March brings one of my favorite international holidays, International Women’s Day. March 8 is dedicated to celebrating the incredible accomplishments of women. While International Women’s Day reminds us of all the amazing things women can achieve, we should still remember we have a long way to go to achieve equality in the workforce.
To date, only 8.2% of the Fortune 500 CEOs are women, and women comprise only 7.3% of the Fortune 1000 CEOs.1 Disappointing as these statistics may be, we can and should work actively to make a change. To understand how we can improve the situation, we should first look at some of the factors that cause women to have less opportunity for leadership.
Why Aren’t More Women in Leadership?
According to the paper, “Do Women Want to Lead? Gender Differences in Motivation and Values,” complex factors contribute to the lack of women in leadership roles.2 Extensive research has been done on the topic, however, and the lack of women leaders can be boiled down to three main reasons.
The first is discrimination. Women who apply for leadership roles are rejected more often than men. This causes women to apply for fewer leadership roles, reinforcing the idea that women do not want to be in positions of leadership.
The second is gender stereotypes. Women who are more assertive, display more agency, and are more directive tend to be viewed as aggressive and in a more negative light when compared to male counterparts. Women are often encouraged to “lean in” (in reference to the Sheryl Sandberg book). But when women do show more self-confidence — such as in negotiating, for example — they are often penalized.3
Third, women often fail to succeed because of the work environment. Working long hours and networking after hours are more difficult for many women. Work-life balance is an increasingly popular concept, but women with families and children still find it more difficult than men to strike a fair balance. Research from the U.S. Federal Reserve Board found that the pandemic disrupted childcare and the ability to perform in-person work for 70% of American families, and 25% of mothers reported having to quit work or work less due to these disruptions.4
According to a report from McKinsey & Company and LeanIn.Org, “Women in the Workplace 2021,” senior executive women are now more significantly burnt out than their male counterparts.5 On a positive note, the report notes that women are doing more than men at their level for improving diversity, equity, and inclusion, and for providing support to teams. Unfortunately, their work is going unrecognized and unrewarded by their companies.
Closing the Gender Gap
By taking proactive steps to recognize and support women in leadership positions, organizations can start changing the environment to build a pathway to success for future women leaders. Addressing burnout, providing recognition and rewards for women leaders, and fostering inclusion and belonging are all necessary measures for organizations to take.5
A diverse pipeline for executive talent is also critical to putting more women in leadership roles.1 Hogan has often preached using personality assessments to build these pipelines. Research shows that personality assessment scores do not differ in any meaningful way across demographics, making them useful for organizations seeking to make more equitable talent decisions. Not to mention, Hogan was founded with the goal of producing discrimination-free assessments that would predict occupational performance as well as or better than traditional methods (such as IQ testing or interviews).
Call to Action
Back in 2008, I worked on a high-potential mentoring project for a major oil company based in the Middle East whose headquarters only employed men for leadership roles. The CEO of this Fortune 500 company spoke frankly to the room of 20-plus high potentials, all men. He told them that the biggest weakness their company faced was the lack of diversity. He said that by eliminating 50% of the potential workforce (women), they were automatically less competitive and setting themselves up for failure.
I would propose that we are all not using the full potential of our workforce, as evidenced by women comprising only 7.3% of the Fortune 1000 CEOs even though research tells us that women are just as capable as (if not more than) men in leadership positions. By not supporting, promoting, and affording leadership opportunities to women, our organizations are not reaching peak performance potential.
At Hogan, we encourage companies to raise the bar for everyone. Using objective personality data to select and develop the best possible talent will not only help companies improve performance, but it will also have the additional benefit of supporting their diversity, equity, and inclusion goals. By including everyone, we all win.
This blog post was authored by Hogan Director of Asia-Pacific Business Development Krista Pederson.
A book on the history of the Myers-Briggs Type Indicator (MBTI) made waves back in 2018 by putting the media into a feeding frenzy over the accuracy and validity of personality assessments. This criticism specifically extended into the popular use of personality testing for careers and their HR applications. As we’ve seen before, the feedback tended to fall into one of three generic claims:
Hiring personality tests are biased and discriminatory
They aren’t relevant for the job
They simply fail to predict performance
Many articles that came from this discussion echoed these themes, going so far as to state that many of the benefits of personality tests are actually myths. However, the talking points raised in this discussion seem to miss one critical detail: It’s difficult, but necessary, to distinguish scientifically proven, reliable tools from those that are of poor quality.
