By Dominic Morgan
Many people have ambitions to climb the corporate ladder and ultimately make it to the top, even though the responsibilities of a CEO are immense and their failures can be embarrassingly public. What does it take to become the CEO of a top company?
Endless business magazine profiles and hagiographic biographies reinforce the tropes of the corporate high-flier: charismatic, manically committed, out-of-the-box thinker... It all suggests that unless you can measure up to Richard Branson, don’t even bother applying.
But corporate advisor Elena Botelho says that even if you don’t tick all these boxes, don’t worry, you still have a shot at getting that corner office.
For the past several years, Botelho has been leading an enormous study into what it takes to be a successful executive, called the CEO Genome Project, which has amassed 18,000 C-level executive assessments and 13,000 hours of interviews. Her conclusion, as she and co-author Kim Powell set out in their bestselling book The CEO Next Door, is that “much of what we hear about who gets to the top, and how, is wrong.”
In this interview, Botelho tells us that the whole thing boils down to four simple behaviours.
In The CEO Next Door, you say that the conventional wisdom about who makes it to the top is simply incorrect. How are we getting it wrong?
We think we know the leaders of today. We read about them in the paper, we see their presences online—they’re very much in the public eye. But in actual fact, what we know about them is only skin deep. We have access to their public profiles and we’re fed representations of them, so they either get idealised or get demonised. I believe that power always attracts a lot of fascination, but not a great deal of fact, so leadership is often shrouded in myths such as “to be a successful leader, you need to be a charismatic extrovert.”
However, when we looked at the facts and the data that we collected on CEOs, that entire idea just falls apart. Seventy percent of CEOs didn’t actually even set a goal to become a CEO until much later in their tenure, which is great news for those that are currently at different levels in their careers.
Surprisingly, the data also revealed that charismatic extroverts did not in fact have any performance advantage over other personality types. There are in fact many introverted leaders that have built up a tremendous followership.
The creation of the CEO Genome Project database was no small feat. How did it come about?
ghSMART has been in the leadership advisory business since 1995, and for 23 years, leading industrial boards and CEOs have really relied on our firm to help them assess potential leaders. So, all of the data we used in the book and in our research is actual data from companies we worked with. We’re able to help companies predict a candidate’s performance with about 90% accuracy.
For every executive recorded in the data set, we’ve got at a minimum of six hours’ worth of data and an analysis on their entire career, their behaviour, the results they’ve achieved, their motivations and the career choices that they’ve made. In some cases, it’s also supplemented with the predicted data on the executive as well. So, the depth of that data is really unique, whereas most of the leadership research or research on CEOs is limited to the public profiles of Fortune 500 CEOs, so it’s not representative. The breadth of the data is really distinctive as well, as it covers many companies of various sizes, in every industry code. Our data set is more heavily focused on companies in the United States, but about 15%-20% of it has been sourced from international teams as well.
The book argues that in reality the key to being a successful CEO is following four behavioural traits. What are these four behaviours?
An easy way to remember them is through the acronym DARE. “D” stands for decisiveness, “A” for adapting proactively, “R” for relentless reliability, and “E” represents engaging for impact.
The interesting thing about decisiveness is that we imagine successful CEOs to be able to make better-than-average decisions. We assume that it’s about quality, that they’re able to be more accurate in their decision making than others. What surprised us when we ran the analysis of the data was that what really sets CEOs apart is the speed of their decision making. These people are often quick to make decisions, often from a very young age.
When it comes to adapting proactively, many assume that strong adapters are just those that have a natural talent for predicting what the future holds. What is interesting is that when we assessed CEOs on how adaptable they are, one of the features that really set them apart was that they were willing to let go of the past even while it was still profitable. There are a lot of companies that don’t adapt, precisely because their human habits or business processes are linked to the old way of doing business, and so they allow themselves to become obsolete. The leaders who really stood out for their proactive adaptability were those who were willing to challenge themselves before it was too late.
We’ve had about 17,000 people take an online self-assessment tool that is used to assess these four behaviours, and reliability has consistently been the lowest scored behaviour. So, while being reliable may sound very simple, it is actually really hard. These four behaviours are associated with high performance, and what’s fascinating is that only reliability can double your chances of getting the job. It is therefore arguably the most powerful behaviour, and one that we can all improve on.
