Do pilots make better CEOs?

According to a new study from the University of Notre Dame and the University of Oregon, the type of risk-seeking behavior that motivates people to fly could also make them more effective as corporate leaders and CEOs. The study had looked at 179 companies led by CEOs who were also pilots and 2,900 companies that were led by non-pilots and the researchers found that the pilot-led companies tended to do better by certain benchmarks.

Specifically, Matthew Cain, an Assistant Professor of Finance at Notre Dame’s Mendoza College of Business, noted that pilot led companies:

  1. Had significantly more leverage and debt.
  2. Had volatile stock prices.
  3. Were 1.35 times more likely to execute an acquisition in a year.

In addition, it was noted that pilot led companies tended to execute better and higher quality acquisitions that created more value for their firms.

Professor Cain also pointed that:

Piloting small aircraft as a hobby is more risky than driving a motorcycle, flying a helicopter, or even crop-dusting. Thus, the research shows, these CEOs exhibit a clear willingness to engage in risky activities for the sake of pleasure.

Hence, we want to ask you our readers what you think: Do pilots really make better CEOs or corporate leaders? Moreover, have you ever worked for a company led by a pilot CEO or have you ever reported to a manager or executive who was also a pilot? If so, what were the noticeable differences?

9 Responses to Do pilots make better CEOs?

  1. Gill Courage August 24, 2011 at 14:57 #

    Where, exactly, did Professor Cain get his statistics? Crop dusting is regularly judged to be one of the riskiest occupations in the world and "flying a helicopter" is actually "piloting a small aircraft"!

    Pilots are trained to carefully assess risk and proceed on the results of that assessment… maybe pilots are simply better at assessing risk in all areas of their lives?

    • Matthew Stibbe August 24, 2011 at 20:14 #

      For myself, I think flying teaches some very valuable things for managers: 1) the ability to learn / 'followership', 2) attention to detail, 3) rational risk-taking and – important for me – 4) the fact that there is life beyond the office walls! 🙂

  2. Karlene Petitt August 24, 2011 at 20:00 #

    Perhaps, based on the risk taking… yes. Perhaps from the knowledge of the inner workings of the actual airline operation… yes. But from what I've witnessed, in the eight airlines I've worked with, is that the pilots' ego is too large to be an altruistic leader.

    The reason the pilot moves into a management position is all about financial personal gain, stroking the ego, and not so much for the good of the corporation or the community they serve.

    Management styles have shifted from the old school, in my mind for the better, to more of servant leadership. This appears to be lost on the pilot manager/executive. One cannot be an effective leader if the primary goal is self-serving.

    I'm currently formulating a book with this exact premise. Fascinating. Thank you for sharing an excellent post.

    • Matthew Stibbe August 24, 2011 at 20:17 #

      Servant leadership is a good thing (I think) and it is something I see practiced in flying schools all the time. Your flying instructor and CFI have lots of authority and power but they use in a very collaborative, constructive way. I don't think that pilots move into management positions for ego or money any more or less than anyone else does. But in my experience, pilots are generous spirited and collegiate and my personal experience suggests that pilots might actually be less-serving than the rest of the population. And if there is a bit of pride and confidence, it is built on hard-earned experience not vainglory. Just my two pennies, as a pilot-CEO myself!

  3. Micah August 24, 2011 at 21:19 #

    I'm not sure the method for this research is appropriate or, at least, I'm not certain that this does anything more than identify flying as a "bucket list" item held by many aggressive or risk-friendly personalities. I'm not convinced that flying makes these CEOs more aggressive but probably the correlation runs the other way. I wonder whether the risk-averse pilot would be less likely to climb to CEO and more satisfied with, say, the CFO position? Maybe Head of Accounting?

    I know that the research isn't making any explicit judgements about flying, but even still maybe it's just not useful information. I wonder whether we could get similar results by watching company softball games and measuring how many CEOs swing at the first pitch.

    Really, I'd like to see these same risk-friendly criteria (rate of acquisitions, debt leveraging, and stock-price volatility) compared to TT for each of these pilot CEOs (if there is enough data to make the analysis worthwhile.) Do more experienced pilots take fewer risks than less experienced pilots? Do more experienced CEO pilots take fewer risks than less experienced CEO pilots?

  4. Karlene Petitt August 25, 2011 at 01:59 #

    Hi Mathew, maybe we are talking about different pilots. As a group… the aviation community is exactly as you described. But I'm speaking from experience with the commercial airline world. The pilots who love to fly, do just that. Then others fly, and form their businesses on the side and excel because of those skills you speak of.

    But from my experience… working closely with, and from the horses mouth, the primary goal of pilot airline managers is stock options and the paycheck at the end of the year. Final average earnings for the commercial pilot in management is the guiding light.

    While none of them achieve the CEO level, I'm speaking directly from the perspective of flight operations management pilots. Some do a fabulous job, and sadly those end up quitting because of the lack of ability to impact change. Most pilots won't beat their heads against the wall for too long. But those who I have spoken, do what they can for longevity. No boat rocking. No outside the box. Etc.

    Not all, and I never say never… but leadership can be trained. Unfortunately not all airlines have great CRM training. In theory, I agree that the traits should be a benefit… and probably the only reason that many can handle the job. But just because one is a pilot does not make them CEO material.

    However, I don't think as a rule a pilot should be a CEO for their airline… But then, are we talking apples and oranges? I'm talking a commercial airline pilot becoming a CEO or upper level manager at an airline.

    A different world than yours.

    The question is this… are you who you are because you fly, or did flying make you who you are?

    And remember, never say never. Look at yourself. And I personally would be a great CEO and I'm a commercial airline pilot. But then, there is also a different level of motivation between men and women in the "airline" industry too.

    What I speak of is … Airline Pilots becoming management in their airline.

    Thanks for your response. I love the dialogue.

  5. Karlene Petitt August 25, 2011 at 02:01 #

    Gill, Pilots really are higher risk takers. It's that innate personality trait.

  6. Gill Courage August 25, 2011 at 08:07 #

    Karlene, I'm a pilot and business owner. I'm not a risky operator. A large part of flight training involves working out the possible outcomes and doing what won't kill you. A huge part of the risk assessment occurs on the ground, before you do anything. If I thought that what I was doing was "risky" I would not be doing it!

    Most people never do any risk assessment of their daily activity.

  7. Karlene Petitt August 25, 2011 at 15:55 #

    Gill, Yes… People need to do more risk assessment. When I was instructing on the 747 that was "the" most important assessment I shared with my students… Opening their eyes as to the potential risks. We can teach procedures… but we can also teach what to look for within ourselves and our environment. As commercial pilots we are motivated to accomplish the mission. There are always risks. By assessing those risks we will mitigate and avoid them.

    So, while you may not think you are a risk taker… you are a pilot, and you are a business owner. How many people do that? Trust me, denial is a pilot trait too. 🙂

    Risk taker doesn't mean a bad thing. It doesn't mean we avoid safety. It means we do what it takes to be safe and do the right thing.

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