What Makes a Great CEO?
Myth #1 Only Ivy Leaguers need apply.
In fact, only 7 percent of the CEOs the authors have analyzed graduated from an Ivy League college. Eight percent of CEOs in our sample did not even complete college or took unusually long to graduate. Ivy League graduates are more prevalent among the ranks of Fortune 500 CEOs, but outside of that small set of the largest companies, the authors see a much broader range of educational backgrounds and pedigrees.
Myth #2 CEOs were destined for greatness from an early age.
Over 70 percent of the CEOs the authors interviewed didn’t set out to become CEOs early in life. Only when they came within reach of the C-suite—typically after fifteen-plus years of experience—did they start to feel that maybe they could achieve and thrive in the role.
Myth #3 CEOs are egotistical superheroes.
We were intrigued to uncover that the CEOs who saw “independence” as their defining character trait were twice as likely to underperform compared to other CEOs. The weakest CEO candidates used “I” at a much higher rate than “we” compared to the rest of the CEO candidates. For many successful CEOs, this team orientation has its roots in early organized athletics and in mentoring others.
Myth #4 Successful CEOs have a larger-than-life personality with exceptional charisma and confidence.
Wildly charismatic “masters of the universe” may prowl unchallenged in the boardrooms shown in Hollywood films, but, in real boardrooms, results speak louder than charisma. Over a third of CEOs in the authors’ study actually describe themselves as “introverted.” And self-described introverts in the authors sample were even slightly more likely to exceed boards’ expectations. When looking at CEOs who met expectations, the authors found no statistically significant difference between introverts and extroverts. High confidence more than doubles a candidate’s chances of being chosen as CEO but provides no advantage in performance on the job.
Myth #5 To become a CEO you need a flawless résumé.
The reality: 45 percent of CEO candidates had at least one major career blowup that ended a job or was extremely costly to the business. Yet more than 78 percent of them ultimately won the top job.12 What set successful CEOs apart was not their lack of mistakes but how they handled mistakes and setbacks when they did occur. CEO candidates who talk about a blowup as a failure are half as likely to deliver strong performance as a CEO.
Myth #6 Female CEOs succeed differently from men.
Women may deploy leadership styles and exhibit attributes different from men’s, but statistically, gender has no impact on the probability of delivering strong results as a CEO. Successful CEOs exhibit the same four CEO Genome Behaviors, whether female or male. Where it matters, female and male CEOs appear more similar than different. Unfortunately, the one big difference remains. Depending on the year, only about 4 to 6 percent of the largest companies are led by female CEOs.
Myth #7 Great CEOs excel in any situation.
A common misperception is that a great CEO is capable of handling any situation. Actually, the authors find that great CEOs are very thoughtful about identifying the roles and context where they can be successful. They have the self-discipline to turn down the wrong job even when it comes with a CEO title. Many CEOs who are great at turning around a struggling company may struggle in a high-growth context and vice versa.
Myth #8 To become a CEO, you need to check every box.
Everyone has areas for improvement, and CEOs are no exception. Even the best-performing CEOs have three to six key development areas to improve when they get the job. Those who succeed quickly surround themselves with the right teams to complement their skills and experience.
Myth #9 CEOs work harder than the rest of us.
CEOs, of course, work very hard, but so do others in a wide range of jobs. Analysis showed no predictive relationship between how hard a leader worked and how likely she or he was to become a CEO. Furthermore, 97 percent of low-performing CEOs in the authors’ sample scored high on work ethic.
Myth #10 For CEOs, the smarter, the better.
Above-average intelligence is an important indicator of C-suite potential.14 However, once at the C-suite level, higher intelligence as measured by standardized tests does not increase the odds of being hired as CEO or performing well in the role. In fact, CEO candidates who “cut to the chase” and speak in clear, simple language are more likely to be hired than those with complex and cerebral vocabulary.
Myth #11 Experience trumps all.
Among the more shocking findings in the authors’ research: First-time CEOs were statistically no less likely to meet or exceed expectations than those with prior CEO experience.
Get Better With Every Decision
- Make faster decisions.
- Make fewer decisions.
- Look back. Learn from your past decisions.
- Look inward. Ensure you are physically and mentally ready to make clearheaded decisions.
- Look forward. Gain distance from the decision at hand. Consciously apply a “future” lens to the current decision.
- Look around. Ensure the diversity and robustness of your information in an effort to screen out bias.
- When things go poorly, take full ownership and mine the mistakes for learnings.
Build Your Relationships Through Routines
- Define your intent. Align your aspirational intent (your most important big-picture goals) with your transactional intent (your goal for any one interaction).
