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Qualities of Chief Executive Officer for Organizational Success


Qualities of Chief Executive Officer for Organizational Success

A chief executive officer (CEO) of an organization requires a large number of qualities besides hard work and dedication for the success of the organization which he is heading. The performance of the organization is dependent on the capabilities of the CEO. The job carries with it a large amount of responsibilities. The job of CEO is not a bed of roses. In fact, it is a very tough job and is fundamentally different from any other job in a senior management position.

The CEO needs to have the self-discipline to get results. He needs to be charismatic. He is required to have high cognitive ability, conscientiousness/achievement, and extraversion/assertiveness. He needs to have innovative strategies. He is required to forge long-term relationships with customers, innovate, execute, build high-performing teams, ensure accountability, manage people, communicate, engage others, create workforce plans, exercise judgment, have emotional intelligence, and possess an honorable character

The CEO needs to have leadership qualities. His integrity is to be unquestionable. He is to be impartial. He is to be modest and endure greatness besides being efficient and flexible. He is to be aggressive but respectful. He is to move fast to fulfill the commitments. He is to be calm under pressure. He is required to treat people with respect. He is to set the example and high standards for others to follow.

A CEO is to have a lot of enthusiasm and persistence. He is to be innovative and proactive. He is required to have analytical skills and creative thinking. He needs to have vision and strategic plans. He is to be diligent and systematic.  At the same time he is to pay attention to details.

A CEO is to have the habit of listening. Also, he is to be communicative. He is to be open to criticism. He is to make people accountable for the performance.

A successful CEO identifies the performers and encourages them to sustain their performance. At the same time he develops those people who are underperforming. He is required to give credit to the performers. He is not to blame the underperformers but analyze the reasons for the underperformance so that actions can be taken for correcting the situation. He resolves the problems. He has zeal to make the organization achieve success. He is fanatically driven towards organizational success and has workmanlike diligence. He makes his team consisting of the right people.

The four behaviours

There are four behaviours which a successful CEO needs to excel. However, it is rare to find a CEO excelling in all the four. These behaviours (Fig 1) are (i) taking decisions with speed and conviction, (ii) engaging for impact, (iii) adapting proactively, and (iv) delivering reliably. These behaviours sound deceptively simple. But the key is to practice them with maniacal consistency, needs a great challenge for any CEO.

Fig 1 Four behaviours of CEO

Taking deciding with speed and conviction – The high performing CEO is one who always seems to know exactly how to steer the organization to the path of success in its operations. However, a high-performing CEO does not necessarily stand out for making great decisions all the time. Rather, he stands out for being more decisive. He makes decisions earlier, faster, and with greater conviction. He does so consistently, even amid ambiguity, with incomplete information, and in unfamiliar domains.

A high performing CEO realizes that a wrong decision may be better than no decision at all. He is aware that a bad decision is better than a lack of direction. Most decisions can be undone, but the CEO has to learn to move with the right amount of speed.

Interestingly, those CEOs who relish intellectual complexity, sometimes struggle the most with decisiveness. While the quality of their decisions is often good, because of their pursuit of the perfect answer, they can take too long to make choices or set clear priorities, and their teams pay a high price. These smart but slow decision makers become bottlenecks, and their teams either grow frustrated or become overcautious themselves, stalling the entire organization.

 Decisive CEO recognizes that he cannot wait for perfect information. Once he has around 60 % to 70 % of reliable information he takes the decision. But he does work actively to solicit multiple points of view and often poll a relatively small, carefully cultivated ‘kitchen cabinet’ of trusted advisers who can be counted on for unvarnished opinions and sound judgment.

Many a times, the CEO checks two things. The first is the impact of the decision if it goes wrong. And the second is how much the delay in decision making is going to hold other things. This approach of the CEO also inspires his team members to trust their own judgment on operational decisions and this is critical to freeing the CEO for fewer but more important decisions.

Also, successful CEO knows when not to decide. After all, it is too easy to get caught up in a volley of decision making. But CEO is needed to pause briefly to consider whether the decision is actually to be made lower down in the organization and if delaying it briefly would allow important information to emerge without causing irreparable harm.

But once a path is chosen, the high-performing CEO goes ahead with the decision without wavering. Employees and other stake holders quickly lose faith in CEO who hesitates while taking decisions or who backtracks once a decision is made and also if decisions does not turn out well.

Engaging for impact

Once the CEO set a clear course for the organization, he has to get buy-in among the employees and other stakeholders. Strong performing CEO balances keen insight into the stakeholders’ priorities with an unrelenting focus on delivering the results. He starts by developing an astute understanding of the stakeholders’ needs and motivations, and then gets people on board by driving for performance and aligning them around the goal of value creation. CEO is more likely to succeed when he deftly engages stakeholders with the results orientation.

