What Skills Do CEOs Need Today to Succeed
July 31, 2024 – While the pandemic is in the rearview mirror, that doesn’t mean we aren’t experiencing challenging times. From economics to politics, and from cyber threats to artificial intelligence (AI), the world can be difficult to navigate—and so can the role of a CEO. A 2024 survey from The Conference Board showed that inflation and a possible recession are the leading concerns among CEOs worldwide. Meanwhile, AI is reshaping nearly every aspect of the workplace. All of this is occurring against a seemingly constant backdrop of conflict and global unrest, according to a new report from DHR Global’s Keith Giarman, Christine Greybe, Mike Magsig, and Heather Smith.
It’s a lot, to say the least. Some CEOs are built to rise to the occasion, but even they need an equally proficient and passionate leadership team around them, according to the DHR report. The firm provides a few qualities and factors that are critical for the success of today’s CEOs and other C-suite leaders, with insights from the firm’s executive recruiters and leadership consultants.
Digital Literacy
“Technology drives just about everything. AI is currently the headliner for technological change, but it’s not the first, and won’t be the last, advancement to transform the workplace,” the DHR report said. “Before AI, there was the emergence of the smartphone, and before that, the internet. AI is barely out of its infancy, with new tools and improvements rolling out daily.”
It was once a rather harmless and laughable quirk to keep it “old-school,” but it’s now a huge drawback to be unattuned to the latest tech. Leaders don’t necessarily need to become tech experts, but they do need to have some degree of digital literacy.
“Being aware of what’s happening with technology is a must in any industry and organization,” said Mr. Giarman, who serves as managing partner of DHR’s private equity practice. “That knowledge translates to agility and the ability to identify opportunities. Companies with innovative leaders have a culture of disrupting themselves—meaning they continuously explore how technology can enhance their operations—rather than waiting for broader disruption to hit. Innovative CEOs make disruption a normal course of business.”
Financial Acumen
Alongside technology, finance is a key component of a CEO’s aptitude. “And in the same vein, the CEO’s knowledge needs to be reasonably up to speed,” the DHR report said. “While CEOs don’t need the same level of expertise as a CFO, they must have a handle on profit and loss and other key financial indicators like cash flow, revenue growth, and gross margin.”
“In business, numbers don’t lie. The numbers tell the story of the company’s overall standing and eventual success,” Mr. Giarman said. “Without a financial baseline, it takes longer for a CEO to see what’s happening, especially if they’re relying solely on a CFO’s briefing.”
Critical Thinking
Digital literacy and financial acumen are always useful, but only meaningful, when paired with critical thinking. DHR explains that CEOs must peel back layers of data, analytics, perspectives, and implications before making decisions.
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Ms. Greybe, president of DHR Leadership Consulting, emphasized the importance of listening to enable critical thinking. “CEOs need to gather all the relevant information available,” she said. “Then, they must apply that information in tune with the mission and goals of the organization. Aptitude tests consistently show a strong correlation between critical thinking and successful CEOs. It’s a leader’s means of anticipating challenges, evaluating potential outcomes, establishing a path forward, and communicating that path clearly and effectively.”
Emotional Intelligence
Events in the world affect people at work. “That’s where emotional intelligence is an intangible but indispensable quality in a leader,” the DHR report explains. “Emotional intelligence involves recognizing and understanding one’s own emotions and those of others. It’s about managing emotions effectively, building meaningful relationships, and creating an environment where employees feel valued and understood.”
For a CEO, DHR notes that having high emotional intelligence means being able to lead with empathy and humility, while maintaining what’s ultimately in everyone’s best interests: the company’s stability. Emotional intelligence is often what attracts top talent to follow a CEO from one company to the next.
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Digital transformation is no longer the sole domain of IT developers and coders. The evolution towards digital solutions is beginning to encompass all industries. Companies that hop on this train early can expect to see themselves pull ahead in terms of operational efficiency. However, embracing digital transformation comes with several challenges, including significant changes in mentality, says a report by digital-focused executive search firm Hightech Partners (HTP). “A key to navigating these challenges is having a leader at the helm that understands disruptive transformation,” said the report.
The report explains that the CEO typically sets the tone for a company’s culture. A positive company culture creates a safe space where people can process outside events, reconcile emotions, and pursue positive change together.
“Leadership has evolved from instructing to influencing,” said Ms. Smith, a partner in DHR’s board & CEO practice group. “It’s now focused on understanding, supporting, and connecting others. Emotional intelligence is a key indicator carefully evaluated in our executive recruiting process.”
A Capable C-Suite
“The idea of a rock star, do-it-all CEO isn’t quite applicable to the way leaders lead and organizations succeed today,” the DHR report said. “The CEO’s job description isn’t to single-handedly fix everything; it’s to nurture a cohesive leadership team for the betterment and profitability of the company. Building the right team starts with recruiting individuals who have complementary skills and strengths. It requires understanding the unique value each executive brings to the table and aligning their abilities with the company’s strategic goals.”
An Experienced Board
The DHR report says to remember, CEOs aren’t meant to be lone rangers. In addition to working alongside the C-suite, they benefit from a thoughtfully assembled board of directors. Board members and CEOs alike must recognize that they are partnering with, not competing against, each other in working toward a vision for the future, the study says.
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“Clients often bring us in to look at the composition of the board and identify what experiences and skills are needed to advise the CEO through current events and toward a future vision,” said Mr. Magsig, managing partner of DHR’s board & CEO practice group.
“It’s a two-way street,” Ms. Smith said. “The board is relying on the CEO to be agile and strategic. The CEO is relying on the board to be insightful and forward-thinking. There should be a balance of ambition and risk mitigation. In a board director, look for a broad range of functional experiences, and someone who understands the fiduciary role of supporting and advising as part of a team, rather than driving the action. A director’s value to the board is shaped not by career progression alone, but by the outcomes achieved and the knowledge acquired during their professional journey.”
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“The benefit of having those extra voices and perspectives can be invaluable, particularly when there’s surrounding uncertainty in factors such as the economy, regulatory pressure, and global tension,” Mr. Magsig added.
The Leadership Personality
The DHR report says that when searching for a leader, whether a CEO, CFO, chief technology officer, or board director, there’s ultimately that underlying “it” factor. “You can sense it in a candidate’s posture and delivery,” the firm said. “A standout candidate is authentic, articulate, and believable. Identifying the it factor requires multiple touch points, data points, and the right combination of measurable testing and skilled interviewing. It’s equal parts art and science; formal and informal. It’s rigorous, but human.”
“Experience and skills are far from the only factors,” Mr. Magsig said. “I’m looking for how a candidate describes their most successful accomplishments. Are these personal stories or team stories? I want to understand their value systems and, in turn, their leadership intangibles.”
Ms. Greybe added: “There’s never a 100-percent match across all factors. Many CEOs that we place are first-time CEOs. We assess emotional, analytical, and social intelligence alongside other factors and encourage organizations to prioritize a candidate’s overall capability and potential for future performance.”
Mr. Giarman reiterated DHR’s multifaceted approach to leadership assessment: “It’s about who they are and how they think,” he said. “You’ll miss out on great candidates if you’re overly focused on an exact prototype.”
Mr. Smith concluded: “Talent has risen to a priority topic on the boardroom agenda. It’s become a central focus for all organizations to seek exceptional leadership, starting with a successful CEO.”
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Contributed by Scott A. Scanlon, Editor-in-Chief and Dale M. Zupsansky, Executive Editor – Hunt Scanlon Media