So, should personality tests be used for hiring?
Yes, and here’s why.
Contrary to what these articles are claiming, high-quality personality assessments do, actually, predict performance, surpassing the quality of alternative, more traditional talent acquisition methods such as resumés and interviews. For these reasons and more, there are clear advantages of using personality tests in the hiring process — so why does controversy still exist? The true criticism of personality assessments actually stems from the widespread popularity of inexpensive, ‘trendy’ tools that lack science-based conclusions.
In a flooded market of personality tests that claim to be accurate, how can you know which assessments are truly effective? In short, looking at the validity and reliability of an assessment tool.
Validity
Validity indicates the predictive ability of an assessment by measuring the correlation of one thing with another, such as the correlation of personality with job performance.
To break it down, validity is measured with a coefficient between 0 and 1 (absolute value). The closer to one, the more accurate the predictive power of the assessment. A robust assessment tool, such as the Hogan Assessment suite (HPI, HDS, and MVPI) has a predictive validity of .54. Comparatively, the structured interviewing of candidates has a predictive validity of only .18.
In other words, validity is a measure of accuracy.
Reliability
Reliability, on the other hand, can tell you if the assessment can properly measure the same thing time and time again. The reliability of an assessment can be evaluated in two broad ways: 1) internal consistency and 2) test-retest reliability.
Internal consistency relates to the questions that are used in each assessment; by asking a question in a few different ways, the tester helps ensure that the assessment is getting an accurate measurement of the concept.
Test-retest reliability is a measure of the consistency of responses over time. Are people responding to questions the same way each time they take the test? Inconsistent responses can indicate that assessments results are not actually measuring personality, which should be relatively stable over time.
To put it plainly, reliability is a measure of consistency.
While there’s no doubt that, in some cases, there are pros and cons of personality tests, it’s important to make the distinction between tests that are ‘flashy’ and those that are science-based. In your search for a high-quality assessment tool, pay close attention to the following topics to ensure efficacy:
Validity and reliability — Ask the vendor for information on the reliability and predictive validity of their assessments. These two things can tell you if the assessment is accurately and consistently measuring what they say it does.
Scientific background — Quality assessment tools should be heavily researched and built on a sound theoretical framework. If this information is not readily available, there’s a good chance the quality of that assessment is poor.
Accordance with employment guidelines — Many countries have employment guidelines to protect employees from discrimination. Any assessment used for recruitment purposes should demonstrate how they follow those guidelines.
Predictive ability for job performance — Often, assessments feature questions that measure identity or self-perception of oneself, which can often be flawed. A better approach is to use objective measures of reputational factors that predict performance.
Adaptability for different cultures/languages — Be sure to find out if an assessment is adapted to your specific language and culture. Proper translation is important but not sufficient to account for all cultural differences.
The next time you hear someone highlight the problem with using personality tests for hiring, urge them to look deeper into the options available and equip them with the means to properly vette an assessment tool. As Adrian Furnham, internationally acclaimed management expert and Professor of Psychology at University College London emphasizes:
“There are two criteria for a good assessment: evidence of test validity and quality of feedback on questionnaire. It should be useful for the employer and the employee alike: It measures clearly what you need it to measure; it is clear and straightforward for the respondent; the test has considerable evidence of reliability and validity, and the employee gets rich and useful feedback. In my experience, the three Hogan measures (HPI, HDS and MVPI) are the ones that have proved to be the most effective, because of the above reasons.”
A clip featuring comedian Chris Rock that went viral last year sums up the issue of high-stakes hiring. Skewering the “few bad apples” phrase often applied to policing in the United States, he riffs:
“Bad apples? Some jobs can’t have bad apples. Some jobs, everybody gotta be good. Like … pilots! American Airlines can’t be like, ‘Most of our pilots like to land. We just got a few bad apples that like to crash into mountains. Please bear with us.’”1
Rock’s bit on the unforgiving nature of high-stakes hiring is spot-on. Medical professionals, first responders, pilots, military personnel, and people in other potentially risky occupations have little room for error. A slip of the scalpel or a miscalculated military directive could easily result in the loss of human life. And just as precision is required of those who enter high-stakes professions, it is also required of the talent acquisition processes that fill these roles.
