HBR's 'Best-Performing' CEOs: What they have in common

24% of top performers hold engineering degrees

The Harvard Business Review has named its 100 best-performing CEOs in the world, with top performers representing 22 different nationalities and a variety of leadership styles and core values.

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HBR's 'scientific approach' to finding 'the best'

To create the list, HBR researchers:

  • Looked at companies that had been listed in the S&P 1200 as of December 2013;
  • Identified CEOs who had assumed their role between 1995 and April 2012—and hadn't been convicted or arrested; and
  • Used Datastream and Worldscope to calculate daily company returns for a given CEO from the day he or she took office until April 30, 2014.

Researchers then plugged the data into a formula to find country-adjusted returns, industry-adjusted returns, and change in market capitalization for each executive.

In total, HBR researchers ending up ranking 832 CEOs from across 827 different enterprises, spanning 30 counties and representing 43 nationalities.

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The team conducted regression analysis to control for biographical factors like having a certain type of degree or being a company founder in order to isolate the effect of that particular factor.

The top 10

According to the calculations, the 2014 best-performing CEOs were:

    1. Jeff Bezos, Amazon
    2. John Martin, Gilead Sciences
    3. John Chambers, Cisco Systems
    4. David Pyott, Allergan
    5. David Simon, Simon Property Group
    6. Lars Rebein Sørensen, Novo Nordisk
    7. Hugh Grant, Monsato
    8. J. Michael Pearson, Valeant Pharmaceuticals
    9. Mark Donegan, Precision Castparts
    10. William Doyle, PotashCorp

According to the research, the top 50 CEOs on average saw shareholder returns of 1,350% during their tenure as CEO.

However, researchers acknowledge that the best CEOs should be measured by more than their financial performance; the strongest leaders must set a strategic vision, convey authenticity, and execute long-term planning.

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As such, HBR asked reputation management consultancy Reputation Institute to rank the top 100 on alternate factors—like governance, leadership, and work environment—rather than investment performance.

The top 10 best-performing CEOs based on these alternate factors were:

    1. Martin Winterkorn, Volkswagen
    2. Lars Rebien Sørensen, Novo Nordisk
    3. Nick Hayek Jr., Swatch
    4. Jeff Bezos, Amazon
    5. Herbert Hainer, Adidas
    6. Michael Kowalski, Tiffany & Company
    7. Simon Wolfson, Next   
    8. Robert Iger, Walt Disney 
    9. Franck Riboud, Danone  
    10. Ulf Schneider, Fresenius

What do HBR's 'best performers' have in common?

The HBR data found that 24 of the 100 best-performing CEOs have undergraduate or graduate degrees in engineering, compared with 29 who have MBAs. Eight CEOs hold both degrees.

According to Harvard Business School dean Nitin Nohria, engineers perform well in both technology-based companies as well as other types of firms in part because such a background gives leaders "practical and pragmatic orientation. He says, "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," adding that the discipline "also teaches you to try to do things efficiently and eloquently, with reliable outcomes, and with a margin of safety" and encourages weighing both costs and performance.

James Citrin, an executive recruiter, says many firms are more apt to hire an outside applicant if he or she has studied engineering because such candidates tend to excel at "architectural thinking" and problem solving (Ignatius, Harvard Business Review, November 2014).

How to be a better manager

Most staff aren't naturally great leaders, but studies show that leadership and management can be taught. Use our Leadership Competency Diagnostic to help your managers further develop their strengths and focus on opportunities for improvement.

Meanwhile, it's never too early to start grooming a great manager. See our Succession Management Implementation Guide to ensure you deliberately chose your future leaders—don’t let circumstances choose them for you.

And see more stories from our archives on the power of good management, and strategies to be a better leader.

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