, you could
work making refrigerators, and if you were the head of
that business unit, you're basically the CEO of a fortune
one thousand company that did a lot for their global
stature to be Like, if you learn how to be
a CEO at GE, you can run anything.
Speaker 2 (02:47):
So Matt says it was the end of an era
when GE closed Crotonville and sold it, raising questions about
where the next generation of executives would come from and
what values they'd learn along the way.
Speaker 3 (03:00):
Just three dozen companies accounted for preponderance of SMP fifteen
hundred CEOs over the years, so we knew these factories
always existed. What we didn't know, though, was how they
were changing. So I said, well, if GE's not the
pre eminent CEO factory anymore.
Speaker 1 (03:17):
Who is.
Speaker 2 (03:21):
I'm David Gera and this is the big take from
Bloomberg News today on the show, the next generation of
CEO factories, the new pipeline for executive talent where tomorrow's
CEOs are learning to lead and what that says about
global business. For years, GE's management training program was the
(03:45):
gold standard, according to Bloomberg's Matt Boyle, and other companies
sought to emulate GE's approach.
Speaker 3 (03:52):
So that model was replicated, not perfectly, but look at
a Procter and Gamble, where if you were running Pampers
or something, you know, you were basic the CEO of
a global company, or even abroad at Semens, the German conglomerate,
Honeywell IBM. You know, this was replicated. Johnson and Johnson
is another one. So you have these sort of other
(04:12):
CEO factories coming up. But traditionally GE was the be
all end all. So if you went through Crotonville, whether
you only spent you know, a few days there or
a few months, you're really seen as sort of this
management material.
Speaker 2 (04:24):
I know they sold it off in twenty twenty four,
so there's a delicious metaphor there. But what led to
the end of GE's reign as a factory for s
a lot.
Speaker 3 (04:34):
Of it, you know, the end of GE as sort
of the paragon of American business. It's fall from grace
has been well chronicled by Bloomberg and by other outlets, certainly,
But once you get broken up, once the bloom is
off the rows in terms of the CEOs you are
producing and sending out into the world, not exactly distinguishing themselves.
As you've saw some of the people, especially more recently
(04:57):
the GE alums who have gone to run Boeing to
the ground basically yeah, barb no daily at home depot,
some of them not really setting the world on fire,
and so it sort of just ceased to be the
factory that it was still churning out very talented business executives,
of course, but once you got past that period in
(05:18):
the nineties and the aughts where it was, you know,
in a pedestal. But I think GE, since they were
so high up, had the furthest to fall.
Speaker 2 (05:26):
And as that happened, as GE struggled to find its
footing and broke up, we saw big tech continue to rise.
But replicating the kind of leadership that sets those companies
apart isn't easy. We had Mark Kerman on the show,
our colleague at Bloombergoo covers Apple, and he was talking
about the uniqueness of that company that they've tried to
bring in outside executives, and it's failed time and time again.
(05:48):
There's something about Apple's culture that can't be replicated. It's
hard to get somebody to come in and recognize what
it is or how to operate in that world. How
much of an outlier is it as you see it?
Are there still major companies today in tech or other
sectors that are just kind of by virtue of the
way they're built or they've evolved, kind of resistant to
having somebody come in from the outside to run them.
Speaker 3 (06:09):
Yeah, and I think what mark set is totally true.
Another supporting point there is how hard it is to
come out of those big tech firms and be successful
as a CEO elsewhere.
Speaker 1 (06:20):
That was happening a lot now that was a big
head scratcher.
Speaker 2 (06:23):
Matt worked with a data research group called Live Data Technologies.
Speaker 3 (06:27):
I said, okay, well, can you just tell us where
every public company CEO over the past twenty years has
come from, or where have they ever worked, what's on
their resume? And so we generated this data set that
showed over three five year periods, how the factories to speak,
have risen and fallen. When so, when these rankings came
in and we're looking down the list of the top
(06:49):
CEO factories. First thing we said was, Where's Apple, Where's Meta,
Where's Amazon? Where are all these tech titans that are
these days the sort of paragons of business whatever they do,
whether it's their return to office policy or their approach
to try you know, companies model themselves on big tech
these days, and so we said, well, where are they?
