What makes a high-performing CEO?
You ought to read this article on what makes some CEOs successful and others not. There are lots of interesting things to learn from their 10 year old research study called the CEO Genome Project. The researchers were able to identify what makes a high performing CEO relative to a less successful one from a wide swath of business leaders. They examined 17,000 C-suite leaders including 2,000 CEOs in all major industry sectors and sizes. The authors are at ghSmart and partnered with economists at the University of Chicago and Copenhagen Business School along with analysts at SAS Inc. Here are some of the findings that stood out for me:
- Boards like to hire extrovert CEOs but introvert CEOs tend to be better performers.
- Almost every CEO made material mistakes in their careers and 45% had at least one major career blowup. Learning from failure is important to success.
- Educational pedigree did not correlate with performance. Only 7% had an undergraduate Ivy League education. This is something I have read before but it is interesting that it continues to be confirmed.
The authors drilled down to find that four key behaviors that are critical in making a successful CEO. If boards are able to use these as a yardstick, they might be able to consistently find the right person for the job. Mind you, not everyone excels at all four qualities but the possession of more than one made a marked difference according to the research.
- High performing CEOs are decisive. They make decisions earlier, faster and with greater conviction. And they do so consistently. As one CEO exclaimed… most CEOs who lose their jobs do so because of their indecisiveness.
- High performing CEOs engage. The highest performing CEOs engage their stakeholders in order to drive results. They are unrelenting in achieving a deep understanding of what their stakeholders need and what motivates them. They take the energy of their critics and turn it into a positive dynamic. The highest performing CEOs are careful about “emotional contagion.” I love those two words. As an example, that’s when the CEO works out of his or her office with a scowl or any other kind of unintended gesture that sends the wrong signal. It reverberates across the organization. CEOs must be calm under pressure while taking the pulse of their stakeholders on a regular basis.
- High performing CEOs adapt proactively. The authors found that CEOs who adapt at the highest levels are 6.7 times more successful. As the head of McKinsey put it, “It’s dealing with situations that are not in the playbook.” These CEOs spend 50% more of their time on long-term goals and when they do experience setbacks, they learn and grow from them. Unfortunately for CEOs, setbacks are painfully visible.
- High performing CEOs deliver consistently. These CEOs produce results reliably say the authors. “Boards and investors love a steady hand, and employees trust predictable leaders.” Nicely worded. It also all gets down to the wisdom of teams. Having the right team in place is critical and usually the downfall of new CEOs when they don’t make this happen.