Steve Kaplan, an expert on C-suite hiring and CEO performance, dives into the complexities of selecting the right CEOs. He reveals that successful CEO traits often differ from those of other executives, highlighting skills like decision-making, execution, and charisma. Kaplan warns against merely favoring likability over effectiveness in hiring practices. He explores how trends in CEO characteristics have evolved while certain core traits remain constant, using examples from iconic leaders to emphasize the crucial balance of execution skills and interpersonal abilities.
Effective CEOs typically possess execution orientation, creativity, and charisma, which are critical traits for success in their roles.
The hiring process often favors likability over execution skills, leading to potential misalignment between selection and actual performance outcomes.
Deep dives
Key Traits of Successful CEOs
Research indicates that effective CEOs often exhibit traits such as execution orientation, creativity, and charisma, which are critical for success in the role. Candidates who display efficient, proactive, persistent, and strategic qualities tend to perform better once in the position. Interestingly, while agreeable interpersonal skills are important, they are sometimes prioritized over execution capabilities during the hiring process. This suggests that companies may mistakenly favor likability at the expense of necessary decision-making skills.
Impact of Hiring Practices on CEO Success
The podcast highlights that the hiring practices for CEOs do not guarantee success, as those chosen often do not fulfill the expected performance metrics. Analysis demonstrates a significant difference between candidates who are capable but less agreeable and those who are personable yet ineffective in execution. Boards are cautioned against selecting candidates based solely on being likable, as this can lead to suboptimal performance outcomes. The research emphasizes the importance of balancing both execution ability and interpersonal skills in the hiring process to enhance the likelihood of a successful CEO.
Evolution of CEO Characteristics Over Time
CEO profiles have shown stability in fundamental traits over the past two decades, with an emphasis on execution remaining constant despite market changes. Research attributes a consistent demand for execution-oriented skills among CEOs, irrespective of whether they lead public or private firms. This reflects a broader understanding that effective leadership requires decisiveness and the ability to follow through on strategic plans. Nevertheless, a subtle shift suggests that the candidates being hired have become marginally more execution-focused, demonstrating a recognition of the need for results-driven leadership.
Are American companies any good at hiring CEOs? When a company is searching for its next CEO, what skills are they looking for? And are those the same skills that make CEOs successful in the job? We talk with Chicago Booth’s Steve Kaplan, who’s spent decades analyzing C-suite hiring practices and CEO performance. His research finds that candidates who get hired as CEOs are different from other C-suite executives, but also that hiring practices do not guarantee that the person who wows the hiring committee will succeed in the top job.
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