And we realize there's a couple of reasons why you
(07:11):
don't see a lot of the big tech firms outside
of IBM. One reason is positive to us, is that
when you leave big tech, you often go into the
world of venture capital. You want to invest. You want
to invest in the next Meta or the next Google,
So that kind of takes them out of their running
to be a corporate CEO. Another reason is that they're
often very skilled and being what's called like a product
(07:32):
CEO rather than a general management CEO. So their skills
are really applicable to launching the next iPhone or launching
some sort of you know, software as a service type
of thing. But they're very concerned to tech, and you
can't just take them out of tech and then send
them to some other company and be like, okay, now
go sell refrigerators, so you don't have that GE model
(07:54):
that you used to. And the third reason is they're
just young. They don't have enough of a track record.
Metta only went public twenty twelve, which is just like
halfway through the time period we were looking at here.
So there's just not enough executives that they've hired to
go off into the wilderness and become CEOs elsewhere. So
that might change, we might see some more CEOs in
(08:15):
corporate America or the corporate world at large who have
that big tech pedigree, but for now not as many.
Speaker 2 (08:22):
So there was the underrepresentation of big tech. And another
trend emerged in the data.
Speaker 3 (08:28):
And it just hit me over the head immediately as
soon as I saw the chronological breakdown of how the
professional services firms and the consulting firms were just slowly,
steadily and then all of a sudden, you know, occupying
nearly the entire top ten. In our top ten, we
have McKinsey, Accenture, the A Deco Group, Ey, Deloitte, and PwC.
(08:49):
And so you start to think, well, where's where's IBM,
You know, where's GE. They're still there, but much further down,
so they've been knocked from their perch, and I think
this is the first sort of story that really takes
a look at here is the case and here's why.
Speaker 2 (09:05):
So how did large consulting firms become the new CEO pipeline?
And how is that changing business?
Speaker 4 (09:11):
That's next pop quiz.
Speaker 2 (09:22):
What do Sundar Pichai, Sheryl Sandberg and James Gorman have
in common? They all used to work at McKenzie. My
colleague Matt Boyle has been reporting on this trend that
the new pipeline for executive talent runs from consulting firms
to C suites and he's been thinking a lot about
what's required of a modern day executive. So it's twenty
(09:44):
twenty five.
Speaker 1 (09:46):
What are the.
Speaker 2 (09:46):
Qualities or assets in a good CEO today? I imagine
that definition has changed in recent day.
Speaker 1 (09:53):
It really has.
Speaker 3 (09:54):
I mean, he speaks to the evolution of the role
of the CEO. One big thing I came acro is adaptability.
You have to be able to adapt quickly to an
ever changing role. Then if you talk about ever changing
world today is a perfect example in terms of the
word uncertainty being used what ten million times over the
past three months on earnings calls and the estimate, yes, exact,
(10:18):
probably it's low balling it. But you need that ability
to anticipate. And if you can't anticipate because you don't
know what, let's say, President Trump's going to do with
tariffs next week, you have to at least be able
to adapt quickly. And that's where consultants are pretty strong.
Their whole job is to go in blind to a company,
assess it very quickly, and then figure out what to do.
(10:39):
So adaptability is one another one is just a sort
of a facility with digits and data, let's call it,
you know, a tech savviness. They also have a good
understanding of corporate cultures because again they have to come
in fly in parachute, in blind, get to read on
a corporate culture quickly and sort of suss that, okay,
what's going to be possible, you know, within the scope
(10:59):
of of this engagement. And they are usually pretty good
at selling themselves. These are consultants, you know, that's sort
of if you're not good at selling yourself and your vision,
you're not going to last very long at McKinsey, a
Bane or a BCG. And so that is a huge
part of these days of a CEO's job.
Speaker 2 (11:15):
So this new pipeline runs from the accentures and the
PWC's and the McKinsey's of the world to these C suites.
Let me pose to you an age old question, and
that is what do consultants actually do?
Speaker 1 (11:29):
Well? What are they so fast? Side? That is the
age old question.
Speaker 3 (11:34):
Certainly, what consultants do, I think is a little bit
different than what a lot of Americans think consultants do.
They might just think of a consultant as you know,
someone who jets in first class, comes to the company
and has a quick look around and then delivers, you know,
a presentation. This is what you should do, you know,
(11:54):
lay off twenty percent of your people, you know, go
into China, you know, launch a new product, and then
they get skidattle, they're gone. While that is one element
of what some consultants do usually more on this strategy side,
what I learned in the course of reporting this story
is that that is not what most consultants are doing today.
