What makes a good CEO has changed — and engineers and marketers are beating out MBAs with years of finance experience for the job

• IAC head of executive recruitment Sharfi Farhana has plenty of experience placing CEOs and C-suite execs.

• She said a lot has changed in terms of what many companies want from their CEOs.

• Nowadays, many companies are looking for CEOs who can grapple with the technology, products, and ideas.

• That means CEOs with backgrounds in products, product marketing, and engineering are more in vogue.

OkCupid, Tinder, and Vimeo are quite different brands in most respects, but they have one major thing in common.

They're all owned by IAC, and, when they need a new CEO or C-suite executive, they turn to head of executive recruitment Sharfi Farhana and her team.

She's responsible for recruiting top executives within IAC's wide array of brands, which also include Match.com, Dotdash, Investopedia, Dictionary.com, CollegeHumor, and ANGI Homeservices Inc. Farhana has been with the company for six years and has helped place leaders in IAC businesses like Vimeo, The Daily Beast, DailyBurn, and Ask Media Group, through internal and external recruiting.

Farhana's seen firsthand what makes for a great CEO candidate. And she told Business Insider that there's been a fundamental shift in what businesses want from prospective CEOs.

A background in finance or operations isnt what it used to be

Traditionally, she said most prospective CEOs have had to demonstrate operational savviness and a focus on the bottom line to be considered serious contenders.

"Until recently, a majority of CEO candidates were sought after for their finance or operational know-how and background," Farhana told Business Insider.

But that's changed, somewhat, at least in the technology and digital media industries.

"Today, what we're seeing is, throughout the industry, there's this focus on generating fresh, new ideas for digital services that people will pay for," Farhana said.

Of course, that doesn't mean that people with financial or operational backgrounds will be overlooked. But, for the next generation of future CEOs, strong product expertise and marketing skills will be more at the forefront.

"That's a shift from what was previously mostly a functional role, to one that now directly enhances the brand," Farhana said.

Many companies are looking for CEOs with marketing, engineering, or product know-how

When Farhana is conducting internal and external talent searches — or, as she calls it, playing "matchmaker between great talent and the right business opportunity in this hyper-growth industry" — she's typically looking for people who truly understand the technology and product behind whatever brand she's hiring for.

That means that people with a background in product, product marketing, and engineering all have a major leg up, in her view.

"They are much closer to the realities of what can be built and how technology can solve problems for people," Farhana said. "That kind of aptitude and skill set makes for a stronger CEO candidate."

Farhana gave the example of Vimeo CEO Anjali Sud. When Farhana and her team tapped Sud to take on her first ever chief executive role, they were especially impressed by her experience in marketing.

"She was running product marketing for Vimeo for several years very successfully," Farhana said. "Who knows the creators better than the exact person who successfully marketed them for several years?"

The amount of time youve spent in the industry is far less important nowadays

Farhana added that, at least when it comes to IAC's recruitment, the length of a candidate's executive tenure is now a far less important factor.

"Management's different today than it was before," she said. "Even though a position has a lot of responsibility, I think tenure is something people shouldn't let get in the way of them raising their hand for something that they know that they can do."

Failure can actually give a CEO candidate a major leg up

When she's recruiting, Farhana added that she avoids candidates from consistently successful tech companies. Farhana is looking for people who have created something new, branched out on their own, followed big ideas, struggled, and overcome the odds.

"I look for leaders who've failed epically," she said. "Even with the best leader or the best ideas in place, not all businesses survive. Not all challenges can be overcome. In my recruitment process, I try to understand what lessons were learned. How was failure dealt with? How were impacted employees treated? I think that's a good predictor of what that person will be like as a colleague."

She added: "If someone's coming here just to pick a business, amp it up, pump up the bottom line, and get it to the point of sale for their own personal profit, we're not interested in that kind of a leader. We want someone here for the long haul."

Real-world experience trumps what youve learned in class

Farhana has some of advice to CEO hopefuls: skip the MBA program and throw yourself into solving a real-world problem.

"Build something new," she said. "Something from scratch."

She continued: "You will struggle and you will learn. You will be thrown in the deep end and you will flounder but your learning will accelerate, because it will need to, to survive. In starting something new, you'll lean heavily into what you already know, but also gain new skills from everything from people management. That will give you the skills, gumption, and ambition that we're looking for."