When Mattel's directors went shopping for a new CEO, they found their man in processed cheese. When IBM's board needed to replace John Akers, it picked an executive who had worked in financial services and cigarettes. Were these companies going out on a limb by opting for outsiders who knew little about toys or computers? Yes and no, according to a 2001 working paper, “External Successors, Transferable Skills and Firm Performance,” that will be published in a forthcoming issue of Managerial and Decision Economics.Authors Elizabeth E. Bailey, John C. Hower Professor of Business and Public Policy at the Wharton School, and Constance E. Helfat, associate professor of business administration at Dartmouth's Tuck School of Business, analyze and compare the performance of three groups of externally hired CEOs. One group is composed of executives who came to their new jobs from completely different industries and brought only generic skills, such as the ability to lead. IBM chief Lou Gerstner is such an example. Executives who took the helm already having experience in the same industry and the ability to transfer industry-specific skills to their new roles constitute the second group.