To answer those questions, we identified 200 highly successful CEOs and conducted in-depth interviews with 67 of them. We found that there is no simple recipe for success, but there is virtue in simplicity. Indeed, the CEOs we interviewed could describe their business strategy in an elevator ride up Shanghai Tower.
We also found that, in a sense, all CEOs have the same responsibilities, such as working with the board, engaging stakeholders, setting direction, and creating a positive culture. What separates the best from the rest is how they approach these tasks. All excelled at some, were good at the rest—and knew the difference. All are world-class integrators. And all applied a distinctive set of mindsets against these responsibilities. In our own effort at simplicity, we identified the six mindsets that characterize great CEOs.
Be bold. In times of uncertainty, it can be tempting to minimize the downside. However, that all but guarantees either mediocrity or decline. Successful CEOs want to avoid making mistakes, of course, but they also act boldly, actively seeking significant opportunities. They raise the aspirations of the company, and they look for intersections where the business and the market meet. In effect, they are excellent futurists and thus can define the right vision. While they will cut their losses if a move is a dud, they stick to the strategy. The vision comes first; financial performance flows from that.
Treat the soft stuff as the hard stuff. Only one in three strategies is successfully implemented—in large part because change generates resistance. That is why the “soft stuff”—that is, matters related to people and culture—can be the hardest stuff of all to get right. Research has found that companies that solve the soft stuff are more than twice as likely (from 30 to 79 percent) to execute a strategy successfully.1 To carry their organization with them, leaders need to make the case for change, and then keep track of results.
Solve for the team’s psychology. To build high-performing leadership teams, the best CEOs start with roles, not people, asking what the most important jobs are and then finding people who can do those jobs. And they design for overall functionality, bringing in a wide range of expertise. CEOs must engage with each individual while keeping some distance. And, again, the soft stuff counts.
Help directors help the business. The board is the CEO’s boss, but an awkward one—a lot of people, infrequently seen. Like any relationship, the bedrock is trust. That means being open, honest, and prompt about plans and problems. Bad news is, well, bad, but delivering it is also a chance for the board to help, which is its function. CEOs should establish a strong relationship with the lead director and check in with other directors once or twice a year. Finally, introduce the board to the company by connecting the board to managers. As Piyush Gupta, the longtime CEO of Singapore’s DBS Group, put it: “The board, to me, is a partner, and they can talk to anyone in my management team. I believe the free flow of information is helpful for complete alignment.”2
Start with “Why?” Purpose can be difficult to define. At the very least, it should be powerful enough to inspire people, simple enough to be readily understood, and make business sense. And purpose matters: companies with a clear social purpose have significantly outperformed the S&P 500 over the past 20 years.3 The best CEOs ask themselves why their company exists, then make purpose an intrinsic part of the business model, knowing that testing strategy against purpose can open up new areas of growth. Leading with purpose can also enhance employee well-being and build loyalty.
Do what only you can do. Being a CEO is a 24/7 job, but no one can work that way. Great CEOs make it a priority to manage themselves to ensure that they are not being pulled apart. That is obviously personal, but we did find some commonalities. The most important is self-discipline, particularly regarding the use of time. Old-school techniques such as lists, stars, and color coding crop up often as time-management techniques. At the same time, the CEOs we spoke with also build flexibility into their schedule—to respond to the unexpected or simply to think. Many combine high-intensity work with recovery periods, whether that is a ten-minute break between meetings or playing the piano. Ultimately, managing personal effectiveness is about developing a sense of perspective, and then using that to see into the future.
No book can create a great CEO, any more than a boxing manual can produce a Manny Pacquiao. But in business, as in boxing, there is such a thing as good technique. CEOs matter: we calculated that the 200 CEOs we identified created additional economic value of about $5 trillion. By identifying the mindsets that characterize great leadership, we believe that excellence can be cultivated—now and in the future.
This article originally appeared in Bloomberg on May 4, 2022, and is reprinted here by permission.