The 4 Behaviors Exhibited by Successful CEOs
There’s little overlap between what boards think makes an ideal CEO and what actually leads to high performance. Quite simply, what makes a CEO look good to the board has little connection to what helps him or her actually succeed in the role. Based on interviews with board members and majority investors deeply familiar with CEOs’ performance, here are four behaviors that are most critical and predictive of executives’ meeting or exceeding expectations in their role as CEO.
1. Deciding with Speed and Conviction
High-performing CEOs quickly decide on needed actions. Among CEOs who were fired over issues related to decision-making, only one-third lost their jobs due to bad calls; the rest were fired for being indecisive. In the end, a wrong decision is often better than no decision at all. In data gathered by ghSMART, executives described as “decisive” were 12 times more likely to be high-performing CEOs. It’s not that these leaders are right 100 percent of the time; instead, they stand out for making decisions faster and with conviction, even with incomplete information. Smart but slow decision-making can cause bottlenecks, which can lead to attrition due to frustrated teams, and over-cautiousness can stall the entire organization.
Successful CEOs solicit multiple points of view before making a decision, often relying on a relatively small group of trusted advisors for their honest opinions and sound judgment. Once a path has been set, high-performing CEOs move forward without wavering, thereby building faith in their leadership.
2. Engaging for Impact
The best CEOs engage stakeholders and align them around their vision. High performers develop an understanding of needs and motivations and then bring in people through disciplined communications and influencing strategies. CEOs such as Madeline Bell, CEO of Children’s Hospital of Philadelphia, actually create a stakeholder map and spend time identifying detractors and their potential concerns. These CEOs still act decisively, however, by giving everyone a voice but not a vote.
Don’t confuse engaging stakeholders with being liked, however. In fact, being seen as “too nice” or protecting teams from tough decisions are traits commonly seen in lower-performing CEOs. Instead, skilled CEOs gain support of their organizations by instilling confidence that they will lead the team to success, even if that means making unpopular decisions.
3. Adapting Proactively
CEOs who excel at adjusting to rapidly changing environments are 6.7 times more likely to succeed. Adaptable CEOs spend as much as 50 percent of their time thinking about the long term, compared to other executives, who average 30 percent. Highly adaptable CEOs focus on the big picture and are attuned to broad and diverse information flows. They scan networks and data sources, finding relevance in information that may at first seem unrelated to their business. As a result, they can identify change earlier and make strategic moves to take advantage of it. Successful CEOs also treat their mistakes as opportunities to learn and grow, with nearly 90 percent of strong CEO candidates in the ghSMART data set scoring high on dealing with setbacks.
4. Delivering Reliably
The ability to produce steady and predictable results is possibly the most powerful of the four behaviors; candidates scoring high on reliability are twice as likely to be picked for the role and 15 times more likely to succeed in it. The key to reliable delivery is setting realistic expectations up front; successful CEOs do their own due diligence by studying budgets and plans and understanding the expectations of the board, employees and customers. Then, they quickly assess the business and develop a point of view on what’s realistic. High-performing CEOs communicate their vision and work to align expectations around it.
CEOs ranking high on reliability also build business management systems. They establish regular meeting schedules, dashboards of metrics, and multiple channels for monitoring performance and making rapid course corrections. Most importantly, they surround themselves with strong teams to enable them to execute reliably on a broader scale.
There is no perfect mix of the four behaviors that works for every CEO position; the industry and the company context determine which behaviors and skills are most important in any particular situation. While there is no single universally applicable approach, though, focusing on these essential behaviors will improve an individual leader’s chances of succeeding in the role.
Nicole Wong, Vasmi Tetali, Dina Wang and Stephen B. Kincaid are principals at ghSMART.