The big difference being that they are often sticking around
(12:16):
and making sure that you know, whatever they recommend, whether
it's a new technology, a new way of management, they
stick and make sure it's actually working. So they're kind
of they're getting their hands dirty in a way that
I don't think a lot of people recognize that consultants
normally do.
Speaker 2 (12:33):
We were talking about the kind of training apparatus that
these old industrial companies built up, if that was a
corporate campus or just a program, a training program. Do
you see the same thing playing out at these consulting firms.
Do They have very rigorous training programs of their own
with the goal of, yes, building their ranks, but getting
(12:53):
exactly to the head of HRT accentsure. They spend as
much on training what they call learning and development, as
GE used to spend on all of its Crotonville apparats.
That said accentre has hundreds of thousands of employees, so
there is a lot of training that needs to be done.
But I've talked to other firms as well, and they're
(13:14):
just getting a lot more rigorous about creating putting some
structure behind this, which is a good thing.
Speaker 1 (13:19):
Certainly.
Speaker 3 (13:20):
Now we all laugh and joke about, oh I got
to sit through with stupid you webinar, or there's some
course from hr I have to take, But these companies
really take it super seriously and they know if you're
actually paying attention in some of this training. And granted
it shouldn't all just be boring webinars. It should be
one on one learning with senior leaders, you know, in
person stuff, stuff that you're not just going to do
over a zoom call. But the point is, whether it's
(13:42):
Accenture or the Swiss Staffing firm a deco group, you
talk to the heads of HR there, you really learn
that they really have realized, wait a minute, we've got
to put some more structure and rigor into this training.
So it's not just something you tick a box and
do on a random Friday in the summer. It's something
that you want to actual we spend time on. You know,
it's going to make you a better employee and then
(14:03):
a more employable executive hopefully down the line.
Speaker 2 (14:07):
Is the most common path to go from being a
partner at one of these firms directly to becoming a
CEO or their other stops along the way to them.
Speaker 3 (14:15):
It should never be a direct path actually from partner
at Accenture right into the C suite. That is kind
of actually a recipe for disaster. Some of the advisors
I talked to for this story. Had really said you
have to allow them to make all the predictable mistakes
in one or two let's say lower level corporate jobs.
(14:35):
So usually if you're coming out of consulting and you
get a corporate job, you should maybe work as an
operations chief or a strategy chief is a very common one.
Walmart and other companies have hired being consultants as heads
of strategy, so then you get the feel for the
company and the culture and you're really immersed in it
without having to be the sort of the be all,
end all decision maker before you're elevated right into the
(14:59):
CEO position.
Speaker 2 (15:01):
I want to ask you about times when this has
worked out well, drawing from the world of consulting, putting
folks from there into the c suite, and times when
it hasn't.
Speaker 3 (15:09):
Yeah, I mean a good example. And this is a
CEO I talked to as a CEO of Ranstad. Now
this is company not a lot of Americans know about
staffing company. Staffing company. They do a lot of you know,
staffing solutions. If you've got a workforce issue, you'll call
him in to fix it. They also own the job
site Monster dot com. So some of us might know
(15:29):
them that way.
Speaker 1 (15:30):
So anyway, their CEO is this Dutch guy.
Speaker 3 (15:33):
They're based in the Netherlands, and he had run two
massive units of Accenture. He'd actually been there so long
he was there when it used to be called Anderson
Consulting in.
Speaker 1 (15:43):
The old days.
Speaker 3 (15:44):
But the point is, having talked to him, he got
to know just about every industry under the sun, from
retails to autos to utilities. So he had the industry
knowledge of just about any industry, which is very helpful
now that his clients are across industries. But he also
was very good at deploying experts to fix whatever problems
(16:04):
issues their clients were having in his years and Axcenture.
Speaker 1 (16:08):
And he's also just like he's a personable guy too.
