The consulting giant McKinsey is known for producing C-suite leaders, including CEOs. It’s one of the many reasons that roughly 1 million people apply for the company’s 10,000 annual job openings every year.

In fact, the ranks of Fortune 500 CEOs are filled with people who have consulting experience—47 Fortune 500 CEOs have also spent time at top-tier management consulting firms including McKinsey, Deloitte, BCG, Bain & Company, Accenture, EY, and KPMG.

But in a new story, senior writer Phil Wahba—my colleague with a knack for analyzing how people make it to the top—notes an important caveat to this trend: Not one of those 47 CEOs has moved directly into the coveted corner office role following their consulting career. They all had jobs at other companies first.

Joel Bines, a retired managing director at AlixPartners, a consulting firm, shared a blunt explanation for why this may be: “There is nothing about management consulting that prepares anyone to be a CEO of anything.”

Bines, who spent 19 years at AlixPartners, wasn’t trying to knock the members of his own professional tribe. Companies often hire former consultants because they’re pre-selected to be strong candidates that come with “rigorous training,” according to Jason Baumgarten, head of Spencer Stuart’s global CEO and boards practice. But the so-called “PowerPoint Picassos”—consultants who have learned how to craft a masterful presentation for their clients—are often unprepared for the actual experience of running a company. 

Wahba uses Elizabeth Spaulding’s history as the former CEO of Stitch Fix to illustrate this phenomenon. He writes that in 2020, when Spaulding was named president of the fashion retailer, the company’s shares “soared on the belief that Spaulding, a well-regarded management consultant with pedigree from the elite firm Bain & Company and unimpeachable tech cred, would be the leader to reignite the onetime e-commerce darling.” She didn’t last two years. Spaulding was ousted after sales fell and the company had to conduct mass layoffs.

But Stitch Fix is an exception among large firms. Boards “seem to share Bines’s view that by and large, CEO candidates who have only worked at consultancies, even the elite ones, are not sufficiently equipped with the broad set of skills and breadth of experience needed to lead big, complex companies,” Wahba writes. “And in the process, such boards seem to have saved themselves from a lot of wasted time.”

Lila MacLellan
lila.maclellan@fortune.com
@lilamaclellan

Noted

“The location of the coffee machine matters a ton. It predicts roughly 20% of interaction within offices. It’s about the same order of magnitude as the predictive power of where you are on the organization chart. If I put a coffee machine in between two teams, they will communicate more. If I put it in the center of a team area, on the other hand, that team will communicate more internally.”

—Ben Waber, cofounder of behavioral analytics company Humanyze, shared this invaluable finding from his research with Fortune’s Geoff Colvin.

On the Agenda

👓 The latest PwC Pulse Survey shows that only 17% of business leaders strongly believe a recession will hit in the next six months. It also found that the risk of increased cyberattacks is the top concern on executives’ minds now, while worries about the labor supply have eased. 

🎧 In this video, Judy Samuelson, executive director of the Aspen Institute’s Business and Society Program, and Prudential Financial vice chair Rob Falzon discuss how companies are integrating environmental and social causes into their business strategies, and which topics—executive pay, corporate taxes, share buybacks—remain ignored.

📖 Bookmark these smart ideas for becoming an “exceptional” independent director, courtesy of the experts at Russell Reynolds. Two sample tips: “Cultivate a mindset of lifelong learning,” and “seek diverse perspectives and experiences to broaden your understanding of different industries, cultures, and disciplines.”

In Brief

—Norway’s $1.4 trillion wealth fund warned it would leverage its weight as the world’s largest single stock market investor to step up its campaign for companies to add more women to their boards. It’s also not happy about excessive executive pay. How the fund will pursue these new goals is still unclear.

—Boards put aspiring CEOs through some tough tests before giving them the keys to a corporate kingdom, as Fortune senior writer Trey Williams has discovered. He recently looked into the wild world of psychometric tests and job simulations meant to measure a CEO candidate’s abilities.

—In the past few years, the Department of Justice has pushed 15 board directors of various companies to resign just by questioning whether their presence presented a conflict of interest. (Federal laws prevent executives from sitting on the board of a direct competitor.) Last week, the Federal Trade Commission bolstered the DOJ's efforts by formally enforcing a law against interlocked directors for the first time in 40 years.

—Consultants say companies should crack down on jargon in their communications with investors, regulators, and others, especially as they face new ESG and cyber-disclosure expectations. “I’m not saying they hold the pen to write everything in the proxy, but engage and be a part of the process with general counsel and the members of management to help tell their story to investors,” Maria Castañon Moats, leader of the Governance Insights Center at PwC, told Fortune.

—Former D.C. attorney general Karl Racine believes we’re in for another few years of legal skirmishes over corporate ESG policies before the anti-ESG movement gets a case before the Supreme Court. In the meantime, he predicts, companies will likely back down from ESG projects to avoid expensive and time-consuming litigation, whether or not a complaint seems meritless.

The Long Read

You’d be forgiven for questioning whether you want to read another story about Elon Musk, owner of X, formerly known as Twitter. The news is already saturated with tales of his corporate signage antics in San Francisco and his controversial tweets. But The New Yorker’s Ronan Farrow spent a year on a new investigative piece that reveals a less-examined side of the Silicon Valley leader, who is also the CEO of carmaker Tesla and the spacecraft and satellite company SpaceX. Farrow’s profile explores how Musk has positioned himself to become a “shadow” power, someone actual officials must contact when they need the billionaire to maintain satellite-linked Internet access in Ukraine, for example.

Here’s one paragraph that’s sure to raise eyebrows:

“Current and former officials from NASA, the Department of Defense, the Department of Transportation, the Federal Aviation Administration, and the Occupational Safety and Health Administration told me that Musk’s influence had become inescapable in their work, and several of them said that they now treat him like a sort of unelected official. One Pentagon spokesman said that he was keeping Musk apprised of my inquiries about his role in Ukraine and would grant an interview with an official about the matter only with Musk’s permission. ‘We’ll talk to you if Elon wants us to,’ he told me.”