High-Stakes Hiring Depends on Data
Those who manage high-stakes hiring processes know that even the most competent candidates have weaknesses — the highly qualified are still human, after all. Problems arise when a candidate’s shortcomings conflict with the demands of the job. Using personality tests in talent acquisition processes can help identify a candidate’s possible weaknesses up front. This allows hiring managers to determine whether a person’s possible shortcomings represent an area for development or a potential liability.
To avoid headline-making accidents, employers should focus on crafting a hiring process that uses multiple evaluation methods — for example, interviews and personality tests. When interviews are used as the primary hiring method, incompetent hires are less likely to be detected. An objective measure of personality, though, can provide insights that cannot be gleaned from interviews.
The Consequences of High-Stakes Hiring
So, what behaviors might indicate incompetence for a high-stakes hire? Our database of global personality research shows that individuals who are prone to fail in high-risk occupations tend to be described as inattentive to detail, unreliable at rule following, susceptible to stress, ineffective at working with others, and overly concerned with being the center of attention. When a candidate exhibits one or more of these behaviors, safety should be a concern. Lives may even be at risk.
The Costa Concordia cruise ship accident is just one regrettable example of lethal misalignment between role and individual. On January 13, 2012, Captain Francesco Schettino turned off the ship’s warning systems because he felt confident that he knew the Italian coast well enough. Captain Schettino overestimated his capabilities. A coastal reef tore a 50-meter gash in the ship’s side, tragically killing 32 passengers. Captain Schettino was later convicted of manslaughter, and it is a shame that his negligent behaviors were not flagged during his former organization’s hiring process.
Hiring processes should prioritize candidates who are trainable, compliant, strong, poised, vigilant, and cautious. Well-validated personality tests can identify these qualities, so hiring managers can weigh them against an individual’s weaknesses. Captain Chesley B. Sullenberger III, also known as Sully, is an example of a successful high-stakes hire. On January 15, 2009, Captain Sullenberger was piloting U.S. Airways flight 1549 when both of the engines ceased to work. Captain Sullenberger was able to save the day by safely maneuvering the plane to land on the Hudson River near New York City.
Captain Sullenberger’s disposition played a big role in averting disaster. His subordinates described him as calm, cool, and collected during the ordeal. Hiring managers who are seeking to fill positions with a high risk of accidents should focus on finding people with qualities like those of Captain Sullenberger — people who can competently stand at the helm if (or when) catastrophe strikes.
Personality and Accident Prevention
Research shows that making hiring processes longer will not safeguard against bad hires. Incorporating well-validated personality tests, however, can make interview processes more comprehensive while shortening their length.
At Hogan, we’ve seen this firsthand. We once worked with a large metropolitan transportation company with the objective of using personality to reduce bus accidents. Employees hired using Hogan’s Safety solution were more safety-conscious. They had 40% fewer rule violations, 25% fewer workers’ compensation claims, and 20% fewer accidents.
In another instance, we worked with a U.S. plastic tube manufacturing company that was struggling with an increasing number of accidents and injuries. After the company introduced personality tests into its selection efforts, the accident rate was reduced to zero within two years, and the company received the maximum reduction in fines from past OSHA audits.
In some industries, the quality of the talent acquisition process can literally decide the fate of others’ lives. In more mundane circumstances, it can decide who fills key roles that are responsible for keeping the organization afloat. Regardless, no employer can afford to let bad hires spoil their organization.
To say the current talent market is competitive might be an understatement. Concerns about the skills gap have intensified as the number of open jobs in the United States has grown considerably in the past year and a half. Job openings hovered around 7 million before the COVID-19 pandemic, rose to 9 million by April 2021, and then climbed to 10.9 million by the end of July 2021.1–3 Meanwhile, the unemployment rate has also risen, and many workers have been unable to find new work due to skill misalignment with the available openings, concern for their health, issues with childcare, distance from opportunities, and more.2,4 In other words, jobs are opening, the size of the talent pool is shrinking, and the skills that were in-demand pre-pandemic are even more so now.
For many employers, finding the right people to hire right now may seem near impossible. There are numerous ways organizations can improve their talent management strategies to not only hire but also retain top talent. One in particular entered the spotlight this summer when a LinkedIn post went viral: cutting back on interviews to reduce time to hire and gain candidates’ loyalty. Interview fatigue is a critical flaw in the candidate experience at many organizations — and thus an insidious threat to your talent acquisition strategy.
