How the Best CEOs Differ from Average Ones
The Harvard Business Review published an article, “How the Best CEOs Differ from Average Ones,” authored by Russell Reynolds Associates consultant Dean Stamoulis. He shared findings from the firm’s research on how CEOs differ meaningfully from the overall executive population across many personality attributes. The article is excerpted below.
We all know the stereotypes: Great CEOs are extroverted. They’re self-promoting. They’re risk takers. But are these stereotypes true? Which traits actually differentiate CEOs from other executives? And, most important, which attributes separate successful CEOs from other CEOs?
There is a great deal of conjecture and mythology about CEOs and the attributes that define their success. So what should companies look for when they hire a new CEO?
In today’s rapidly changing markets, with digital disruption looming over every business, this question has never been more important. Russell Reynolds Associates, in partnership with Hogan Assessment Systems, has led a research effort to separate myth from reality, identifying key indicators of leadership that have a measurable impact on a company’s growth. The results demonstrate that intensity, an ability to prioritize and focus on substance, and an ability to know what one doesn’t know (and utilize the best in what others do know) are more strongly related to best-in-class CEO leadership than traditional traits like extroversion or self-promotion.
We believe our data-based approach has particular relevance due to our use of Russell Reynolds Associates’ and Hogan’s proprietary psychometric databases at the core of the study. Other researchers have approached these questions about CEOs by conducting interviews, analyzing resumes, and even evaluating vocal patterns. We chose an in-depth approach, creating detailed psychometric profiles of 200 global CEOs, using the results of three well-established psychometric instruments: the Sixteen Personality Factor Questionnaire (16PF), which provides an overall measure of adult personality, including interpersonal skills, emotional factors, resiliency, and communication style; the Occupational Personality Questionnaire (OPQ-32), which measures management and leadership style and behavior, including how people try to influence others, their approaches to innovative thinking, and self-motivation; and the Hogan Development Survey, which measures areas for development or potential derailing factors in managers and executives, including their decision-making style and independence of thinking. We validated the trends we discovered in another global sample of 700 CEOs produced by our partners at Hogan and subsequently compared these CEOs to the non-CEO executives in our proprietary database of 9,000 senior leaders.
Our analysis revealed that CEOs differ meaningfully from the overall executive population across many personality attributes. Two traits in particular stand out: an ability to embrace appropriate risks and a bias toward acting and capitalizing on opportunities. We consider these traits the “essence” of the CEO personality. In other words, a CEO is significantly less cautious and more likely to take action when compared to other senior executives.
As for the stereotypes, while we confirmed that CEOs in general are more likely to be risk takers than other executives, we did not find that they are consistently extroverted or self-promoting.
In addition, six other traits differentiate the typical CEO from other executives on a statistically significant basis:
- drive and resilience
- original thinking
- the ability to visualize the future
- team building
- being an active communicator
- the ability to catalyze others to action
It’s rare to have such detailed psychometric data related to the mindset of the CEO. It is even rarer to be able to link psychometric data to corporate performance. To make that link, we applied a quantitative hurdle of 5% compound annual growth rate during the CEO’s tenure.
To read the full article, click here.