The cult of the superstar CEO


That at least is the clear conclusion to emerge from research conducted by Jim Collins, the author of a number of best-selling books about what makes companies great. Particularly fascinating are the findings he reported in his book “Good To Great,” published a decade ago.

For that book, Collins identified companies in the Fortune 500 whose shares, at some point since the early 1960s, went from merely keeping up with the market itself to outperforming it by a margin of at least 3 to 1 over a period of at least 15 years. He then constructed a control group of similar companies that never underwent this transformation from good to great.

Collins found that the mediocre companies were far more likely than the great ones to appoint superstar CEOs as white knights. In fact, Collins told me in an interview a few years ago, more than two-thirds of these mediocre companies “tried the outside savior model, and it didn’t work.”

In contrast, more than 90% of the good-to-great companies appointed their CEOs from within, and those CEOs hardly met the criteria of being a superstar: They remained largely unknown to the outside world.

From this and other findings, Collins concluded that “bringing in a white knight to be CEO is a recipe for mediocrity.”

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