Interview Fatigue: The Case of Mike Conley
Mike Conley was interviewing for a job at an organization that seemed like the perfect fit. He was interested in the role, the company’s mission was one he could get behind, and the pay and benefits were generous. The only problem? They expected him to participate in nine interviews.
Anguished by interview fatigue, Mr. Conley withdrew his name from the candidate pool and hopped on LinkedIn to vent his frustration about how the number of interviews for senior-level executive jobs have continued to increase in length.6 He surmised that employers’ fear of picking the wrong candidate wastes more time than is necessary; he suggested contract-to-hire or other forms of trial periods could be an antidote to hesitation during the hiring decision.6 Warning employers that the number of interviews can make competitive candidates look elsewhere, he ended his post with a declaration: “With this withdrawal, I make a stand. A stand against never-ending interviews. A stand for job hunters.”6
Far from a shout into the abyss, Mr. Conley’s post turned out to be something of a Martin Luther moment, a Ninety-five Theses for interview fatigue. Covered by news outlets such as Forbes and the BBC, his plea for shorter interviews went viral with more than 1.9 million views.6
Other professionals, from entry level to executive, chimed in with support and commiseration about interview fatigue. One commenter cheekily suggested that, after the fifth interview, employers should start paying candidates for their time.6 Another commenter suggested the conversation would be more productive if companies guilty of lengthy interviews were tagged directly in the thread.6 Yet another commenter, who once went through an 11-step interview process only to hear that the position was postponed, suggested that never-ending interviews were a sign that employers were unclear on what they needed or weren’t empowered to make decisions.6 The top commenter, who shared that they had a four-month series of interviews only to lose the position to an internal candidate, stated, “Mike, I share your frustration and applaud your decision.”6
Mr. Conley’s complaint exposed interview fatigue to be a common flaw in the overall candidate experience. Fortunately, his story has a happy ending. An employer saw his LinkedIn post and liked his enthusiasm for efficiency. After a number of job interviews he considered appropriate, Mr. Conley is now happily employed as a VP of software engineering.6
How Many Interviews Are Too Many Interviews?
Like most things in business, there is no magic number of interviews — it depends on the organization. Nonetheless, four appears to be an important threshold for both employers and candidates to avoid interview fatigue.
Google, where candidates were formerly subjected to more than a dozen interviews, has become a trailblazer in interview efficiency.7 Google’s research found that after the fourth interview, interviewers had 86% confidence in the candidate.7 Afterward, confidence rose by less than 1% with each additional interview.7 Furthermore, 94% of the time, the hiring decision remained the same whether the candidates were interviewed four times or 12 times.7
This research suggests that exceeding four interviews is likely to lead to interview fatigue. Google learned from these findings and now follows the “rule of four” for interviews, only passing this benchmark on rare occasions.7
But What If We Make a Bad Hire?
A common reason employers conduct excessive interviews is to avoid making a bad hire. And understandably so — even many of the professionals who agreed with Mr. Conley’s lament conceded that avoiding bad hires is important for company survival. Employees who are onboarded and are unsuccessful in their roles can spread disengagement like contagion, and turnover costs an average of one-half to two times an employee’s salary (and this is a conservative estimate).8 Still, as LinkedIn’s zeitgeist and Google’s research reveals, overreliance on interviews will not shield employers from the danger of making a bad hire and will instead contribute to interview fatigue and inefficiency.
The good news is that interviews can be supplemented with another powerful tool for talent acquisition: personality tests. While it is well documented that interviews have low predictive validity, a well-validated personality test can predict how a candidate is likely to perform in a given role, uncovering truths about a candidate that interviews can’t. In this way, using personality tests in interviews can help employers avoid making bad hires by ensuring that the ultimate hiring decision is backed up by data. These insights are useful because, no matter the number of interviews, candidates will likely be self-conscious and intentional about only highlighting their strengths to potential employers. Let’s be honest — how many candidates do you think speak candidly about their weaknesses? Personality data can give hiring managers objective insight into a candidate’s values, strengths, and weaknesses and biases to help them make a sound hiring decision.
A Faster Way to Make a Good Hire
Employers who wish to take an even more tailored approach to finding the right person for a particular job can go a step further by establishing a custom personality profile. Using a custom personality profile in candidate selection allows hiring managers to identify the candidates who most align with their needs and avoid spending valuable interview time with people who are less aligned with the job requirements or organizational culture.
