CEO Next Door Book Reveals Four Key Behaviors Of Successful CEOs And Busts CEO Myths
The CEO Next Door is the new book that offers career advice for everyone who aspires to rise in their organization and achieve their full potential. Impressively, that advice is based on an in-depth analysis of over 2,6,00 leaders -- drawn from a database of more than 17,000 CEOs and C-suite executives.
The results of the research burst several myths surrounding CEOs. Those busted myths, described more fully later in this post, include:
- Over 70% of CEOs set their sights on the top job late in their careers.
- On average, they’ve had five to seven setbacks on their journey to the top.
- Only 7% graduated from a top university.
- They are decisive.
- They are reliable, delivering what they promise when they promise it, without exception.
- They adapt boldly.
- They engage with stakeholders without shying away from conflict.
The book is co-authored by Elena L. Botelho and Kim R. Powell. Today, Powell answered the following questions for me.
Kim R. Powell (photo by: Mariana McClure)
Question: A lot has been written about CEOs. How is your research different?
Powell: At ghSMART we spent a decade applying state-of the-art analytics to a data set of 17,000-plus leaders to uncover who gets to the top and what sets apart the best CEOs. This “Moneyball for leadership” approach showed that much of the conventional wisdom about what it takes to become a CEO and succeed is wrong. As it turns out, using data rather than gut instinct helps us select the right CEO candidate for a company about 90% of the time, as opposed to a 50% error rate in a conventional interview process.
Question: Which of your findings are most surprising?
Powell: In addition to dispelling many common CEO myths, we found that those who reach the top share four key behaviors that anyone can master at any point in one’s career:
1) they are decisive;
2) they are reliable, delivering what they promised when the promise it, without exception;
3) they adapt boldly;
4) they engage with stakeholders without shying away from conflict.
What’s surprising is that relentless reliability turns out to be the most powerful behavior. CEOs who are known for being reliable are 15 times more likely to be high-performing, and their odds of getting hired are double that of everyone else.
While it sounds simple, this is the behavior many of us need to work on the most. Of 11,000 people who took our self-assessment on the four behaviors, most rated lowest in reliability. Across the board, people habitually under-estimate their ability to adapt and are overconfident about their reliability.
Question: What do prevailing stereotypes about leadership get wrong? Why is it a problem?
Powell: The media’s narrative of leadership has long been dominated by talk of larger-than-life visionary prophets like Steve Jobs and executive warriors like Jack Welch. This iconic CEO is powerful and patrician, a bold, charismatic extrovert with a flawless résumé. He (and it’s almost always a he) is an oracle of business judgment with superhuman confidence, a brilliant strategist who shapes the reality in his path. It’s a story we’ve been absorbing for decades—and it doesn’t reflect reality (see CEO Myth vs. Reality further below in this post).
This is a problem because it has a big impact on society. Choosing the right CEO to lead a business affects the livelihoods, returns, pensions and careers of millions of employees, shareholders and their families. And hiring or holding onto the wrong CEOs costs shareholders an estimated $112 billion in lost market value every year.
Worse, it prevents people with CEO potential from leading companies. Our careers are in large part influenced by prevailing assumptions about who makes it to the top and how. These stereotypes affect our perception of what we can achieve. For example, if you look beyond the Fortune 500 featured so prominently in the media, there are over two million CEOs of companies with 5-plus employees in the U.S. alone (these smaller companies generate almost half of U.S. non-farm GDP). Ultimately, the wrong perception of who gets to the top prevents millions of talented people from even aspiring to get there.
Chapters in the book fall within these three sections:
- Get Strong: Master the CEO Genome Behaviors
- Get to the Top: Win Your Dream Job
- Get Results: Navigate the Challenges of the Role
Borrowing on the advice of the former CEO of Medtronic, Art Collins, authors Powell and Botelho outline Collins’ advice on the art of apology:
- Be personal. Assume personal responsibility rather than simply act as a spokesperson.
- Be focused. Address specific acts or mistakes as well as impact parties, so it is clear that you understand the ramifications of what went wrong.
- Be genuine. Convey in both words and tone hones remorse and atonement.
