The CEO Genome … it’s about being decisive yet adaptive, engaging and reliable, to deliver more business impact

February 8, 2019

The CEO Genome is a research project by two authors, Elena Botelho and Kim Powell, built on an in-depth analysis of 2,600 leaders to write a new book The CEO Next Door on what it takes to get to the top.

It reveals the common attributes and counterintui­tive choices that set apart successful CEOs. They draw out lessons that we can apply to our own careers, no matter where we are and where we strive to get to.

Much of what we hear about who gets to the top and how is wrong.

  • Those who be­come chief executives set their sights on the C-suite at an early age. In fact, over 70 per­cent of the CEOs didn’t have designs on the corner office until later in their careers.
  • You must graduate from an elite college. Only 7 percent of CEOs in the data set are Ivy League graduates—and 8 percent didn’t graduate from college at all.
  • To become a CEO you need a flawless résumé. The reality: 45 percent of CEO candidates had at least one major career blowup.

What those who reach the top do share are four key behaviours that anyone can mas­ter:

  • They are decisive
  • They are relentlessly reliable
  • They adapt boldly
  • They engage with stakeholders without shying away from conflict

It’s rare for successful leaders to excel at all four behaviours, but most excel in more than one. Here is a short extract from an HBR article the researchers wrote to describe the behaviours in more detail:

1. Deciding with speed and conviction.

Legends about CEOs who always seem to know exactly how to steer their companies to wild success seem to abound in business. But we discovered that high-performing CEOs do not necessarily stand out for making great decisions all the time; rather, they stand out for being more decisive. They make decisions earlier, faster, and with greater conviction. They do so consistently—even amid ambiguity, with incomplete information, and in unfamiliar domains. In our data, people who were described as “decisive” were 12 times more likely to be high-performing CEOs.

Interestingly, the highest-IQ executives we coach, those who relish intellectual complexity, sometimes struggle the most with decisiveness. While the quality of their decisions is often good, because of their pursuit of the perfect answer, they can take too long to make choices or set clear priorities—and their teams pay a high price. These smart but slow decision makers become bottlenecks, and their teams either grow frustrated (which can lead to the attrition of valuable talent) or become overcautious themselves, stalling the entire enterprise. So it’s no surprise that when we looked more closely at the executives who were rated poor on decisiveness, we found that only 6% received low marks because they made decisions too quickly. The vast majority—94%—scored low because they decided too little, too late.

High-performing CEOs understand that a wrong decision is often better than no decision at all. As former Greyhound CEO Stephen Gorman, who led the bus operator through a turnaround, told us, “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.”

Decisive CEOs recognize that they can’t wait for perfect information. “Once I have 65% certainty around the answer, I have to make a call,” says Jerry Bowe, CEO of the private-label manufacturer Vi-Jon. But they do work actively to solicit multiple points of view and often poll a relatively small, carefully cultivated “kitchen cabinet” of trusted advisers who can be counted on for unvarnished opinions and sound judgment.

Bowe motivates himself to act on decisions by framing things this way: “I ask myself two questions: First, what’s the impact if I get it wrong? And second, how much will it hold other things up if I don’t move on this?” That approach, he says, also inspires his team members to trust their own judgment on operational decisions—which is critical to freeing the CEO up to home in on fewer but more important decisions.

To that end, successful CEOs also know when not to decide. Stephen Kaufman, former CEO of Arrow Electronics, suggests that it is all too easy to get caught up in a volley of decision making. He advises pausing briefly to consider whether a decision should actually be made lower down in the organization and if delaying it a week or a month would allow important information to emerge without causing irreparable harm.

But once a path is chosen, high-performing CEOs press ahead without wavering. Art Collins, former chairman and CEO of Medtronic, told us: “Employees and other key constituencies will quickly lose faith in leaders who waffle or backtrack once a decision is made.” And if decisions don’t turn out well? Our analysis suggests that while every CEO makes mistakes, most of them are not lethal. We found that among CEOs who were fired over issues related to decision making, only one-third lost their jobs because they’d made bad calls; the rest were ousted for being indecisive.

2. Engaging for impact.

Once CEOs set a clear course for the business, they must get buy-in among their employees and other stakeholders. We found that strong performers balance keen insight into their stakeholders’ priorities with an unrelenting focus on delivering business results. They start by developing an astute understanding of their stakeholders’ needs and motivations, and then get people on board by driving for performance and aligning them around the goal of value creation. In our data, CEOs who deftly engaged stakeholders with this results orientation were 75% more successful in the role.

CEOs who excel at bringing others along plan and execute disciplined communications and influencing strategies. “With any big decision, I create a stakeholder map of the key people who need to be on board,” explains Madeline Bell, CEO of Children’s Hospital of Philadelphia. “I identify the detractors and their concerns, and then I think about how I can take the energy that they might put into resistance and channel it into something positive. I make it clear to people that they’re important to the process and they’ll be part of a win. But at the end of the day, you have to be clear that you’re making the call and you expect them on board.”

