Professional Documents
Culture Documents
LESLIE PRATCH eorges Doriot, the Harvard busi- ability that allows him to utilize all his skills
advises corporate directors,
senior executives, private
equity investors, and ven-
ture capitalists whether the
individuals being consid-
ered for a firms most
important strategic and
G ness school professor who in 1946
co- founded American Develop-
ment and Research, the first
modern venture capital fund, famously told his
students that he would rather invest in a B ven-
and experience. Can the CEO improvise to
exploit unexpected opportunities and deal with
threats? Is he or she at risk for avoidant or
manipulative behaviors when timetables are
not met, when plans need to be revised? Is the
operational responsibilities ture with an A person than in an A venture CEO willing to work with investors to resolve
possess the psychological with a B person. Doriots thinking about what problems and address concerns? Predicting
resources and personality drives the success of a new venture is today a how a CEO is likely to perform under these
strengths needed to be
successful.
central feature of the venture capitalists pro- conditions is one of the most difficult evalua-
leslie@lesliepratch.com fessional identity. Many experienced venture tions that private equity investors must make.
capitalists and private equity investors, in fact, Investors typically try to predict the quality
JORDAN JACOBOWITZ regard the quality of a CEOs leadership as the of an executives leadership by examining CVs,
is an associate professor at
the Chicago School of decisive factor in a ventures success. Their eval- observing behavior during interviews, and
Professional Psychology uation of the quality of a ventures leadership checking references. This is the approach that
and adjunct senior lecturer is often the most important consideration in firms use when determining which manage-
at Northwestern Univer-
making investment decisions. ment trainees to hire. This approach works best
sity, Counseling Psy-
chology Department. Compared to firms in stable industries, in traditional corporate settings, where future
Among his professional privately funded ventures typically operate conditions often repeat the past, and where the
activities during the past under conditions of high stress, possess lim- executives performance has little effect on the
thirty years has been the
application of psycholog-
ited resources, and have short and possibly companys bottom line performance. It has a
ical assessment instruments unforgiving time spans for achieving goals. In hit or miss quality in terms of predicting an
to assess, explain, and pre- some cases, the market space for these ven- executives leadership under ambiguous, novel,
dict behavior and feelings tures may never materialize. The leaders of or rapidly changing conditions, where the
among normal and clinical
populations across the life these ventures often face operating environ- quality of the executives performance is not
span. ments more challenging than those faced by meaningfully different from the companys
executives heading more established firms. overall performance. Given the enormous risks
Investors need confidence in the CEOs their ventures face, can private equity investors
capacity to function in this environment. The improve the accuracy of their predictions
CEO needs not only cognitive ability and regarding the future performance of senior
functional skills, but also a generalized coping executives of their portfolio companies?
Company Stage
ID Business When CEO Arrived Industry Business Challenge Why Considered Successful
1 Web-based personal Start-up Web-based media Grow company and develop revenue model Sold internet company for $60+ million in late 1990s
publishing and services Raise capital to finance growth Grew internet division for acquiring company that was later sold for $10+ billion
communities
Exit through sale or IPO
2 Automated materials Start-up Web-based distribution Take product from concept to beta, bring to Proved he could design and procure industrial commodity through web-based
management software services market and sell at a profit (expansion stage) distribution
Grow software sales (growth stage) Launched and grew company to seven-figure in revenue in six months
Exit through sale Raised two rounds of venture capital
3 Biotechnology for Start-up Life sciences, Develop and license chemicals for food and Sold first company and led IPO raising $50+ million
pharmaceutical and food pharmaceuticals pharmaceutical applications Started current company to supply chemicals to pharmaceutical and food
industries industries
4 Performance opticals Growth Consumer products Build the business in a sustainable way Prior success as CEO of consumer products company that was funded by his
health care and optical Strengthen its distribution and leverage that current investors; led a dramatic turnaround there
growth
5 Contract research Growth Pharmaceutical services Save a dying business: Unsustainable losses VCs did a search and liked this CEO: He knew where he was going and how to