Not to mention, personality data is proven to reduce the number of necessary interviews, cutting the interview-to-hire ratio by as much as 50%.9 Gathering personality data before meeting a candidate lets hiring managers prepare to ask insightful questions, resulting in more informative and efficient interviews. Aside from helping produce a more educated hiring decision, this refinement of the interview process also allows organizations to reduce their time to hire, resulting in a better candidate experience and reduced likelihood of interview fatigue. In a volatile, uncertain, complex, and ambiguous talent market like the one we currently find ourselves in, employers who consider the quality of the candidate experience they create will come out on top.
Unfortunately, the talent shortage is expected to worsen even more in the coming years, and a staggering 70% of organizations are not prepared to meet their future talent needs.10 Beyond talent acquisition and retention, understanding the role of candidate experience in talent attraction is critical in the competition for top talent, especially when it comes to finding effective workers with the most in-demand skills, such as analytics, communication, and adaptability.10 Key to thriving in the current talent market, personality tests provide organizations with a clear picture of how candidates will perform in a given role without causing interview fatigue (or potentially drawing the ire of LinkedIn users).
Morath, E. (2021, May 6). Millions Are Unemployed. Why Can’t Companies Find Workers? The Wall Street Journal. https://www.wsj.com/articles/millions-are-unemployed-why-cant-companies-find-workers-11620302440
Hardy, J. H. III, Gibson, C., Sloan, M., & Carr, A. (2017). Are Applicants More Likely to Quit Longer Assessments? Examining the Effect of Assessment Length on Applicant Attrition Behavior. Journal of Applied Psychology, 102(7), 1148-1158. https://doi.apa.org/doiLanding?doi=10.1037%2Fapl0000213
The preliminary Commission report concluded that the primary cause of this misconduct was:
“…greed – the pursuit of short-term profit at the expense of basic standards of honesty…From the executive suite to the front line, staff were measured and rewarded by reference to profit and sales…When misconduct was revealed, it either went unpunished or the consequences did not meet the seriousness of what had been done.”
All of this brings back memories of the 2007-08 financial crisis in the US. Much like in the US, calls for more stringent regulations are inevitable. However, such regulations are unlikely to mitigate devious financial practices in the future. Indeed, as the Commission pointed out:
“…The law already requires entities to ‘do all things necessary to ensure’ that the services they are licensed to provide are provided ‘efficiently, honestly and fairly’. Much more often than not, the conduct now condemned was contrary to law. Passing some new law to say, again, ‘Do not do that’, would add an extra layer of legal complexity to an already complex regulatory regime…”
Further, the strategies currently being implemented to mitigate the risk-taking culture of banking and finance risks do not appear to be working. As Alessandra Capezio, a professor at the Australian National University, points out, the problem is not the standards and regulations of the banking and financial industries: it is the people in the industry, particularly the leadership.
It should surprise no one that the banking and financial services industries attract people who are interested in, and motivated by, money. Our own data on the personalities of more than 10,000 leaders in the banking and financial services industries from all over the world confirm this: people in this sector score well-above average on Commerce, a scale measuring the degree to which one is interested in business and financial pursuits.
However, being interested in money is not all that makes banking and finance leaders unique. They also score higher than average on Power – the desire to have authority over others and control of resources, Ambition – the tendency to take charge and compete with others, and Mischievousness – the tendency to manipulate others and bend the rules. Further, banking and finance leaders also tend to score below average on Security – the desire for predictability and stability, Prudence – the tendency to display high moral / ethical standards, and Dutiful – the tendency to conform and obey regulations set by others. Overall, these data paint the picture of the typical banking and financial industry leader just as described by the Commission and Capezio: greedy, risky, manipulative, and self-interested.
This is not to say that all banking leaders fit this description. In fact, the history of corporate financial scandals – including the recent banking scandals in Australia – is peppered with moralistic whistleblowers who brought the truth to the public. But these folks are exceptions to the rule.
What can be done about the problem of risky and malicious practices that seem to run rampant in the banking and financial services industries? The answer is not more regulations. As we have seen time and time again, the kinds of people who become leaders in these institutions are not bound by regulations. If the root cause of the problems facing the banking and financial services industry is the leadership, then the solution is to select better—more ethical—leadership. Fortunately, there are hundreds of years of research on the science of personality, leadership, and organizational effectiveness that can be used to inform leadership decisions. Unfortunately, many organizations – including financial organizations – continue to ignore the benefits of scientifically-validated personality assessments for leadership selection. In doing so, they put themselves, their employees, and their customers at risk.
