4 Behaviors of Top-Performing CEOs

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Welcome to the HBR IdeaCast from Harvard Business Review. I'm Sarah Greene. Carmel Michael, Charismatic, two meters tall, a degree from a top university, a strategic visionary, white and male. His career went straight to the top thanks to his ability to make decisions under pressure, perfect ones. That's the stereotype of the ideal CEO. It's one that investors and boards seem to reflexively turn to as they bring on new chief executives to turn floundering companies around or just lead strong companies through changing times. But there's a disconnect here. Our guest today has for 10 years conducted research on CEO performance. Dubbed the CEO Genome Project, it illuminates the real behaviors that separate high performing chief executives from disappointing ones. Simply put, this stereotype is wrong. Joining me now is Elena Botello, a partner at GH Smart, a consulting firm. She's the co author of the article what sets successful CEOs apart. It's in the May, June 2017 issue of Harvard Business Review. Elena, thanks for talking with the HBR IdeaCast.

Sarah, thank you for having me here. It's a pleasure.

So what's wrong with that stereotype?

Well, first of all, I think what's wrong with it is probably your audience right now is feeling an all time low because even me just listening to you kind of, my blood pressure is up, my motivation is down. It's kind of a scary picture, like who could measure up to this standard, right? And in fact, what we found doing our research, actually nobody does and nobody has to. You know, in our practice We've been advising CEOs for 22 years. And I kept getting stumbling upon this irritating fact that the CEOs I got to know up close and personal really looked nothing like this, you know, image of perfection and a pretty uniform image at that that we see in the public media or in the conventional wisdom. And so we decided to dig into this with the data. And so what we found is things that really turned out to matter weren't so much things that you are born with, whether it's your height or weight or gender or color of your skin or hair or anything else or access you have to Ivy League education. It actually turned out to be all about the behaviors that you can control. And so I think we didn't know what we would find when we embarked on the CEO genome. But what we did find is that your destiny is largely in your own hands.

One of the things I found really interesting and surprising about the research was that introverts are slightly more likely to be the most effective CEOs than extroverts. Why is that? What's that finding?

Folks got really excited about it. The Washington Post picked it up. Susan Cain was very excited about that. When we did our analysis, we basically bucketed CEOs in three buckets. Did they meet expectations, did they exceed expectations, or did they underperform? And we did find that in a group of the CEOs who exceeded expectations, there was a slight higher percentage of introverts. So for me, the main takeaway is, yes, it's tempting to say, gosh, introverts are better CEOs. What the data told us is that it's actually not. Again, it's back to it's really not about what you're born with. So no more excuses for any of us. It's really. It's really how you behave and how you act, which you can change.

Yes, well, and also, if you're an introvert, don't give up.

Exactly. And me being an introvert, I'm excited about that finding.

The other thing that I think really grabbed a lot of people's attention was that about the same number of CEOs had been to an Ivy League institution as who hadn't gone to college at all.

Isn't that fascinating? Yeah, so I was shocked. So the power of our data is that we looked at CEOs of every industry and every company size, including Fortune 500 and Fortune 100 and small companies. There are about, I think, 6 million CEO jobs in this country alone. And so what we found, ironically, again, this kind of stuff that you could have never planned for intentionally before you started looking at the data, is that it's almost equal amount of CEOs who graduated from Ivy League schools undergraduate as there were who didn't actually graduate from college at all. And when we looked at their performance, guess what, it actually didn't matter.

And just to sort of put a finer point on this, you're Talking about the CEOs who were extremely effective. So is it possible that some of these factors that are stereotypes influence who gets chosen to be CEO, but they don't actually affect performance once you are CEO?

Sarah, thank you for asking me that question. So that was one of the fascinating and frankly disappointing and concerning findings that we stumbled upon very early, which is it is known, more likable CEOs charisma being part of that. And in fact More likable executives of any role are more likely in fact to get hired. And so then what we were able to do is we took that further and we looked at how then they performed. And so what we found is exactly what you're describing, which is the characteristics that help you get the job actually aren't the characteristics that help you succeed or fail in the job.

I was especially interested in the article to notice that you picked out confidence. So being confident, appearing confident, helps you get the job, but it doesn't seem to help you on the job. Why might there be a disconnect on something like that?

It's a really great question. So look, people, fundamentally we're all attracted to people that are warm and confident. And Harvard Business Review published a lot of research to that effect. And so you do find that likability and confidence are associated with a higher probability of getting hired. Often. While boards and investors that make hiring decisions are very sophisticated and very thoughtful, ultimately when it comes to picking people, they resort to gut feel. And so they get seduced by the same factors that might affect who gets the first date or who gets picked for the soccer team first. And so those are the factors that drive getting hired. Why does confidence matter when post hire? When you get into the role, other things are more important. So confidence is no longer the factor that helps separate the best from the rest.

