The hierarchies of business are, as such that there remains a need for one person to head up an organisation. Normally supported by a board of executives and senior leadership teams, CEOs have the task of leading companies from the front, often judged by the success they achieve on the balance sheet. Whilst growth and profitability are key indicators, what leadership traits are the most important for a CEO to have in their armoury?
The lifetime of a CEO has changed in recent decades. The average median tenure of a Fortune 500 CEO has fallen from 9.5 years to 3.5 years in the last ten years; indicating either a dissatisfaction with leadership or an impatience for the delivery of results.
Another argument is that for those listed on the stock market, a CEO’s responsibility lies with the shareholders. Therefore, actions that are taken to reduce costs, perhaps through headcount as a means of increasing profit, without a view to the future stability of an organisation are short-term in nature. This is known as shareholder theory and as a result, the tenure for CEOs who take this drastic action tends to lead to shorter tenures.
Key leadership traits of a CEO
Whatever the reason or theory, it’s a fact that CEOs today have less time than their counterparts in the 00s so with that in mind, what are the key leadership traits organisations value?
That very much depends on the vision for the business, whether it is, as above, a responsibility in the short term to create shareholder value or a longer-term sustainable strategy.
Nevertheless, in a recent study by Chad Harrison International, it was found that senior managers value some key traits more than others. The ability to communicate effectively was considered the most important attribute of a good leader.
As a CEO, it’s vital to ensure a company message and vision is transmitted to other senior leaders as well as the wider company. A strong communicator will disperse the message verbally to senior leaders as well as through the utilisation of internal communications systems.
The second most important quality that senior managers believe a CEO should have is the ability to inspire. A vision for an organisation has to include something that the majority of people can believe in. Practically, inspirational leaders tend to have the following qualities:
They express unwavering positivity – rather than focusing on the problems associated with the inevitability of facing issues, they remain steadfast with their positivity, preferring to spend time on solutions.
They are grateful to their team – inspirational leaders show appreciation to their employees. This can help reduce turnover and negative attitudes since nothing drains commitment from a team like feeling their efforts go unnoticed.
They are passionate – Enthusiasm is infectious and part of being an inspirational leader is about illustrating a desire to come into work every day and drive the organisation forward.
The third most important quality is the ability to delegate. If you’ve read Ken Blanchard’s ‘The one-minute manager meets the monkey’ you’ll know about ‘monkey management’. There is a very big difference between that and delegating effectively. The latter is about managing the workload of staff effectively, ensuring productivity is maximised without pushing too far.
In the last decade, the tenure of a CEO has reduced significantly. In the forthcoming decade, the aforementioned skill sets may also change. The introduction of new industry 4.0 technologies will require CEOs to be more technologically savvy. As such, the vision for organisations will be forced to change and leadership styles may too.
Looking to the future, to find out more about what skills CEOs need in the modern world, read our update: ‘the changing nature of the CEO in the modern world’.