What You Need to Know Right Now to Level Up as a CEO
The role of Chief Executive Officer (CEO) presents several paradoxes. Though it is seen as a strategic role, most individuals hired into the role have operational backgrounds. A study of 130 CEOs by Russell Reynolds Associates reveals CEOs to be thick-skinned, but not insensitive. The research further indicates that CEOs are capable of both including others in decision-making and making them independently.
A Chief Executive Officer is, of course, usually the highest-ranking person in a company or organization, the ultimate authority for making managerial decisions. The CEO oversees the organization’s success and monitors risk. While no uniform roster of CEO roles and responsibilities exists, CEOs typically communicate on behalf of the organization to internal and external stakeholders. They lead the charge on the organization’s mission, vision, and social responsibility, as well as helm strategy development. Other C-Suite leaders report to the CEO, who evaluates their performance.
Major CEO concerns as we leave the 2010s include climate change, disruptive technology, and economic nationalism, 2019 research from KPMG reveals.
Key Competencies for the CEO Role
After studying 222 CEOs from 18 companies that survived for 100+ years, Christian Stadler summarized back in 2015 for Forbes the typical path to the CEO role: Obtaining an engineering degree, getting a few years of work experience, earning an MBA at a prestigious university (preferably Harvard), gaining a management-consulting role (especially at McKinsey), gaining employment in the company the would-be CEO wants to lead someday and gaining operational and finance chops, as well as international experience. An undergrad degree is still essential to become a CEO, and a significant proportion of top leaders also hold MBAs. While internal candidates comprised 79 percent of CEO hires when Stadler did his study, external hires have increased in recent years. Leaders reach the CEO role, on average, 24 years into their careers.
While CEO skills can be summarized as leading people, leading change, communicating and building coalitions, exercising business judgment, and being results-driven, experts have cited specific niche CEO competencies. When preparing career-marketing communications to send to employers, those aspiring to the CEO role should emphasize these qualities:
- Forward thinking
- Calculated risk-taking
- Team- and coalition-building
- Thoughtful action- and execution-orientation
- Strong strategic skills
- Good operational skills
- Business judgment
- Keen ability to read people
- Results orientation
- Ability to maintain close customer connections and anticipate customer needs
Here are a few suggestions for those seeking to break into the CEO role or expand their horizons in an existing CEO role:
- Significant past mistakes may not rule you out as a CEO. In the KMPG report, 74 percent of CEOs said that they had a significant misstep early in their career. CEO Genome Project research similarly cites 45 percent of studied CEOs who had had at least one major career blowup that ended a job or was extremely costly to the business. The key is that they learned from their experiences. Be sure to explicate your learning if you are asked to discuss mistakes from your career.
- Demonstrate your ability to make rapid decisions with conviction. This decision-making competency is one of four behaviors that Harvard Business Review says sets CEOs apart. “High-performing CEOs do not necessarily stand out for making great decisions all the time; rather, they stand out for being more decisive. They make decisions earlier, faster, and with greater conviction,” writes Elena Botelho, Kim Powell, Stephen Kincaid, and Dina Wang. After interviewing several CEOs, Devin Pickell concurs: “Having confidence in your decision-making skills is one of the most important qualities of any CEO candidate.” (The other three distinguishing behaviors in the Harvard Business Review study are attaining buy-in by driving for performance and aligning team members around the goal of value creation, adapting proactively to a rapidly changing environment, and reliably producing results.)
- Plan a career path with breadth, depth, and height. That’s how two of the authors – Botelho and Powell – of the Harvard Business Review study on distinguishing CEO behaviors characterize the ideal career path to CEO: Broad experience as the ultimate generalist in the first eight career years, going deep to attain measurable results in years 9 to 16, and soaring to new heights as enterprise leaders in years 17-24.
- Be willing to drive change and accept “productive failure.” An acceptance of new ideas, even those that fail, is the new mandate for Chief Executive Officers. “[CEOs] must lead a fundamental transformation of their operating models, building an agile, customer-focused and connected enterprise by combining advanced technologies with operating redesign,” notes the KMPG report.
- Introversion need not count you out as a CEO. As the 10-year study CEO Genome Project discovered, “while boards often gravitate toward charismatic extroverts, introverts are slightly more likely to surpass the expectations of their boards and investors,” as reported in Harvard Business Review.
CEO Trends to Watch
- Diversity, inclusion and belonging will become a differentiator. CEO Action for Diversity & Inclusion is leading this charge, stating on it site: “Recognizing that change starts at the executive level, more than 800 CEOs of the world’s leading companies and business organizations, are leveraging their individual and collective voices to advance diversity and inclusion in the workplace.” The organization has created the CEO Pledge.
- Top concerns focus on talent issues. The Employer Associations of America’s 2020 National Business Trends Survey reports that top challenges to business executives include talent acquisition and retention, ability to pay competitive wages/salaries, and ability to pay for benefit costs.
- Accelerated disruption calls for adaptive leadership. “The challenges businesses face are adaptive,” writes Maureen Metcalf in Forbes, “Leaders need to change themselves and their organizations.” Metcalf points to the work of Harvard’s Dr. Ron Heifetz, who describes adaptive leadership as a “practical leadership framework that helps individuals and organizations adapt to changing environments so they can effectively respond to recurring problems.”
- Experts call for resilience. Resilience is a strong theme in the KPMG report, which states, “CEOs need to build resilience within their organizations by driving change.” Forbes’s Metcalf concurs: “The people who make change possible hit a point of diminishing performance that impacts their ability to deliver. Employers must provide work environments that maximize employee performance.”
The final paragraph of the KMPG research nicely summarizes the current milieu and upcoming trends for CEOs:
“The modern CEO needs to accept and embrace the fact that they have more to do and less time to do it in. They need to become internal disruptors of their own businesses, challenging management dogma and entrenched practices. They will need to forge stronger links with their customers, accepting the need to anticipate their requirements through insights gleaned from data-driven analysis. They must also create an environment where new ideas can be tested without prejudice and in which willingness to change is recognized as a strength, not a weakness.”