And looking at these high performing CEOs, so confidence doesn't make much of a difference. They're slightly more likely, you mentioned to be introverts. They may not have a college degree. If they do have one, it may not be from a top school. One of the other things that I think would surprise people is, is that they have a kind of more circuitous career path than maybe many people would assume. Tell me a little bit about that.

What a great question. Yes. So we all imagine that it's so hard, the odds of getting into the CEO role are so slim, even for somebody who's done everything right, that it's very natural to assume that you must have a flawless career track record. You cannot afford to make a mistake. And in fact, when we work with C suite executives that aspire to the CEO role in, especially when they're in the window, they tend to be really risk averse. They get very careful to make sure there's not a mistake they make. Well, the data tells a very different story. So when we looked at the CEOs, as many as 45% of them had not only a mistake, but a major career blowup. And so A major blow up might be, I led this acquisition that ended up eroding and destroying shareholder value that turned out to not be successful for our business. So every single CEO candidate that we've assessed has had career mistakes, and 45% of them had major, major blowups. Might include getting fired from a role, et cetera. Another really interesting thing we found is that actually individuals who had one blow up were more likely to be recommended to be hired for the role than those who had none. Hmm.

Why do you think that is?

I think there are two reasons for that. The board wants to see somebody who's been tested. If anything is true about the CEO role is no matter how well prepared you are for the role, you will be tested, you will be challenged in ways that you can't anticipate, and often in ways where you don't really control the outcome. And so boards actually do want to see somebody who's had to deal with tremendous amount of pressure. That's reason one. And reason two is the fact that an individual is able to describe, explain, and own up to the failure or blow up also builds stronger trust with the board.

Really the heart of your findings are these four behaviors that you found that the most successful CEOs do and, and focus on. You said that they might not seem that surprising, but the thing is to really perform them with maniacal consistency. So the first one is the speed of decision making. And I thought this was interesting because it wasn't that sort of. To follow up on your last point, it wasn't that the problem was that people made bad decisions. It's that the least effective CEOs just didn't decide.

Exactly.

Yeah. So what is it about decisiveness that would maybe help someone who suspects that they might have a problem with that kind of thing?

Yeah, so. So the findings stunned us. Basically, we think of decisiveness as kind of speed times quality of decision making. And we expected that the delta and the advantage that strong CEOs have would be all around quality. And so we were surprised to find out that it was really, in fact, all about speed. We found when we looked at these CEOs up close and personal, they have a need to decide. And, and if anything, smart CEOs put people around them that help put a brake pedal a little bit and balance their tendency to be very decisive. Recently you might have seen Jeff Bezos published his shareholder letter. And if anyone who is curious to learn more about these behaviors, in addition to reading the Harvard Business Review article fully, could also look at Jeff's letter to the shareholders. It's a great primer that talks frankly about each of these four behaviors in different ways. And he talks about how important it is to remain competitive, how important it is to move with velocity, to move with really high speed, to make decisions, as opposed to really try to make sure that every decision is perfect.

Yeah, so actually, I have that letter. It's interesting because he talks about that there's a problem when companies make high quality decisions slowly.

Exactly.

He says to keep energy in dynamism, you have to somehow make high quality, high velocity decisions. He says it's easy for startups, although I'm not sure that's entirely true. Might be easy for him in a startup, but very challenging for large organizations.

And it's fascinating, right, because back to this image that you described at the outset of the Superhumans with Super Insight. In fact, ironically or counterintuitively, sometimes we find the smartest executives we work with sometimes struggle with decisiveness if they tend to really relish the complexity and see the shades of gray, and always try to turn another crank on the analysis to get to really from a good answer to really a perfect answer. And what we find. Successful CEOs really understand the organizational need for moving forward and having a clear direction to move ahead. And when they make mistakes, they adapt.

So it's interesting because in the Jeff Bezos letter, he says most decisions should probably be made with somewhere around 70% of the information you wish you had. And if you wait for 90%, you're probably being too slow.

Exactly.

Why do you think that speed of decision making is so important?