When interacting with stakeholders, CEOs like Bell are acutely aware of how their moods and body language can affect the impact of their communications. Though much has been written about “emotional contagion,” new CEOs are often surprised by the unintended damage that can be caused by a stray word or gesture. “Every comment and facial expression you make will be read and magnified 10 times by the organization,” says Kaufman. “If you grimace during someone’s presentation because of your bad back, the person making the presentation thinks they’ve been fired.” Composure is a job requirement, and more than three-quarters of the strong CEO candidates in our sample demonstrated calm under pressure.

CEOs who engage stakeholders do not invest their energy in being liked or protecting their teams from painful decisions. In fact, both those behaviors are commonly seen in lower-performing CEOs. Instead, the skilled CEOs gain the support of their colleagues by instilling confidence that they will lead the team to success, even if that means making uncomfortable or unpopular moves. These CEOs do not shy away from conflict in the pursuit of business goals; in fact, in our analysis two-thirds of the CEOs who excelled at engagement were rated as strong in conflict management. The ability to handle clashing viewpoints also seems to help candidates advance to the CEO’s office. When we analyzed leaders who’d made it there significantly faster than average, one of the qualities that stood out was their willingness to engage in conflict.

When tackling contentious issues, leaders who are good at engagement give everyone a voice but not a vote. They listen and solicit views but do not default to consensus-driven decision making. “Consensus is good, but it’s too slow, and sometimes you end up with the lowest common denominator,” says Christophe Weber, CEO of Takeda Pharmaceutical. Weber makes a habit of having unstructured meetings with 20 to 30 of the company’s high potentials before making key decisions. The goal of those meetings is to challenge him and present him with new perspectives, but he is careful not to create the illusion of democracy.

None of this means that CEOs should behave as autocrats or lone wolves. Typically we see “take no prisoners” CEOs last only as long as the company has no choice but to submit to shock therapy. These CEOs often get ousted as soon as the business emerges from crisis mode—they lose the support of their teams or of board members who’ve grown tired of the collateral damage. It’s no coincidence that the careers of turnaround CEOs are frequently a series of lucrative two- to three-year stints; they put out the fires and then move on to the next assignment.

3. Adapting proactively.

For evidence of how important it is for businesses and leaders to adjust to a rapidly changing environment, we need look no further than the aftermath of Brexit and the recent U.S. presidential election. Our analysis shows that CEOs who excel at adapting are 6.7 times more likely to succeed. CEOs themselves told us over and over that this skill was critical. When asked what differentiates effective CEOs, Dominic Barton, global managing partner of McKinsey & Company, immediately offered: “It’s dealing with situations that are not in the playbook. As a CEO you are constantly faced with situations where a playbook simply cannot exist. You’d better be ready to adapt.”

Most CEOs know they have to divide their attention among short-, medium-, and long-term perspectives, but the adaptable CEOs spent significantly more of their time—as much as 50%—thinking about the long term. Other executives, by contrast, devoted an average of 30% of their time to long-term thinking. We believe a long-term focus helps because it makes CEOs more likely to pick up on early signals. Highly adaptable CEOs regularly plug into broad information flows: They scan wide networks and diverse sources of data, finding relevance in information that may at first seem unrelated to their businesses. As a result, they sense change earlier and make strategic moves to take advantage of it.

Adaptable CEOs also recognize that setbacks are an integral part of changing course and treat their mistakes as opportunities to learn and grow. In our sample, CEOs who considered setbacks to be failures had 50% less chance of thriving. Successful CEOs, on the other hand, would offer unabashedly matter-of-fact accounts of where and why they had come up short and give specific examples of how they tweaked their approach to do better next time. Similarly, aspiring CEOs who demonstrated this kind of attitude (what Stanford’s Carol Dweck calls a “growth mindset”) were more likely to make it to the top of the pyramid: Nearly 90% of the strong CEO candidates we reviewed scored high on dealing with setbacks.

4. Delivering reliably.

Mundane as it may sound, the ability to reliably produce results was possibly the most powerful of the four essential CEO behaviors. In our sample, CEO candidates who scored high on reliability were twice as likely to be picked for the role and 15 times more likely to succeed in it. Boards and investors love a steady hand, and employees trust predictable leaders.

Leaders ignore the importance of reliability at their peril. Simon—a high-potential executive we were asked to coach—was known as a miracle worker at his company. In a culture where exceeding plan by 2% was seen as a win, he had just delivered 150% of his revenue target. While he’d had some misses in the past, he was now successfully running the company’s largest business unit—its crown jewel. When Simon threw his hat into the ring for a promotion to CEO, the directors were impressed with his recent exceptional performance, but they didn’t fully understand how he’d achieved it, and as a result they doubted it was replicable. So the board opted instead for a “safer” candidate who was known for delivering steady, predictable results year after year.

 

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