What does it take to be a CEO? Whether you’re considering your own career aspirations, or looking to hire your next leader, it’s a big question - and one for which new research is providing some surprising answers.
An obvious starting point might be expertise - the need for total understanding of your category and intimate knowledge of the company, built up through years of experience. Think of Steve Jobs or Mark Zuckerberg, who grew their companies around them from day one. Or the majority of the UK’s best paid CEOs, who’ve worked their way to the top of the company after ten years or more of diligent service. It seems that an essential qualification for a CEO is to be the most knowledgeable and experienced person in the room - the captain who knows these waters like no one else.
But there are enough high profile exceptions to show that it’s not simply about being a highly knowledgeable insider. Adam Crozier has held CEO positions in companies as diverse as Saatchi and Saatchi, The Football Association, Royal Mail and ITV. Dame Carolyn McCall was CEO at The Guardian and held non-exec roles at Lloyds TSB, New Look and Tesco before she became Chief Exec of Easyjet.
These high profile examples show us that there is something transferable in the skill set of a Chief Exec - something more important than insider knowledge of the organisation or years spent in the category. After all, there are plenty of ‘lifers’ who don’t rise to the top of their organisation.
If people can be effective leaders across different companies and sectors, the skills that make this possible must be more universal; personal traits that can be applied to different situations, rather than narrow expertise in a single field. Things like charisma, strong leadership, good judgement, competitiveness and self-confidence perhaps. But how can we know which traits are really most valuable? How do we develop (or identify in others) the right blend of characteristics to make a great leader?
For the first time, these questions can be answered empirically, through research from Lumina Learning. Through extensive workplace research, Lumina have identified 16 personal competencies that play a role in our performance at work. While personal traits can often be overlooked when writing a job description, they are shown to account for up to 18% of variance in job performance - your personal traits can make or break your performance in a role.
Here are those 16 key competencies, neatly grouped into the core areas of performance through Pioneering, Influence, Delivery and People:
While all of these 16 competencies look desirable, some are more vital to specific roles than others. As part of their research, Lumina surveyed 134 CEOs to understand the personal traits that were most common to this group. The results were - at first sight - a little surprising.
You might expect the most valuable competencies of CEOs to be found in their natural ability to influence - the red band of competencies in the image above that comprises of Working Under Pressure, Engaging and Energising Others, Providing Direction and Persuasion.
You might equally expect strong people skills to be a priority for a leader - Supporting Others, Coaching and Development, Collaboration, Emotional Intelligence (the green row at the bottom).
In fact, the most important traits amongst CEOs were found to be mostly associated with Pioneering behaviours: Adapting to Change, Agile Learning, Conceptualising Strategies and Fostering Creativity. All four of these Pioneering traits make it into the to 6 core competencies for CEOs, along with just two Influence-related skills - Working Under Pressure and Providing Direction.
What should we make of this finding? Lumina’s research is not suggesting that the other 10 competencies don’t matter. Just that these six are the most defining of CEOs and most prevalent across this group. But why?
The answer comes from thinking more deeply about what we ultimately want from a CEO. Ultimately, the key role for a CEO is to orientate the company to the future - to take the right steps to stay ahead of competitors, predict changing customer demands, and ensure continuing success in a changing world. This might require investing in new product development, or buying in new expertise through mergers and acquisitions, or slim-lining particular functions.
You don't need to be able to write code to lead Facebook
To do these things well requires the core pioneering skills described above. It requires a creative thinker who’s open to new ideas, adapts to change and can solve problems creatively. All of these attributes are more important in setting the direction of a company and navigating a path to success than knowing the ins and outs of how everything is done in great detail. To put it another way, you don’t need to be able to write code to lead Facebook - there are enough great coders there to take care of that.
So how do we make use of these findings? If you’re looking for your next CEO, either through recruitment or internal development, looking specifically for evidence of these pioneering competencies is a good place to start. For transparency, 4and20million partner with Lumina Learning to provide competency evaluations that measure an individual’s strengths and weaknesses in this area, for use in recruitment or development.
If you’re looking to grow into a leadership role in the future, keeping these core competencies in mind is a valuable exercise. None of these traits are fixed, and we can work to develop areas where we are perhaps less naturally strong. So finding opportunities to sharpen, test and demonstrate your creativity, adaptability and agile thinking can be as positive to your development as learning your trade and reading hundreds of management books.
More generally, thinking about the particular personal traits that are important to a role (alongside the required technical skills and experience) is a really valuable way of making more considered hiring or career decisions.
For example, it takes an entirely different set of traits to be a good HR professional, where the predictable people-oriented skills are blended with an ability to get things done and a need to engage successfully with others. In short, the traits that make you a great HR Director won’t necessarily help you to be a great CEO. Having the right blend of traits in your team - and the right people in the right roles - is hugely important, yet not widely considered.
So what skills and traits make a CEO?
A big picture thinker who can adapt their perspective quickly in an ever changing world. Someone who has an appetite to learn, copes well with pressure and brings others along with them. A visionary who is just focused on the next five years as today.
...and once that person is in place, they need a senior team around them that bring the other competencies into play effectively - a people-oriented HR Director and a pragmatic, delivery-focused Operations Director, for example.
Finally, ensuring these different priorities and ways of thinking work well together - through understanding each others' perspectives and learning to communicate effectively - will make for a supercharged, adaptable and highly capable leadership team.
For more on how to define the core skills needed for your next role, how to measure them in interview, and how to build complementary and highly effective teams, get in touch with us via our website: https://www.4and20million.com/contact-us