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One of the mysteries of the workplace is how to become a chief executive officer. Some people, of course, seem to know the secret. But the rest of us wonder: Is there a special formula? And if so, can I rise to the top?
A new study shows CEOs develop themselves for the post by taking on tough challenges that others would shy away from and along the way sharpen their softer skills of influence.
Claudius Hildebrand and Robert Stark, consultants with SpencerStuart, analyzed the performance of every CEO this century of an S&P 500 company, and then dug deeper to learn why some succeeded and others failed.
“Optimally, preparation for the way up involves seeking out wide-ranging roles that will stretch you, roles that often extend well outside your comfort zone but that provide broad experience and allow you to develop a whole-enterprise systems perspective of how companies operate. Preparation also entails hard inner work, pushing yourself to address any weaknesses in your leadership skills. Particularly challenging is the transitioning from a leader who relies mostly on the directive, command-and-control style of leadership, which may have produced great results in prior positions, to a collaborative influencer who delegates and understands how to lead through inspiration and empowerment,” they write in The Life Cycle of a CEO.
To reach the top, ironically, it’s important to learn that you can’t be fully in control. Companies are complex, adaptive systems. Successful leaders learn they must harness the talents and capabilities of people in the firm through the force and clarity of their vision and strategy. They must galvanize and enable people.
“Few, if any, leaders have fully developed all these capabilities by the time they take over as CEO. But those with the best chance of succeeding have done concerted work to develop their leadership skills, and they continue to do so once they’ve stepped into the role and all throughout their tenures,” they write.
They don’t climb a fixed ladder to the top rung so much as travel a winding route that involves bold and risky moves to gain breadth as well as depth of experience. Think of those side routes, as the consultants who studied them do, as investments. “The more you get comfortable with discomfort and learn how to seek the advice and support you need to succeed with a daunting set of new responsibilities, the stronger those muscles will be when you run into vexing challenges,” they note.
Speed to the top is not always of the essence. Sometimes future CEOs at a critical time stepped down to pursue a promising pathway that ultimately helped prepare them for the top. The key is to develop greater operational, strategic and leadership skills. Most boards also expect CEO candidates to have had at least one stint as a general manager of a large unit or division.
Boards also prefer internal hires for the CEO suite. Over the past two decades, 76 per cent of CEO appointees were internal candidates, with that more likely in the largest firms. Even when from outside, they had generally worked in the same industry.
By moving across functions and divisions as they took on challenges, these high performers were forced to adapt to different cultures within the organization and, when the assignments were overseas, different national cultures. “Particularly notable about the stretch moves of the most successful CEOs is not only how wide-ranging they were but how rapidly they were made. Most stayed in one role no longer than three to four years. They relentlessly pushed themselves to learn how to quickly learn, which often involved great risk,” the consultants say.
Other studies have shown social skills increasingly prioritized in executive hiring, with the greatest surge for CEOs. Their own research, examining correlations between leadership skills and company performance of 47 CEOs selected to lead public companies, found the highest performers were the most accomplished in influencing through empowerment. They stress that the directive style has its moments in certain situations such as crises. But generally, the best results come through empowering others.
Scott O’Neil, former CEO of Merlin Entertainments, told them when he was president of Madison Square Gardens he tried to put through three different transformational proposals but couldn’t get any done. He realized he had a choice to either be effective as a leader or be right all the time. In the words of his executive coach he had to stop being a warrior and become a sage.
The most important skills to develop, their study suggests, are thoughtful and active listening, expressing and demonstrating empathy, conveying humility, collaborating, fostering psychological safety and communicating a clear and motivating vision. That’s a lot to learn. But together they move you from a warrior to leading with influence, and can be the ticket to be a contender for top posts.
And when you get there, you can’t stop learning, their research emphasizes. In particular, while the focus is usually on what is accomplished in the first 90 days for a CEO or the first year, they discovered a significant sophomore slump, when with the blush off the rose, CEOs face tougher questions about moves they are making and crises often pop up. Gregory Ebel, CEO of Enbridge, told them, “Somewhere in the first 12 to 18 months you are going to run into a buzzsaw.” Be prepared.
Cannonballs
- Stanford University management science professor Robert Sutton recommends a 90-10 rule for successful leadership: Roughly 90 per cent of people should like you while 10 per cent don’t. If too many colleagues think you are a sweetheart, that might suggest you have become a weak people pleaser and if two-thirds of co-workers are praying for your departure that indicates you are not getting the balance between likeability and respect right.
- Futurist Rishad Tobaccowala says the six skills every manager should develop are their communication, curiosity, creativity, cognition, convincing and collaboration.
- Consultant Art Petty warns that it’s easy to blame an organization’s culture for problems, including a failure to be innovative and creative, but that’s a cop-out: “The lack of freedom and encouragement to ideate, share, explore and experiment isn’t a cultural flaw; it’s a leadership failing.”
Harvey Schachter is a Kingston-based writer specializing in management issues. He, along with Sheelagh Whittaker, former CEO of both EDS Canada and Cancom, are the authors of When Harvey Didn’t Meet Sheelagh: Emails on Leadership.