The Six Attributes of Leading CEOs

I recently worked with a company whose CEO had led it on a tremendous run of prosperity. Under his leadership, the company had gone from virtual bankruptcy to being number one or two in nearly all of its markets.

As I watched the CEO work with the board, I was struck by the frequency and intensity of friction. In fact, it was quickly apparent that the CEO and many of the board members had what could only be described as a very formal working relationship, without any of the usual banter and camaraderie so often found in American business. Yet the company’s success had remained extremely impressive for more than a decade. The question struck me—how much do popularly held notions of a CEO’s likability and collegiality matter to a company’s success? The answer is: not very much. But there are a set of factors that do matter.

The ultimate list of topics that should be covered in any CEO evaluation are fairly well known, but the following character traits are the six most important and should be weighed carefully by boards when thinking about their recruitment plans. Though this is not an all-inclusive list, the information gathered and the abilities examined are a minimum standard that should be integrated into any selection effort.

What Makes Leaders?

• 1. Demonstrated performance. The first step is to determine if a potential candidate possesses the skills necessary to make quality decisions. It is not enough to simply focus on the candidate’s previous record.

Role playing through a scenario that the company is presently facing seems to work most often in identifying promising candidates, according to our research. This can be measured quite easily against the company’s internal deliberations and the results the company has produced. The method usually employed works like this: Describe the problem and have the candidates give you their ideas as to how they would address the situation. Prepare a checklist of considerations you identified when addressing the scenario and use it as a guide to assess the individuals. By going through this exercise, you will be able to get a better feel for what the candidates consider when they approach a problem, and you will be able to judge if their reasoning is sound and likely to lead to desirable outcomes.

• 2. Approachability and team leadership. Nearly all accomplished senior executives have the requisite social skills necessary to comport themselves well in an interview situation, even at the board level. This ability, however, does not highlight their skill at building and sustaining high-functioning teams.

Again, our research found that the most successful method was to look at the candidate’s previous team, and ask about the tenures of those reporting directly to him or her. Who left the executive leadership team and what did they leave to do? Nothing measures as high in terms of defining leadership than a good retention rate. Even better, if a candidate can provide an impressive list of team members who have gone on to bigger-and-better positions, it indicates that he or she has a knack for choosing good people and is a strong mentor who can effectively coach other people to professional success. The key is to look for long-term patterns regarding a candidate’s ability to mentor and also retain top talent.

• 3. Use of critical feedback to improve performance. Thomas Carlyle, an 18th-century writer, once said, “The greatest of faults is to be conscious of none.” Like anyone, CEOs are fallible human beings who need others to help them recognize mistakes or weaknesses if they are to improve their performance. We have found in our research that executives who welcome critical feedback effectively, improve over the course of their professional careers, while those who do not, slide towards mediocrity. Accordingly, no vetting would be complete without a look at a senior executive’s willingness to pursue self-improvement.

A method that worked from our research sample was to ask the candidates by what means they obtain consistent, frank feedback about themselves, and what was the most accurate constructive criticism they’ve received in the last three years. Then to gain further insight, follow this up by inquiring about what steps they have taken to correct the problems identified, and how they measured their progress. Leaders who are capable of confronting their own fallibility are much more likely to detect cues that they are making a mistake and rapidly take corrective action. An adaptive leader, particularly in a competitive, fast-changing environment, is crucial.