- Make no excuses. Avoid shifting blame, minimizing harm, or whitewashing a bad situation.
- Act swiftly. The sooner an apology is given, the better the chance the apology will be accepted.
- Be comprehensive. Get all the facts out, admit all know shortcomings, and clearly articulate what has yet to be determined.
- Prevent recurrences. Articulate an action plan to correct what went wrong and to make sure the same problem doesn’t happen again.
CEO Myth vs. Reality
CEOs were destined for greatness from an early age. Over 70 percent of CEOs didn’t set out to become CEOs early in life. Only when they came within reach of the C-Suite—typically after fifteen-plus years of experience—did they start to feel that maybe they could achieve and thrive in the role.
CEOs are egotistical superheroes. CEOs who saw “independence” as their defining character trait were twice as likely to underperform compared to other CEOs. The weakest CEO candidates used “I” at a much higher rate than “we” compared to the rest of the CEO candidates. For many successful CEOs, this team orientation has its roots in early organized athletics and in mentoring others.
Successful CEOs have a larger-than-life personality with exceptional charisma and confidence. Wildly charismatic “masters of the universe” may prowl unchallenged in the boardrooms of Hollywood films, but in real boardrooms results speak louder than charisma. Over a third of CEOs actually describe themselves as “introverted.” And self-described introverts were slightly more likely to exceed boards’ expectations. For CEOs who met expectations, there was no statistically significant difference between introverts and extroverts. High confidence more than doubles a candidate’s chances of being chosen as CEO but provides no advantage in performance on the job.
To become a CEO, you need a flawless résumé. The reality: 45 percent of CEO candidates had at least one major career blowup that ended a job or was extremely costly to the business. Yet more than 78 percent of them ultimately won the top job. What set successful CEOs apart was not their lack of mistakes but how they handled mistakes and setbacks when they did occur. CEO candidates who talk about a blowup as a failure are half as likely to deliver strong performance as a CEO.
Female CEOs succeed differently from men. Women may deploy different leadership styles and exhibit different attributes from men’s, but statistically, gender has no impact on the probability of delivering strong results as a CEO. Successful CEOs exhibit the same four “CEO Genome Behaviors,” whether female or male. Where it matters, female and male CEOs appear more similar than different. Unfortunately, the one big difference remains. Depending on the year, only about four to six percent of the largest companies are led by female CEOs.
Great CEOs excel in any situation. A common misperception is that a great CEO is capable of handling any situation. Actually, great CEOs are very thoughtful about identifying the roles and context where they can be successful. They have the self-discipline to turn down the wrong job even when it comes with a CEO title. Many CEOs who are great at turning around a struggling company may struggle in a high-growth context and vice versa.
To become a CEO, you need to check every box. Everyone has areas for improvement, and CEOs are no exception. Even the best-performing CEOs have three to six key areas to improve when they get the job. Those who succeed quickly surround themselves with the right teams to complement their skills and experience.
CEOs work harder than the rest of us. CEOs, of course, work very hard, but so do others in a wide range of jobs. Analysis showed no predictive relationship between how hard a leader worked and how likely she or he was to become a CEO. Furthermore, 97 percent of low-performing CEOs scored high on work ethic.
For CEOs, the smarter, the better. Above-average intelligence is an important indicator of C-suite potential. However, once at the C-suite level, higher intelligence as measured by standardized tests does not increase the odds of being hired as CEO or performing well in the role. In fact, CEO candidates who “cut to the chase” and speak in clear, simple language are more likely to be hired than those with a complex and cerebral vocabulary.
Experience trumps all. First-time CEOs were statistically no less likely to meet or exceed expectations than those with prior CEO experience.
Kim R. Powell is the coauthor of, The CEO Next Door, and a Principal at ghSMART, where she advises Fortune 500 senior executives, private equity firms and non-profit leaders in the areas of management assessment, leadership coaching and organizational change. Powell was a F.C. Austin Scholar at the Kellogg School of Management at Northwestern University where she earned an MBA with Honors.
Thank you to the book publisher for sending me an advance copy of the book.