running millions of dollars every month get there. He was firm, decisive; he could bring discipline to a company that
7 Receivables Recapitalization Collection industry Grow the business Previously successful at predecessor company, with responsibility for a number
management for of different functional areas
businesses Investors saw company as a growth opportunity; CEO had assembled a strong
leadership team; 20% CAGR; 30% EBITDA growth over four years
8 Hotel management Recapitalization Hospitality industry Increase profitability When hotel sold to new investor group, current GM was asked to stay; in four
years he grew profits from $4.5 million to $14 million; now running additional
properties for same investor group
9 Hospital management Growth Health care Acquire hospitals, run them more efficiently, Co-founded company and ran it for 12 years
leverage economies of scale Under his leadership, company grew to become large hospital management
company
10 National franchiser Growth Personal care Grow the business without sacrificing profits Grew up in the industry and knew how to run the company
On track to deliver on investors financial expectations
SUMMER 2004
EXHIBIT 1 (continued)
Company Stage and CEO Success Measures
SUMMER 2004
11 Lawn and garden Recapitalization Home improvement Top line growth while maintaining profitability Has restructured the business successfully
equipment products Sell to strategic or financial buyer within five Has so far exceeded investors expectations for earnings growth
years or go public
12 Semiconductors Growth Semiconductors Grow company to be candidate for successful IPO Company was losing millions/month; CEO sold facilities, reduced headcount,
cut product lines, and returned company to profitability in less than one year
13 Software for consumer Early stage Software Grow the business Measured by unit sales, the companys software was one of the top 100
electronics Permit investors to exit through sale to strategic programs ever produced
buyer Founded company and led it through several successful rounds of financing
14 Corporate training and Start-up Software Grow the business Started company with no capital; rate of growth averaged over 40% per year;
performance support Permit investors to exit through sale to strategic arranged highly successful sale to outside investors
software buyer
15 Semiconductor Early stage Semiconductors Grow revenue and profits Hired as consultant to build strategic marketing plan; eventually appointed CEO
components On track to meet investor timetables/expectations
16 Medical software Start-up Software Grow revenues and profits prior to IPO Met investors timetables/expectations
17 Semiconductor Early stage Semiconductors Grow revenues and profits leading to IPO Has been successful with previous start-ups
manufacturing Share price up 8 since IPO
technology
18 Telecommunications Growth Telecommunications Grow through acquisitions Revenues up 5 over three years during difficult industry conditions
services
19 Genome sequencing Early stage Biotechnology Develop commercial applications of academic Two-time successful CEO of venture backed firms
research Before that, led successful start-up funded by parent company
20 Packaging and container Recapitalization Paper products Under-performing family business Improved sales, cut costs, maintained morale while turning around sleepy family
manufacturing Outside investors hired CEO to head turnaround business
or artistic-minded.
13
ognize problems. In setting goals, they were
ness to actively deal with problems, and an
Looking at the particular measures of
group the CEOs revealed very active coping
ation above the expected average, that is, as a
particular instrument that was employed was
A story telling projective personality test was used This is a story about the people and their rela-
to assess the presence of motives, interpersonal styles, con- tionships. . . . The family is working the fields,
flicts, coping tendencies, and personality dispositions such providing for themselves, expecting another child.
as self-esteem, confidence, and conscientiousness that may The older daughter is going off to school. To me
or may not have been manifest on self-report instruments. it communicates the bonds that everyone has and
Although it is possible to apply or construct reliable pro- the roles that everyone plays supporting each other
cedures to obtain scores for these areas, we used the pro- and it looks like a happy family and for me the
jective test results qualitatively and clinically to yield an takeaway is the development of each person indi-
individualized personality profile for each subject. This vidually and yet as part of a family unit.
profile aided in understanding how each individual CEO
integrated psychologically (on conscious and unconscious Finally, the sheer enjoyment of personal success and
levels) his or her past history, internal needs, and current a pervasive sense of self-satisfaction is captured in the next
external work, familial, and leisure life spheres. story (recited to a picture of a man climbing a rope).
