Why the world’s ‘CEO factories’ need retooling

December 21, 2021 | Publication

Another chief executive rolled off the Unilever production line last week, when Leena Nair was appointed to run luxury goods company Chanel.

Nair, who has worked at Unilever for nearly 30 years, is a product of the group’s leadership development programme. Indeed, as the consumer goods company’s chief human resources officer, she runs the system that builds its future leaders, and the leaders of other companies, including, in recent years, Unilever alumni such as Sir Dave Lewis, who ran Tesco, the UK retailer, until 2020.

The likes of Unilever, McKinsey, IBM, and Procter & Gamble are “CEO factories”. They can apply a first crude filter to the fire-hose of talented young graduates. This elite group then reaps the benefits of tailored training, job rotations and secondments. Managers emerge with a reputational boost based on the employer’s corporate pedigree.

Waiting at the CEO factory gate to see who emerges is no longer a foolproof succession shortcut, however.