It’s a busy time for two of our newest business leaders. Yahoo CEO Marissa Mayer recently held her first earnings call. Citigroup’s Michael Corbat has completed his first month on the job. Both CEOs face substantial challenges in transforming their companies and setting them on a profitable path. Both come to their jobs without prior experience as a chief executive. Both replace CEOs who departed precipitously. But here the similarities end.
Does the route to a company’s top spot — outside hire versus homegrown talent — make any difference to a CEO’s effectiveness and ultimate success? Does one route have advantages over the other? Analyses of CEO succession and company performance suggest these are not trivial questions. Let’s take a closer look.