Almost every manager covets the role of CEO at some point in his or her career. And yet, it is lonely at the top. A very tough position to fill. 25% of CEOs of Fortune 500 companies in this century were either fired or asked to quit.
A PwC study revealed that $112 billion is lost annually in just the world’s 2500 most significant companies. The actual figure is much higher.
So, what exactly makes a manager a successful CEO? There are four essential attributes and one that can cut the legs out from under you. A survey from Korn Ferry showed that 87% of business leaders aspire to the CEO office. If you focus on developing and mastering these 4 attributes, you will dramatically raise your odds of becoming a successful CEO.
In case you think this is a click-bait article, I am paraphrasing the research done over a decade by the CEO Genome project that ultimately resulted in a book called “ The CEO Next Door”. 17000 C Suite executives and 2000 CEOs over the entire spectrum of industry were assessed. This was a scientifically, rigorous exercise.
The Four Behaviour’s
1. Decision Making with speed and conviction
Picture this. You need to make a huge call after assessing all the data. It could make or break your company. What would you do?
Many CEOs either make a bad call or are indecisive.
A good CEO is a decisive CEO. The one who realises it’s better to make a possibly bad call than no decision at all. These CEOs are 12 times more likely to be high performing CEOs. They make decisions earlier, faster and with greater conviction.
They ask themselves two key questions. First, what is the impact if I get it wrong? Second, If I don't act now, how will it impact other related issues?
At times it is better to slow down and wait for a clearer picture to emerge. But that is usually the exception and not the norm.
Of the CEOs fired for issues related to decision making, only 33% were fired for bad calls. 67% were fired for being indecisive.
94% of CEOs scored low for being indecisive compared to 6% who scored low for making decisions too quickly.
The conclusion is clear. Make quicker decisions.
2. Engaging for impact
75% of strong CEO candidates display composure under pressure. It is an essential requirement. For example, even a wince of pain because of a bad back during a presentation can lead to the presenter thinking they are likely to be fired.
Strong CEOs do not flinch from conflict in the pursuit of business goals. 67% of strong CEOs who excelled at engagement were rated as strong in conflict management.
The next step in making quicker decisions is to enrol stakeholders and employees in the outcome. CEOs who did this were 75% more successful in the role.
We live in a world of Brexit (where ironically leaders can’t make decisions, leave alone the right ones), tariff changes, trade wars, climate change, disruptive innovation and other sundry management trip wires.
Navigating this in a large company can be challenging. The assessment shows that CEO's who excel at adapting are 6.7 times more likely to succeed.
It’s a no-brainer to be told that a CEO has to look at short medium and long term to succeed. But adaptable CEOs spend 50% of their time thinking about the long term. Average CEOs, in contrast, spend only 30% of their time in long term thinking.
Highly adaptable CEOs regularly plug into broad information flows. They scan vast and diverse sources of data and find relevance in information seemingly unrelated to their business. Consequently, they sense change earlier and move strategically to take advantage of it.
Setbacks are part of leading at the top. 90% of strong CEO candidates were scored high on dealing with setbacks. CEO’s who considered setbacks to be failures had a 50% less chance of thriving.
The ability to produce results reliably is the most powerful of the four essential CEO behaviours. 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 steadiness and employees like predictability.
94% of strong CEO candidates very rated as consistent at keeping commitments. A corollary to reliability is strong organizational and planning skills. 75% of CEOs were rated strong in this parameter.
One key to being perceived as reliable is to set realistic expectations upfront.
The biggest mistake the CEO’s make?
The single most common mistake that CEOs make - 60% of them- is not getting the right team in place quickly enough. Successful CEOs set a high bar and focus on performance rather than personal comfort or loyalty.
There is no perfect mix of the four behaviour's that work for every CEO position. The industry and company context will determine which behaviour's and skills are most important in any particular situation.
However, the research shows clearly that focusing on these four attributes will improve your chances of being selected for the role and more importantly, once selected, succeeding in it.
The information for this article was sourced from HBR “What sets successful CEOs apart”