We discovered a number of patterns, ranging from
CEOs who were psychologically organized in a secure, This is the story of a man who has the ability to climb
resilient, and self-satisfied way to those who revealed under- up and down a rope. He found the dream opportu-
lying areas of defensiveness and vulnerability. We believe
14 SUCCESSFUL CEOS OF PRIVATE EQUITY FUNDED VENTURES SUMMER 2004
nity performing in Cirque du Soleil, and even though about the farm. She also resented the life that her
hes aging, he still performs today and feels a great mother had because she had to work so hard for so
sense of accomplishment that his body allows him to many hours a day. Elizabeth wanted to be better
perform, and hes very satisfied with his role. than that, to have more, to tour more places than
just rural Kansas. So she worked on the farm to
A second CEO created different stories to the three scrimp up enough money to finally attend a uni-
pictures to which the CEO just described told his sto- versity outside the state. She went on to become a
ries. This second CEO appeared just as content, suc- world-renowned poet, Elizabeth Browning. And
cessful, and resilient as the first but emphasized much now you know the rest of the story.
more the personal needs of the stories central characters,
and emphasized how success was tied to the persever- Finally, this CEOs philosophy that perseverance and
ance and drive of the individual and not the collective sup- coping are the keys to success is clear in his story to the
port received from others. In fact, the message seemed man climbing a rope.
to be that successful individuals must go beyond the
expectations of others and pursue relentlessly their own Called The Rope of Life. As you can see from
goals. One must respect others, but not let their desires the picture, life is represented by a rope and how
or limitations serve as impediments for success and self- to climb it. The higher you go, the more mental
actualization. For example, to the picture of a boy playing and physical strength it requires. When your feet
a violin, this CEO told the following story. are on the ground and you are holding on to the
rope, it is kind of like childhood. You have some-
Bobby was a young boy who had to take violin. thing to hold on to, to hold you up, and to orient
His mother and father believed that he should learn you, and you have a stable foundation. But as
culture. Bobby wanted to play sports. He religiously you rise, pull-by-pull, kick-by-kick, it gets a little
played the violin to fulfill his one-hour-a-day prac- tougher. Sometimes you slide backwards. It actu-
tice requirements and even an occasional recital; but ally burns your hands. Sometimes you bleed its
his true love was the tennis courts. Finally, after so painful. But you know you cant go back to
struggling for 10 years to play the violin, he won the ground, you have to move on, so you try a
his first tennis tournament and went on to become little harder, you think about ways to deal with
a great tennis player. He never did learn to really the pain and the stress and you realize you can
enjoy the violin. move forward and upward, you have to make
time for those sacrifices. Sometimes you dont
To the picture of farm people, this CEO revealed have time for eating, for sleeping. In the end, it
the need to go beyond environmental limitations and is worth it, but dont let somebody tell you that
reverse the fear of becoming overwhelmed by circum- you can let go of the rope; its easier, because
stance by transforming it into glorious success. when you have hit the ground it hurts and you
have to start over. So the moral of the story is:
Life on the Farma title. We lived on a farm in plan your next move, focus, hang on, deal with
rural Kansas. As you can see my mother was preg- problems at hand, and in the end youll achieve
nant. There were many children. We all had tasks the heights of success.
to perform. It was our job to help raise the crops,
tend to the livestock. It was all part of our In contrast to the CEOs just described, there were
upbringing but it made it difficult to get a good those whose stories revealed tendencies towards con-
education. Elizabeth wanted to be a student. She striction, defensiveness, passivity, and uncertainty, despite
was a good student. She loved reading; she loved the fact that they consciously described themselves as active, open,
working with children, and she didnt care a lot energetic, and confident individuals. This contrast suggested
SUMMER 2004
Ability Experience Prior to
Test Highest Becoming CEO of Corporate or Small Venture
ID Age Score Degree Present Venture Background Remarks
14 42 29 J.D. 2 Small venture Ran consulting practice for accounting firm before going into business for himself
15 44 26 B.S. 22 Corporate and small venture Hired as consultant before replacing CEO
16 47 30 M.A. 19 Corporate and small venture Academic research background; moved between corporate jobs and smaller ventures; started present venture
in 1990
17 64 15 B.S. 19 Corporate Recruited by VC to head a portfolio company
17 Rural Disrupted Second of two from original family; oldest son; eventually step-siblings from fathers second marriage
personality functioning. The second is a semi-projective sen- ligence, work skills, and experience, and 2) development,
tence completion technique, which elicits a more spontaneous including family and socio-cultural background.
presentation of self. The third is a projective story telling tech-
nique, which taps even more covert, indirect, and less con- Intelligence, Work Skills, and Experience
scious revelations of self.
