Steve Tappin and Andrew Cave noted in their 2008 book, The Secrets of CEOs, that two-thirds of company CEOs struggle in their roles and don’t know where to turn for help.
While countless authors, researchers, and CEOs themselves have tried to bottle and sell the fairy dust of CEO success, CEO Excellence: The Six Mindsets That Distinguish the Best Leaders from the Rest, a new book out this month from three senior partners at McKinsey & Company, offers a fresh perspective and new guidance for understanding and navigating the complex dynamics of the chief executive role.
Based on interviews with 67 CEOs of top quintile performance companies – that have collectively generated over $5 TRILLION in company value during their tenures in the role – from Satya Nadella and Reid Hastings to Jamie Dimon, Mary Barra and more, they lay bare the most fundamental commonalities between these uncommon leaders and illustrate them with vibrant stories from the road. But before diving into key success factors, the study offers a new definition of the CEO role itself.
Understanding the Ask
Before you can speak to what drives success for a CEO, you have to understand what it is he or she is tasked with accomplishing. The CEO role, the authors argue, isn’t intended to be a catch-all for ‘do everything.’ It ultimately encompasses six core responsibilities:
The key isn’t for the chief executive to be an expert at all six or to march through the list checking each one off in turn. Even the best CEOs typically only do two or three of the above things exceptionally well. The top job is more about having the ability to drive for excellence and integrate efforts across each area, making adjustments as needed to maintain balance in the organization. Much like the captain of a ship, all six areas must be actively managed in parallel so that no one thing sinks the ship.
Not only do CEOs have to manage six processes that are each far from simple, their job is to do so while considering the opposing dynamics a CEO must reconcile. How to weigh short-term impact with long-term goals? Shareholder versus stakeholder interests? Speedy versus fact-based decision-making? Their need as a leader to act with confidence while also being humble enough to ask for help?
Driving Success with Mind Over Matter
The book ultimately posits that success can be boiled down to the mindsets with which they address each of their responsibilities. This unique group of high performers was committed to learning and open to growing from their experiences. Few if any CEOs arrive at their role with all the answers. Their styles and skills evolve over time along the journey. Failures happen along the way. But in telling the stories that have defined key moments in this group’s careers, six clear mindsets – one for each of the responsibilities of the CEO role – emerged.
While these mindsets obviously aren’t instruction manuals in and of themselves, they do offer guidance on how to approach questions in a way that helps them leverage more of the resources they have at hand (like the Board and other stakeholders), build organizational structures, habits & ideologies to support objectives (like team dynamics or cultural competencies), and prioritize the big things (in their own agendas and in the company’s). The mindsets are:
“It’s lonely and frustrating because of information asymmetry,” noted Satya Nadella of IBM. That’s both the advantage and the curse of the CEO role, and points directly to the uniqueness of a job that requires one person to be strong enough to manage so many vectors, without allowing their influence create a spike in any one of them. It’s a great exercise in perspective, for one.
While this simple framework offers a clear glimpse into the mindsets that set great CEOs up for success, it’s the stories that bring the model to life and offer actionable insights for real life. At the end of the day, it’s not skill, experience, luck, or perseverance. It’s not being a subject matter expert in any one area or function. While those all help, as the ultimate integrator of company success day in and day out, it’s the mindsets they bring to the role that matter.