Why Are So Many CEO’s Engineers?

If you look through a list of the top CEO’s in the world you’ll see a few common things pop up again and again: they usually studied Engineering, and a lot of them pursued an MBA.

Let’s look at why this

Engineers are usually data-driven

If you are on the board of directors for a company and looking for a rising star to join your business as it’s CEO you’re going to be looking for someone that understands the business and has the data to back it up. You’ll be much more comfortable trusting your money and your business in the hands of someone who can present data in a clear and digestible manner. The fact that they’ve sat down and done their homework, and looked into all the aspects of the business is going to make investors much more confident that they’re the right person for the job.

Ideally these CEO candidates are genuinely data driven and do in fact understand the business on the fundamental level, but for the position of CEO you also need to have a vision for the future. If you’re exceptional at running the business as it is you might make a really great COO, but if you want to be a great CEO you also have to make some great predictions on where the industry is headed.

They have a good understanding of business fundamentals

What you’ll find with a lot of CEO’s who are engineers is that they came up in the industry and started on the front lines, developing solutions to the business problems or optimizing processes. This gives them a leg up on any outsiders, since they’ve actually worked in the company’s facilities with their specific tech stack, on their machines.

Time spent working within these company facilities also gives them a good idea of what makes those locations work, and what challenges they face. Someone who comes up within the company will have a better understanding of why the company has facilities in certain locations, and the capabilities of the equipment.

Engineers are often founders

This is probably the most straightforward reason for why so many CEO’s are engineers. Engineers are well suited to transition from product creators to business owners. A lot of companies struggle to expand beyond the local/regional level and engineer founders are very often skilled at working at scale, and are able to make the leap. Growing beyond the small-medium business stage requires the right mix of people skills and technical talent so while it’s no guarantee an engineer can bridge the gap, I think it’s usually easier for them to pick up the business side of things than vice versa.

The Unwritten Rule

This is more prevalent within Silicon Valley but in some companies there is an unwritten rule that the CEO has to be an engineer. These companies were usually founded by engineers and built up by huge teams of engineers who were able to bring the best products to market, and so naturally they’re rather hesitant to hand the reigns over to someone who doesn’t have a technical background. There may be some truth to this heuristic, as it is sometimes cited as part of a business’s natural life cycle. Engineer/Founder comes out with a revolutionary product, the business grows rapidly, then as the business and industry mature the founder dies/sells/gets kicked out and is replaced by someone with a non-technical background. The company starts to lose sight of what made them successful in the first place, focusing instead strictly on the bottom line, and begins a slow decline.

Tech Companies

As the world economy has shifted towards tech and automation in general it only makes sense that the CEOs of some of the biggest companies in the world are the engineers who founded them. We saw a few CEOs with engineering backgrounds during the late 1800s with the Industrial Revolution, but most rich people came from a capitalist background (ie they already had existing capital). Technology, and more specifically software has enabled us to grow businesses into a massive scale at relatively low cost.