When you think of a CEO, what do you picture?
Let me guess: a clean-cut white man of slightly above average stature, with a whole bunch of charm and a degree from a prestigious university. He has a vision, and exudes the conviction to make it a reality.
The reason I can make this assumption is because, just by looking at the statistics, I know I’m right. Across the board (no pun intended), that is who companies tend to hire.
Here’s a statistic that you may not know, but that is equally as important: 2016 saw a record-high CEO turnover rate in S&P 500 companies of 17.1%, up nearly 5% from 2015.
The majority of dismissals were a result of relevant companies underperforming, and occurred in industries that have struggled to adapt to innovative competition (such as retail) or emerging technology and practice (oil and gas companies).
By looking for traditional (and, frankly, antiquated) aspects in their CEOs, companies are suffering. If the trend continues, many are likely to come tumbling down.
So what’s the solution? What should companies be looking for when hiring a CEO?
The Four Behaviours of a Successful CEO
Over the last 10 years, a group of researchers at leadership advisory firm ghSmart have been conducting an extensive study on the attributes of successful CEOs.
With findings drawn from a database of over 2000 CEOs, The CEO Genome Project has dispelled many of the long-held assumptions about high-performing CEOs simply aren’t true. For instance, more drop out of college than graduate from an Ivy League School, with rates of 8% and 7% respectively.
What the project has discovered is that successful CEOs not only demonstrate, but actively develop four key behaviours that make them suitable for the job.
Here are those four behaviours, as revealed to Harvard Business Review earlier this year.
1) They are Decisive
CEOs who are considered decisive are 12 times more likely to bring success to a business than those who aren’t.
When looking at those not considered decisive, the researchers found that 94% made bad decisions because they waited too long to act on an issue. In doing so, they create bottlenecks inside the business, giving competitors the edge and their employees a whole bunch of headaches.
Decisiveness is about not just making a decision, but making it quickly, and with conviction.
Jerry Bowe, CEO of private-label manufacturer Vi-Jon says that he feels he’s ready to make a call once he has “65% certainty” about the result.
“A bad decision was better than a lack of direction. Most decisions can be undone, but you have to learn to move with the right amount of speed”, emphasises former Greyhound CEO Stephen Gorman.
Of note – 45% of CEO candidates have made major mistakes in their career that proved costly to their business. 78% of them still got the job, because the boards respected their initiative and recognised how they worked to make amends.
2) They Balance Engagement with Vision
75% of successful CEOs were able to deftly balance stakeholder priorities with business results.
By doing so, they are able to acknowledge the detractors of projects and encourage discussion, all while maintaining their position of authority.
This balance requires emotional acuity and supreme composure. The best are aware that every movement or phrase employed when presenting, or being presented to, can be wrongly perceived and serve to make delicate situations volatile. So they remain calm, approachable, but are able to subtly remind everyone in a room that at the end of the day, the decision is theirs alone to make.
3) They are Quick to Adapt
If a CEO is quick to adapt to internal and external pressures, they are 6.7 times more likely to prove successful.
Of the four behaviours presented, this is the one that CEOs consistently recognised as important. This holds especially true in the current climate.
Successful CEOs spend about 50% of their time focused on long-term vision, compared to 30% for others. By keeping their eye on the future, they are better able to act on opportunity rather than react to opportunity claimed by their competitors.
When the latter does occur, 90% of high-performers responded by tweaking their approach to ensure they did better next time. Conversely, CEOs who see setbacks as failures are 50% more likely to do just that – fail.
4) They are Reliable
Anyone who remembers what it’s like to be an employee knows the importance of having a leader they can rely on. No wonder CEO candidates considered reliable are twice as likely to get the job, and 15 times more likely to succeed.
94% of successful CEOs ranked high when rated on their reliability, which would indicate that it is the most important of all four behaviours.
As leaders, they set benchmarks for engagement and customer expectations, for planning and organisation, for accountability and performance. They embody the values of the organisation, and surround themselves with strong teams so that all of these elements are clearly demonstrated through the business.
Are You Tomorrow’s CEO?
100% of low-performing CEOs ranked high on integrity in the researchers’ study. 97% ranked high in work ethic.
Committing to the job is obviously important when you’re applying for a c-suite role. But it’s not what marks excellence in the position.
If you truly want to succeed, it is time to train yourself on these four behaviours. They’re deceptively simple, but excellence never comes easy.