Why engineers make great CEOs
thehindu.com
thehindu.com
That's why you see so many oil company CEOs who are geologists or engineers, tech company CEOs who are developers, and CPG CEOs who are marketers.
The big exceptions would be Finance, Logistics, Business Consultancy or Conglomerates.
(One big exception: Tony Hayward, who's was also one of the few energy-industry CEOs to have a STEM PhD. (CEO of BP during the Macando/Deepwater Horizon blowout.) Other exceptions are mostly very small, exploration-only companies.)
The truth is, though, that the oil industry hires very few geologists in proportion to the number of engineers. (This is true even if you disregard the entire "downstream" refining and marketing half and just stick to exploration and production.)
The most common job function for most oil and gas companies is building or maintaining physical infrastructure of some sort. (e.g. wells, production facilites, pipelines, refineries, etc) Therefore, oil companies hire mostly engineers, and most oil company CEOs are engineers. (Once again proving your point.)
She's perpetually overworked as well, which squares with a supply/demand imbalance. You'd think that this'd just lead to higher salaries - and by her accounts, her employer basically does throw money at her - but the fact that petroleum geologists are paid pretty well hasn't yet filtered down to university students choosing their majors.
A lot of it is that a geoscience job at an oil company requires an M.S. or a Ph.D., and geology degrees typically take longer than most other fields. There's a minimum of a 6-year lag between starting undergrad and being eligible for a job. Typically it's more like 7-8 years total for an M.S. and 8-12 years for a Ph.D.
Therefore, it's a long pipeline. I just started in industry, and when I switched to geology in undergrad (early 00's), oil companies were not hiring geologists and hadn't been for 15 years.
The stigma associated with going into the oil industry depends a lot on where you are geographically. If you go to an "oil patch" school, then it's the opposite effect. It is a factor, but I'd argue the field vs. desk job part has a larger influence.
Geologists tend to become geologists because they _really_ like the outdoors. With a few exceptions, as a petroleum geologist, you're behind a desk 100% of the time. Compare that to fields like environmental consulting or state government work where you can start right out of undergrad and are in the field a significant portion of the time. (Both of those pay less and tend to involve less actual geology, though.)
Finally, there's a risk/reward trade-off. Geologists tend to be among the first to go when layoffs start. We're concentrated in exploration and development (note: field development, not software), and exploration is viewed as an expense, not a profit center. Exploration budgets get slashed the second things look like they're going to take a downturn, and smaller companies lay off most of their exploration geologists whenever oil prices drop. Development is the second thing to cut back on after exploration. A lot of the folks that I got my M.S. with started jobs in '06 or '07 and were laid off in '08 or '09. They've all since found jobs again, but the cycle will repeat itself.
For a business major to do the vice versa would be virtually impossible (programmer is possible, but not 'engineer' in the traditional sense).
I am pretty sure I could teach just about anyone who is motivated and interested enough math/chemistry/physics/computer science to get through any given engineering degree in those areas.
I think the amount of business people who are motivated to and interested in learning the engineering skills is way lower than the amount of engineering people who are motivated to and interested in learning business skills, but that isnt about ability, that is about motivation and interest.
Engineering interest maps much more directly to engineering education than business interest maps to business education.
You don't see to many people doing that switch, but I'd attribute it to factors other than any kind of ability chasm. What we do isn't rocket science[1].
[1] Unless you are a Kerbal Space Program developer. Then it is rocket science. Of the fun kind.
I took a single class at the USC Law School on Constitutional Law. It was considered a brutal general education class, but myself and some fellow engineers in the class found it absolutely trivial. Turns out case law has many similarities to formal logic.
An engineering education gives you a huge toolset with which to model and solve different kinds of problems, a toolset that non-engineers simply do not possess.
Practical experience (of a practicing engineer) shows that the value of an engineering degree outweighs that of one's work only in the first couple of months, or even weeks, on a job. The skills of incompetent engineers are in significantly less demand than that of incompetent managers (sadly). Unlike an MBA, the engineering diploma isn't worth the paper it's written on the moment people realize you're clueless. It's not a very good safety net :-).
Out of the top-20 MBA programs, STEM undergraduate degrees are about as common as business/economics undergraduate degrees: http://www.beatthegmat.com/mba/2009/11/20/which-undergrad-ma....
Its like government - military men think a military leader is needed; business wants a businessman etc.
I think the best leader would be - a leader. Someone who gets competent advisors, makes decisions and inspires the crew to do their best.
There's a significant element missing in this line of thought and it involves emotions/people. By this reasoning, a robot might also make a damn good CEO.
The Head of Sales (US) understands the US market better than the Director of Sales, who understands it better than the CEO. So, the CEO can make an impact by choosing people, understanding their motives, skills and the relationships between them, and giving them a chance to shine.
When a new president is elected, and imposes policies he came up with in opposition without access to treasury data and expert advice, something is wrong. Shame it happens every time. Big company CEOs are trying to make money, not get re-elected, so they should manage not do.
Ok this affects me at the moment. Why? Because I have two incompetent bosses. Basically I have junior / intermediate level programmers telling me what to do (and getting paid more than me for it). They took the promotion for the money. I do the "smart" work and make the technical decisions (when they make technical decisions they are often poor choices, basically from lack of experience).
Its at the point that I am going to take the next management position that comes up.
