Best of IdeaCast: Behaviors of Successful CEOs

CURT NICKISCH: Welcome to the HBR IdeaCast from Harvard Business Review. I’m Curt Nickisch.

A lot has changed in the business world in the last few years. But there are some fundamentals that still ring true, and it’s good to be reminded of them. Like the ingredients that make a good leader. As we end one year and begin a new one, we wanted to reshare this episode that looks at the characteristics of the most effective CEOs out there. Whether you already are a chief executive or aspire to run an organization one day, the good news is: these behaviors can be learned.

In fact, the stereotype we might have of a leader or CEO – might be all wrong. That’s according to a research analysis from the consulting firm ghSMART, where Elena Botelho coleads the CEO Genome Project. She’s also a coauthor of the HBR article: “What Sets Successful CEOs Apart.” Back in 2017, she told IdeaCast host Sarah Green Carmichael about the four behaviors that really make CEOs successful. Here’s their conversation with the takeaways that still apply today.

SARAH GREEN CARMICHAEL: 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?

ELENA BOTELHO: When we did our analysis, we basically bucketed CEOs in three buckets. Did they meet the expectations? Did they exceed expectations? Or did they underperform? And we did find that in the 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. It gets 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.

SARAH GREEN CARMICHAEL: Yeah. And also, if you’re an introvert, don’t give up.

ELENA BOTELHO: Exactly. And me being an introvert, I’m excited about that finding.

SARAH GREEN CARMICHAEL: But 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.

ELENA BOTELHO: Isn’t that fascinating?

SARAH GREEN CARMICHAEL: Yeah.

ELENA BOTELHO: 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, six 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.

SARAH GREEN CARMICHAEL: And 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 a CEO.

ELENA BOTELHO: 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 likeable 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.

SARAH GREEN CARMICHAEL: 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?

ELENA BOTELHO: Look, people fundamentally will attracted to people that are warm and confident, right? 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 doesn’t that confidence matter 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.

SARAH GREEN CARMICHAEL: In 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. One of the other things that I think would surprise people, is that they have a kind of more circuitous career path then maybe many people would assume. Tell me a little bit about that.

ELENA BOTELHO: 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 has done everything right. 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, 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 blow up. 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 blow ups. 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.

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 has had to deal with tremendous amount of pressure. 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.

SARAH GREEN CARMICHAEL: Really the heart of your findings for these four behaviors that you found that the most succesful CEOs 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 the problem was that people made bad decisions. It’s the least effective CEOs just didn’t decide.

ELENA BOTELHO: Exactly.

SARAH GREEN CARMICHAEL: 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?

ELENA BOTELHO: Yeah, 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 that 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 if anything, smart CEOs put people around them that helped 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 was curious to learn more about these behaviors, could also look at Jeff’s letter to the shareholders. It’s a great primer that talks frankly about each of these four behaviors and 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.

SARAH GREEN CARMICHAEL: 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.

ELENA BOTELHO: Exactly.

SARAH GREEN CARMICHAEL: Says to keep energy and 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.

ELENA BOTELHO: And it’s fascinating, right? Because ironically or counter-intuitively, 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 form a good answer to really a perfect answer. 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.

SARAH GREEN CARMICHAEL: 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.

ELENA BOTELHO: Exactly.

SARAH GREEN CARMICHAEL: Why do you think that speed of decision making is so important?

ELENA BOTELHO: 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? 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 their 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.

SARAH GREEN CARMICHAEL: 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 it had a penalty kick, your best strategy is just to guess and jump.

ELENA BOTELHO: Yes.

SARAH GREEN CARMICHAEL: And just pick right or left and just go.

ELENA BOTELHO: Yes.

SARAH GREEN CARMICHAEL: But it’s really hard to do that, because you feel like no, I should wait and see which way the ball’s going.

ELENA BOTELHO: Right.

SARAH GREEN CARMICHAEL: But actually, statistically speaking, you just have a much better chance if you just guess.

ELENA BOTELHO: Isn’t that fascinating?

SARAH GREEN CARMICHAEL: It goes against every sort of decision making principle that you would assume.

ELENA BOTELHO: 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.

SARAH GREEN CARMICHAEL: That is true, if a little bit exhausting sounding at the same time. So one of the other behaviors that you uncovered is adaptability.

ELENA BOTELHO: 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.

SARAH GREEN CARMICHAEL: So is this like corporate sort of adapting your business model, or just adapting personally to new things. I mean, what– when you talk about adaptability, what does it really look like?

ELENA BOTELHO: 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 than 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 in diverse information flows. So that allows them to look forward. 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, right, you think of Kodak. You think of blockbuster, right? The infuriating part or the sad part about those stories, is that they fail to adapt not, because they didn’t know the right answer. Well, blockbuster had three opportunities I think to buy Netflix at 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 is a great example from Andy Grove that you’re probably familiar with. What we find is actually part of where companies really struggle to adapt and industry 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.