CEO who excels at bringing others along plan executes disciplined communications and influencing strategies. He creates a stakeholder map of the key people who need to be on board. He identifies the detractors and their concerns, and then he thinks about how he can take the energy that they might put into resistance and channel it into something positive. He makes it clear to people that they are important to the process and they will be part of a win. But at the end of the day, CEO is to be clear that he is making the call and he expects them on board.

When interacting with stakeholders, CEO is to be acutely aware that how his mood and body language can affect the impact of the communication. He is to be aware that often unintended damage can be caused by a stray word or gesture. Every comment and facial expression he makes will be read and magnified 10 times by the organization.  Any shouting can cause irreparable damage. Composure is a job requirement for the CEO and he is required to demonstrate calm under pressure.

CEO who engages stakeholders does not invest his energy in being liked or protecting his teams from painful decisions. In fact, both those behaviours are commonly seen in lower-performing CEO. Instead, the skilled CEO gains the support of his colleagues by instilling confidence that he will lead the team to success, even if that means making uncomfortable or unpopular moves. Such CEO does not shy away from conflict in the pursuit of the organizational goals. In fact, the CEO who excels at engagement is also strong in conflict management. The ability to handle clashing viewpoints and the willingness to engage in conflict also helps the CEO.

When tackling contentious issues, the CEO, who is good at engagement, gives everyone a voice but not a vote. He listens and solicits views but does not default to consensus-driven decision making. Consensus is good, but it is too slow, and sometimes it ends up with the lowest common denominator. Some particular CEO makes a habit of having unstructured meetings with 20 to 30 of the organization’s high potentials before making key decisions. The goal of those meetings is to challenge the CEO and present him with new perspectives, but he is careful not to create the illusion of democracy. None of this means that CEO is to behave as autocrat.

Adapting proactively

It is very important that the CEO is to adjust to a rapidly changing environment. The CEO who excels at adapting is more likely to succeed. This skill is very critical for the CEO. The CEO is successful when he deals with situations which are not in the playbook. As a CEO is constantly being faced with situations where a playbook simply cannot exist, he is to be better ready to adapt.

The CEO is to know that he has to divide his attention among short-term, medium-term, and long-term perspectives, but the adaptable CEO spends significantly more of his time (as much as 50 %) thinking about the long-term. Other executives in the organization, by contrast, devote on an average around 30 % of their time to long-term thinking. The long-term focus is important for CEO since it makes him to pick up more likely the early signals. Highly adaptable CEO regularly plugs into broad information flows. He scans wide networks and diverse sources of data, finding relevance in information which may at first seem unrelated to the organization. As a result, he senses change earlier and make strategic moves to take advantage of it.

Adaptable CEO also recognizes that setbacks are an integral part of changing course and treats his mistakes as opportunities to learn and grow. CEO who considers setbacks to be failure has 50 % less chance of thriving. Successful CEO, on the other hand, offers unabashedly matter-of-fact accounts of where and why he had come up short and gives specific examples of how he squeezed his approach to do better next time.

Delivering reliably

Ordinary as it may sound, the ability to reliably produce results is possibly the most powerful of the four essential CEO behaviours. The board of directors as well as investors like a steady hand, and employees trust that CEO who is a predictable leader. Such a leader ignores the importance of reliability at his peril.

An example is given to illustrate it. Mr. X was a high-potential executive of an organization. He was known as a miracle employee in the organization. In a culture where exceeding plan by 2 % was seen as a success, he had just delivered 150 % of the target. While he had some misses in the past, he was now successfully running the organization’s biggest and most important department. When he threw his hat into the ring for a promotion to CEO, the selectors were impressed with his recent exceptional performance, but they did not fully understand how he had achieved it, and as a result they doubted it was replicable. So the selection board opted instead for a safer candidate who was known for delivering steady, predictable results reliably year after year.

To deliver reliably is of paramount importance for a CEO. The CEO who has high consistency following through on his commitments is a successful CEO. A key practice here is setting realistic expectations up front. In the first few weeks on the job, reliable CEO resists the temptation to jump into execution mode. He digs into budgets and plans, and engages with directors, employees, and customers to understand expectations. At the same time, he rapidly assesses the organization strength and weaknesses to develop his own point of view on what is realistic and works to align expectations with that.

CEO who ranks high on reliability employs several other tactics as well. He is rated strong on organization and planning skills. He establishes business management systems which include a rhythm of meetings, dashboards of metrics, clear accountability, and multiple channels for monitoring performance and making rapid course corrections. Most important, he surrounds himself with strong teams.

Unfortunately, this was not true for most of the CEOs. The very common mistake which many of the CEOs commits (by a surprisingly as high as 60 % of them), is not getting the right team in place quickly enough. The successful CEO moves decisively to upgrade talent. He sets a high bar and focuses on performance relevant to the role rather than personal comfort or loyalty, the two criteria which often lead to failure.