I believe everyone thinks they're the only one smart, special snowflake.
Maybe I sound arrogant, but when you have to override 75% of their decisions for something better, then I think I am more experienced than them.
Then there was having to dig onto code written and commented by them.
# open file
file.open(filename)
Consolations.
Engineering teaches you a lot of the analytical / architecture skills you need to build and run organizations, but you won't be ready to lead until you learn a decent amount of the other business functions that make up just about every company.
You need to learn how marketing works, but not just the basics - learn what type of people are good at each role, what are the types of roles you need for different types of marketing strategies, some of the tactics for each strategy, etc...
Rinse and repeat for sales, operations, finance, product (different from, but aligned with engineering), and general strategic stuff like legal, recruiting, release strategy, fund raising, investor management, and so on.
Here's the good news: you don't need to be an expert in all of these areas when you get started. You just need to know enough to know which questions to ask and then surround yourself with advisors who can help answer them.
If you've ever built a new product (doesn't literally need to be a commercial product) from scratch and actually gotten people to use it, then you're probably already capable of thinking strategically - that's the first core ingredient for dealing with the market / product / economic challenges tasked to CEOs.
The second ingredient is the empathy and people-management part... This means being able to internalize concepts like e every employee is different, values different things, and therefore might need / expect different things from you - some employees might deeply care about working on interesting projects; others might care about being able to work in a specific time / location so they can maximize the time they spend with their family; some might care about money; but in my experience overwhelmingly most employees just care about feeling like their work is meaningful and appreciated.
Learning how to build an organization out of people who all have different personal priorities, levels of experience, backgrounds, and personalities is not trivial. You basically need to develop a high degree of self-awareness about your own needs and values as an employee first. And once you're able to do that, it gets a lot easier to recognize and understand what others need.
TL;DR; - there's a big menagerie of different things you have to learn to be a CEO, and engineering can help you structure the process of learning them but it's not enough unto itself. Develop a strong sense of self-awareness, a good advisory board, and the humility to ask for help when you need it.
http://en.m.wikipedia.org/wiki/John_Roth_(businessman)
Roth was an engineer who oversaw stock schemes and false accounting such that he was able to completely wipe out the company. (Nortel was one of Canada's largest companies and now its gone)
With all due respect, when I read "engineering's long and glorious history", I have other names in mind.
But setting aside some business missteps, it seems like engineers/CEOs are better for companies (especially tech growth companies) than MBAs. It was after all, Lazaridis' background that helped RIM achieve so much success that they could afford to pay $600 million to NTP in 2006 and also be in the competition with iPhone.
I am unable to answer the phone around 40% of the time (before the caller hangs up), due to the stupid swipe gesture I need to do. A physical green button was orders of magnitude more usable and reliable.
If the CEO doesn't make sure the company makes money, the company will fail. I see this a lot in smaller companies. Larger companies probably don't let engineers get to the higher ranks unless they can make the company serious amounts of money.
Ultimately a business is about making money, and the CEO has to make sure that happens. Otherwise, you aren't much of a CEO.
Although if your business happens to have tenants, you should understand those too.
Great COOs and CFOs make sure that lifeblood is vibrant, while CEOs can focus on executing on the company's designated purpose.
Although the engineers are broadly parts of the intelligentsia community, they are kinda 'useful', and it was theorized that the worker-peasant-soldier students[1] were politically trustworthy, many of those students were sent to universities to fill in the blanks, and many of them became engineers(, and career as a worker in an industrial factory, together with residential records, or Hukou in a city was quite desirable then).
Now that China has been led by people who were born in 1950s or earlier for years, they were quite likely to be in universities during or after the Cultural Revolution years. It wouldn't at all be surprised that some of them were trained as engineer(, but diverted to administrative paths during career).
[1] http://books.google.com.hk/books?id=J5QbQpQTegwC&pg=PA124&lp...
France notably has most of its management come from the Grande Ecoles that give out "engineering degrees". But they end up only spending about 2 of their 5 years on their specific domain, and a good chunk of their time on business management classes.
"The engineer who can become an entrepreneur, who can then become a CEO... there's something magic about that formula"
First of all, CEO != POTUS.
Secondly, in the words of Harry Truman, "don't you ever cast any aspersions on Mr. Hoover because he's done some very important things for this country and the world."
e.g.:
Early in 1946, when large parts of both Europe and Asia were threatened with famine, Truman made Hoover honorary chairman of a Famine Emergency Committee, and in that capacity Hoover traveled 35,000 miles to twenty-two countries threatened with famine. As a result of his recommendations, the United States in five months shipped more than 6,000,000 tons of bread grains to the people of hungry nations.
- Plain Speaking: An Oral Biography of Harry S. Truman
Not to mention a lot of successful food relief efforts he drove during and after the First World War. How do you think the guy got elected President in the first place?
Hoover did have leadership skills, it seems in particular the problem-solving kinds that a successful engineer-CEO might bring to the table. His political policies and the times he lived in just didn't intersect well.
On the other hand, it's really simplistic to assume that engineers are "the good guys" and that having an engineer-turned-CEO will guarantee an engineer-driven organization. There are plenty of self-hating, Benedict Arnold engineers who'll gladly sell technology out to management. For some reason, a substantial portion of the engineers who become executives are that kind, and I don't know why, but it gives the good engineers who move into leadership a bad name.