![]() ![]() ghSmart has assembled a database of assessments of 17,000 C-suite executives-including more than 2,000 CEOs-which covers all major industry sectors and a full range of company sizes. This article is based on research conducted over 10 years as part of ghSmart’s CEO Genome Project. We sifted through that information, looking for what distinguished candidates who got hired as CEOs from those who didn’t, and those who excelled in the role from those who underperformed. The database has in-depth information on each leader’s career history, business results, and behavioral patterns. Partnering with economists at the University of Chicago and Copenhagen Business School and with analysts at SAS Inc., we tapped into a database created by our leadership advisory firm, ghSmart, containing more than 17,000 assessments of C-suite executives, including 2,000 CEOs. Its goal is to identify the specific attributes that differentiate high-performing CEOs (whom we define as executives meeting or exceeding expectations in the role, according to interviews with board members and majority investors deeply familiar with the CEOs’ performance). That realization led us to embark on a 10-year study, the CEO Genome Project. Yet we’ve been struck by how few of the successful leaders we’ve encountered fit this profile. It holds that a successful CEO is a charismatic six-foot-tall white man with a degree from a top university, who is a strategic visionary with a seemingly direct-to-the-top career path and the ability to make perfect decisions under pressure. That disconnect starts with an unrealistic yet pervasive stereotype, which is shaped in large part by the official bios of Fortune 500 leaders. ![]() In the more than two decades we’ve spent advising boards, investors, and chief executives themselves on CEO transitions, we have seen a fundamental disconnect between what boards think makes for an ideal CEO and what actually leads to high performance. Clearly, many otherwise capable leaders and boards are getting something wrong. Those figures are discouraging for directors who have the hard task of anointing CEOs-and daunting to any leader aspiring to the C-suite. The fallout from these dismissals can be staggering: Forced turnover at the top costs shareholders an estimated $112 billion in lost market value annually, a 2014 PwC study of the world’s 2,500 largest companies showed. From 2000 to 2013, about a quarter of the CEO departures in the Fortune 500 were involuntary, according to the Conference Board. The chief executive role is a tough one to fill. (4) They deliver results in a reliable fashion, steadily following through on commitments. (3) They adapt proactively, keeping an eye on the long term and treating mistakes as learning opportunities. ![]() (2) They engage for impact, working to understand the priorities of stakeholders and then aligning them around a goal of value creation. Instead, top performers demonstrate four specific business behaviors: (1) They’re decisive, realizing they can’t wait for perfect information and that a wrong decision is often better than no decision. Charisma, confidence, and pedigree all have little bearing on CEO success, it turns out. The findings of their 10-year research project challenge many widely held assumptions. ![]() In conducting an analysis of in-depth assessments of 17,000 executives, the authors uncovered a large disconnect between what directors think makes for an ideal CEO and what actually leads to high performance. Clearly, boards do not always get their hires right. Too many CEOs falter in the job about a quarter of the Fortune 500 chiefs who leave their firms each year are forced out. At the top of the ladder, the stakes are high and the demands intense. ![]()
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