Ivies loosen grip on top CEO jobs
By Del Jones
USA Today
Imagine how far Brenda Barnes would have gone had she graduated from Harvard, Princeton or Yale.
No need, Barnes says. Attending Augustana College in Rock Island, Ill., "made me CEO of Sara Lee," she says. With a workforce of 150,400 and 2004 sales of $19.6 billion, Sara Lee is the largest corporation with a female chief executive.
"At Augustana, we say there might be other schools that open more doors," says Barnes, who declines most interviews but was quick to come to the phone to talk about her alma mater. "Once we get in the door we stand up better than anybody."
Mounting statistics back her claim. Between World War II and the early 1980s, just about every major company shopped for future CEOs in Cambridge, Mass.; Princeton, N.J.; or New Haven, Conn. Since then, there has been a dramatic shift that has been highlighted in recent executive suite shake-ups:
Last week Hewlett-Packard replaced Carly Fiorina with Mark Hurd, who got a business degree at Baylor University ('79) on a tennis scholarship. The man taking over at Walt Disney in October is Robert Iger, an Ithaca College graduate ('73), who replaces Michael Eisner of Denison University ('64) in Granville, Ohio.
A study by Spencer Stuart, an executive search firm, found that the percentage of CEOs at Fortune 500 companies who were educated at Ivy League schools declined from 16 percent in 1998 to 11 percent in 2004. Even the vaunted Harvard MBA shows signs of erosion. Among large-company CEOs who have MBAs, 28 percent received their degrees at Harvard, according to the 1998 study. By 2004, that had slipped to 23 percent.
Change began in 1980
A separate survey by the Wharton School at the Ivy League's University of Pennsylvania indicates the trend extends back 25 years. In 1980, 14 percent of CEOs at Fortune 100 companies received their undergraduate degrees from an Ivy League. By 2001, 10 percent of CEOs received undergraduate degrees at one of the eight Ivies. The percentage of CEOs with undergraduate degrees from public colleges and universities shot up from 32 percent in 1980 to 48 percent in 2001.
Barnes isn't the first to hit the CEO lottery out of Augustana, a Lutheran liberal arts school overlooking the Mississippi River. There are QCR Holdings CEO Doug Hultquist ('77) and Noodles & Co. CEO Aaron Kennedy ('85) and retired Deere CEO Robert Hanson ('48). Murry Gerber, CEO of gas company Equitable Resources, graduated the same year ('75) as Barnes.
"It isn't Ivy League status that we rely on for our reputation. It is the accomplishment of our graduates," says Augustana President Steven Bahls.
Augustana churned out all its CEOs even though it has just 2,200 students. Another example where size doesn't matter: Pacific Coast Baptist Bible College in San Dimas, Calif., has an enrollment of 108, yet produced David Edmondson, who takes over as RadioShack's CEO on May 19.
Slap on ivies
Perhaps the ultimate slap on Ivies: Michael Dell for the first time passed Bill Gates as the most admired executive, selected last month by entrepreneurs at the Inc. 500 conference. Neither Dell nor Gates graduated from college, but at least Harvard could take a measure of pride in counting Gates among its dropouts. Dell dropped out at the University of Texas.
The trend is a pet peeve of FedEx CEO and Yale graduate ('66) Fred Smith. "I've talked to (Yale President) Rick Levin about this many times," says Smith, who blames Yale's de-emphasis of business in favor of disciplines such as history, economics and government.
There are other reasons behind the trend. Non-Ivy colleges and universities, both public and private, have gained in stature, allowing recruiters to do more fishing at non-Ivies to avoid the "sense of entitlement" they encounter when they go to Ivy campuses, says Jeffrey Sonnenfeld. He, by the way, has three Harvard degrees and is now an associate dean at Yale and founder of The Chief Executive Leadership Institute. Not every student at the non-Ivies is CEO material, "but you don't have to fish blindly," Sonnenfeld says.
More Ivy graduates are interested in large corporations, but he suspects some "reverse snobbery" may hold them back because companies have non-Ivies doing the hiring, Sonnenfeld says.
The best CEOs today have a rapport with the rank and file, says Bill Zollars, CEO of trucking firm Yellow Roadway and a University of Minnesota alumnus ('69). "People who go to the University of Minnesota are used to being with people of all socioeconomic backgrounds," he says. "It's just as important to talk to (employees) one-on-one as it is the investment community and bankers."
Trend growing
If anything, the CEO trend away from Ivies is intensifying. So far in 2005 there have been 24 new CEOs named to run Fortune 1,000 companies, according to public-relations firm Burson-Marsteller. USA Today found only one, Corning's soon-to-be-CEO Wendell Weeks, with an Ivy League degree, a Harvard MBA ('87).
Weeks went to work for Corning after getting his undergraduate degree from Lehigh ('81). When he gave CEO James Houghton notice that he was quitting to go to Harvard, Houghton — who happens to be the third of four generations in his family to attend Harvard ('58, MBA '62) — offered to pay his tuition and salary if Weeks promised to return to Corning. Weeks, who replaces Houghton as CEO on April 28, says he had to turn down lucrative offers from headhunters to keep his promise.
Few of his fellow Harvard students went into industry, Weeks says, and instead opted for the higher starting salaries at investment banks. When asked if that hurts corporations and U.S. competitiveness, Weeks laughs and uses self-deprecating humor: "I've yet to see the study that proves that Harvard creates value."
