Almost every organization desires to lead its industry, and selecting the right CEO is essential to this strategy. Some CEOs are simply born to innovate, are smart, are driven, and are brave as well as bold. These leaders are legends such as Lee Iacocca and Steve Jobs. Then there are more inspirational leaders such as Mary T. Barra and Kenneth Chenault, who are inherent leaders. They excel at motivating, communicating, building strong teams, and encouraging cooperative efforts to develop and do something better.
What sets these award-winning CEOs apart from lackluster leaders is that they focus on the state of the organization and the needs it has to succeed.
CEOs that merely “get by” may have desired skills. The company that they run may sell, make, or provide excellent products or services. Workers may be highly productive and receive excellent feedback. But if the CEO is focused on his or her career highlight reel instead of the organization’s needs and objectives, both the CEO and the organization will fail.
How can organizations identify CEOs that are self-focused instead of organization-focused? Start with these essential questions that quickly identify short-term impact:
- After a competing CEO has been seen covered in the media, is there a sudden change in behavior such as taking fewer conservative actions that lack solid, thoughtful planning?
- Do reports to stakeholders represent an accurate picture? Or are more positives represented than negatives?
- Are more risky behaviors being observed, such as more M&A (merger and acquisition) activities? Are the premiums higher? Are the returns lower?
Award-winning CEOs, on the other hand, exhibit behaviors that may not garner short-term results, but lay the groundwork for stable, long-term success.
Sector Does Not Matter
While some industries enjoy periods of growth, at the end of the day, the sector alone does not determine hero status. Award-winning CEOs realize that nothing is guaranteed when it comes to the continued prosperity of their organization. They are confident yet humble, recognizing that success should not be taken for granted. These CEOs plan for both good and bad times.
Any Company Can Rise to Superstar Status
At the same time, award-winning CEOs remain optimistic and portray this sense of hope to their employees. They realize that, as much as any business can fall from grace, it can also rise to the top of the ranks. While nearly half of superstars lose their coveted status during every business cycle, the companies below them get the chance to take their place. In fact, some firms have risen from the bottom 10 percent all the way to the top 10 percent within a single business cycle. (1) This pattern has been going strong for over 30 years.
Intangible Asset Investments Are Key
One distinguishing feature of award-winning CEOs is their willingness to invest in intangible assets – items such as brands, data, software, customer contracts, employee training, and supply-chain partnerships. It is no coincidence that superstar companies spend two to three times more on research and development (R&D) than their peers. Superstar companies in the top 1 percent, as determined by economic profit, are almost three times more R&D intensive than median companies and nearly 10 times more R&D intensive than companies in the bottom decile. (1)
Digital capabilities are among the most critical intangible assets in which an organization can invest. The business environment is becoming increasingly digitized – a rate that was accelerated out of necessity by the pandemic. The reason for this is not one of the obvious ones that may come to mind. Instead, digital capabilities are valuable in large part because they complement other intangible investments and yield higher returns to companies that leverage them well. (1)
The most prominent players in this game are automation and artificial intelligence. These capabilities improve productivity and customer/client service while delivering game-changing time savings to employees.
Organizations have choices when it comes to selecting essential leadership, such as CEOs. Who they choose is as important as what the future holds for the organization. Understanding the key strategies that make for great CEOs, as well as superstar companies, can significantly aid in this process.
Uncertain times call for creative strategies. Contact Gavel International to be inspired with solutions that connect and engage your people.