Elena Botelho and Kim Powell from ghSMART, who conducted a 10-year analysis project to find out which characteristics, traits and abilities really make a good CEO.
The result is very different from the widespread opinion on the subject and also from what is required in job offers for CEOs. The current CEO prototype is a charismatic man, over 1.80 tall, with an MBA from an elite university or equivalent, who sees vision and strategy clearly and is able to make the right decision in stressful situations. The data show, however, that in the USA only 7% of the 6 million CEOs have studied at the best universities and only 8% do not even have a university degree. Some are immigrants, and many have worked their way up in the company from the bottom up.
In their 10-year analysis and using a database of thousands of companies, Botelho and Powell concluded that there are 4 traits that clearly stand out in successful CEOs. If a CEO has these, the probability that the company will be successful increases many times over. These are the four characteristics that stand out among the 30 that headhunters look for when recruiting a CEO.
These characteristics are very simple and may seem almost disappointing. But the key is to create a focus and maintain it with absolute coherence.
Decide quickly and convincingly
Making decisions quickly and always being right that’s easy to say. It’s not always that easy in real life, but the fact is that with a decisive CEO, the likelihood of success for the company he runs increases. Make decisions earlier, faster and more confidently. Such a CEO has twelve times more chances of success than a CEO who doubts, hesitates and cannot decide. In these cases, the CEO becomes a bottleneck for the company. In the ghSMART study, the vast majority (94%) did worse because they made decisions slowly, late and with little determination.
Successful CEOs have realized that a wrong decision is often better than no decision at all. The study quotes Jerry Bowe, CEO of Vi-Jon, as an example: “When I have 65% of the information on a subject, I have to make the decision.
These two questions can help you make a decision:
- How expensive can a wrong decision be if you consider the likelihood that you are wrong?
- What are the costs to the company if you don’t make up your mind?
And once the decision has been made, don’t hesitate any more, don’t doubt it. Make up your mind and take the leap with all your might. The price of not doing so and radiating doubt is the loss of credibility, and often the best team members are the first to leave the ship of a CEO who doesn’t decide, only slowly or with little determination.
Win the team for yourself
A CEO doesn’t just get things moving in the right direction he needs his people. It’s not for nothing that the phrase “people are the company” is so nicely used. Without the support of the management team, all decisions are useless, no matter how quickly and correctly they are made. That’s why it’s important for a CEO to know who his key people are and make sure they’re behind the decision.
In case of doubt and for important decisions, it can be helpful to make a mapping with the key people, to know and understand the position of the critics of the plan, and to work actively with them to determine what needs to be changed about the plan so that they also support the decision.
Contrary to popular belief, the team’s commitment to winning does not mean that they like you or that you need to protect them from tough decisions. On the contrary, according to ghSMART, the chances of success for this type of CEO are often lower. Creating commitment means building the trust that the CEO will lead the company to success, despite the difficult decisions he has to make on the way there.
Executives with this trait listen to all opinions, but do not necessarily let everyone have their say and even less give vetoes to everyone. Finding a consensus takes a lot of time and often only results in the lowest common denominator, the company usually does not win with this formula. The key lies in finding the middle way between listening and commitment and at the same time making a decision quickly and decisively.
Adapting to the unpredictable
As already mentioned, one of the most important responsibilities of a CEO is to make decisions in key situations and prevent stagnation. If the circumstances are simple, the members of your team can also make a decision. In addition, the economy in the VUCA world is evolving faster and faster, confronting us with unpredictable changes. Because of all this, companies need CEOs who are able to adapt quickly to new, unknown situations and yet continue to work with the characteristics described above. Studies show that CEOs with this trait have 6.7 times more chances of success with their company.
For this to work, many successful CEOs devote a lot of time to the long-term challenges. The most successful ones are a proud 30% to 50% of their time. How much time do you take for the future of your business in five, ten or twenty years?
Deliver consistent results
It is not a surprise, but it does not hurt to remember that the most important factor is the consistent achievement of results. Contrary to what you might think, this is not so much about the size of the results, but about consistency. This means: to consistently achieve what has been preached, i.e. to adhere to one’s own forecasts and obligations. In this way you create credibility and trust, for Patrick Lencioni the basis for building a successful management team.
Decisive for this is the practice of setting achievable goals and consistently achieving them. At EOS we define quarterly priorities which are called Rocks and must be S.M.A.R.T. You then have three full months to implement them. This gives the company and the CEO every quarter the opportunity to set and achieve their goals.
ghSMART found that successful CEOs in this discipline work with different tactics: They implement a corporate governance methodology, set a pace for meetings that supports the execution of the business plan, work with dashboards, and have clearly defined responsibilities across the organization. And last but not least, they surround themselves with the right people in the management team.
Unfortunately, 60% of less efficient CEOs take too long to assemble their management team. Or they are looking for personal comfort, sympathy and loyalty instead of focusing on performance and values. A decision basis that often does not lead to the hoped-for results.