Information gathered using these three instruments taken As evaluated by the investor (see Exhibit B-1), all of the
together allows us to determine the congruency or stability of CEOs demonstrated the requisite level of functional skill and
an individuals personality. Are the individuals coping abilities cognitive ability to perform in their jobs. The mean score on
manifest either behaviorally or in a self-reported way congruent a non-verbal assessment of reasoning abilities was consistent
with other motives or drives, or are they in conflict? Knowing with the authors research on M.B.A. students and medical stu-
this is important because if the personality system is in conflict, dents. The CEOs, however, tended to be considerably older
the individuals behavioral style may break down over time than business and medical school students. This is significant
and cause instability in his or her leadership. because non-verbal intelligence scores tend to peak in the twen-
ties and decrease gradually with age. We might hypothesize
APPENDIX B that had the CEOs taken the mental reasoning test in their
twenties, they might have scored a standard deviation higher.
In general, then, the CEOs are highly intelligent people.
FINDINGS ON INTELLIGENCE This study made no formal evaluation of the quality of
AND DEVELOPMENT the CEOs functional skills (e.g., expertise in marketing,
As mentioned in the body of the text, we are reporting fundraising, engineering) and accepts the investors assessment
in this appendix the research findings as they bear on 1) intel- that their skills in these areas were sufficient.
Fathers Occupational History Fathers Career Subjects Characterization of Mothers Occupational Role Mothers Emotional Subjects Characterization of
SUMMER 2004
ID While Children at Home Progression Father While Children at Home Relationship with Son Mother Special Comments
1 Schoolteacher Stable Loyal, honest, helpful, generous, Business-oriented but chose to Distant Unemotional. Family close but does not share much emotion.
everybodys friend, super positive. teach so that she could be around More a friend than a mom Did not provide a feminizing Unsupervised from age 16 on got attention by
Undoubtedly my moral compass. for her children influence. achievement in sports
Almost became a minister; taught Not one to delve deeply into matters
that being a teacher is fundamentally of the heart.
about serving others.
2 Entrepreneur: started as Ascending Did not elaborate on father. High school English teacher for 38 Nurturing Encouraged her sons education. Father and son started medical device business
engineer, moved into years Highly educated and more refined together that they still operate
management, then started own than father
business
3 Entrepreneur: started as auto Ascending Serious but fun. Homemaker Nurturing Funny and artistic. Great family environment growing up.
engineer, moved into Very supportive of dad.
management, then bought spin
off of Big 3 auto maker Always starting businesses on the Schoolteacher then stayed home to
side. take care of kids
4 Entrepreneur: started in retail Ascending Successful businessperson, the Homemaker Nurturing The foundation of the family. Warm, benevolent, traditional Catholic family
and carpet sales; started his own consummate sales person, good The morals of the family came from
successful business rapport with people. her. She conditioned our ideas of what
was right and wrong
She was well educated and wanted to
ensure we were all well educated.
Came up through a more affluent
than father.
5 Corporate: rose from door to Ascending Dad was very professional, Homemaker Nurturing Mom was a super mom, a great cook. Parents relationship was very stable.
door insurance sales to regional passionate about being honest. You The rock at home with dad traveling
head of major insurance could count on whatever he said to be all the time. Strong, opinionated. A
company the truth. powerful physical presence at home.
6 Middle management: accountant Stable Dad wasnt jovial; was serious, Homemaker Distant Serious, stern, Germanic reserve; not Parents divorced when subject was in 5th grade and
within a business reserved. warm or emotionally expressive. remarried each other a few years later.
Didnt do a lot with dad. Dad
worked six days a week and one
night so I only saw him Sundays.
7 Small businessman: owned Stable Dad was very loving, very caring. Homemaker Nurturing Her life was her family.
insurance agency Fishing, hunting, sports with dad. Worked a bit in the insurance She ruled the roost at home without
agency. letting father know it.
8 Middle management: started as Ascending Very forceful, strict, authoritarian, Homemaker Nurturing The moral force; whatever principles
engineer put intense pressure to achieve I have today, she taught me
humility, humanity, sincerity, and
openness to others.
9 Laborer: construction worker Stable Little interaction with father, who Homemaker Distant Mother in poor health
worked, ate, slept, watched TV.