The CEO is the ultimate pacesetter for the business. Literally. If the CEO is slow, everybody around him will be. Him or her will be that much slower. Right. Because very few people in the company move faster than the CEO. That's one piece of it. The second piece of it about scale. The CEO doesn't do anything herself or himself. The only way they really achieve results typically is by setting direction and then ensuring that the organization is aligned behind that direction. It's really hard to align someone behind something that you don't know or that you haven't decided. And so when I coach CEOs, when we work through this decision making, it really is about making sure that the organization is clear where they need to execute. Because for every brain cell of anyone who works under the CEO that's spent on addressing the business problem, there's probably at least one brain cell that's worried about what does the CEO really want from me? And so if the moment uncertainty creeps into that, you really paralyze the organization.

So it reminds me in a strange way of when I was, I played soccer as a kid and I was a goalie. And they always would say that in a penalty kick, your best strategy is just to guess and jump.

Yes.

And just pick right or left and just go.

Yes.

But it's really hard to do that because you feel like, no, I should wait and see which way the ball is going. But actually, statistically speaking, you just have a much better chance if you just guess.

Isn't that fascinating?

It goes against every, every sort of decision making principle that you would assume.

Well, and I think that's actually, that's a great, great reminder for your listeners because we looked at CEOs as kind of proxy for the most successful people in business. All of us could benefit. It's kind of never too early and never too late on any of these four behaviors. And there are plenty of opportunities to practice in your daily life.

Oh, that is true, if a little bit exhausting sounding at the same time. So one of the other behaviors that you uncovered is adaptability.

Yes. So adaptability and decisiveness actually go hand in hand. Right. When you move quickly, part of what might happen is you might make those mistakes. Well, we find a lot of times they're not deadly mistakes. And ability to adapt, either adapt because you have to change course as a result of making the wrong decision, or adapt to the environment and to the opportunities and the risks presented to you is really critical.

So is this like corporate sort of adapting your business model or just adapting personally to new things? I mean, what, you know, when we talk about adaptability, what does it really look like?

CEO leaves a really strong footprint on the company. These folks do two things exceptionally well. They do spend more time thinking about the future. So their lens is kind of longer term lens on the business and on the world. And they also have a wider lens in that they tend to be curious and engaged in a broader set of information flows, networks, people they talk to. And so they do get a lot of inputs from that. So more time on the future and more time kind of in diverse information flows. So that allows them to look forward to the other really, really critical thing that you might not think about as part of adaptability is they're really good at letting go. And so if you think about companies that have failed to adapt, you think of Kodak, you think of Blockbuster. The infuriating part or the sad part about those stories is that they failed to adapt not because they didn't know the right answer. Well, Blockbuster had three opportunities, I think, to buy Netflix at, you know, single digits, millions of dollars. They didn't. Kodak actually had the first online photo sharing capability. But we all know about Facebook. And so what we find, and there's a great example from Angie Grove that you're probably familiar with, what we find is actually part of where companies really struggle to adapt and industries struggle to adapt. It's enough to look at the conventional music industry or conventional bookstores. Right. It's as much about not letting go as it is about not knowing where the future direction needs to be.

Well, what is the Andy Grove story?

There's a reason his book is called Paranoid Survive.

Right.

So Anzi was forever vigilant about what's the next latest and greatest kind of risk and opportunity and what's coming around the corner. So Anzi had a conversation with his co founder where he said, so if the board were to fire us today, why would that be? Well, it's because we failed to pivot around dram. Why don't we do that? Why don't we do that ourselves? And so I think anytime when you're struggling to let go of something, life proves that when there's no other choice, people are much more adaptable than we might even expect of ourselves. And so I think companies and leaders that adapt faster just don't wait for that kind of point of no return.

Is there a kind of upper limit to adaptability where you know and you're just kind of reacting in the moment? Can you sort of take it too far?

Actually, if you look at any of these four behaviors, we probably all know who goes to extremes on one of them. What we find differentiates CEOs is that they actually balance in kind of the sweet spot of effectiveness on a couple of them. So any one of these can become an overused strength. And so you do want to be mindful of that.

The third one you uncovered was all about how they engage stakeholders to sort of come along with their vision. Tell me a little bit about kind of how they're doing that in a way that might be different from what a sort of typical or less effective executive would be doing.

