There are numerous studies published by highly respected management consultants and international business schools alluding to the seemingly ever-shortening “life expectancies” of CEO’s. Some studies suggest that 40% of CEO’s are no longer in their
position within 18 months of their appointment. Others suggest that the CEO survival rate is improving slightly. Still, more research indicates the highest CEO turnover rates are in Australia. Regardless of the various findings, there is ample, if only anecdotal, evidence to indicate the job is becoming increasingly complex. Dealing with an “unpredictable progression of shifting markets and competitive terrains”, as former Harvard professor Ram Charan says, is clearly a hugely complex job. Not only is the business landscape more demanding, but the job is too – if only because today’s successful CEO’s so often need to be both managers and leaders. Getting into the details, driving processes and change, providing focus, following up, and being able to establish a concrete yet flexible corporate vision and direction, are essential capabilities of today’s CEO. The isolation of the job is increasing dramatically; the relentless drive; maintaining optimism in the face of mistakes; holding on to their conviction when no one else can see through the risk; unparalleled determination; kicking, pushing, pulling, dragging, inspiring and taking action, often with crushing deadlines, are non-stop. And it goes on – little if any consideration for themselves; dealing with back seat drivers; non-stop negotiating; never-ending change – this list is just the beginning of the demands of the most important hiring selection you will ever have to make.
And it is an incredibly difficult hurdle to not only find the necessary level of talent needed but, most importantly, be able to recognize it when you see it.
Having said that, there are some characteristics that can very easily be measured that stand out with the best of the best CEO’s.
To start with, let’s not worry about intelligence, drive, confidence, competitiveness, communication skills, etc. Those go without saying and are present in most senior executives. As well, let’s not focus on industry experience and technical knowledge issues. In our view, boards tend to put far too much emphasis in this latter area, to their own detriment. It would be our view that spending much more time determining who they are is much more critical than industry experience. The main problem is that industry experience is not a very good and reliable predictor of success and true leadership
capabilities. And yet so many boards fall back on this approach time and time again – regardless of the associated risks to the outcome. In fact, this trend is so serious that, at this very moment, one of Canada’s finest CEO’s is currently finding boards completely resistant to his candidacy because, after 17 years in one industry, he is looking for a new challenge outside his familiar haunts. And boards around this country are “taking a pass” because they are too busy focusing on related industry experience and technical knowledge and not enough on leadership. This is a chap who has moved one of the toughest businesses in the world, in ten short years, from a $40M local company to one that is a global $1.7B business on four continents- with no acquisitions. Truly outstanding. Whoever is wise enough to understand that leadership capabilities are the prime issue for selection (who they are) and not industry and technical knowledge (what they are) is going to be in the enviable position of working with one of
the finest CEO’s in this country!
There are a few characteristics that really identify the truly exceptional leaders that, taken as a cluster, allow for exceptional performance – every time! Let’s explore them.
Identifying Best of the Best – What to look for in the interview and background checks.
While there are many different groups and stakeholders who will want to “weigh in” on the matter of CEO selection, in the end, the final decision may well be in your hands. Take counsel where you think it appropriate. But, sooner or later the decision or ultimate influence on the final choice might well be yours. To that end, here are some considerations we suggest you include in your deliberations.
Introversion
Oddly enough, one might think this is the last thing needed in a world class operating CEO. But introversion is actually a very important interpersonal component to successful CEO’s.
Before we explore this aspect of CEO make-up, we need to first review some basic but relatively unrecognized psychological facts.
People are a combination of both extroversion and introversion. There is no question that many people are more of one than the other. Lots of folks are quite extroverted. And many are fairly introverted. But curiously, there are some individuals who are both extroverted and introverted. Nothing unusual here. These two characteristics are mutually exclusive events. So it is actually quite normal, but not common, for some people to be both.
