What makes a successful CEO? We analyzed 5 million leaders to find out
What we look for in our leaders can change with every economic boom and bust. We dismiss certain characteristics as weaknesses in one period, only to value those same characteristics as strengths in the next cycle. I have seen this occur countless times during the 30 years of my career – as I’m sure you have too. As interesting as it has been to watch these changes, it has been even more impressive to observe the evolution of leader assessment and selection advance from an informal effort to a much more scientific process. Last year, my company Russell Reynolds Associates entered into a partnership with Hogan Assessments. We started working together to examine psychometric data from more than 5 million leaders. We wanted to take advantage of this huge trove of scientific data to better understand how to identify executives with both the potential to rise to the C-suite and with the highest likelihood of long-term success.
C-suite roles are challenging and often high-profile. Making a mistake can be costly. Reducing executive failure by finding leaders who are equipped to navigate uncertainty relieves a tremendous risk for a company. What we found when going through our data was striking. Some of the personality characteristics that help leaders ascend to the C-suite may result in short-term positive performance. Yet these same characteristics can also lead to career derailment. Successful leaders are masters of “competing competencies” – pairs of psychometric traits that would appear to be at odds with each other. By being able to handle both traits, leaders magnify their abilities while minimizing their weaknesses. The competing competencies are especially clear in four areas:
1. Disruptive and pragmatic: An organization needs leaders to disrupt the status quo with innovation, but they also must be pragmatic about focus, priorities and the pace of innovation in their organization.
2. Risk-taking and reluctant: Good leaders take calculated risks and are opportunistic, but we also want them to show vigilance in order to avoid steering an organization off a cliff.
3. Heroic and vulnerable: Heroic leaders need to ensure that perseverance and grit do not turn into self-delusion. Leaders need to solicit enough input and counsel to make continuous improvements to themselves and their organization.
4. Galvanizing and connecting: Leaders must generate support with energy and inspiration, but they also need to know when to take a step back and share credit, promote the success of others and connect the organization to higher values and a mission.
Looking at these traits not only reduces risk when hiring the C-suite but also allows us to assess the C-suite as a whole and understand the dynamics of the group. This can help us to evaluate the culture of a company and align it with the company’s strategy. Naturally, these competing competencies can help plan for succession by identifying the next generation of C-suite members. It is remarkable that we can look at information on 5 million leaders and, relatively easily and scientifically, analyse their psychometric data and see the patterns that emerge. Thirty years ago, we would never have dreamed of having that much information available to us, let alone being able to make sense of it all. Leadership is complex, but, luckily, leader assessment and selection has never been as scientific or insightful as it is today. This level of insight will never go out of style.