A 10-year study set out to identify attributes that differentiate the best chief executives. The findings challenged many widely held assumptions.
The chief executive role is a tough one to fill. From 2000 to 2013, about a quarter of the CEO departures in the Fortune 500 were involuntary, according to The Conference Board. Clearly, many leaders and boards are getting something wrong. The question is, what?
In the more than two decades we’ve spent advising boards, investors and chief executives themselves on CEO transitions, we have seen a disconnect between what boards think makes for an ideal CEO and what actually leads to high performance. That disconnect starts with an unrealistic stereotype, according to which a successful CEO is a charismatic 6-foot-tall white man with a degree from a top university, who is a strategic visionary with the ability to make perfect decisions under pressure.
Yet few of the successful leaders we’ve encountered fit this profile. That realization led us to embark on a 10-year study, the CEO Genome Project. Its goal is to identify the attributes that differentiate high-performing CEOs.
Partnering with economists at the University of Chicago and Copenhagen Business School and with analysts at SAS Inc., we tapped into a database created by our leadership advisory firm, ghSmart, containing more than 17,000 assessments of C-suite executives, including 2,000 CEOs. The database has information on each leader’s career history, business results and behavioral patterns. We looked for what distinguished candidates who got hired as CEOs from those who didn’t, and those who excelled in the role from those who underperformed.
Our findings challenged many widely held assumptions. For example, our analysis revealed that while boards often gravitate toward charismatic extroverts, introverts are slightly more likely to surpass expectations. We were also surprised to learn that virtually all CEO candidates had made material mistakes in the past, and 45 percent of them had had at least one major career blowup that ended a job or was extremely costly to the business.
Yet more than 78 percent of that subgroup of candidates ultimately won the top job. In addition, we found that educational pedigree in no way correlated to performance: Only 7 percent of the high-performing CEOs we studied had an undergraduate Ivy League education, and 8 percent of them didn’t graduate from college at all.
Our most important discovery was that successful chief executives tend to demonstrate four specific behaviors that prove critical to their performance. Our research suggests that when leaders who aspire to the CEO’s office deliberately develop those behaviors, they dramatically raise the odds that they’ll become high-performing chief executives.
It’s rare for successful leaders to excel at all four behaviors. However, when we dug through our data, we found that roughly half the strong candidates had distinguished themselves in more than one of the four essential behaviors.
1. Deciding with Speed and Conviction
High-performing CEOs do not necessarily stand out for making great decisions all the time; they stand out for being more decisive. They make decisions earlier, faster and with greater conviction.
Interestingly, the highest-IQ executives we coach sometimes struggle the most with decisiveness. While the quality of their decisions is often good, they can take too long to make choices. When we looked at the executives who were rated poor on decisiveness, we found that only 6 percent received low marks because they made decisions too quickly. The vast majority scored low because they decided too little, too late.
Once a path is chosen, high-performing CEOs press ahead without wavering. Our analysis suggests that while every CEO makes mistakes, most of them are not lethal. We found that 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
Once CEOs set a clear course for the business, they must get buy-in among their employees and other stakeholders. We found that strong performers start by developing an 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 excel at bringing others along tend to plan and execute disciplined communications and influencing strategies. When interacting with stakeholders, they are acutely aware of how their moods and body language can affect the impact of their communications.
CEOs who engage stakeholders do not invest their energy in being liked or protecting their teams from painful decisions. Instead, skilled CEOs gain the support of their colleagues by instilling confidence that they will lead the team to success, even if that means making uncomfortable or unpopular moves. These CEOs do not shy away from conflict in the pursuit of business goals and can handle clashing viewpoints.
3. Adapting Proactively
Our analysis shows that CEOs who excel at adapting are 6.7 times more likely to succeed. CEOs themselves told us over and over that this skill was critical.
A long-term focus also helps: Highly adaptable CEOs regularly plug into broad information flows, scanning wide networks and diverse sources of data and finding relevance in information that may at first seem unrelated to their businesses. As a result, 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.
4. Delivering Reliably
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 percent of the strong CEO candidates we analyzed scored high on consistently following through on their commitments.
In their first weeks on the job, reliable CEOs resist the temptation to jump into execution mode. They dig into budgets and plans, and engage with board members, employees and customers to understand expectations. At the same time, they rapidly assess the business to develop their own point of view on what’s realistic and work to align expectations with that.
Three-quarters of CEOs who ranked high on reliability were rated strong on organization and planning skills and surrounded themselves with strong teams.
Leadership success is not a function of unalterable traits or unattainable pedigree. Nor is there anything exotic about the key ingredients: decisiveness, the ability to engage stakeholders, adaptability and reliability.
While there is no “one size fits all” approach, focusing on these essential behaviors will improve both a board’s likelihood of choosing the right CEO — and an individual leader’s chances of succeeding in the role.
Elena Lytkina Botelho is a senior partner at ghSmart, a leadership advisory firm, and the founder of the CEO Genome Project. Kim Rosenkoetter Powell is a principal at ghSmart and a co-leader of the CEO Genome Project. Stephen Kincaid is a principal at ghSmart and a past president of the Society of Consulting Psychology. Dina Wang is a partner at ghSmart and formerly a fellow at the Forum for Growth and Innovation at Harvard Business School.
This article originally was published by Harvard Business Review on May 3, 2017.
Copyright 2017 Harvard Business School Publishing Corp. Distributed by The New York Times Syndicate.