SARAH GREEN CARMICHAEL: What is the Andy Grove story?

ELENA BOTELHO: There’s a reason his book is called Paranoid Survive, right? So Andy was forever vigilant about what’s the next latest and greatest kind of risk and opportunity, and what’s coming around the corner. So Andy 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.

SARAH GREEN CARMICHAEL: Is there a kind of upper limit to adaptability where you’re just kind of reacting in the moment? Can you sort of take it too far?

ELENA BOTELHO: 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.

SARAH GREEN CARMICHAEL: 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 how they’re doing that in a way that might be different from what sort of typical or less effective executive would be doing.

ELENA BOTELHO: Imagine the orchestra conductor. And I’m not an expert in music, but I’m told that a good orchestra conductor, 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 reaching– musical instrument or each section of 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 soul service of the music.

The only goal of the conductor is to bring the orchestra together, without playing any instruments herself or himself, and to 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. 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 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 exchange we found very ironic and counter intuitive, 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 Chainsaw Al, for the younger listeners, I’m sure there’s somebody in your life that just feels seems to operate under this motto that as long as I crush the targets, they’ll line up, right? 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 longer run.

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

ELENA BOTELHO: Successful CEOs have to be black belts at emotional self-management. One CEO we worked 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 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 fresh, it takes real practice. So for anyone who’s listening, I would recommend starting it wherever you happen to be today, because that again, that’s helpful in any aspect of your life and really does help you play at your best to these four behaviors.

SARAH GREEN CARMICHAEL: 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 uncovering this, and the data, and how you came to realize that this was a really important skill.

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

SARAH GREEN CARMICHAEL: Why? Why did you hate it?

ELENA BOTELHO: And there was so much debate on our team that surely this was completely utterly unexciting. You know? Gosh, like talk about milquetoast, right? Or motherhood and apple pie, like really? Are we really finding that?

But you know, 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 than exciting behavior, it turned out to be the most powerful one.

Well, it gets a lot of press and the accolades is often the spectacular homerun. But what we find at the end of the day is that it’s really consistency that wins the day. So then in the proverbial tortoise and the hare, the tortoise does end up winning as it turns out when you look at the CEO data.

SARAH GREEN CARMICHAEL: I could see how someone would be like OK, I can learn to decide things faster, and I can learn to become more adaptable by letting things go. I can even get better at kind of bringing along my various stakeholders, but becoming more reliable seems somehow to me, the hardest thing 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.

And then you became the person who paid your parking tickets on time or you didn’t, you know? And now as an adult, as a CEO, to ask them to change that, I don’t know. It just seems really hard.

ELENA BOTELHO: So you’d be surprised. Among the CEOs we work with, there are lots of them whose world is a mess, and who don’t pay their parking tickets, and who are not kind of the model of organizational skill. 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. They really have to– 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? Is actually getting the right people around you who can help you be reliable. Actual 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. And reliable business often feels a bit more like a marching band than a jazz improv.

SARAH GREEN CARMICHAEL: 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?

ELENA BOTELHO: Well, 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.

SARAH GREEN CARMICHAEL: 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?

ELENA BOTELHO: I love that this word mistake has become a bit of a 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 minding 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 Read at Pfizer, so Ian became a CEO at Pfizer in 2010. The company was in dire straits. It’s well publicized that the prior CEO had a lot of challenges. He walked into a company 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 kind of how the health care industry has evolved. And so, one of Ian’s kind of rallying cries has become dare. To A few years back, Pfizer pursued acquisition of AstraZeneca, which was going to be a really, really big turning point for the business. And then Pfizer 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 the 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.

SARAH GREEN CARMICHAEL: So the challenge with having this stereotype that’s very different than what actually works in reality, right, 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 kind of stay in the running if they think they fit these four behaviors? And how can boards maybe get better at picking the right people?

ELENA BOTELHO: I would say 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 at CEOgenome.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.

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

ELENA BOTELHO: 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, is 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 is just starting out their career, maybe that one thing will be, well maybe they’ll show up on time for that next meeting and be reliable. So it actually doesn’t matter where you start, as long as you start somewhere.

CURT NICKISCH: That’s Elena Botelho, a partner at ghSMART and a coauthor of the HBR article “What Sets Successful CEOs Apart,” speaking with Sarah Green Carmichael in 2017.

And we have nearly one thousand IdeaCast episodes like this one … and more podcasts to help you manage your team, your organization, and your career. Find them at HBR dot org slash podcasts or search HBR in Apple Podcasts, Spotify, or wherever you listen.

Thanks to our team: Senior producer Mary Dooe. Associate Producer Hannah Bates. Audio product manager Ian Fox. and Senior Production Specialist Rob Eckhardt.

Thanks for listening to the HBR IdeaCast. We’ll be back with a new episode on Tuesday. I’m Curt Nickisch.