Speaker 3 (16:10):
He's not this robotic consultant who just speaks like he's
a PowerPoint in human form, which I think goes a
long way as well. So when he missed out on
the job of running Accenture, he was on everyone short
list to get a global CEO job and he took
the job at Ranstad. So he's a great example sort
of a consultant made good. Now, how about a couple
(16:33):
examples when this hasn't worked out. Yes, the recent poster
child for a consultant who did not turn out well
in the c suite was John Donahoe at Nike, a
longtime Bain and Co. Consultant, did very well there. He
also had some other corporate roles before he was at eBay,
did extremely well there. So he was following like the
(16:54):
proper path, you know, a couple of corporate roles in
c suite seasoning. But then he goes Intoni, which you
know is a challenging culture, a very challenging culture to
come into from the outside, and it was a flame out.
Now it wasn't just because he was a consultant that
it didn't work, but it's sure as heck didn't help
that he was trying to bring some of his bin
(17:15):
teachings into a culture and sometimes these corporate cultures will
just reject it out a hand and say, no, that's
not how it's done here, this is not you know,
this is not the Nike way. And you know, financial
performance COVID on top of it. A lot of things
contributed to his downfall. But another one is the former
CEO of Starbucks, who's Mackenzie Alum. There you have a
(17:35):
case of a founder, Howard Schultz, who just never.
Speaker 1 (17:38):
Really seems to go away.
Speaker 3 (17:39):
Yes, and maybe you know, he didn't have as much
of a runway as he needed to do some of
the things to turn Starbucks around, but there was not
much patience given to him, and so he was out after.
Speaker 1 (17:52):
Just over a year.
Speaker 2 (17:54):
I want to end with a philosophical question, and that is,
what do we gain or lose by hoving a pipeline
like this, having this kind of mold of who the
ideal CEO is? What does it mean that we're kind
of restricting I don't know, a diversity of opinion or
perspective on what that job entails or could entail.
Speaker 3 (18:11):
Yeah, I think it's a really good point, and we
are probably constraining and constricting ourselves a little bit to
say that, Okay, well now we don't need to hire
and the CEO doesn't have to be from ge but
he now has to be from Accenture. So okay, you're
not getting someone from this box. You're getting someone from
a different box. Whereas, especially these days in the world
of business, we really need to be hiring people who
(18:33):
are not in a box at all, or at least
willing to look up outside the box and have a
peek around. But I think it's the job of corporations, though,
when they are figuring out who's going to be leading
us into this wilderness that we're into right now, to
be hopefully looking across the board at not just the
people from let's say Central Casting, whether Central Casting is
(18:55):
ge or now it's Accenture and McKinsey and saying or
at least filling up the senior management roles with enough
people who are willing to challenge orthodoxy, have a sense
of you know, is this really the way we should
be doing things guys? And I think there's a lot
to be said for maybe taking a chance at least
on someone who's in a non traditional type and you know,
(19:17):
roll the dice there and see what happens.
Speaker 2 (19:25):
This is the Big Take from Bloomberg News.
Speaker 1 (19:26):
I'm David Gerra.
Speaker 2 (19:28):
To get more from The Big Take and unlimited access
to all of Bloomberg dot com, subscribe today at Bloomberg
dot com slash podcast offer. If you like this episode,
make sure to follow and review The Big Take wherever
you listen to podcasts. It helps people find the show.
Thanks for listening. We'll be back tomorrow.
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:08):
General Electric. GE made headlines back in twenty twenty two
when it decided to close Crotonville, it storied corporate campus
in New York's Hudson Valley. In its heyday, GE was
known for making well almost everything, from trains to microwaves.
It also had a reputation for making good managers who
(00:29):
took classes in leadership at that Crotonville office park, and
many of them eventually left GE to run other companies.
Speaker 3 (00:37):
GE for years was the training ground, the original CEO factory.
Speaker 2 (00:43):
Matt Boyle covers work and management for Bloomberg, and he
says Crotonville was legendary.
Speaker 3 (00:49):
It was just sort of the sprawling facility upstate, just
not far from the city where you would go and
it wouldn't just be like a one day leadership seminar
like a lot of companies would do where you might
get a guest speaker from Harvard Business.
Speaker 1 (01:02):
School to a trust fall.
Speaker 3 (01:04):
Yeah, you would stay there. You would stay there for
days and days, and you know, you would of course
also learn the ins and outs of like some of gees,
you know, like their six sigma black belts, you know,
management techniques, then you would hear from management professor.
Speaker 2 (01:18):
If you're a fan of the sitcom Thirty Rock, all
of this may sound familiar. One of the main characters,
Jack Doneghie, the brassy network boss played by Alec Baldwin,
had climbed to the top of GE's corporate ladder. I'm
giving the keynote address of the company's six Sigma Retreat
to Move Forward in Croton On Hudson.
