What Boards Look for in a CEO
by
Jim Citrin
I recently spent two days with the board of a major global company interviewing candidates for the position of CEO. As the directors were seated around the boardroom table, the chairman gave a warm welcome to the candidate and set the stage for the 90-minute discussion.
In a process repeated eight times during the course of the two days, he kicked off the interview by posing a question he'd posed to every other candidate: "How would you assess the state of our industry and the company's position within it?"
The discussion flowed from there, with every director asking different questions to probe the key areas as they saw fit.
The Key Factors
It was a remarkably clarifying experience sitting through all the interviews and seeing through the eyes of the directors how different candidates came across, what resonated, and what did not.
It was equally noteworthy observing the dynamics of the board in its various modes of evaluation, probing, selling, and decision-making. What became clearer than ever was what boards really look for when they assess CEO candidates.
In order to get to the table as a serious candidate for an important position, of course, you have to have a sufficient amount of relevant experience and a demonstrated track record of success.
Reference:: Sikh Philosophy Network http://www.sikhphilosophy.net/business-and-lifestyle/22369-leadership.html
However, in the majority of cases, it's what goes on inside the boardrooms during the live conversations that determines the candidate around whom the board coalesces and who is ultimately selected for the job.
So what are the ingredients that determine the winners from the losers? The basic attributes that separate the best candidates from the rest are:
- Intellectual prowess: Don't underestimate the importance of sheer gray matter.
- Having a well-founded point of view: Boards look for someone to stake out a sensible position with firmness.
- Superior communications skills: This is the ability to unlock that gray matter and articulate that point of view in a clear and compelling way.
- Values: There must be a strong match between what the individual stands for, and what the directors and the company stands for.
- Executive presence: This is the intangible ability to inspire confidence in a group setting.
Trust Is Essential
Beyond these qualities, however, there's something even more important -- a capability that underlies these essential attributes and that ties them all together. It's the ability to think clearly.
When boards are looking to put their trust, fiduciary responsibilities, and reputations behind a new leader, it's largely a game of confidence. Once they've selected a new CEO, the directors will leave the room and go back to their own day-to-day, pressure-packed lives until the next board meeting.
They'll be passing the baton of responsibility to the new leader to carry the company forward in a way that they can feel secure about. The board is therefore looking for someone who both understands the situation in a deep way, and who can develop a specific plan of action for leading the company through the maze of issues and opportunities to optimize short-term and long-term results.
Clarity Gets the Job
Across the two days I spent in that boardroom, the divergence among candidates along this dimension was astonishing. The most successful were those who could:
- Explain the key competitive dynamics in the industry, i.e., what was driving change, who was winning, and who was losing and why.
- Clearly describe what the company should do to thrive, i.e., what the top priorities should be, what strategies should be pursued, and what acquisitions considered.
- Present a sound and specific organizational "architecture" that would enable the company to move forward in a decisive and effective way, i.e., how the company should be organized, what positions should report directly to the CEO, which functions should be centralized and which pushed into the business units, and how to align incentive systems to reward the desired behaviors.
The least successful candidates were, by stark contrast, muddled in their thinking, generic in their diagnoses, unclear about the company's priorities, rambling about what strategies to pursue, and generally all over the place as to how they would organize the company going forward.
Reference:: Sikh Philosophy Network http://www.sikhphilosophy.net/showthread.php?t=22369 The Secret Ingredient
The technical term for what the strongest candidates displayed is "executive intelligence," a concept coined by Dr. Justin Menkes in his
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