Leadership: what are the qualities required of today's CEOs?
Covid-19, uncertainties, economic recession, and the unpredictability and volatility of our environment have swept the board clean, prompting business leaders to re-think their way of being, their way of working.
The Les Echos article, “Leadership: what are the qualities required of today's CEOs?" referenced the Russell Reynolds Associates report ‘Keeping An Open Mind: Why An Unconventional Candidate Could Be The Right CEO Successor’ and quoted Russell Reynolds Associates Consultants Marc Sanglé-Ferrière and Paul Jaeger. The article is excerpted below.
L'Oréal will officially induct the Group's new CEO Nicolas Hieronimus this coming 1st of May. A few days later, Véronique Bédague will take over the senior management of Nexity once the general assembly scheduled for 19 May has approved her appointment. At the same time, Jean-Paul Agon, CEO at L'Oréal for the past ten years, will take the helm as chairman of the cosmetics giant's board of directors. And Alain Dinin will continue as chairman of France's leading property developer.
In today's troubled times, what are the qualities required of a CEO? "The current crisis requires managers to communicate differently. To reassure employees, shareholders and customers, they need to adopt a simple rationale and provide answers to topics in which they have not necessarily been schooled. This calls for a degree of humility - something they are not always used to - talking about what they know but also about what they do not know. A good manager has to reach out at a time when distance is becoming the norm," says Diane Segalen, founder of the firm Segalen + Associés.
What other skills are required? The most valuable is certainly the ability to deliver and embody an inspiring vision to stakeholders based on the corporate purpose, and then to adapt it over time. "The crisis is changing the qualities expected of company managers. They are having to rethink their job. Societal issues, even if only the corporate purpose, were on the rise before the pandemic: it is now unthinkable to run a company without bearing them in mind. The ability to place the company at the service of all its stakeholders has become even more of an imperative," confided Brigitte Lemercier to "Les Echos" at the end of the first lock-down. Alexandre Viros, CEO of Adecco France, shares this feeling in "Les Dirigeants face à la crise," a collection of interviews conducted by experts at Boyden: "We are entering a new era, the era of meaning, which is having a profound and lasting effect on people's consciences," he says.
Knowing how to define and achieve strategic results is, of course, a prerequisite. "Other crucial qualities are the ability to inspire and set the course for the organisation's leaders, as well as taking into account the overall interest of the company," add Marc Sanglé-Ferrière and Paul Jaeger, partners at Russell Reynolds in Paris. "The CEO must also instill energy and a spirit of mutual support within teams. This know-how - based on a sort of charisma - is invaluable so that once their backs are turned the company can move forward without their constant intervention."
Finally, after a year of Covid, it is more important than ever to know how to relate to others based on a dynamic of rebuilding, in other words, resilience, adaptation and emotional intelligence. Knowing one's strengths and weaknesses is also crucial; the same goes for always bearing in mind the considerable risk whereby nothing goes quite as planned. This is the skill base that makes for a strong top person today.
The difference: potential
Then come more personal considerations and the question of perfect fit. What are the past performances of the candidates in contention? What qualities did they rely on to achieve them? What is their value system and what gives them the energy and desire to get out of bed in the morning? In addition to their experience and leadership style, the difference between two candidates will come down to potential.
According to a study conducted by Russell Reynolds with S&P 500 and FTSE 350 companies between January 2018 and the end of the third quarter of 2020, 70% of new CEOs are promoted internally, including a good number, but not all, of seconds-in-command. L'Oréal, for example, has a long tradition of producing talent in-house and of drawing on an internal pool of skills. But increasingly, in many groups, even when a homegrown candidate is perfectly well placed, the board makes sure it has made the right decision by comparing with external profiles.
The emerging trend: in these times of disruption, "unconventional" profiles are attracting ever greater interest with boards and their nomination committees, according to a study by Russell Reynolds, which cites the example of John Donahoe, a former eBay, PayPal and ServiceNow executive, who, after joining the board in 2014, became CEO of Nike in 2020.
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