Speaker 1 (01:36):
Oh, is that like a corporate retreat?
Speaker 2 (01:39):
Doneghie is so nervous about that speech. He makes Liz Lemon,
Tina Fey's character, go with him.
Speaker 3 (01:45):
Lemon.
Speaker 2 (01:45):
The Retreat to Move Forward is a global meeting of
GE's best and brightest.
Speaker 1 (01:49):
Careers are made there.
Speaker 2 (01:52):
It's no wonder Jack Doneghie was anxious. GE's training center
was where the company put managers through their paces.
Speaker 3 (02:00):
Your weaknesses would be identified, they would be worked on,
you know, really hammering home if your weakness was in
financial statements or on the finance side, if your weakness
was on marketing, they would work on those and they
would just churn through hundreds of people.
Speaker 2 (02:14):
That rigorous training made those GE managers attractive to other
companies when they were looking for new leadership and by
virtue of how big GE was and how much it did,
those trainees had broad experience.
Speaker 3 (02:28):
They were conglomerates, so you could work in you know,
jet engines, you could work in GE Capital, you could
work making refrigerators, and if you were the head of
that business unit, you're basically the CEO of a fortune
one thousand company that did a lot for their global
stature to be Like, if you learn how to be
a CEO at GE, you can run anything.
Speaker 2 (02:47):
So Matt says it was the end of an era
when GE closed Crotonville and sold it, raising questions about
where the next generation of executives would come from and
what values they'd learn along the way.
Speaker 3 (03:00):
Just three dozen companies accounted for preponderance of SMP fifteen
hundred CEOs over the years, so we knew these factories
always existed. What we didn't know, though, was how they
were changing. So I said, well, if GE's not the
pre eminent CEO factory anymore.
Speaker 1 (03:17):
Who is.
Speaker 2 (03:21):
I'm David Gera and this is the big take from
Bloomberg News today on the show, the next generation of
CEO factories, the new pipeline for executive talent where tomorrow's
CEOs are learning to lead and what that says about
global business. For years, GE's management training program was the
(03:45):
gold standard, according to Bloomberg's Matt Boyle, and other companies
sought to emulate GE's approach.
Speaker 3 (03:52):
So that model was replicated, not perfectly, but look at
a Procter and Gamble, where if you were running Pampers
or something, you know, you were basic the CEO of
a global company, or even abroad at Semens, the German conglomerate,
Honeywell IBM. You know, this was replicated. Johnson and Johnson
is another one. So you have these sort of other
(04:12):
CEO factories coming up. But traditionally GE was the be
all end all. So if you went through Crotonville, whether
you only spent you know, a few days there or
a few months, you're really seen as sort of this
management material.
Speaker 2 (04:24):
I know they sold it off in twenty twenty four,
so there's a delicious metaphor there. But what led to
the end of GE's reign as a factory for s
a lot.
Speaker 3 (04:34):
Of it, you know, the end of GE as sort
of the paragon of American business. It's fall from grace
has been well chronicled by Bloomberg and by other outlets, certainly,
But once you get broken up, once the bloom is
off the rows in terms of the CEOs you are
producing and sending out into the world, not exactly distinguishing themselves.
As you've saw some of the people, especially more recently
(04:57):
the GE alums who have gone to run Boeing to
the ground basically yeah, barb no daily at home depot,
some of them not really setting the world on fire,
and so it sort of just ceased to be the
factory that it was still churning out very talented business executives,
of course, but once you got past that period in
(05:18):
the nineties and the aughts where it was, you know,
in a pedestal. But I think GE, since they were
so high up, had the furthest to fall.
Speaker 2 (05:26):
And as that happened, as GE struggled to find its
footing and broke up, we saw big tech continue to rise.
But replicating the kind of leadership that sets those companies
apart isn't easy. We had Mark Kerman on the show,
our colleague at Bloombergoo covers Apple, and he was talking
about the uniqueness of that company that they've tried to
bring in outside executives, and it's failed time and time again.
(05:48):
There's something about Apple's culture that can't be replicated. It's
hard to get somebody to come in and recognize what
it is or how to operate in that world. How
much of an outlier is it as you see it?