And it is here we find the world-class CEO’s – working well with people but possessing a decent dose of introversion. It makes
them independent, less needy for attention, more grounded, less egotistical and more insightful. Clearly, a certain modest amount of introversion is critical to high levels of performance. Ensure you check this aspect of a potential CEO’s candidacy very thoroughly. Boards have been known to be concerned with identifying charisma and charm, glibness and “smooth edges” in their newly chosen operating CEO’s. Even if those characteristics are important to you, ensure you also look for someone who is well balanced between extroversion and introversion. The best of the best operating CEO’s are like this – every time – virtually without
exception. It is one of the haracteristics that allows for resolve in the face of difficulty or the legions who have never-ending opinions but little or no actual accountability.
Negative Affect
True leaders have the ability to say “no” to both themselves and others. They know how to hold people accountable. They are not always popular. They can be critical. They confront – most often politely, but at times, not so politely. They can point out problems. They are, at times, “rough around the edges.” They are impatient for achievement throughout the organization. They think critically. They are never satisfied. All of the above is what psychologists refer to as “negative affect.” And they must have this negative affect without losing their optimism. Goodness gracious!
Negative affect can be intimidating and threatening, for sure. Mostly because most people don’t have it. Mere mortals take comfort in the fact that everyone else is just like them – working hard to ensure no one is offended. Make no mistake. Diplomats are not leaders. They build committees to spread the hard decisions around. And as everyone knows, there have been many statues erected around the world in honour of leaders but I dare you to find one built in recognition of a committee! Paul Wilson, the CEO of Marks, who has brilliantly and profitably guided this corporation to over $1B in top line sales, is legendary for his ability to confront effectively. People do find him intimidating but he is a true leader – and people know it – and almost never
leave his employ. They know his confrontation skills are directed at being constructive, developmental, seeking solutions, providing focus etc.
If you require the best of the best, look for negative affect, aimed in the right direction, in the interview and background checking process. It makes for a winner every time!
Self Insight
No one is perfect – obviously. We all have certain operating tendencies. And the only way to mitigate them is for a leader to have the necessary self-insight in order to know when adapting or throwing the proverbial “change-up” pitch is required in a specific situation. The CEO must be able to ask questions like “Do I need to push harder in this circumstance?” “Do I need to ease off?” “How do I need to adjust to ensure a specific audience hears me?” “Was I being too hard on a particular individual”? “Was I
being too easy on that same person?” “Am I carrying ‘water’ for my team or are they doing so for me?” Frankly, the list of questions a CEO has to ask him or herself on is endless. And the only way to know how to adapt and maximize one’s impact is to “know thyself.” Those CEO’s who do not have this capability rarely adjust their approach to deal with different situations and different people. And when they do so, it is often for their own gain – not for the development and growth of the other guy. Most CEO’s who lack self-insight are far too self-centred for the job at hand. The best are a curious blend between selfish and selfless. But not decidedly one or the other. And most of all, they have the capacity, because of their self -insight to, as Warren Bennis observed, “move the human heart.”
And they only get to do that by listening very carefully to all concerned. It is a process that is exhausting. In fact, if you are not entirely “worn out” after a marathon session interacting with others, then you are not listening well enough. Period. The best CEO’s will tell you this.
Ability to Recognize Ability
Highly competent CEO’s are exceptionally gifted in recognizing ability and character in others. It’s hardly newsworthy that filling the talent roster with capable people is essential – after all, who can possibly do it all? So, top-flight CEO’s will definitely have the ability to “size up” people quickly. They need to be “plugged in” to people – their hopes, ambitions, motivations, desires, etc. One of the quickest ways to determine a person’s skills in this area is to enquire of them, about a ½ hour into an interview, whether the candidate considers themselves to be a good judge of people. Almost 100% will say they are. Then ask the candidate what their “take” is of you, the interviewer. It’s a great way to see for yourself exactly any given candidate’s capabilities in judging people.
Other Do’s and Don’t’s
Don’t fall in love and stop asking the tough and constructively direct questions.
Do put “insiders” through the same rigorous process as those applying from the outside.
Do ask former employees of CEO candidates at least as many questions as any other group.
Do ask far more of the questions about who they are and many less about their related industry experience, technical knowledge and the like.
