Becoming a Chief Executive Officer is as much the beginning of a new journey as it is the end of the last one. In this turbulent era, a leader's capacity to grow and evolve is as critical to success as is meeting financial targets.
What does it really feel like to become a chief executive officer?
While CEOs have been studied and surveyed many times, past projects have not focused on the human side of the CEO, or the critical elements of preparation and adaptation. This has been — until now — the untold story.
We surveyed 402 current CEOs from various industries, countries and corporate structures. They shared perspectives on the realities of the role, their preparation, their succession planning process, and how they lead and cope in these volatile times. They told us that they have had to transform themselves while also transforming the business. Navigating this dual journey is critical to success.
Our findings are divided into three categories:
Mindset for Success; Preparation and Succession; and Expectations vs. Reality.
What does it mean to be an effective leader today? We asked CEOs how they manage, and how they have adapted to the role.
They told us that they feel confident about their traditional skills, but less so about the more human aspects of leadership. Although they see a direct link between self-transformation and organizational transformation, many struggle with achieving both.
“As CEO, I need the capacity to transform myself as well as my organization.”
79% of Chief Executives agreed or strongly agreed with the statement above. Today's leaders see a link between self-transformation and organizational transformation— and believe that both are required for an executive to find success in the top role. Yet they know that this is no easy task.
CEO perspectives
“Transitioning into the role of CEO required an intense period of reflection.”
Overall, 54% of CEOs said they agreed or strongly agreed with the above statement. For first-time CEOs, the number was 60%.
Q.
As CEO, there is a tension between “Being”, which means the organization feels your presence, and “Doing” the job, or executing the operational requirements.
Is there one habit that helps you achieve this balance and/or one that limits your ability to do so?
Sources of honest feedback
We also asked CEOs who they turned to for honest feedback. It's critical that they reflect on who they have become—while at the same time getting input on that fact from others.
51%
Your senior leadership team
28%
Board of Directors
24%
You have to rely on your own judgment
38%
Chairman
The results revealed a stunning lack of communication among important stakeholders. Just over half—51%—of respondents rely on their senior leadership team for that feedback, which implies that nearly half of them can't or don't.
Boards of Directors' primary roles are CEO succession and governance. But just as important—and often missed—is their responsibility to advise and support their CEO on his or her own development. When asked where they turned for honest feedback, only 38% of CEOs named the Chairmen of their own Boards of Directors, only 28% cited any member of their Board, and almost one-quarter (24%) said “You have to rely on your own judgment.”
Can you truly prepare to be a Chief Executive? Yes...and no. In general, they expressed confidence. 80% of respondents indicated that they felt either “somewhat” or “fully” prepared for their current role.
Yet when you dig deeper, some interesting contradictions emerge. Internally-selected CEOs feel less prepared, and the succession process is lacking in many critical ways.
Preparedness
CEOs were also extremely forthcoming about where they fell short in their preparation and in which ways they wished they had been better trained.
32%
Fully prepared
8%
Somewhat unprepared
48%
Somewhat prepared
1%
Completely unprepared
28%
of internally promoted CEOs felt fully prepared.
38%
of externally promoted CEOs felt fully prepared.
Q.
What aspects of your succession process could have been improved?
“Being the CEO.”
CEOs need more guidance on the human side of leadership.
The largest number of open-ended responses (56) related to the parts of the role that were unique to being a CEO.
The CEOs also were particularly outspoken about needing more experience and skills training (45 respondents), help with communications and media (31), and assistance with Board relations (25).
Which one developmental measure was most useful?
31%
Ongoing development feedback from direct reports, boss and peers
16%
Job rotation
4%
Standard senior leadership development programs
4%
Senior leadership development programs designed for my team and me
Ongoing feedback from direct reports, boss, and peers was the most useful measure, according to 31% of respondents. 16% pointed to job rotation. Only 8% of respondents chose leadership development programs, whether traditional or bespoke—suggesting that many of those currently in use are not fulfilling their promise to their executives.
Succession Planning:
Still an Afterthought
We asked Chief Executives what they wish they had known before they took the role, and what has been easier and more difficult than anticipated.
They reported that several parts of the role had unfolded as expected—but that several elements, such as driving cultural change and building senior leadership teams, were more difficult.
In your role as leader, how comfortable
are you doing the following?
And yet, when CEOs were asked how various aspects of the role compared to their expectations, we heard a much more nuanced perspective, with a clear message that many things were more difficult than anticipated. This is particularly true of the human aspects of the role—supporting our belief that CEOs are not getting the preparation they need in this area.
More difficult than expected
50%
Driving cultural change
48%
Finding time for myself and for reflection
47%
Developing my senior leadership team
40%
Balancing the short-term financial focus with the longer-term transformation of my company
Most important business objectives
Next, we asked executives what they wished to achieve in the role. Every CEO has the same overall mandate—to lead a successful business. But what do they think are the most important goals beyond that strict business mandate? We asked CEOs to rank their two most important objectives beyond building a successful business—and received some fascinating responses.
There were two objectives that CEOs ranked as equally important: “Ensuring long-term success by investing in the future” (63% ranked it first or second, with 88% of Swedish executives doing so) and “Creating a value-based culture with purpose” (62%).
63%
Ensuring long-term success by investing in the future
62%
Creating a value-based culture with purpose
Who we talked to
402
respondents
$2.6
trillion USD total estimated revenue
11
countries
82%
run companies with over USD 1 billion
61%
first-time CEOs
53%
internally promoted CEOs
Key takeaways:
What helps a CEO succeed?
It's more about “being” than “doing.”
We believe that the preparation efforts and programs available today focus on “doing” rather than “being.” Especially in unpredictable times, the best way to prepare leaders for the top role is to help them adopt a mindset of constant personal growth. They must embrace curiosity, learning, adaptability, and the ability to influence culture and build strong teams. New conditions and opportunities demand that they leave their comfort zone—and that they understand that no one, not even the Chief Executive, has all the answers.
Boards must support the CEO through the leader's entire tenure.
There is much room for improvement in the relationship between Boards and CEOs. Today's world demands that Boards support the growth and development of CEOs, which they must focus on in tandem with the transformational needs of the business. This relationship only begins with the appointment decision. It needs to be a dynamic process, matching the upcoming transformation of the organization with the transformative mindset and capabilities of the CEO candidates.
Internally selected candidates need more.
Internally selected candidates expressed more concerns about both the level of their preparation and the ability to build a group of both inside and outside supporters. There is an opportunity to make sure that insiders are not only prepared from a resume or P&L basis but also from a personal development standpoint.
Get in touch
We hope you find the insights useful to your own organization's — and your own — development as a leader. Contact us with any questions or feedback.
Kati Najipoor-Schütte
Global CEO Practice Leader, Frankfurt
Dick Patton
Global CEO Practice Leader, Boston