Are there still major companies today in tech or other
sectors that are just kind of by virtue of the
way they're built or they've evolved, kind of resistant to
having somebody come in from the outside to run them.
Speaker 3 (06:09):
Yeah, and I think what mark set is totally true.
Another supporting point there is how hard it is to
come out of those big tech firms and be successful
as a CEO elsewhere.
Speaker 1 (06:20):
That was happening a lot now that was a big
head scratcher.
Speaker 2 (06:23):
Matt worked with a data research group called Live Data Technologies.
Speaker 3 (06:27):
I said, okay, well, can you just tell us where
every public company CEO over the past twenty years has
come from, or where have they ever worked, what's on
their resume? And so we generated this data set that
showed over three five year periods, how the factories to speak,
have risen and fallen. When so, when these rankings came
in and we're looking down the list of the top
(06:49):
CEO factories. First thing we said was, Where's Apple, Where's Meta,
Where's Amazon? Where are all these tech titans that are
these days the sort of paragons of business whatever they do,
whether it's their return to office policy or their approach
to try you know, companies model themselves on big tech
these days, and so we said, well, where are they?
And we realize there's a couple of reasons why you
(07:11):
don't see a lot of the big tech firms outside
of IBM. One reason is positive to us, is that
when you leave big tech, you often go into the
world of venture capital. You want to invest. You want
to invest in the next Meta or the next Google,
So that kind of takes them out of their running
to be a corporate CEO. Another reason is that they're
often very skilled and being what's called like a product
(07:32):
CEO rather than a general management CEO. So their skills
are really applicable to launching the next iPhone or launching
some sort of you know, software as a service type
of thing. But they're very concerned to tech, and you
can't just take them out of tech and then send
them to some other company and be like, okay, now
go sell refrigerators, so you don't have that GE model
(07:54):
that you used to. And the third reason is they're
just young. They don't have enough of a track record.
Metta only went public twenty twelve, which is just like
halfway through the time period we were looking at here.
So there's just not enough executives that they've hired to
go off into the wilderness and become CEOs elsewhere. So
that might change, we might see some more CEOs in
(08:15):
corporate America or the corporate world at large who have
that big tech pedigree, but for now not as many.
Speaker 2 (08:22):
So there was the underrepresentation of big tech. And another
trend emerged in the data.
Speaker 3 (08:28):
And it just hit me over the head immediately as
soon as I saw the chronological breakdown of how the
professional services firms and the consulting firms were just slowly,
steadily and then all of a sudden, you know, occupying
nearly the entire top ten. In our top ten, we
have McKinsey, Accenture, the A Deco Group, Ey, Deloitte, and PwC.
(08:49):
And so you start to think, well, where's where's IBM,
You know, where's GE. They're still there, but much further down,
so they've been knocked from their perch, and I think
this is the first sort of story that really takes
a look at here is the case and here's why.
Speaker 2 (09:05):
So how did large consulting firms become the new CEO pipeline?
And how is that changing business?
Speaker 4 (09:11):
That's next pop quiz.
Speaker 2 (09:22):
What do Sundar Pichai, Sheryl Sandberg and James Gorman have
in common? They all used to work at McKenzie. My
colleague Matt Boyle has been reporting on this trend that
the new pipeline for executive talent runs from consulting firms
to C suites and he's been thinking a lot about
what's required of a modern day executive. So it's twenty
(09:44):
twenty five.
Speaker 1 (09:46):
What are the.
Speaker 2 (09:46):
Qualities or assets in a good CEO today? I imagine
that definition has changed in recent day.
Speaker 1 (09:53):
It really has.
Speaker 3 (09:54):
I mean, he speaks to the evolution of the role
of the CEO. One big thing I came acro is adaptability.
You have to be able to adapt quickly to an
ever changing role. Then if you talk about ever changing
world today is a perfect example in terms of the
word uncertainty being used what ten million times over the
past three months on earnings calls and the estimate, yes, exact,
(10:18):
probably it's low balling it. But you need that ability
to anticipate. And if you can't anticipate because you don't
know what, let's say, President Trump's going to do with
tariffs next week, you have to at least be able
to adapt quickly. And that's where consultants are pretty strong.
Their whole job is to go in blind to a company,
assess it very quickly, and then figure out what to do.
