3 Reasons why Engineers make the Best CEOs

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When you look to develop the leadership talent in your organization, where do you go? Many companies look to sales, marketing, finance, or operations to find their next leaders. According to the latest research though, they may be looking in the wrong direction.

Harvard Business Review (HBR) just released their list of the Best-Performing CEOs in the World. They judged CEOs based on hard data like increases in shareholder return and market capitalization. They also looked at the long term, considering the performance of CEOs over their entire tenure. One interesting result from their report was that 24 out of the top 100 CEOs in the world are engineers. In fact, on the top of their list was Jeffrey Bezos of Amazon, an engineer who does not even have an MBA.

Finding engineers in the top spot of market-leading companies shouldn’t come as a surprise. Earlier studies by executive recruiting firm Spencer Stuart came to similarconclusions. In looking at the educational background of S&P 500 CEOs, they found 33% of the CEOs had undergraduate degrees in engineering while only 11% were in business administration.

So the question is, why do engineers make great CEOs? It might make sense that engineers rise to the CEO role in technology companies but HBR found strong performing engineer-CEOs at non-engineering companies like Anheuser-Busch InBev, Intercontinental Exchange, and Sampo. So it’s clear engineers possess certain characteristics that make them well suited for the role of CEO.

The education and experiences of engineers is unique. With a strong emphasis on math, science, and technology, engineers are called upon to design, build, create, improve, and influence just about everything we use in modern society. This puts engineers on the front lines of solving challenging problems and doing the things that others say can’t be done. It’s no surprise then that engineers elevate to leadership positions where their unique background and experience can be used to improve the broader business. Writers on this topic suggest there are three unique characteristics that engineers bring to the CEO role:

1. Engineers have a practical, pragmatic orientation. Nitin Nohria, dean of Harvard Business School, explains that, “Engineering is about what works, and it breeds in you an ethos of building things that work—whether it’s a machine or a structure or an organization. Engineering also teaches you to try to do things efficiently and eloquently, with reliable outcomes, and with a margin of safety. It makes you think about costs versus performance. These are principles that can be deeply important when you think about organizations.”

2. Engineers are analytical and are problem solvers. A recent American Society for Quality (ASQ) survey showed 69% of respondents felt analytical thinking, organizational skills, and problem solving were key attributes for running a successful company. Systematic problem solving is at the root of engineering. It’s also the foundation of what makes a great CEO. Engineering skills include analytical thinking that, at the CEO level, allows for better informed decision making. Engineers tend to be more organized and logical, considering the full consequences of a decision before making a commitment.

3. Engineers are both detail orientated and architectural thinkersMichael Lovell, chancellor of UW-Milwaukee says that, “One of the things we learn in engineering is to be a systems-level thinker, so that we see a very big picture in how adjusting one area affects and impacts downstream other areas. That’s really important when you’re running a large, complex organization. If something gets to [the CEO] level, it’s not an easy problem to solve. [They] need to look at all of the variables before making a decision. It’s a thought process.”

The other interesting conclusion HBR found was that, when a company looked to hire a CEO from the outside, they typically looked for someone with an engineering background. James Citrin who leads Spencer Stuart’s North American CEO practice stated that, “When boards are making decisions, and they know it’s riskier going outside, it often gives them comfort if a candidate has studied engineering.” Citrin says it’s specifically because engineers excel at architectural thinking and logical problem solving.

When looking to develop the next great leaders in your company, are you ignoring the engineering department? Engineers are proving themselves to be strong, capable CEOs who are leading many of today’s top global companies. Smart business leaders recognize this fact and are including engineers in their leadership development programs.

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