Qualities of CEO needed for success

The following are major qualities which are needed in CEO for him to succeed.

Resilience (or grit) – In the present day environment, changes in the working atmosphere is quite frequent. And when this change occurs, CEO who has resilience is generally resourceful and agile. He has the ability to take on the change and adapt to what is happening around him and to him as the working changes. CEO who has resilience/grit is able to take good risks and is open to change.

Transparency – A successful CEO has the uncanny ability of not letting rumours spread by being open and transparent and embracing solutions not problems. If an employee is frustrated with customer, he makes the CEO put that negative energy into coming up with a solution. If co-employees have a rift, rather than nurturing the gossip the CEO makes the employee get over it and fixes the issue.

The successful CEO knows that one of the quickest ways to get employee feedbackk and earn the trust of the employees is by being transparent. He is to be a firm believer of open information sharing and normally he leads by example. It lets employees find applicable solutions and it builds solid relationships which increase the overall motivation.

Being transparent is the most important quality of an effective CEO. Especially when it comes to working with idealistic and the younger workforce, it is important for them to understand the big picture. This means that the CEO is not to just tell them to do something without explaining how this task or function integrates within the larger organizational initiative. When the employees are able to see the connection, they often feel much more empowered and motivated to do a better job.

Emotional intelligence – Emotional intelligence (EQ) is a quality which can be taught but it needs consistent practice. The challenge with this quality in CEO is the ‘what to practice’ is not as straight forward as with other competencies. EQ helps CEO show up in a more connected, empathetic, and judgment-free way.

A good CEO improves his emotional intelligence by making a concerted effort to understand the reasons behind an employee’s behaviour. It can be a lack of trust, a bad past experience or a fear behind a bad decision. When he understands this, it is easier to react with dignity to any type of situation.

Passion – Engagement is the secret cure to the people based organization. With engagement CEO gains huge amounts of discretionary work effort/product which goes well above and beyond what is merely required for any given role. Like it or not, the CEO is the cultural image of the organization and passion for the work, passion for the product, passion for the goals, passion for the successes and passion for the inevitable twist and turns is the key to widespread engagement. And the opposite is even truer, that is, the lack of passion leads to tragic disengagement.

Empathy – Empathy not only allows a CEO to understand the employees and the customers better, but it is also known to enhance pro-social (helping) behaviours. Because of this, empathy enables the CEO to address issues faster and with more precision, and it makes them more flexible to respond to an ever-changing organizational environment.

A CEO needs to have the ability to relate to the employees and be able to put himself in the soul of the organizational employees. Without this quality of empathy, it is very hard to rally the employees around the vision.

While the CEO is often focused on profitability and growth, and rightfully so, there are times when he needs to remember that his teams consist of people who have things going on outside of work. By having empathy and understanding what else is happening in their lives, he can better lead them through the good and bad times.

Empowerment – A CEO is to empower the subordinates by delegating tasks appropriately, providing proper guidance and limits, and supporting the decisions of the subordinates. When the subordinate leaders are empowered, their intelligence and talents can be unleashed to help the organization grow. When they are stifled, only the minimum gets accomplished because few are motivated to help an organization that is overbearing.

Open-mindedness – The ability to not be closed off to new ideas or challenges to established norms is what sets apart an open-minded CEO. A CEO who can look at the best lessons of the past and current while being open to the ideas of the future has the best opportunity to create success in him, the organization and the employees. Being able to change with the times, flexible when needed and decisive when required is a rare thing for a CEO.

A successful CEO is inquisitive and uses strong, open-ended questions to learn about the employees, identify opportunities and threats to the organization, and challenge the top employees to take risks, think critically, and increase engagement. Of course it probably also goes without saying that asking a great question is not enough, successful CEO also knows how to listen and leverage the answers he receives to make good decisions.

Patience – Patience is a defining characteristic of a successful CEO. He patiently waits for the right opportunity and does not swing at every pitch. More so, understanding that success does not happen overnight, and obsessing over the process and not the result normally cultivate a culture of patience and ensure long-term success.

Diplomacy – One of the most important jobs of a CEO is ensuring that everyone is absolutely on the same page, and that the team works together towards a common goal despite any cultural or political differences.

Initiative for action – No task is beneath a CEO even the tedious tasks. Just because he is a high up executive does not mean that he is above the tedious jobs. He has to take the initiative to do small tasks around the office and lead by example.

Humility – Humility in other words is a willingness to admit mistakes and make amends. When the decisions turn out poorly, successful CEO is willing to admit it immediately. He does not simply double down and hope that the situation will eventually improve. Then he volunteers to lead the effort to do whatever is required to make the necessary corrections. All the stakeholders involved remember and respect this type of integrity.

No one likes a know-it-all, and this is even true for the CEO. The ability to delegate and let go and accept help from others can propel any organization.

