Why Social Skills Are So Important for C-suite Executives—And How To Measure Them

Board and CEO AdvisoryCEO Succession
Article Icon Article
7月 11, 2022
5 read
Board and CEO AdvisoryCEO Succession
Executive Summary
What are you looking for when hiring C-suite leaders? More companies are now prioritizing social skills over traditional operational and finance competencies.
rra-image-asset-86.jpg

 

Today’s most effective leaders are different to the ones of old. Command and control structures are, for the most part, a thing of the past. CEOs rarely hide away in a corner office on the top floor anymore. And C-suite executives no longer work in siloes; they actively collaborate with each other and the CEO.

These are the visible signs of a fundamental shift in how leaders lead. As companies and their top teams see the conditions for success are changing faster than ever, and employees demand leaders who appeal to their values, priorities, empathies and hopes, soft skills are becoming critical to the C-suite.

To explore whether companies are making a conscious effort to adapt leadership styles to match the changing world, we partnered with faculty members from Harvard Business School and Imperial College London to leverage machine learning tools to analyze 5,000 anonymized C-suite job descriptions from the last 20 years. As we explored in the Harvard Business Review,  we found that between 2000 and 2017 companies decreased mentions of strength in managing financial and material resources by almost 40% and increased mentions of strong social skills by almost 30%.

What’s causing the shift?

The analysis suggested four factors are causing the shift towards soft skills.

1. Organization size and complexity
The focus on social skills is especially clear in large firms—as well as publicly listed multinationals and those that engage in mergers and acquisitions.

As organizations become more complex, top executives must be able to coordinate specialist teams, manage a multitude of relationships with outside partners and stakeholders, and communicate powerfully with their employees. For all those tasks, it helps to be able to interact well with others.

2. Technology-based operations
When, in 1966, management maestro Peter Drucker wrote, “The more we automate information-handling, the more we will have to create opportunities for effective communication,” even he wouldn’t have imagined to what extent this would become true.

As companies use technology to automate routine tasks, demand is growing for “human skills”, such as judgment, creativity, and perceptiveness—skills that computers don’t have (at least yet).

3. Social media
Historically, CEOs weren’t constantly in the public eye. But the rise of both social media, which can capture and publicize missteps instantly, and platforms like Slack, which let employees discuss their bosses in real time, has changed this.

Gone are the days when leaders only needed to explain things to boards and leadership teams at a set time and place. Today, they are always accessible. And as commentary on their decisions becomes instant, poor communication, even in the eyes of just a handful of people, can have big consequences.

4. Diversity, equity, and inclusion
Organizations are, rightly, putting ever greater importance on diversity, equity, and inclusion. A big part of this is CEOs and other senior leaders dealing with issues publicly, empathetically, and proactively. And that demands strong social skills.

Leaders who can perceive the mental states of others can more easily interact with various employee groups, make them feel heard, and represent their interests. More importantly, they can nurture an environment in which diverse talent thrives.

How can organizations attract and develop this new breed of leader?

With social skills more vital to leadership success than ever before, organizations will need to focus on two areas as they hire and cultivate new members of their top teams.

1. Develop social skills in up-and-coming leaders
Traditionally, organizations cultivated future leaders by rotating them through critical departments and functions, posting them to various geographic locations, and putting them through executive development programs.

In this environment, social skills mattered—the ability to quickly form constructive relationships with new colleagues, customers, regulators, and suppliers affected performance. But such skills were a means to achieving operational goals, so there was rarely explicit, systematic, and objective evaluation and development of them.

In executive development programs today, organizations need to define ways to evaluate and develop social skills, and even prioritize them over the “hard” skills they currently favor. One way to do this is to put high-potential leaders in positions where they need to interact with various internal and external stakeholders, and closely watch how they perform.

2. Assess the social skills of candidates
Historic assessment criteria for C-suite candidates, such as work history, technical qualifications, and career trajectory, don’t tell you a lot about social skills. So, organizations will need innovative approaches to candidate assessment.

At Russell Reynolds Associates, we psychometrically test candidates to understand their personality traits. This helps us match the candidates with organizations, and it can shed light on people’s social skills. For example, it can accurately assess whether someone is outgoing and comfortable with strangers, how well they can communicate to bring people together, and whether or not they are self-aware and their willingness to share their vulnerabilities with others.

It could also be possible to develop artificial intelligence tools to assess C-suite candidates’ social skills. There are already interesting algorithms assessing other skills across the workforce, and organizations could adapt them to examine their top teams.

Great C-suite leaders must have great social skills

In a technology-driven world with more engaged and empowered stakeholders, the need for leaders to have outstanding social skills is clear. The good news is, organizations are already looking for such leaders, although it’s likely to be a subconscious shift.

Going forward, the question will be whether companies can actively develop and hire this new breed of leader. The answer will largely depend on whether they choose to effectively evaluate the social skills of candidates, and whether they make the cultivation of social skills integral to their talent-management strategies.

 


 

Author

PJ Neal is the Global Head of Knowledge and Operations, Board and CEO Advisory Partners. He is based in Boston.