Imagine an orchestra conductor. And I'm not an expert in music, but I'm told that a good orchestra conductor has a really, he's really tuned in to both his players emotional states and what motivates them and what they care about and how to help them perform to their best ability in that day, to what the role of each musical instrument or each section in the orchestra is. And so while they're tending to their stakeholders, right, as we would say, in the business world, their ultimate purpose is they're there in the sole service of the music. The only goal of the conductor is to bring the orchestra together without playing any instruments herself or himself, and really create something special that, left to their own devices, individual stakeholders would fail to produce. One of the CEOs that I've been spending time with recently, Tom Monahan led corporate executive board. We had a conversation about just his reflections on being a CEO. And he said, look, we were very conscious as a leadership team that we had three sets of stakeholders. It was our employees, our customers, and our shareholders. And we were responsible to all three. And that, left to their own devices, left unchecked, each one of the three would bankrupt the company in a hurry. And so my role as a CEO was to balance these. And the way he framed it was beautiful. He said, I had to keep them in a state of constructive dissatisfaction. So it was really interesting how he framed it. So it wasn't that I needed to please all three, but I had to keep them in the state of constructive dissatisfaction so that the business could grow and so that the business could be successful. And so that's what we really see successful CEOs doing. The other two extremes we're all familiar with, you did a great article with us last year, I think, called the dangers of hiring a Nice CEO. And so that extreme we found very ironic and counterintuitive, which is CEOs who relate for affinity, meaning their dominant need is to be liked as opposed to be effective in the role, actually end up producing a lot of strife and a lot of unhappiness in the organization. On the other extreme, we all know for the older listeners, it's the chainsaw owl. For the younger listeners, I'm sure there's somebody in your life that just seems to operate under this motto that as long as I crush the targets, they'll line up. And so what happens in both of those scenarios when they're taken to extreme, we see the individual leaders and the companies they lead not do particularly well in the long run.

So when you're trying to sort of juggle all the needs of these different stakeholder groups and also make sure that, you know, they're all kind of happy with you, but also kind of unhappy with you at the same time, and just the right amount, it seems like that would take a lot of emotional labor. How did the CEO, as you talked with kind of deal with that state of being. Well, everyone's kind of a little bit annoyed with me all the time.

Successful CEOs have to be black belts at emotional self management. One CEO I work with, we talk about clear and reset. So his day is scheduled in 30 minute increments and he might be going from a tough shareholder meeting to a meeting with an employee whose spouse just passed away, to giving a media presentation about a new product coming out. And this ability to clear the plate mentally and reset and come into every dialogue crush, it takes a real practice. So for anyone who's listening, I would recommend starting it wherever you happen to be today, because again, that's helpful in any aspect of your life and really does help you play at your best to these four behaviors.

So the fourth behavior deliver results reliably. It really speaks to the kind of unsung heroism of just being consistent day in, day out, which is not something that I think our culture focuses a lot of attention on. Tell me a little bit about kind of uncovering this and the data and how you came to realize that this was a really important skill.

Well, so reliable delivery was fascinating because we kind of hated it when we uncovered it.

Why? Why did you hate it?

And there was so much debate on our team that surely this was, you know, completely, utterly, you know, unexciting. You know, gosh, like, talk about milquetoast, right? Or motherhood and apple pie. Like, really, are we really finding that? But the data spoke for itself. Not only that, not only was it very clearly associated with higher probability of high performance, it was actually the only one of the four behaviors that both improves your odds of being hired into the role as well as improves your odds of being successful. And so it actually turned out to be, sadly for the most unexciting behavior, it turned out to be the most powerful one. What gets a lot of press and the accolades is often this spectacular home run. But what we find at the end of the day is that it's really consistency that wins the day. So in the proverbial tortoise and the hair, you know, territories does end up, end up winning. As it turns out. When you look at the CEO data.

I could see how someone would be like, okay, I can, I can just learn to decide things faster and I can learn to become more adaptable by letting things go. And I can even get better at kind of bringing along my, my various stakeholders. But becoming more reliable seems like somehow to me, the hardest thing to, to improve on, because to me, that just seems like the kind of thing like you are either the person who remembered your homework for school in the morning or not, you know, and then you became the person who, you know, paid your parking tickets on time or you didn't, you know, and now as an adult, as a CEO, to ask someone to change that, I don't know, it just seems really hard.

So you'd be surprised. Among the CEOs we work with, there are lots of them whose wallet is a mess and who don't pay their parking tickets and who are not kind of the model of organizational skills. What the reliable CEOs do share in common is this mindset of they want to be counted on. They may not be organized, but when you know it's your proverbial who would I want to be in the foxhole with? And so these CEOs are not just willing to be counted on, but they actually want to be counted on. That's their natural kind of momentum around that, if you will. Now, another bit of good news I would tell you around reliability is that reliability of these four behaviors is probably one that's easier for the CEO to supplement their natural propensities, if you will, with a team around them. The mindset has to come from the CEO. It has to matter to them that they can be counted on, that their business can be counted on by customers and other stakeholders. After that, the number one lever to reliability for someone who, like you and I, by the way, is maybe not most on time, right, Et cetera, is actually getting the right people around you who can help you be reliable, actually letting them build that reliability into your business. Because the classic founder example of this inspirational visionary founder who is moving a mile a minute and has lots of different ideas, often unintentionally, some of their behaviors not only don't help them build reliability directly, but actually prevent others from building a reliable business around them. And so my best advice to leaders would be put people around you who can help you be reliable and then let them actually do their job of being reliable. A reliable business often feels a bit more like a marching band than a jazz improv.