A successful CEO has to be able to say sorry when it is needed. If the CEO wants the organization to be constantly innovating and improving, his team members are to be reflective and self-aware. CEO needs them to know when they have made mistakes and correct them so that they can get better. This is only a realistic expectation if the CEO of the organization is willing to do the same thing. A good CEO says that he made a mistake, He is sorry, and here is what he is doing to get better. If the CEO can do this, it sets the right tone for the rest of the organization.

Influence – The ability to lead through influence, rather than authority, is the most important quality of a CEO. Influence requires strong coaching, emotional intelligence, effective communication, negotiation and consensus building skills. CEO who employs these skills to influence teams and stakeholders produce better employee and customer engagement, increased collaboration and innovation, and ultimately drive greater excellence for the organization. He performs better compared to those CEOs who attempt to use their position and authority to demand it.

Purpose –The CEO has to have in his mind a clear reason that the organization exists beyond profit and be able to articulate that clearly and consistently to all audiences both internal and external. Doing so motivates the employees, attracts customers and creates differentiation and separation from competitors. And it also drives both the external brand and internal culture to create a healthier and more valuable organization.

Vision – A successful CEO is able to help the team members understand the big picture so that they can connect their success back to the success of the organization. The vision is to be big enough to inspire and broad enough to be inclusive. Doing so allows everyone in the organization to understand the importance of the role they play in bringing that vision to reality.

Trust – A CEO cannot do it all alone in order for the organization to be successful, hence he is needed to delegate. With the delegation comes a trust that the employee, at whatever level, is going to achieve success. A successful CEO has the ability to trust in the potential of the employees and the ability to achieve success through others.

Integrity – A CEO is a person who does the right thing, even when it is unpopular or extremely tough to do so. He has to find something to care deeply about in the organization and in each individual that touches the organization. He does what he loves in the service of people who love what he does.

Integrity matters in three ways. CEO with great integrity fosters critical trust amongst colleagues and direct deports, and demonstrates a commitment to moral and ethical behaviours. CEO who does not value integrity will not gain the trust and buy-in of their teams and colleagues, which negatively impacts engagement and performance. And leading with integrity does not mean never making mistakes, but recognizing and owning them, which leads to continual self-development, and demonstrates humility to others.

Problem solving – One quality of a successful CEO is the ability to solve problems. CEO faces challenges all of the time so he must be able to assess the challenge, find possible solutions (and consequences associated with those solutions), and select the best possible solution.

Perspective – What separates successful CEO from the rest of the employees is his ability to see the bigger picture instead of becoming lost in the details. The good CEO understands how each member of his team works to contribute to the overall goals of the organization, and ensures that everyone understands which tasks he is responsible for. By keeping the end objective in sight, he can push the organization towards the long-term goals, rather than becoming stuck at the short-term goals.

Listening – For a successful CEO, the secret to success is attentive listening to the people he works with. He listens and responds to employee suggestions for continuous improvement and uses those ideas to grow the organization.  He also openly listens and responds to the messages coming from other metrics like employee turnover, as well as does proactive listening through organizational surveys and a liberal open door policy.

 Effective CEO takes the time to listen deeply to every person related to the group or organization. He believes in the often overlooked, creating and modeling a culture of listening in the organization which is the key to connecting with customers and employees, making each person feel valued as a person as well as a member of the team. He believes that listening is required to grow the organization, make profit, and build relationships and it is the key ingredient for being an effective CEO.

 A successful CEO needs to listen to what customers want and also to feedback from the employees and clients. Sometimes, he does not hear what he would like to hear, but actively listening to comments allows an effective CEO to make changes, which in turn earns respect.

Ownership / accountability – CEO, who takes ownership and is accountable for his work, can quickly implement any successes, as well as learn from any failures. Beyond making or saving the organization, the successful CEO also typically develops their employees to do the same.

Motivation – Successful CEO is a motivator. His leadership quality can be spotted by everyone. This quality of CEO indicates his positive, can-do attitude. The CEO demonstrates a willingness to roll up his sleeves and get things done and understand the importance of working with others as well as working hard on his own. He genuinely wants to be engaged and involved in the organizational growth and has a great attitude and approach to helping the organization to grow and expand in the long run.

Note of caution for CEO

However, it is very normal that the person who rises to the position of CEO in the organization soon forgets many of those qualities which he wanted to be in CEO when he was a lower level executive in the organization. Also CEO has to develop good relationships with the new entrants to the organization since they bring new ideas and also a good relationship with those successful ex-employees who have taken the organization to new heights so that their experience of handling difficult situations can be made use of for the benefit of the organization. Further, after becoming CEO, a lot of power comes to the person and this power can corrupt his mind and the person can become prone to arrogance. A successful CEO takes precaution towards avoiding this.

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