Whether it’s time to hire a new CEO or evaluate your current one, it can be tough to define exactly what qualities will make someone successful in the role. Setting metrics for success is one thing, but defining the personal qualities that create that success is more subjective. As you create a CEO succession plan, it’s vital for the committee or board to first agree on the skills, experience, and personal traits required to lead the company. Skills and experience may be measurable and objective, but what are the personal qualities that will contribute to a successful tenure as CEO?
While no two CEOs will be exactly alike, certain leadership dimensions can benefit any company. Here are ten leadership qualities to consider as you create a succession plan.
Top 10 Qualities for a CEO
1. Integrity and Trustworthiness
In an age where skepticism is common, and anyone in a leadership position is expected to lead with openness and transparency, integrity and trustworthiness are more important than ever. A CEO candidate should be above reproach, and the candidate should be able to admit and make mistakes.
2. Big-Picture Oriented/ Clear, Strong Vision
The best CEO candidates will be able to look beyond the day-to-day functions of the company to think strategically about the future, develop a vision, and provide a path toward long-term success. Your future CEO should be able to look at the company from a 50,000-foot view and from a 500-foot view, metaphorically, to identify a path forward.
3. Deep Marketplace Knowledge
Ideally, your CEO candidate will understand the intricacies of your business from the outset. He or she will see the nuances of the marketplace and understand how to craft a long-term strategy for growth or change that accommodates those nuances. In addition, the ideal CEO candidate will be attentive to customers and encourage the development of a customer-centric business that anticipates needs and creates loyalty.
4. Cultivates Employee Engagement & Performance
Employee engagement is vital to the company that wants to thrive going forward. Increasingly, employees say they will sacrifice pay for other factors, such as working for a quality manager who values their work or recognizes their contributions. When employees are engaged and satisfied with work arrangements, satisfaction and performance increase. The smart CEO candidate will have a record of devoting time and energy to improving employee engagement.
5. Results-Driven/ Bias to Action
Your ideal CEO candidate will be able to focus on results without getting bogged down in details that can be delegated to others. A good CEO will be focused on actions that produce clear business results, not just activity for the sake of activity.
6. Balances Risk & Opportunity for Sustained Growth
A CEO must operate from a good balance of risk orientation and safety bias. Obviously, a company can’t grow if every decision is focused on the lowest risk possible. But on the other hand, too much risk will drive a company into the ground. A quality CEO candidate establishes mitigators for risks and moves on, wisely and methodically proceeding toward business results and improved performance.
7. Financial Acumen
CEOs don’t necessarily have to be accountants, but they should have a good grasp of financial principles, be able to translate those principles into business results and understand how to create real value for the business. They should be able to understand and explain key performance indicators and EBITDA, even if someone else does the math behind those numbers.
8. Decisive
The buck has to stop somewhere, and if it stops with a leader who overthinks or takes too many alternate opinions into consideration, final decisions will be tough to come by. While important or weighty decisions can definitely benefit from a waiting period or additional input, look for candidates who have a track record of being willing not only to make a decision but also to defend it—and own the mistake if it’s the wrong decision.
9. Passionate, Active Communicator
In some sense, this may be the most important dimension of any leader, but especially of a CEO. Communication is the lifeblood of any organization, and when senior leaders are removed, distant, or secretive, no organization can thrive. A quality CEO candidate will not only communicate frequently with anyone in the organization but will also encourage other senior leaders to do the same, creating a culture of openness.
10. Relationship-Focused
Closely related to being a good communicator is the quality of being relationship-focused. A good CEO candidate will relentlessly build genuine relationships with customers, business partners, and employees based on trust and mutual respect.
It’s never too early to start the CEO succession planning process—even if your CEO just started! These ten qualities can also help boards evaluate the success of a current CEO. Of course, looking at the bottom line is vital, but it’s also important to understand that a CEO who exhibits these ten leadership dimensions will be more likely to produce a healthy financial outcome than a leader who struggles in most of these areas.
As you create your succession plan, use these ten qualities as a foundation for future candidates, and then build out your leadership pipeline with similar dimensions in mind for future senior leadership positions. Focusing on the leadership pipeline now will help create organizational stability, business continuity, and long-term growth.