They’ve annoyed us all by talking down to us about anything and everything, even when it’s obvious they know far less than they believe. But know-it-alls don’t just ruin watercooler gatherings and dinner parties. When they rise to positions of power, they can wear away at productivity and trigger costly mistakes.
Joann S. Lublin wrote an entertaining article on the subject in the Wall Street Journal. She interviewed a number of self-professed former know-it-alls that caused major problems for themselves and their companies, such as losing over $2 million on a home purchase, hiring an unsuitable job candidate, and not asking subordinates for their input.
The know-it-all causes all kinds of professional headaches. They don’t try to learn about an issue or ask for help, which leads to poor decisions. They ignore some people or are condescending to others, which leads to a toxic work environment. They project a false aura of power and knowledgeability, which gets them promoted into jobs they might not actually be able to perform.
Right now, the United States has a perfect example of know-it-all leadership – President Donald Trump. Even before his election, he’s directly and literally said he knows it all. Axios compiled a list of all the things Trump has said he knows about more than anyone, including campaign finance, ISIS, the visa system, international borders, international trade, and drone technology, just to name a few of their nearly two dozen examples.
Though the political news of the day seems bleak, the know-it-alls in Lublin’s article took significant steps to improve their behavior. One made certain his managerial hires hold diverse viewpoints, and he encourages them to call him an idiot. Another gave his committee more power when making hiring decisions. All of them took a similar approach – they became more humble.
Humble leadership is the flip side of know-it-alls. Rather than assuming they know what’s best, humble leaders turn to their co-workers and ask questions in order to make the most informed decision possible. At Hogan Assessments, we define humility as self-awareness, appreciating the strengths and contributions of others, and openness to new ideas and feedback toward personal performance. Know-it-alls generally lack those three characteristics.
Furthermore, humble leaders become more successful than know-it-alls. They don’t allow their sense of self-worth to interfere with leading their organization to success. A recent study revealed high levels of humility lead to higher rates of employee engagement, more job satisfaction, and lower rates of turnover. Humility is the antidote to know-it-alls.
Although Lublin’s interviewees became self-aware enough to change their habits, not all know-it-alls can correct their habits without outside intervention or a particularly costly mistake. Personality assessments can also help know-it-alls understand what they’re doing. No matter the method, increasing self-awareness and learning to ask questions is clearly a better strategy than pretending you know everything while showing the world you clearly don’t.
We all know the stereotypes: Great CEOs are extroverted. They’re self-promoting. They’re risk takers. But are these stereotypes true? Which traits actually differentiate CEOs from other executives? And, most important, which attributes separate successful CEOs from other CEOs?
There is a great deal of conjecture and mythology about CEOs and the attributes that define their success. Russell Reynolds Associates, in partnership with Hogan Assessment Systems, has led a research effort to separate myth from reality, identifying key indicators of leadership that have a measurable impact on a company’s growth. The results demonstrate that intensity, an ability to prioritize and focus on substance, and an ability to know what one doesn’t know (and utilize the best in what others do know) are more strongly related to best-in-class CEO leadership than traditional traits like extroversion or self-promotion.
We believe our data-based approach has particular relevance due to our use of Russell Reynolds Associates’ and Hogan’s proprietary psychometric databases at the core of the study. Other researchers have approached these questions about CEOs by conducting interviews, analyzing resumes, and even evaluating vocal patterns. We chose an in-depth approach, creating detailed psychometric profiles of 200 global CEOs, using the results of three well-established psychometric instruments: the Sixteen Personality Factor Questionnaire (16PF), which provides an overall measure of adult personality, including interpersonal skills, emotional factors, resiliency, and communication style; the Occupational Personality Questionnaire (OPQ-32), which measures management and leadership style and behavior, including how people try to influence others, their approaches to innovative thinking, and self-motivation; and the Hogan Development Survey, which measures areas for development or potential derailing factors in managers and executives, including their decision-making style and independence of thinking. We validated the trends we discovered in another global sample of 700 CEOs produced by our partners at Hogan and subsequently compared these CEOs to the non-CEO executives in our proprietary database of 9,000 senior leaders.
Our analysis revealed that CEOs differ meaningfully from the overall executive population across many personality attributes. Two traits in particular stand out: an ability to embrace appropriate risks and a bias toward acting and capitalizing on opportunities. We consider these traits the “essence” of the CEO personality. In other words, a CEO is significantly less cautious and more likely to take action when compared to other senior executives.