Finally, to engage for impact is really about engaging with your stakeholders and asking yourself who your stakeholders are and how you’re going to work with them to move your enterprise forward towards the objectives that you have.
Do you think the keys to success as a CEO are changing due to changes in technology? If so, how are they changing?
I would say that technology is improving transparency but also increasing noise levels, which affects how a leader performs. In the book, we give the example of how United Airlines mishandled a passenger. In the past, it probably would have been limited to the plane. But now, in an instant it is transmitted to the entire world.
Improved transparency also creates a higher bar for leaders, so that they have to be decisive, adaptable, reliable, and engage in the right way. At the same time, technology provides a better tool to support these behaviours as well. CEOs today have better tools to support their decision making, and have better processes and technology to rely on to build a better organisation. Technology is definitely raising the stakes.
What common mistakes do CEOs make that harm their performance?
One of the most common mistakes and pitfalls that we’ve seen leaders at every level struggle with is failing to ensure that they’ve got the right team around them. CEOs have to consider how well their team is spread out to achieve the objectives that have been set. It’s important to not just accept the team as is, but to really think about what skills are needed to deliver on the organisation’s expectations. Seventy-five percent of the CEOs we interviewed admitted that their number one mistake was when it came to this.
What advice would you give an ambitious MBA student on how they can quickly climb up the career ladder?
I would advise them to excel in everything they do and to start practising the four behaviours. To consistently excel reveals reliability. Be someone that everyone can always count on and great things will happen.
In the book, we talk about three particular sets of career accelerators, which helped leaders become CEOs faster than average. The book explores three career catapults which all involve risk-taking. It’s natural to be afraid to make a mistake, but it’s important to not only deliver results, but to also have the visibility that is needed to move up quickly.
The CEO Next Door says that for people looking to advance their careers, “sometimes it is better to go small in order to go big.” Could you unpack what you mean by that?
“Go small to go big” is one of the three career catapults. When we analysed CEOs that got to the top faster, about 60% of them had an experience in their career which at the time looked like they were taking a step backwards. An example is someone leaving a job at a big name company to go and run a division that’s underperforming, or someone that was given an HR role that was not considered to be a high-pedigree role. Typically, these roles come up because there is a problem that needs solving. They may look unglamorous at the time, but they actually give you a degree of freedom to step up and take a greater level of responsibility. That’s why these “go small to go big” catapults are so effective, because in a smaller environment you often have a bigger opportunity to prove yourself at a very early age.
Are there any kinds of people that you would advise not to pursue the corner office?
Being a CEO is definitely not for everyone. There are many other ways to have tremendous impact on the world. If you don’t like to be counted upon by others, then being a CEO is definitely not for you. Leadership is really about others counting on you to take them places that they wouldn’t have been able to go on their own. While the position may look like it’s the main person in charge all the time, their role is ultimately about being responsible towards others. If the primary motivation behind being a leader is for personal advancement or a sense of glory, it will be a very painful task to accomplish.
Did your research reveal any differences between male and female executives in terms of the career paths they have followed or the behavioural traits that they display?
What we found in our research is that when comparing candidates that have equal levels of accountability, women were less likely to get the job. What we also found was that the four behaviours apply across genders. I would also argue that if you look really closely at a leader’s style, there is often a greater difference between how two male or two female leaders lead than the difference between leaders of the two genders. While women may go about things differently or while it may look different, fundamentally high-performing female or male CEOs are highly decisive, adaptable, reliable, and engage for impact. It is important to note that women and minorities do face very unique obstacles on their way to the top, including higher hurdles and challenges.
Where do you plan to take your research on executives next? Do you have new areas that you plan to explore?
We’re currently focusing on actively building up the research. We’ve had several articles come out since the book was published, on topics such as failure or performance reviews. Our main focus now at ghSMART is to use the results of our research with boards and CEOs, to allow for its full impact. I’m spending a lot of time speaking to board members, organisations, and CEOs, to help them really apply the lessons in the book. We want to help leaders become even more successful in their organisations. In terms of future research, we will also be doing additional analyses on women and leadership in the corporate world.
[This article has been reproduced with permission from CKGSB Knowledge, the online research journal of the Cheung Kong Graduate School of Business (CKGSB), China's leading independent business school. For more articles on China business strategy, please visit CKGSB Knowledge.]