Are You Ready to Be CEO?

Statistics show that nearly half of all newly chosen CEOs will fail. The blame for such a dismal record, according to Bill Pasmore, Senior Vice President of the Center for Creative Leadership, lies both with the corporate boards tasked with replacing a CEO, and with the candidates themselves who mistakenly believe that they are ready to take over the top spot. Both the boards and the candidates can be misled by an impressive track record at the functional or business unit level, he says.

Experience —managing a large business unit or geographic region, working in different functions, and being posted abroad — is important, of course. But as Pasmore details in a CCL white paper called Are You Ready? Four Keys to Becoming a CEO, experience is just one of four “areas of readiness” required for success in the CEO position. Personal, network and relationship readiness are all equally important.

Personal readiness concerns who you are as a person. Does your personality fit with the culture of the company for which you are a candidate? Do you have the ethics and the values that the company is looking for? Does the board feel comfortable with you in the CEO position? In a recent interview with IEDP, Pasmore explains that it is very difficult for candidates to overcome board concerns about their personality, no matter how experienced they might be. “The other things are fixable,” he says. “But who you are as a person is not easily changed.”

Most boards are “more comfortable with someone who knows they have things to learn versus someone who represents self-confidence and self-assurance,” Pasmore says. This attitude can trip up many self-confident, experienced candidates. “They think they are the ideal candidate, that they have the right value,” he says. “What they need to do is check their internal assessment with the board’s assessment.” For example, a candidate may believe that he or she is coming across as confident and experienced, while the board is actually seeing someone who is arrogant, self-centered and boastful.

“I see it time and time again,” he continues. “Candidates are not humble enough because they are afraid of seeming less capable.” Balance is important, however. “Humility can also be interpreted as a lack of interest in the job, that you don’t care,” he says. “So it can be a double-edged sword.”

Network readiness, according to Pasmore, involves who you know inside and outside the company. Access and influence is vital to the success of any CEO, and that access and influence depends on the personal network that they have built over the years. A new CEO should have developed good contacts throughout the organization’s system, from internal functions and departments to external stakeholders such as suppliers and customers. Contacts in the press and among Wall Street analysts, and in governmental agencies as well, are key. Finally, Pasmore also recommends a network of advisors, including other CEOs, on whom the CEO can call for guidance.

Relationship readiness is the ability to build the productive and respectful relationships a leader needs to succeed. One could assume that those who have risen to the level where they are under consideration for a CEO position are adept at building productive relationships, but this is not always the case. “It varies from candidate to candidate,” Pasmore says. “There are people who get to the top by stepping on others… They are not good at managing relationships with peers.”  This can be an issue. New CEOs who didn’t maintain good relationships with peers in their previous positions will have problems of resistance and undermining from those same people. Yet, Pasmore notes, a surprising number of leaders don’t have the maturity to understand that moving up by stepping on people is shortsighted and ultimately damaging to one’s career.

“Sometimes, I wonder why we write the books,” he says. Despite all the literature produced on the importance of values and constructive behavior leadership, many ambitious people continue to believe that the only criteria that count are results. Leaders give the right answers about the balance of personal values and performance, but in practice, it’s a different story. There’s still this sense, he says, “that the big dog wins.”

Some of this may be due to the pressure of the job. It’s “so much easier to say ‘why don’t we just do it this way”’ than ‘let’s get together and talk about it.’” With the demands and the push for results, it’s natural for leaders to take a short cut here, save time, and move on to more important issues. But accumulate those little acts of saving time, says Pasmore, and you quickly become used to giving orders.