As for the stereotypes, while we confirmed that CEOs in general are more likely to be risk takers than other executives, we did not find that they are consistently extroverted or self-promoting.
In addition, six other traits differentiate the typical CEO from other executives on a statistically significant basis:
drive and resilience
original thinking
the ability to visualize the future
team building
being an active communicator
the ability to catalyze others to action
It’s rare to have such detailed psychometric data related to the mindset of the CEO. It is even rarer to be able to link psychometric data to corporate performance. To make that link, we applied a quantitative hurdle of 5% compound annual growth rate during the CEO’s tenure.
When we compared the results of the best-performing CEOs to those of their less successful peers, we found that best-in-class CEOs stand out in three ways:
They show a greater sense of purpose and mission, and demonstrate passion and urgency. These traits often manifest themselves as intensity, impatience, and an eagerness to move forward as well as a strong sense of ownership and immersion in activities. Researchers at McKinsey recently published related observations pertaining to new CEOs. In short, they asserted that the worst thing new CEOs can do is “sit on their hands.” The best-performing CEOs “move boldly and swiftly to transform their companies.” We don’t advocate decisions and actions that are overly spontaneous or impulsive, but we do value efficiency and speed in analyses and when acting on strategy.
They value substance and going straight to the core of the issue. They have an ability to rise above the details and understand the larger picture and context. They have a keen sense of priorities as they think and act. We summarize this as an ability to “separate the signal from the noise.” Great CEOs have a “nose” for what are the most significant issues, challenges, threats, and opportunities facing an organization. While they draw on myriad inputs and discussions, their views about prioritization are clear and often quite independent. Ram Charan spoke to HBR about this several years ago in the context of “making tough calls.” We are seeing this play out right now, for example, in the retail space, where forces are creating tremendous complexity for CEOs. As retail is increasingly omnichannel, online, digital, and global, CEOs need to be thinking about consumer demand fluidity, globalization, regulations, and exchange-rate volatility, to name a few issues that barely scratch the surface of what retail CEOs are juggling.
They have a greater focus on the organization, outcomes and results, and others than on themselves.They “know what they don’t know” and have an ability to be open-minded, seek additional information, and actively learn. This notion of a relatively modest CEO is counterintuitive for many. At the same time, there has been a good deal of writing about the usefulness of humility in CEOs. Our finding is data-based evidence that the Level 5 CEOs described in Jim Collins’s book Good to Great — leaders who are “a study in duality: modest and willful, shy and fearless” — can be related to desirable organizational results. Warren Buffett is a wonderful example of how this set of traits can play out in a leader: Despite overseeing what could be considered one of the most successful companies ever founded, Buffett estimates that he spends 80% of his day learning in an effort to understand businesses, markets, and opportunities. We summarize, of course, that great CEOs need to have the capacity to act boldly in difficult and uncertain situations; to be able to develop and articulate a strong point of view; and to be highly determined. The additional point here is that the most-successful CEOs also need to believe that the best idea wins and that they often obtain the best ideas based largely on how they work with others in a collaborative way.
There is no single profile for the successful chief executive. In every case, boards will have a broad set of business conditions to assess before determining their target profile. Some companies may require a true extrovert — someone willing to trumpet the company’s successes through constant and varied social gatherings. Others may benefit from a quieter approach, from a leader who can build relationships without appearing too “salesy” and who can avoid spooking relevant markets. But at the top of the list should always be the ability to embrace effective and appropriate risks and the ability to act on opportunities in high stakes situations — especially when the “right” action is not initially clear. These are the headlining traits that separate CEOs from other senior executives.
When a board wants to increase their odds of hiring a successful leader, it should interview and assess candidates for intensity and impatience, find those who focus on core issues, and search for a leader with the ability to have a point of view while still being open-minded and recognizing the power of the organization around him or her. These characteristics of our best-in-class CEOs will benefit almost every business, as they are clear markers for the ability to act quickly, draw nonobvious and nonlinear conclusions, connect thoughtfully across a wide variety of channels, and take advantage of digital and market disruption — all essential in today’s dynamic markets.
Dean Stamoulis leads Russell Reynolds Associates’ Center for Leadership Insight. He provides guidance to boards and chief executive officers on how to build excellent leadership teams. This advisory work includes optimizing hiring, promotion, and succession decisions, and contributing to the development of promising senior executives.