(10:39):
So adaptability is one another one is just a sort
of a facility with digits and data, let's call it,
you know, a tech savviness. They also have a good
understanding of corporate cultures because again they have to come
in fly in parachute, in blind, get to read on
a corporate culture quickly and sort of suss that, okay,
what's going to be possible, you know, within the scope
(10:59):
of of this engagement. And they are usually pretty good
at selling themselves. These are consultants, you know, that's sort
of if you're not good at selling yourself and your vision,
you're not going to last very long at McKinsey, a
Bane or a BCG. And so that is a huge
part of these days of a CEO's job.
Speaker 2 (11:15):
So this new pipeline runs from the accentures and the
PWC's and the McKinsey's of the world to these C suites.
Let me pose to you an age old question, and
that is what do consultants actually do?
Speaker 1 (11:29):
Well? What are they so fast? Side? That is the
age old question.
Speaker 3 (11:34):
Certainly, what consultants do, I think is a little bit
different than what a lot of Americans think consultants do.
They might just think of a consultant as you know,
someone who jets in first class, comes to the company
and has a quick look around and then delivers, you know,
a presentation. This is what you should do, you know,
(11:54):
lay off twenty percent of your people, you know, go
into China, you know, launch a new product, and then
they get skidattle, they're gone. While that is one element
of what some consultants do usually more on this strategy side,
what I learned in the course of reporting this story
is that that is not what most consultants are doing today.
The big difference being that they are often sticking around
(12:16):
and making sure that you know, whatever they recommend, whether
it's a new technology, a new way of management, they
stick and make sure it's actually working. So they're kind
of they're getting their hands dirty in a way that
I don't think a lot of people recognize that consultants
normally do.
Speaker 2 (12:33):
We were talking about the kind of training apparatus that
these old industrial companies built up, if that was a
corporate campus or just a program, a training program. Do
you see the same thing playing out at these consulting firms.
Do They have very rigorous training programs of their own
with the goal of, yes, building their ranks, but getting
(12:53):
exactly to the head of HRT accentsure. They spend as
much on training what they call learning and development, as
GE used to spend on all of its Crotonville apparats.
That said accentre has hundreds of thousands of employees, so
there is a lot of training that needs to be done.
But I've talked to other firms as well, and they're
(13:14):
just getting a lot more rigorous about creating putting some
structure behind this, which is a good thing.
Speaker 1 (13:19):
Certainly.
Speaker 3 (13:20):
Now we all laugh and joke about, oh I got
to sit through with stupid you webinar, or there's some
course from hr I have to take, But these companies
really take it super seriously and they know if you're
actually paying attention in some of this training. And granted
it shouldn't all just be boring webinars. It should be
one on one learning with senior leaders, you know, in
person stuff, stuff that you're not just going to do
over a zoom call. But the point is, whether it's
(13:42):
Accenture or the Swiss Staffing firm a deco group, you
talk to the heads of HR there, you really learn
that they really have realized, wait a minute, we've got
to put some more structure and rigor into this training.
So it's not just something you tick a box and
do on a random Friday in the summer. It's something
that you want to actual we spend time on. You know,
it's going to make you a better employee and then
(14:03):
a more employable executive hopefully down the line.
Speaker 2 (14:07):
Is the most common path to go from being a
partner at one of these firms directly to becoming a
CEO or their other stops along the way to them.
Speaker 3 (14:15):
It should never be a direct path actually from partner
at Accenture right into the C suite. That is kind
of actually a recipe for disaster. Some of the advisors
I talked to for this story. Had really said you
have to allow them to make all the predictable mistakes
in one or two let's say lower level corporate jobs.
(14:35):
So usually if you're coming out of consulting and you
get a corporate job, you should maybe work as an
operations chief or a strategy chief is a very common one.
Walmart and other companies have hired being consultants as heads
of strategy, so then you get the feel for the
company and the culture and you're really immersed in it
without having to be the sort of the be all,
end all decision maker before you're elevated right into the
(14:59):
CEO position.
Speaker 2 (15:01):
I want to ask you about times when this has
worked out well, drawing from the world of consulting, putting
folks from there into the c suite, and times when
it hasn't.
Speaker 3 (15:09):
Yeah, I mean a good example. And this is a
CEO I talked to as a CEO of Ranstad. Now
this is company not a lot of Americans know about
staffing company. Staffing company. They do a lot of you know,
staffing solutions. If you've got a workforce issue, you'll call
him in to fix it. They also own the job
site Monster dot com. So some of us might know
(15:29):
them that way.
