The May-June 2017 issue of the Harvard Business Review features a spectacular article, What Sets Successful CEOs Apart. I urge you to read the whole thing, but here are a few highlights.
Between 2000 and 2013, the four authors conducted research on the CEO Genome Project. They noticed in their research that 25% of CEO departures in the Fortune 1000 were involuntary, meaning that the CEOs were fired for lack of performance, as they should be. The result was $112 billion lost market value (share price decline). The authors’ hypothesis is that there is a big disconnect between what boards think makes the ideal CEO versus the characteristics that actually do lead to high performance. It’s important, particularly as you’re recruiting and developing leaders, that you’re looking for these characteristics.
This research debunks the assumption that “a successful CEO is a charismatic six-foot-tall white man with a degree from a top university” who will make a corporation successful. Interestingly, introverts slightly outperform extroverts. By intentionally choosing the people that interview the best or seem the most charismatic, you’re actually excluding some of the most talented people.
Another conclusion has to do with education. Only 7% of the highest performers in this study graduated from Ivy League colleges, and 8% of the top performers didn’t graduate from college at all. Based on their study of 17,000 assessments, there is virtually no correlation between education—especially very expensive education—and performance.
There is, however, a significant correlation between the following four behaviors and high performance.
Decide with speed and conviction I am a big fan of this one. The study concluded that while the fastest decisions aren’t always the best ones, leaders who were able to make decisions quickly and with conviction were 12 times more likely to be high performing.
Another thing this study concludes (and I’ve long believed) is that bad decisions are better than a lack of direction. Better to make a decision that’s not perfect than to have your team languish in uncertainty.
Engage for impact In other words, align all of the stakeholders (employees, shareholders, customers, etc.) around specific quantitative results. The leaders who did this were 75 percent more effective than those who didn’t. It’s important to give everyone a voice but not a vote. Don’t wait until you reach an absolute consensus about anything, because it’s too slow.
Adapt proactively The authors use the example of Brexit, which caught a lot of people by surprise—so much so that a number of businesses did nothing for quite some time after the vote was in. On the other hand, some of the most effective leaders realized that the tectonic plates had shifted in terms of global economy and went to work immediately on adapting.
The key to successful performance isn’t that there aren’t setbacks. Those CEOs who considered setbacks to be failures have 50 percent less chance of thriving, while successful leaders considered setbacks merely setbacks.
Deliver reliably 94 percent of strong CEOs consistently followed through on their commitments. And CEOs who reliably deliver results are 15 times more likely to succeed, because that is really the definition of success: reliably delivering results. In general, the authors recommended that you under-promise and over-deliver.
Interesting note: the authors believe the single biggest mistake after assuming the CEO reins is failing to get the right team in place quickly enough. This creates a lack of confidence and doubt in the leader. If you find yourself thrust into a position of leadership, the most important step is to make sure you’ve got the right team in place immediately. Then get to work right away.
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