In 2004, there were 99 new CEOs named at Fortune 1,000 companies. While eight had Ivy sheepskins, five of those were from Harvard's Advanced Management Program, which is intensive and expensive ($52,500), but takes 10 weeks to complete.
When Barnes first graduated from Augustana, she worked stints as a waitress and a postal clerk before landing a $10,000-a-year job at Wilson Sporting Goods. There, the promotions were frequent.
"The things that contribute most to leadership were things I did not learn from my (geology) major," says Equitable Resources' Gerber, who got to know business and economics major Barnes at Augustana. Gerber says he was introduced to existentialism and "making good with your life while you're on this planet. I don't believe someone from Augustana College would end up with the mess of Enron, to put it bluntly. We don't turn out those kinds of people."
Importance of ethics
Others cited ethics as the backbone of their educations. Baxter International CEO Robert Parkinson, who in 2002-03 was dean of Loyola University's Chicago School of Business, says when he got his MBA from Loyola ('75), it was one of five programs to offer a course in business ethics. Loyola's "Jesuit tradition is educating the whole person," he says. Adecco Group North America CEO Ray Roe credits his years at West Point ('67) for his "strong base of principles, code of conduct and ethics."
However, it's not as if the Ivies are producing more CEOs who push ethical or legal lines. Hank Greenberg, who left in scandal last month at American International Group, went to the University of Miami ('48) and New York University Law School ('50). Harry Stonecipher, fired by Boeing last month after having an affair with a subordinate, graduated from Tennesee Tech ('60); WorldCom's just-convicted Bernie Ebbers graduated from Mississippi College ('67); Tyco International's Dennis Kozlowski went to Seton Hall ('68); and Enron's Ken Lay has degrees from the universities of Missouri ('64 and '65) and Houston ('70).
Martha Stewart, however, is an alumna of Barnard College ('63), an all-female liberal arts affiliate of Columbia University, one of the Ivies.
Of course, the Ivies have pumped out top-notch CEOs. General Electric CEO Jeffrey Immelt has a Harvard MBA ('82). Microsoft CEO Steve Ballmer, a friend of Gates' at Harvard ('77), stayed on to graduate. Sharon Patrick, who took over as CEO of Martha Stewart Living Omnimedia in 2003, has a Harvard MBA ('78). But Patrick then was replaced last year by Susan Lyne, a University of California, Berkeley dropout.
Times have changed, Sonnenfeld says. Had Gates been a product of the 1960s, he likely would have finished Harvard and gone on to develop software products for IBM. Gates may even have made IBM CEO after 30 years.
But the best and brightest of the 1980s started doing things other than getting on the corporate fast track. Now, those decisions are being reflected at the top.
• • •
| Where they worked
Teenagers looking for inspiration as they begin to think about summer jobs might want to consider the path taken by CEOs who began their working lives at a young age.
Charles Schwab CEO of Charles Schwab and Co. The future founder of the investment powerhouse started a chicken operation in his backyard at age 12. He sold eggs door-to-door, hawked the droppings as fertilizer and killed and marketed the chickens himself.
Dick Parsons CEO of Time Warner From ages 12 to 14, Parsons was a paperboy for the Long Island (N.Y.) Daily Press.
Jeff Taylor Founder of Monster.com The future founder of the online job-placement site first worked as a paperboy, then as a dishwasher and salad-maker at a steakhouse.
Mindy Meads CEO of Lands' End At 16, Meads worked as a lifeguard at a country club in Wisconsin. She later became manager of the facility, responsible for coordinating such things as swim lessons, luncheons and other activities.
Tom Kunz CEO of Century 21 Real Estate Kunz started working at his dad's gas station in Ogden, Utah, cleaning counters when he was 5 or 6 years old. He worked there through high school, sweeping, cleaning and pumping gas — which included checking the oil, batteries and tire pressure and washing windows and headlights. "It was probably one of the best learning experiences I've had," Kunz says. "As long as you take care of your customer ... they will basically tell you what they want, and they will tell you how to sell it to them." Edward Liddy CEO of Allstate Liddy plucked chickens and put them on a rotisserie when he was in the sixth grade in New Jersey. "I probably got a quarter an hour and all I could eat," he said. "It was marvelous." As a college student, he spent one summer in New Jersey working for a wildcat company walking on steel beams approximately 80 feet above ground. The job paid well, about three times minimum wage, but it was dangerous.
Liz Lange CEO of Liz Lange Maternity The designer of high-end maternity clothes, who also has a line at Target, worked in the beauty marketing department at Revlon at age 16. "I was analyzing women's preferences, and relationships between their beauty-buying habits, such as lip color vs. nail color," she says. "I learned what it means for me to be somewhere every day and be responsible and to interact with others."
Jim Skinner CEO of McDonald's Skinner flipped burgers as a teenager at a McDonald's in Davenport, Iowa, four decades before becoming head of the company. Five of McDonald's seven corporate chiefs started out as crew people at the fast-food restaurant chain.
David Levin CEO of Casual Male Retail Group When he was 19 and a sophomore at the University of Iowa, Levin and a fraternity brother each pitched in $500 to start a business selling military-type clothing, popular on campuses during the Vietnam War. The store, which later spread to two other college campuses, was making $2 million by the time he graduated. Levin says the experience made him a gutsier businessman. "It made me more well-rounded, just better understanding of what customers want and how to deal with them," he says. Source: USA Today research |