There was some horrifying statistic in the article about how many new CEOs first time CEOs fail to have a good team in place around them. Why do you think that those CEOs are struggling with that part of leadership?

Yeah. Yeah. Well, you know, in a way it brings us back to the beginning of our conversation. Right? Much for the same reason that boards struggle with picking the right CEOs. It's uncanny, right? We know that when it comes to, quote, unquote, hard business decisions, we must rely on hard tools. We all think we're above average drivers, and we all think we're above average at picking people. And so CEOs are no exception.

Are there other big mistakes that you saw or common mistakes you saw in the data? Or is it sort of just the inverse of the four things that we just talked about?

I love that this word mistake has become a bit of a kind of ongoing theme in this conversation. I want to come back to that. So I actually think one of the most underused assets in the world is actually mining mistakes, because that will help you be more decisive, that will help you become more effective at adapting, that will certainly help you deliver reliably, and it will have an amazing impact on your organization. Ian Reed at Pfizer. So Ian became a CEO at Pfizer in 2010. The company was in dire straits. It's well publicized that, you know, the prior CEO had a lot of challenges. He walked into a company that where the stock was trading in the teens. The team was demoralized. He inherited a pretty difficult situation. And Pfizer is in a business where the only way to compete is to be innovative, to move quickly. You've seen how the healthcare industry has evolved. And so one of Ian's kind of rallying cries has become dare to try. A few years back, Pfizer pursued acquisition of AstraZeneca, which was going to be a really, really big turning point for the business. And. And then Fisick decided not to pay the price. And so Ian very quickly went in front of the whole company and said, you know what? This was my dare to try, and it didn't work. And here's where we're going to next. So he was very decisive in that example where he didn't try to kind of put any kind of spin on the story. He went right up in front of his stakeholders, in front of his company, and said, you know, I dared to try. This was mine, and I encourage you to do that, too. And if it doesn't work out, we will adjust course. And so that's just one example where a CEO really paying attention to these behaviors sends a really powerful signal to the organization.

So the challenge with having this stereotype that's very different than what actually works in reality is that some people who might be great CEOs don't ever get hired into the role because they don't fit the stereotype. So how can people stay in the running if they think they fit these four behaviors. And how can boards maybe get better at picking the right people?

Yeah, thank you for asking me, Sarah. And I would say even kind of the real tragedy is that people write themselves off before they even try. So most people don't even try because they see early on that they don't measure up to that imaginary stereotype. And so at a minimum, I hope this work will make it clear that there isn't one way to be a successful CEO and that what it takes is actually something that you can affect. And in case you're curious about how you stack up on these four CEO behaviors that we talked about, you can actually check it out. So if you look@ceogenum.com, you'll find the self assessment to help you measure where you are and even give you a couple of ideas on how you can improve. Now, as we've said, we really zeroed in on what makes a successful CEO. But anybody listening to this should say, well, that's fine, but the boards are still picking the CEOs based on a, on this other set of factors. So what do I do?

How long do you think it will be before we start to see some real change here?

Oh, gosh. Well, you know, I have to be honest with you. More and more boards and CEOs actually want to be on the cutting edge, right? So I think more and more boards are actually realizing that they can't afford to use the old approaches and that they need something that's much more fact based. I guess I would tell you what I would hope. I think there's probably a reason why Nike's motto is just do it as opposed to just think it. I hope that every person listening to this just decides to do one thing and it actually doesn't matter what it is because amazing things happen when you change one thing. And so if you're a board member who is about to make a CEO selection decision, well, maybe that one thing is, well, I will look at these four behaviors and I'll consider them in my decision process. If you're somebody who's just starting out their career, maybe that one thing will be, well, maybe I'll show up on time for that next meeting and be reliable. And so it actually doesn't matter where you start, as long as you start somewhere.

Alina, thanks for joining us today.

Thank you for having me, Sarah. I really enjoyed it.

That's Elena Botello. She's a partner at GH Smart & Co author of the article what sets successful CEOs apart. It's in the May June 2017 issue of Harvard Business Review and at hbr.org thanks for listening to the HBR Ideacast. I'm Sarah Greene.