The age-old question of what makes a successful leader might be one step closer to being answered. A recent study featured in Harvard Business Review sought to identify what makes a successful CEO, how much of that is in accordance with the perception of a successful CEO, and what are the common set of actions and behaviours successful CEOs share.
What is the study?
The CEO Genome Project, the brainchild of four scholars, Elena Lytkina Botelho, Kim Rosenkoetter Powell, Stephen Kincaid and Dina Wang, was born when they noticed a ‘fundamental disconnect’ between what makes a high-performing CEO and what the board thinks makes for an ideal CEO. The authors write, “That disconnect starts with an unrealistic yet pervasive stereotype, which is shaped in large part by the official bios of Fortune 500 leaders. It holds that a successful CEO is a charismatic six-foot-tall white man with a degree from a top university, who is a strategic visionary with a seemingly direct-to-the-top career path and the ability to make perfect decisions under pressure. Yet we’ve been struck by how few of the successful leaders we’ve encountered fit this profile.”
A 10-year study, the CEO Genome project set out to identify specific characteristics that make a high-performing CEO. The researchers used data and information created by ghSmart, their leadership advisory firm, which gave them access to over 17,000 assessments of C-suite executives, including 2,000 CEOs. The authors of the study then analysed leaders’ career history, business results, and behavioural patterns to define what got CEOs appointed in the first place, and what traits helped them excel at their job.
What did the study find?
The authors claim that they have debunked popular and widespread myths and assumptions regarding leadership and how leaders perform. The following are some of the highlights from the findings:
- Although boards tend to choose charismatic and confident extroverts to be at the helm, introverts are slightly more likely to perform better and exceed expectations of the board and investors.
- High confidence more than doubles the chances of a candidate being appointed as the CEO but has no impact on how well the job is done. Roughly, what may look appealing in a CEO candidate has little connection to what helps them succeed in their role.
- 45% of the CEOs had at least one major career mistake in their past, that resulted in costing them a job or ended up as an expensive mistake to their company. However, more than 78% of this subgroup ultimately went on to be CEOs.
- Educational qualifications had no correlation to performance; only 7% high-performing CEOs had an undergraduate Ivy League education, and 8% didn’t finish college at all.
- The study also compressed the characteristics of successful leaders into four specific behaviours that are seemingly indispensable for good performance. From 30 management competencies, more than one in these four traits was found in half of the well-performing CEOs, whereas only 5% of the weak CEOs exhibited the same:
1. Deciding with speed and conviction
CEOs who were decisive were found to be 12 times more likely to be high-performing CEOs. The authors say, “Good CEOs realise that a wrong decision may be better than no decision at all.”
2. Engaging for impact
CEOs who masterfully engaged stakeholders with a focus on delivering results were 75% more successful in their roles. “We found that 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 engage stakeholders do not invest their energy in being liked or protecting their teams from painful decisions.”
3. Adapting proactively
Adaptable CEOs spend as much as 50% of their time thinking about long-term goals and challenges, and this helps them stay the course. Furthermore, adaptable CEOs will scout for relevant data and information from diverse sources and then decide on their strategies. “Adaptable CEOs also recognise that setbacks are an integral part of changing course and treat their mistakes as opportunities to learn and grow. In our sample, CEOs who considered setbacks to be failures had 50% less chance of thriving... Nearly 90% of the strong CEO candidates we reviewed scored high on dealing with setbacks.”
4. Delivering reliably
The authors suggest that the ability to deliver reliable and consistent results is potentially the most important behaviour. “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.”
The authors clearly declare, “The behaviours ... sound deceptively simple. But the key is to practice them with maniacal consistency, which our work reveals is a great challenge for many leaders... To be clear, there’s no perfect mix of the four behaviours that works for every CEO position. The industry and the company context determine which behaviours and skills are most important in any particular situation. A CEO in a rapidly evolving industry—for example, technology—will surely need to excel in adapting proactively, but that behaviour may matter less in stable sectors... Leadership success is not a function of unalterable traits or unattainable pedigree... While there is certainly no “one size fits all” approach, focusing on these essential behaviours will improve both a board’s likelihood of choosing the right CEO—and an individual leader’s chances of succeeding in the role.”
The study has also designed a test that can be used to assess whether you have what it takes to be a CEO. Take the test here and find out yourself!