- Deploy perspective getting to understand various stakeholders.
- Build routines to enlist stakeholders behind your intent.
Adopt the Drills of Highly Reliable Organizations
Nuclear reactors, aircraft carriers, and oil rigs are high-risk workplaces where reliability isn’t a matter of meeting quarterly targets but, literally, a matter of life and death. Every aspect of these organizations’ culture and process has to be fine-tuned to minimize failure, ensure safety, and avert catastrophe. Organizational psychologists call these High-Reliability Organizations.
Of course, bringing these practices to life will require some tailoring to your business, industry, objectives, and context.
Drill #1 Make mistakes safe.
An estimated 440,000 hospital patients in the United States die annually because of preventable errors—that is over 1,000 people every day!9 At the Children’s Hospital of Philadelphia (CHOP), CEO Madeline Bell hired Health Performance Improvement, a consulting firm founded by former nuclear plant managers and naval aviators, to train CHOP’s staff. When the consultants interviewed her staff, they spotted an immediate red flag: Employees reported that management had a “punitive response to errors.”
A punitive culture is not one where employees rush to tell managers about mistakes. Leaders focused on increasing reliability need to destigmatize mistakes. At CHOP, the solution was a program to celebrate rather than criticize staff who reported “near misses”—for example, when a patient was about to receive the wrong medication. CHOP implemented a critical change in language as well: Today, near misses are called good catches. As CEO, Madeline meets everyone who has had a “good catch” on a monthly basis and sometimes meets them at the bedside. And the hospital also offers an annual “Good Catch of the Year” award. Three years after Madeline’s retraining effort, serious safety events had decreased by 80 percent
Drill #2 Level the playing field.
These leaders create the expectation that everyone—workers, managers, and leaders—are equally qualified for and responsible for calling out problems and identifying solutions. All employees are encouraged to raise issues, even when it means ignoring hierarchy.
In a hospital’s operating room, for example, lives are on the line. But this is also a place where a strong hierarchy is very natural; the surgeon is king, and a nurse is far down on the totem pole. Atul Gawande, a renowned surgeon, bestselling author, and health policy expert, set out to discover the most powerful ways to save lives and reduce suffering. The authors’ colleague Alan Foster has been working with Atul as his leadership advisor for over seven years. Atul has found that crushing the barriers of hierarchy is critical to reducing the number of patients who die on the operating table. Atul’s colleagues trained surgical teams to introduce themselves to one another by name. It’s a seemingly superficial icebreaker, yet Atul’s team found that it instantly opened the channels of communication. It announces to each person on the team: “Your voice is unique and valued. You have a responsibility to speak up.” This empowers the nurses and technicians with the confidence to tell the surgeon if they have doubts whether the doctor is operating on the correct leg.
Similarly, great CEOs empower all their employees to raise their voices—and, equally important, they make sure they stay close enough to the field to listen. CEOs often tell us that the ideas that moved the needle didn’t come from their senior team but from the cashiers, the customer-service reps, the drivers, and the button pushers. As Bill Amelio put it, “You just gotta get out there. Kick the tires. Lo and behold, things always come out on the table that you hadn’t known before. In general, people want to tell you the truth.” Bill will respond to an e-mail from anyone in the company within twenty-four hours.
Drill #3 Create a precise shared vocabulary.
Leaders of reliable cultures recognize that successful execution requires seamless communication. They invest in creating a shared precise vocabulary to speed up alignment and reduce the risk of mistakes.
What’s your vocabulary to ensure reliability? If you ask fifty people in your organization about the meaning of a particular term, everyone describes it the same way and acts consistently. Language is one of the ways a culture signals what is important.
Drill #4 Build the machinery of consistent process.
Reliable leaders at all levels aren’t just personally consistent. They build consistency into their organizations by engineering reliable processes. While outsize results are revered and celebrated, sometimes they are the result of herculean efforts (or market tailwinds) that aren’t sustainable in the long run. Inefficient and poorly designed work processes create ambiguity, confusion, and, ultimately, errors and failure. To sustain reliable results over time requires a thoughtful management system, complete with process, metrics, and a predictable cadence that architects for discipline.
Will Powell, the CEO of Sears Hometown and Outlet Stores, learned this when he hired the wrong leader for one of his businesses. “They got me a year of good results, but I could sense, underlying it, [the head of the business] structurally couldn’t replicate it,” he told us. “He had flash and pizzazz to push ideas out there but wasn’t putting in place a foundation that was replicable. It started to unravel in year two and I had to let [him] go.”