10 Laborer: construction worker Descending Absent Various jobs, from waitress to hair Nurturing She is determined, has a great sense Father alcoholic and deserted the family
salon operator of humor, went through a lot of Oldest sister was very strong.
adversity and did so with dignity and
grace.
11 Schoolteacher who rose to be Ascending Distant Homemaker Nurturing Made each son feel like he was the
school superintendent Father stern, disciplinarian. center of her universe.
12 Entrepreneur: started in mid- Ascending Totally devoted to kids, Worked in the business with father She was driven and had A tough business person in a pill box Parents never fought. Epitome of compromise and a
management then owned and uncompromising in his moral Came from a rich, socially high expectations of son. hat she would not let someone take good family. They worked together, played together.
operated small hotels and values (Quaker). prominent family advantage of her, very gracious but Very admiring of father and proud of mother.
restaurants tough as nails. A very proper lady.
Concert level pianist, phenomenal
artist
13 Entrepreneur: machine tool Ascending Very controlling, authoritarian, Homemaker Protective in a Jewish Very controlling, manipulative, Parents divorced when subject was 17.
sales tried to impose straight laced Eagle mother kind of way. an emotional train wreck. Used Conflicted relations with both parents.
Scout values on son. Went to displays of emotion to get her way.
Harvard Business School, went into Experienced both parents as very controlling and
Was raised by a primary caretaker in rejects their values
business, and expected same of all addition to mother.
three sons.
14 Corporate: partner at Ascending Distant Homemaker Distant Focused on raising kids without being Parents separated a few times when subject was a
accounting firm Father very focused on career, emotionally invested in the role teenager and divorced when subject was in his mid-20s.
socially ambitious
15 Laborer: factory worker Stable Distant Mother worked in Nurturing A very wonderful person. Spent a lot Achievement of mother released only when father
Father was not an affectionate administrative/clerical job in a of time edifying others and taking injured
person. Incredible work ethic. Very major corporation after father hurt care of others. A very strong leader.
involved in church with mother. in a hunting accident
16 Entrepreneur: owned and Ascending Abdicated the role of father. Homemaker Nurturing She had friends everywhere, very Father uninvolved in sons life
operated bowling alley, Distant, self- and career-focused outgoing, always making cookies and
insurance agency, retail stores helping at the schools.
Got along really well with mom,
similar sense of humor, could talk to
her.
17 Sharecropper, then odd jobs in Stable Didn t have an ambitious bone in Worked as a waitress after divorce Distant Didnt grow up with mother Parents divorced; subjects lived with father until his
town his body. late teen years; father remarried within three years of
As teenager, kicked out of house by separation from mother
18 Middle management Unstable Father did not live up to promise Homemaker Nurturing Responsible child in an alcoholic Dad ended up drinking a bit too much in high school
family years
Parents divorced when subject gradated from college
and eventually remarried each other
19 Middle management: electrical Stable Distant Homemaker Nurturing Mother made the family run. Both parents were heavy drinkers.
engineer Perceived father as an under- Mother more creative, someone to
achiever find a common ground. More of a
counseling personality.
20 Middle management: salesman Stable Hard working, ambitious, a Homemaker; worked in Controlling. Did not Mother the power in the household, Stern but caring family life. Structured.
on salary dreamer, wanted to have his own administrative role, claims empathize with son s held his father back. Mother risk
business but mother put the clamps adjudication. desires. Wanted him to do adverse (controlling). Believed in the
on, never let him achieve. Described mother as constrictive, well and conform to system. system, these are the authorities and
restrictive rather than encouraging you conformed to them.
SUMMER 2004
EXHIBIT B-4
Current Family Setting
Wifes Occupational
Wifes Level of Preference During
SUMMER 2004
ID Age Marital History Education Childrearing Years Subjects Image of Wife Children Leisure Activities Remarks
1 30 Married at age 29 J.D. Presently running a non-profit She understood the part of me that is an entrepreneur; None plan to have Golf, skiing, singing, restaurant Wife unusually demanding compared to the
and writing a novel she understood my passion, my business. children in a year business other wives in this sample. She challenges him
Also, she was smart and pretty and we got along great. to deal with emotional issues he would
otherwise not.
