Tip 41: What Makes a Good CEO?

21 Apr 2017 3:16 PM | Heather Kaye (Administrator)

A new 10-year study from a leadership advisory firm and economists from two business schools, published in this month's Harvard Business Review, finds that the most successful chief executives often don't fit the mold of an extroverted, charismatic, confident executive who climbed a mistake-free ladder to the top with a degree from an elite school.

The biggest aha, overall, is that some of the things that make CEOs attractive to the board have no bearing on their performance. Like most human beings, they get seduced by charismatic, polished presenters. They simply do better in interviews. There was zero correlation between pedigree and ultimate performance.
Elena Lytkina Botelho
Partner at ghSmart
Founder, CEO Genome Project
Author, The CEO Next Door

Surprising traits of top-performing executives
The CEO Genome Project assessed the early moves of CEOs with outstanding track records; some valuable lessons for leadership transitions emerged. The top four behaviors sound deceptively simple. But the key is to practice them with maniacal consistency, which our work reveals is a great challenge for many leaders.
  1. Deciding with speed and conviction. High-performing CEOs do not necessarily stand out for making great decisions all the time; rather, they stand out for being more decisive. They make decisions earlier, faster, and with greater conviction. They do so consistently—even amid ambiguity, with incomplete information, and in unfamiliar domains. People who were described as “decisive” were 12 times more likely to be high-performing CEOs. Smart but slow decision makers become bottlenecks, and their teams either grow frustrated (which can lead to the attrition of valuable talent) or become overcautious themselves, stalling the entire enterprise. Among CEOs who were fired over issues related to decision making, only one-third lost their jobs because they’d made bad calls; the rest were ousted for being indecisive.
  2. Engaging for impact. Strong performers balance keen insight into their stakeholders’ priorities with an unrelenting focus on delivering business results. They start by developing an astute understanding of their stakeholders’ needs and motivations, and then get people on board by driving for performance and aligning them around the goal of value creation. CEOs who deftly engaged stakeholders with this results orientation were 75% more successful in the role.Three-quarters of the strong CEO candidates demonstrate calm under pressure. Two-thirds of the CEOs who excelled at engagement were rated as strong in conflict management. They do not invest their energy in being liked or protecting their teams from painful decisions. They give everyone a voice but not a vote. They listen and solicit views but do not default to consensus-driven decision making.
  3. Adapting proactively. CEOs who excel at adapting are 6.7 times more likely to succeed. Adaptable CEOs spent significantly more of their time—as much as 50%—thinking about the long term. They sense change earlier and make strategic moves to take advantage of it. Adaptable CEOs also recognize that setbacks are an integral part of changing course and treat their mistakes as opportunities to learn and grow. 90% of the strong CEO candidates scored high on dealing with setbacks.
  4. Delivering reliably. Mundane as it may sound, the ability to reliably produce results was possibly the most powerful of the four essential CEO behaviors. In our sample, CEO candidates who scored high on reliability were twice as likely to be picked for the role and 15 times more likely to succeed in it. Boards and investors love a steady hand, and employees trust predictable leaders. A stunning 94% of the strong CEO candidates score high on consistently following through on their commitments.
If you’re good at course correcting, being wrong may be less costly than you think, whereas being slow is going to be expensive for sure.”
Jeff Bezos
Amazon CEO

 © 2017 The Leadership Sanctuary
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