The magic comes from the fact that the system itself—the clear steps, deadlines, and measurable outcomes—makes it possible to hold people accountable for results. In the authors’ research, CEOs are almost twice as likely to be strong in holding people accountable than the average senior leader.
Build an Antenna for the Future
- Train your adaptation muscles: Pick up a new skill or hobby; immerse yourself in an experience or place that you find uncomfortable; take on a job or volunteer assignment in a completely new area.
- Let go of the past: Conduct annual “spring cleaning.” Ask yourself and your team which habits, practices, and assumptions hold you back today or in the future. Pick the one that feels easiest or most valuable to let go. Let it go.
- Assemble an “Inspiration Cabinet”: a network of people in different fields who expose you to new unexpected ideas and information and help you see things from new angles
- Schedule “Foresight” time at least twice a month: actually block time on your calendar to consider the big picture view and future scenarios. Pick a location, time, and conditions that put your mind in the best state for insight.
- Conduct full immersion into customer experience: regularly spend time walking in the shoes of your customers
- Get curious and ask questions.
Build Your New Language
The best CEOs deliberately develop their own idiosyncratic repertoire of small gestures that send big signals. Here are a few examples of the symbolic language of CEOs
#1 “This matters”
When Tom Monahan was CEO at CEB, he read every benchmarking report the company produced. Every so often he’d follow up to offer a specific point of view on something he’d read. The point he was making wasn’t as important as his sending a powerful message that product quality and customer experience were top priorities for the CEO.
#2 “I’m paying attention”
When a CEO drops in for a surprise plant visit or walks the halls to smile and shake hands, he or she does so in part to remind people that every single day they have an opportunity to excel or to slip up—and, yes, their efforts count.
#3 “I know you’ve got this”
You go to the meeting—just to listen. John Zillmer, the highly successful CEO of Allied Waste, completely turned that company around. Yet, if you attended one of his management meetings, you’d be shocked to see that he often barely said a word. He was present where it mattered, and his silence said, “I’ve got the right people at the table doing the right thing.”
#4 “We’re discussing, not deciding”
When former CEO of Arrow Electronics Steve Kaufman wants to remind his staff that his participation in discussion and debate is meant to explore—not direct—he literally takes off his CEO hat (it’s a baseball cap) and puts on a second hat that says TEAMMATE. “Otherwise, when I ask questions, people think I’m giving answers they have to run with,” he says.
#5 “I want the truth”
Steve Kaufman doesn’t just explicitly ask direct reports to tell him the unvarnished truth, he ensures that bad news travels up to him fast by thanking the bearer and reacting calmly and graciously every single time he’s given information, even when the responses aren’t what he wanted to hear.
#6 “I’m never too busy for you”
Marc Tessier-Lavigne, president of Stanford University, a school with more than 16,000 students, has office hours for students. Through an online signup sheet, anyone enrolled can get ten minutes with the president, with priority given to first-time visitors.5
#7 “I’m human”
Whether you wear a Hawaiian shirt à la Ted Hall or find other ways to bring your personality to work, people want to follow full human beings, not walking suits. For some CEOs, self-effacing humor goes a long way. After replacing half her team at Reader’s Digest, Mary Berner passed out Halloween costumes at a leadership off-site. Her costume? The Wicked Witch of the West.
The language of leadership has to do with actions, not words; signals, not demands. Success is no longer your success. It’s your team’s.
Build The Right Team
You probably think you’ve got it all figured out with your team. There is a one-out-of-four chance that you are right. Seventy-five percent of first-time CEO mistakes are about not moving quickly enough to build the right team.
- There is never a second chance to make the first impression. Seize the moment with a powerful inaugural address.
- Develop your people plan—in writing. Use at least as much objectivity and analytical rigor in your people assessment as you use for other business decisions.
- Know where stars are needed.
- Minimize personnel “projects.”
- Use small gestures to connect with your team.
- For additional help on building your team take a look at Who: The A Method for Hiring, both written by Geoff Smart and Randy Street. Alan Foster is a co-author.
Manage Up & Across
Even the best CEOs at times lament the time and energy it takes to build an effective partnership with the board. How you work with your board will to a large degree determine whether they are the strong arms that support you—or the ones that push you out. When done well, the payoff for the business and for you as the CEO is well worth the investment.
- Take an active role in building a highly effective board, starting early in your CEO tenure.
- Get “up close and personal” with each board member. Understand individual needs, agendas, and interests. Gauge group interactions and power dynamics on the board.
- Engage board members actively to support the business and align with them on clear roles and rules of engagement.
- Avoid surprises.