Jack of All Trades or Master of None? CEO Experience Variety and Firm Performance

This study addresses the debate concerning the performance implications of CEO experience variety. Some scholars take the generalist view of human capital to suggest that high CEO experience variety (i.e., generalism) is beneficial. Yet, others adopt the specialist view to highlight the advantages of human capital specialization. Integrating the opposing views, we argue that the relationship between CEO experience variety and firm performance follows an inverted U-shaped form. Initially, the acquisition of breadth of experience from different firms and industries builds human capital generalism – enabling CEOs to cope with the information processing demands of large firms and realize higher firm performance. After a threshold, however, extensive levels of CEO experience variety come in expense of experience depth and human capital specialization – resulting in declining firm performance. Data from 176 CEOs in large firms support the hypothesized relationship. Our results also show that this relationship varies with the firm’s level of internal and external complexity.