Speaker 1 (15:30):
So anyway, their CEO is this Dutch guy.
Speaker 3 (15:33):
They're based in the Netherlands, and he had run two
massive units of Accenture. He'd actually been there so long
he was there when it used to be called Anderson
Consulting in.
Speaker 1 (15:43):
The old days.
Speaker 3 (15:44):
But the point is, having talked to him, he got
to know just about every industry under the sun, from
retails to autos to utilities. So he had the industry
knowledge of just about any industry, which is very helpful
now that his clients are across industries. But he also
was very good at deploying experts to fix whatever problems
(16:04):
issues their clients were having in his years and Axcenture.
Speaker 1 (16:08):
And he's also just like he's a personable guy too.
Speaker 3 (16:10):
He's not this robotic consultant who just speaks like he's
a PowerPoint in human form, which I think goes a
long way as well. So when he missed out on
the job of running Accenture, he was on everyone short
list to get a global CEO job and he took
the job at Ranstad. So he's a great example sort
of a consultant made good. Now, how about a couple
(16:33):
examples when this hasn't worked out. Yes, the recent poster
child for a consultant who did not turn out well
in the c suite was John Donahoe at Nike, a
longtime Bain and Co. Consultant, did very well there. He
also had some other corporate roles before he was at eBay,
did extremely well there. So he was following like the
(16:54):
proper path, you know, a couple of corporate roles in
c suite seasoning. But then he goes Intoni, which you
know is a challenging culture, a very challenging culture to
come into from the outside, and it was a flame out.
Now it wasn't just because he was a consultant that
it didn't work, but it's sure as heck didn't help
that he was trying to bring some of his bin
(17:15):
teachings into a culture and sometimes these corporate cultures will
just reject it out a hand and say, no, that's
not how it's done here, this is not you know,
this is not the Nike way. And you know, financial
performance COVID on top of it. A lot of things
contributed to his downfall. But another one is the former
CEO of Starbucks, who's Mackenzie Alum. There you have a
(17:35):
case of a founder, Howard Schultz, who just never.
Speaker 1 (17:38):
Really seems to go away.
Speaker 3 (17:39):
Yes, and maybe you know, he didn't have as much
of a runway as he needed to do some of
the things to turn Starbucks around, but there was not
much patience given to him, and so he was out after.
Speaker 1 (17:52):
Just over a year.
Speaker 2 (17:54):
I want to end with a philosophical question, and that is,
what do we gain or lose by hoving a pipeline
like this, having this kind of mold of who the
ideal CEO is? What does it mean that we're kind
of restricting I don't know, a diversity of opinion or
perspective on what that job entails or could entail.
Speaker 3 (18:11):
Yeah, I think it's a really good point, and we
are probably constraining and constricting ourselves a little bit to
say that, Okay, well now we don't need to hire
and the CEO doesn't have to be from ge but
he now has to be from Accenture. So okay, you're
not getting someone from this box. You're getting someone from
a different box. Whereas, especially these days in the world
of business, we really need to be hiring people who
(18:33):
are not in a box at all, or at least
willing to look up outside the box and have a
peek around. But I think it's the job of corporations, though,
when they are figuring out who's going to be leading
us into this wilderness that we're into right now, to
be hopefully looking across the board at not just the
people from let's say Central Casting, whether Central Casting is
(18:55):
ge or now it's Accenture and McKinsey and saying or
at least filling up the senior management roles with enough
people who are willing to challenge orthodoxy, have a sense
of you know, is this really the way we should
be doing things guys? And I think there's a lot
to be said for maybe taking a chance at least
on someone who's in a non traditional type and you know,
(19:17):
roll the dice there and see what happens.
Speaker 2 (19:25):
This is the Big Take from Bloomberg News.
Speaker 1 (19:26):
I'm David Gerra.
Speaker 2 (19:28):
To get more from The Big Take and unlimited access
to all of Bloomberg dot com, subscribe today at Bloomberg
dot com slash podcast offer. If you like this episode,
make sure to follow and review The Big Take wherever
you listen to podcasts. It helps people find the show.
Thanks for listening. We'll be back tomorrow.
Hosts And Creators
Sarah Holder
Saleha Mohsin
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