2 33 Married at age 32 B.A. Former hedge fund trader Drop dead gorgeous, focused on my happiness; very None plan to have Golf, other sports
sweet, cares about everyone. children
3 41 Married at age 26 B.A. Worked with husband until the Very outgoing, fun, funny, a beautiful person and has a Two children, three Family hanging out with family
start up took off and then lot of integrity. Is great with kids and great with the and five and kids.
became a mom at home home.
4 50 Married at age 23 B.A. Taught until pregnant with first A natural with kids, created a successful, warm family. Five children, between Active sports (golf, tennis, skiing,
child ages of eight and 17 scuba diving); travel outside the
United States
Everything outside of work
involves the family.
5 51 Married at age 28 B.A. Homemaker She regards everyone else as more important than she is; Three children, 20, 16, Sports with sons; listening to music Definition of asuccessful marriage is when
she is a very kind and most giving person. Moved and 12. with wife you make the other persons happiness more
frequently; when opportunitiespresented themselves, we important than your own.
took them, she has said, if you think its right and
financially well be better off, then lets go. There has
never been a battle, though there have been tears for her.
6 51 Married at age 23, B.A. Works full-time in mid- More independent than first wife. Two adult children Not well developed; finds it hard not Significantly overweight.
divorced at age 38 and management position from first marriage and to work Does not know why first wife wanted a
remarried at age 40 two adopted children, divorce
age one and four, in
present marriage Met current wife at work
7 53 Married at age 23 B.A. Taught school until they had Smart, from the right side of the tracks, has very good Two children, both Spends time with wife and friends
their first child values, and challenges people when she talks to them. launched
8 55 Married at age 34 Worked front desk at hotel and A great cook, one of the most loving women (he has) Two children, high Movies, concerts, games with family Started family relatively late (38)
then focused on raising known, caring, a bit overprotective, she has been the rock school and college and friends Recovered from lung cancer at age 50
children; is now producing a of the family. Does all the electrical work at home, is a Has run several marathons
movie great mother. A health freak.
9 61 Married at age 25 B.A. Worked about three years then Attractive to wife because she was quiet, stable, and Two adult children Skiing, community service
focused on children mature, and they were compatible.
10 54 Divorced; remarried at Unk Has worked the whole time, a Wonderful, kind, caring, supportive, a great mother to Three children, two Running Bypass surgery at age 49
age 30 very successful (our) kids, beautiful. from their previous
businesswoman. marriages and one they
had together
12 58 Married at age 21 B.A. Homemaker She had an awful childhood yet is one of the strongest One child, launched Tennis, golf, cars and detailing,
people ever, very well balanced, smart as a whip. being with his wife
Ultimately she became very competent, aggressive, very
comfortable with herself.
I moved all over during the course of my career and she
went along. I told her, I will be traveling all over, you
will be alone. She had to deal with it.
13 45 Divorced at age 34, Completing In school She is like him sense of humor, values, able to take No children and does Volleyball
engaged to be remarried M.A. care of herself, doesnt require (him) to make her happy. not know if they will
have children
14 42 Married at age 21 B.A. Homemaker Very left brain; more task oriented One child (baby) Spending time with his wife and
baby dogs
15 44 First marriage at age 21; B.A. Homemaker; registered nurse Strong and independent. Analytical and caring, giving. Two school aged Writing poetry, stories for his
divorced shortly when first married Someone I can expose my vulnerabilities to and get children children, camping with children,
thereafter. Second support, and guidance, and critical feedback. She never cooking
marriage at age 40. doubted Id be successful.
17 47 Married at age 21; B.A. A marketing executive in her Good at describing her feelings with words. Subject Two young children
divorced and remarried husband s company. claims wife is conflicted over working in the company or
around age 43 staying at home with children.
18 64 Married at age 22, B.A. Met his second wife at work; Hard working as a single mother Four children from first Running, international travel
divorced at age 42; her children are now launched. Supportive and encouraging of his career; she followed marriage; two step
remarried at age 44 me literally around the world. children; now has
several grandchildren
I need to give her a lot of credit. With my first wife, I
never would have taken risks the way I did. She (current
wife) has said, if you feel that this is a good thing for you,
let s support it.
