The proper answer is, it depends on the scorecard. Different situations call for different scorecards. That being said, there are some general qualities about CEOs that tend to predict success of failure. We conducted a study pairing in depth assessments of CEO traits with financial performance. It flies in the face of conventional wisdom.
To learn whether there is indeed a profile that can predict CEO success, we teamed up with Steve Kaplan, professor of entrepreneurship and finance at the University of Chicago, and his collaborators, professor Morten Sorenen and research assistant Mark Klebanov. Together, we analyzed the data from 313 Who Interviews we conducted on private equity backed CEOs from 2000 to 2005. Then we matched the CEO assessments with the actual financial performance they delivered, which we tracked down with permission from our clients.
The results were compelling and controversial. In fact, the Wall Street Journal ran a half page article about this on November 19, 2007, that attracted a lot of attention.
Boards and investors have a tendency to invest in CEOs who demonstrate openness to feedback, possess great listening skills, and treat people with respect. These are executives who have mastered the soft skills. We call them "Lambs" because these CEOs tend to graze in circles, feeding on the feedback and direction of others. Boards love Lambs because they are easy to work with, and in fact, in our study Lambs were successful 57 percent of the time. That is not a bad success rate.
The second dominant profile that emerged from our analysis was of CEOs who move quickly, act aggressively, work hard, demonstrate persistence, and set high standards and hold people accountable to them. We call these CEOs "Cheetahs" because they are fast and focused.
Cheetahs in our study were successful 100 percent of the time. This is not a rounding error. every single one of them created significant value for their investors.
Conventional wisdom holds that the sort of emotional intelligence Lambs show is the critically important leadership quality. In fact, our analysis argues otherwise. Emotional intelligence is important, but only when matched with the propensity to get things done. Too many executives have fallen into the trap of accentuating their Lamb skills at the expense of their Cheetah qualities. They work hard to stay in tune with their employees. They're well liked on the shop floor and in the bathroom. There's only one problem: they don't produce value at anywhere near the rate Cheetahs do.
This isn't to say Cheetahs lack soft skills. To the contrary, they are talented people whose soft skills played a critical role in their ascent to the top job. The difference, though, is that Cheetahs know when it is time to stop asking for feedback and to attack a target to achieve key outcomes that move a company forward.
Want to print your doc? This is not the way.
Try clicking the ⋯ next to your doc name or using a keyboard shortcut (