What the science does and doesn’t say
We are all drawn to the stories of successful people and their little secrets to success. We also are drawn to simple stories of their success – the one single thing that makes an individual successful. It is no different to successful CEOs in the business world and how some of these become demi-gods revered across industries and the general public – think Steve Jobs or Elon Musk. Often forgotten is that these individuals are also particularly unpleasant and also show horrific leadership characteristics.
So, what is it that makes CEOs successful?
This is the question that researchers, academics, and motivational writers have asked for decades now and, surprisingly, the research is not as robust as you might think: personal opinions and anecdotes still abound and often trump real research. Sure, there have been many notable and good attempts to define what it takes to be successful as a CEO but disentangling the multiple contextual factors such as industry, economic growth, and political environment, to name a few, is challenging. For example, the tech industry is growing so there are simply going to be more “successful” CEOs in the tech industry. This is an industry effect not a CEO effect. The same goes for economic growth – in periods of economic growth there are loads of successful CEOs.
In writing the updated version of Neuroleadership we have added a section on CEO leadership and spent hours, days, and weeks filtering through research articles, papers, and data. We assumed, as with our previous research into team leaders and senior leaders, that there would be many studies with similar concepts repeated but a single study would fail to encapsulate what it takes. Similarly, what we found is that our framework approach helps consolidate research because the human behavioural framework is always valid. Thirdly you only get the answers to the questions you ask so there would be a lot of dark matter in the research unseen but what may guide success more than anybody could know.
So, what did we find?
Yes, we found as we expected that:
- Many studies repeated similar themes, e.g. decision making
- Many studies tried to sum the results into a version of “3 key traits”
- Studies were dependent on their focus i.e. what question they asked (some were looking at long-term, market valuation, transformation, etc., etc.)
- We could match all the behaviours, skills, characteristics and traits perfectly to the human behavioural framework. This we can match in terms of evolutionary levels and also our emotional needs model (SCOAP).
- To be a fully comprehensive view of CEO success we must include behaviours in all behavioural levels.
So, you may be itching to know what makes a CEO successful and I will answer that through a series of questions and sceptical myths.
1. The most successful CEOs are ruthless and egotistical!
No! And let’s be clear: a CEO can be successful by being ruthless and egotistical, but it often doesn’t last, or they end up spending their time fighting political battles. In growing markets, you may be able to get away with it – but you will certainly miss many growth opportunities and minimise long-term value creation.
Butit is also clear that the research shows that CEOs need to have self-confidence, they need to know what they want, they need to be able to manage conflict, they need to be strong. They will make tough decisions for the good of the company and will make those decisions quickly.
Andthey will think through decisions well, they will manage the human side, they will engage multiple stakeholders, and develop others and trust others with decisions.
Theyalsounderstand the difference between giving people a voice and giving them a vote. They will listen but will make their own decisions – this is almost paradoxical.
2. The most successful CEOs are opinionated!
Not quite. The most successful CEOs have strong opinions and have self-confidence. But the research points to many of them valuing learning, listening carefully, and asking the right questions to get the right information.
Thealsounderstand they may have to make decisions without all the information. Being decisive is critical – this is not the same as being opinionated. Normally a decision is better than no decision.
3. CEOs just care about money!
No, they don’t. Butthey do understand that money is what feeds the company and manage short-term and long-term results and expectations better than less successful CEOs. The best understand the human side and are excellent at building teams and understand that this drives performance which will drive financial results. They understand the human side builds sustainable results.
But, of course, they are focused on results it’s the way they go about it that is different.
4. CEOs are control freaks!
No, again, the best are definitely not. The best give away control and enable and build others. This is not to be confused with decisiveness – they understand that direction has to be given and decisions need to be taken and understand the importance of strategy and focusing on this. They will jump in if people are not following strategy and make sure this is aligned. The best CEOs enable this by communication. They tend to be great communicators and engage all stakeholders regularly and well.
5. CEOs are smart!
Kind of. It is the kind of smarts that is more important.
CEOs need to be able to deal with complexity and think through complex ideas and concepts and analyse multiple aspects of the business. They are rarely deeply analytical and detail focused individuals. They love building knowledge, they are learners, they understand how to simplify complex concepts, they manage paradoxes well. Importantly they are also emotionally intelligent.
A recurrent theme in the research was well-thought-through decisions.
6. CEOs are stupid!
No. CEOs might not be the brightest in the company in terms of IQ but are bright enough to deal with complexity. They do however, use their intuition more than less successful CEOs. As mentioned above they tend to like learning, but often don’t get stuck in detail. They are also communicative and human.
They do however, make big decisions. These are decisions that certain parts of the organisation may think are stupid. But these CEOs understand they may have to take one step back to go two steps forward. The best are however, very good at communicating this and therefore tend to get support and a following and not be considered stupid.
This highlights some of the characteristics and traits of successful CEOs. We can also match these perfectly to the SCOAP model of human emotional needs and drives. This is our theory that sates that all human beings are driven by five core human needs and will be driven to fulfil or protect these. The five needs are:
In short successful CEOs according to the research are:
Believe and value human relationships
Have self-confidence, strength, and manage conflict well
- Decision makers
Can and do make decisions and normally make these quickly but understand the importance of quality decisions
Have high drive to achieve and will constantly drive for better results
- High integrity
They are trustworthy and will do the right thing
- Manage all stakeholders well
They communicate well and manage all stakeholders well
This is all nice and good and gives us a clearer overview than any individual research paper or article. It is also intriguing to see where the failings of CEOs are. For example, many struggle with transformation and the Harvard Business Review reported that there are few CEOs that excel at both strategy and execution. Indeed, most CEOs excelled at execution. This shows normally their promotion track through the ranks where execution is valued highest in most organisations. This means that many CEOs are not versatile and become one-dimensional CEOs. This may be a good thing for a short period of time but in leading a company over a longer period, CEOs will need to adapt to the current challenges.
The real and difficult skills of successful CEOs – dark matter
The dark matter (often ignored in research but ever present in business decisions) I mentioned in the introduction is critical. Some of the above may be obvious: be strong, humanistic and a decision maker. Sounds easy right? However, it is not. It is not because the underlying competencies that we call the dark matter are the ones that are hard to master and less clearly defined. These are:
- Systems thinking – understand how everything impacts the system
- Decisiveness vs openness – we want decisiveness but need to be open to new ideas and changing opinions
- Paradoxical thinking – being able to hold opposing ideas in mind and manage these well
- Short and long-term – being able to manage the short-term but understand and focus on the long-term
- Strategy and execution– being able to focus on and excel at both
- The human side– value human beings but still make tough decisions that impact people’s lives
These require an immense amount of judgement and intuition: to pull back from a big decision because it doesn’t feel right or go with a risky decision because it does. These are harder, less obvious and less often focused on in leadership development, training or the literature. But it is likely that these are precisely what will make a CEO more successful than others!
And yes, to plug our products, we have a way of measuring these with our Human Behavioural Framework and also matching these to your own organisational context which similarly impacts the likelihood of your CEO or senior leaders being effective and successful.
Interested? Speak to us here.