19 53 Divorced in 30s; B.A. Retired executive N/A None None reported This is the only woman in sample
remarried
20 54 Married shortly after B.A. Homemaker; active in Attracted to wife because she was cute and small. Two children, both Spending time with wife
college community and volunteer launched, successful
activities professionals
SUMMER 2004
In terms of their academic performance, all of the CEOs came from intact families (parents were alive and in the family
described themselves as having done well or exceptionally well while the CEO was growing up) and how many came from
in school. Only three had unconventional academic records broken families (only a single parent or a stepparent where one
that included flunking out or dropping out of college before parent died or left). Six of the 20 (30%) came from families
eventually returning to graduate. All 20 of the CEOs had at least that were disrupted by divorce or separation. For three of these
undergraduate degrees. Eight possessed an advanced degree (six six, the parents divorced shortly before the subject reached
M.B.A.s, one J.D., one Ph.D.). In general, they did well in adulthood. In another case, the parents divorced and then
school and moved on, with higher education having an instru- remarried each other. In the fifth case where the parents
mental purpose. divorced, the subject grew up with his father and stepmother.
The sample was skewed towards executives who had In case six, the father abandoned the family. None of the CEOs
extensive experience before becoming a CEO, with 16 out of had a parent die during their childhood.
20 having 15 or more years experience before becoming a Interpreting this finding is tricky. With the divorce rate
CEO of the present venture. The mean years relevant experi- so much lower in the 1950s than today, many of the subjects
ence prior to becoming CEO was 18 (range = 0-36). That mean may have grown up in households that experienced the kind
understates their business background because some of the CEOs of stress that nowadays would result in a divorce. Over-
had business experience that was not considered relevant. whelmingly, however, the subjects did not grow up in single
Ten had small venture experience, 15 had experience in parent households. (Only one of the 20 grew up in a single
corporate settings, and five had experience in both small ven- parent household.) They were socialized into stable families.
ture and corporate settings. The kind of experience and the Moreover, most of the CEOs experienced a very traditional
length of the experience indicates that they learned their man- family structure. They had stay-at-home mothers who were
agement skills in a prior job. The CEOs with less experience responsible for the familys emotional well-being and fathers
were the two who worked in an internet sector. They were whose responsibility was the familys financial well-being. As
also the younger ones in the sample. will be seen later, they seemed to internalize these values and
roles, and reproduced them in their own marriages.
Development Position in Sibship. Fourteen of the 20 were either first-
borns or first males. Generally, first-borns or first males in tradi-
We take two perspectives when we look at the individ- tional Western cultures are reputed to be high achievers, identified
uals development. The first relates to the executives past, how with authority (parental) figures and high-strung (i.e., not easy-
he came to be who he is. This helps explain the individuals going). They strive to achieve social (particularly, authority)
motivational system. The second perspective looks at the indi- approval. The theory is that since they are the first born (or eldest
viduals current state. It explores the developmental forces that male) the parents pay much more attention to their develop-
are currently acting on the individual in order to understand ment, particularly regarding the pace and quality of their early
the individuals present behavior and possibly future behavior. developmental milestones. They are likely to be more exhibi-
tionistic than later-born children in an effort to live up to and
Family and Socio-Cultural Background meet parental expectations and gain their approval. (Later-born
children are generally thought to be more peer-oriented and less
Formative Geographic Location. Twelve of the 20 (60%) needy for parental attention than first-borns.) First-borns, because
executives had suburban upbringings, and eight (40%) had rural of their identification with parents, generally try to lead others,
upbringings. None had urban upbringings. Given that few or to serve as models for others as they grow older. They are the
Americans have rural upbringings, that 40% of the sample had models that their siblings try to emulate (or rebel against).
rural backgrounds is unusual. Without drawing any particular Fathers Occupational History and Characteristics. Of the 20
conclusions, we surmise this is an artifact of the sample. Overall, CEOs, 10 had fathers with ascending careers, eight had fathers
the executives backgrounds suggest that they were upwardly with stable careers, and only two had fathers with unstable/
mobile in their socioeconomic status. descending careers. Of the 10 whose fathers had ascending
Race. Except for one CEO from India, the sample is com- careers, six were successful entrepreneurs, and four rose to exec-
prised of American-born whites. Were this study to be under- utive positions within large organizations. Of the eight whose
taken a decade or two into the future, we would expect to see fathers had stable careers, all were in civil service/middle man-
more non-white CEOs. agement positions. It stands to reason that children where at
Family Structure. We looked at how many of the CEOs least one parent has already been an entrepreneur would have