Talk about an intensive study.
Over the course of 10 years, the Harvard Business Review (HBR) analyzed more than 17,000 assessments of C-suite executives across all verticals, including 2,000 CEOs, as part of their “CEO Genome Project.” Their goal was to find the qualities shared by the best CEOs, in an effort to improve leadership across the board.
First off, what’s interesting is what didn’t matter. For example, education had no correlation to performance – of the highest performing CEOs, 7 percent had an undergraduate degree from an Ivy League university, whereas 8 percent never graduated from college at all. Additionally, the study found high confidence doubled the chance of someone getting hired as CEO, although had no affect on performance.
So what attributes do matter? Using those 17,000 assessments, HBR identified four qualities that separate great CEOs from good ones. These are the skills any organization should teach to their future leaders, as it’ll give them the best chance for success.
The four qualities great CEOs share are:
1. They are decisive.
Is it better to make a fast decision or wait longer to make the perfect decision?
The former. HBR found that decisive CEOs outperformed CEOs who waited to get more information, with the hope to make the perfect decision.
“A bad decision was better than a lack of direction,” Greyhound CEO Stephen Gorman, who led the bus operator through a turnaround, told HBR. “Most decisions can be undone, but you have to learn to move with the right amount of speed.”
“Once I have 65 percent certainty around the answer, I have to make a call,” Jerry Bowe, CEO of the private-label manufacturer Vi-Jon, told HBR.
Once a decision is made, it’s important that the CEO sticks to it and avoids waffling. Because, as Art Collins, the former CEO of Medtronic said, “employees and other key constituencies will quickly lose faith in leaders who waffle or backtrack once a decision is made.”
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2. They know how to get buy-in, although they aren’t dependent on it.
The best CEOs don’t just bark orders – they know how to gain influence and get people excited about their initiatives. Not everyone is going to agree with each decision, but getting as many people about it as possible increases it’s chances of success.
“With any big decision, I create a stakeholder map of the key people who need to be on board,” Madeline Bell, CEO of Children’s Hospital of Philadelphia, told HBR. “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.”
This also means being very aware of how they affect other people. The best CEOs ensure their words, their tone and even their body language all are presented in a way that matches their intention.
“Every comment and facial expression you make will be read and magnified 10 times by the organization,” Stephen Kaufman, former CEO of Arrow Electronics, told HBR. “If you grimace during someone’s presentation because of your bad back, the person making the presentation thinks they’ve been fired.”
All that said, they realize not everyone is going to agree with their decision. Going back to point one, they don’t fall victim to decision-by-committee and push ahead when need be.
LinkedIn Learning courses that teach this skill:
3. They focus on long-term strategies over short-term priorities.
The average executive spends 30 percent of their time thinking of long term, with the rest of their time focused on short-term priorities, according to HBR. Meanwhile, the most effective executives spend 50 percent of their time thinking long term.
This long-term view also allows CEOs to adopt more quickly, too. Because they’ve been thinking about their place in the market and potential disrupters more frequently, they are more prepared when market dynamics change.
“It’s dealing with situations that are not in the playbook,” CEOs, Dominic Barton, the global managing partner of McKinsey & Company, told HBR. “As a CEO you are constantly faced with situations where a playbook simply cannot exist. You’d better be ready to adapt.”
This long-term thinking also leads to those CEOs taking more strategic bets, which invariably leads to more failures, albeit smaller ones. And that highlights another key attribute – the best CEOs have a prototypical growth mindset, where they 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,” according to HBR.
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4. They do what they say they’ll do.
The final quality HBR identified was the importance of reliability. HBR found that 94 percent of high-performing CEOs consistently followed through on their commitments.
One of the biggest mistakes HBR found with inexperienced CEOs is that they often tried to do too much and/or set unrealistic expectations. That lead them to either getting bogged down in too many tasks or coming up short on what they promised; neither of which is received well by boards or the market.
Instead, the best CEOs focus on a few key initiatives, have strong planning skills and set realistic expectations. HBR cites the example of Scott Clawson, who took the helm of Culligan, a water treatment company.
When Clawson took over Culligan, earnings for the company were projected at $65 million. However, when Clawson dug into that number, he realized it was off and earnings were more likely to be around $45 million.
Ultimately, Clawson reworked the business to exceed that $45 million number. But, if he hadn’t set realistic expectations upfront, he would have fallen short of the original $60 million figure and angered the board and the market – despite his good work.
Few CEOs would be bold enough to temper earnings by 25 percent, just like few CEOs are bold enough to say no to many things when they first start a job. But the absolute best leaders are both brutally honest and prioritize brutally, which leads to them being reliable.
LinkedIn Learning courses that teach this skill:
*Image of Netflix CEO Reed Hastings. Credit: Cellnar, Wikipedia Commons
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Topics: Productivity tips
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