Becoming a CEO is the greatest leap that an executive can make in his or her career. What makes it such an extraordinary transition, of course, is the complexity of the role and the skill that is required to manage that complexity successfully. So, what exactly do CEOs have that other leaders don’t?
To answer that question—and, by doing so, help aspiring CEOs optimize their trajectories and assist current CEOs and boards in making better CEO succession planning decisions—we analyzed our database of nearly 4,000 executive assessments, including over 130 CEOs. These tests measure a number of competencies, such as relationship skills, communication skills and decision-making approaches. We believe our findings will reaffirm with quantitative evidence what is perceived to be true and, more important, will provide fresh perspectives around what it takes to make it to the top.
I. Of 60 common attributes used to assess leaders, CEOs differ from other executives in nine of them. (Figure 1) The other 51 attributes remain important for leadership effectiveness, however, they do not differentiate CEOs from other executives.
II. CEOs differ most from non-CEOs in terms of their:
- Willingness to take calculated risks—Figure 1, Number 1
- Bias toward action—Figure 1, Number 2
- Ability to efficiently “read” people—Figure 1, Number 3
Figure 1: Percent Differences in Attribute Scores between CEOs and Non-CEO Executives
III. The nine attributes differentiating CEOs fall into three categories:
- Forward Thinking—the ability to plan for the future
- Intrepid—the ability to perform effectively in complex and difficult environments
- Team Building—the ability to achieve success through others
IV. Analysis within and across the nine attributes reveals a number of interesting CEO profile paradoxes:
- Within attributes, note the usage of “but” within seven of the nine differentiators. See Figure 2.
- Across attributes, CEOs are:
- Strategic yet tactical—see Figure 1, Letter A
- Tough yet emotionally sensitive—see Figure 1, Letter B
- Decisive yet inclusive—see Figure 1, Letter C
These paradoxes suggest that CEOs possess a broad range of capabilities and—more important—know when to “flex” one opposing capability over another to achieve the right outcome.
In addition to highlighting the attributes that differentiate CEOs from the rest, we wanted to provide aspiring and current CEOs and board members with recommended actions that can be used to improve succession planning, leadership development and retention of top talent.
I. CEO Success Profiles: Incorporate the nine attributes in your CEO success profile and assess (internal and external) CEO succession candidates across the nine attributes.
II. Individual Development Plans: For internal CEO succession candidates, design formal individual development plans (IDP) highlighting on-the-job development activities that target specific areas for improvement. Help candidates think through the key lessons each experience will teach prior to task commencement and ask him/her to reflect on key learnings following the completion of an activity.
III. Performance Reviews: Periodically review IDP performance to gauge improvement levels.
For sitting CEOs and those who wish to become a CEO—and for boards who need to effectively identify and prepare CEO successors—knowing which skills and abilities matter most is essential for success. We hope that the findings from this study provide a useful guide for identifying and building the capabilities that differentiate CEOs from the rest.
Russell Reynolds Associates helps companies across many industries, build strong and stable leadership with
the only integrated CEO/Board Advisory Services for corporations and nonprofit institutions.
Dean Stamoulis leads the firm’s Global Leadership & Succession Practice, which provides in-depth assessment of leaders based on psychometric testing and behavioral interviews, to assist clients with leadership development, retention and succession strategies. Dean has been published in BusinessWeek and the American Psychological Association’s Journal of Applied Psychology and is the author of Senior Executive Assessment: A Key to Responsible Corporate Governance.
Erika Mannion is the firm’s Leadership and Succession Practice Leader for the UK and a member of the European Board Practice. She leads Executive Assessments and Board Appraisals for clients across a range of industries for CEO succession planning, post-merger integration, private equity due diligence and talent development initiatives.
Russell Reynolds Associates
Leadership, Succession and Search. In today’s global business environment, success is driven by the talent, vision and leadership capabilities of senior executives.
Russell Reynolds Associates is a leading global executive search and assessment firm with more than 300 consultants based in 41 offices worldwide. Our consultants work closely with public and private organizations to assess and recruit senior executives and board members to drive long-term growth and success.
Our in-depth knowledge of major industries and of our clients’ specific business challenges, combined with our understanding of who and what make an effective leader, ensures that our clients secure the best leadership teams for the ongoing success of their businesses. www.russellreynolds.com