How to choose a CEO

08 February 2017 -

If it is true that leadership really makes a difference, why do companies spend more on graduate recruitment and selection than they do for their CEO?

Guest blogger Adrian Furnham

There are variations on the accepted wisdom for selection and assessment and academically-informed debates about best practice.

Stage one is always a job analysis. A person is appointed to a particular position. To adequately, even exemplarily, fulfil that position with all those other e-words (efficiently, effectively, energetically and that special English ‘effortlessly’), the candidate needs talents and skills.

Psychologists call them abilities, traits and values. HR people call them competencies. The idea is to derive a parsimonious, rank-ordered list of necessary and sufficient competencies required for this particular job.

While it is probable that all (very) senior leaders require similar competencies, some are highly specific to particular jobs. When the Archbishop of Canterbury’s seat ‘came up for grabs’, the competency was leaked to the press. One of the prerequisites was “holiness”. Desirable, but rare in CEOs alas.

Borrowing from other examples it is pretty easy to come up with a sound HR-acceptable list: strategic thinking, ability to inspire others, persuasiveness and communication skills, ability to plan and manage change, team management… blah blah blah.

But there have been some really interesting developments in the selection business. Perhaps the most important is the concept of select out as much as select in. The old way was to list and then look for evidence of competencies you wanted. Enough evidence and the candidate got the job.

But we have known for years that there are certain jobs - bomb disposal expert, spy, submariner - that require a special sort of vetting. Here the search is not only for what is wanted, but also for what is not wanted.

Neuroticism is undesirable in airline pilots: unflappability is essential for coping with emergencies. A low ‘agreeableness’ score would not make a charming James Bond and disagreeable candidates do not become spies. Thus there are ‘select in’ and ‘select out’ lists of qualities.

Business psychologists have recently found evidence of certain personality factors that lead to job/career derailment. You really do not want them in the chap with his finger on the nuclear button.

The top derailment attributes are excessive boldness, mischievousness, self-confidence and Machiavellianism. The paradox is that the characteristics that can help an individual climb the greasy pole are often those that later lead to derailment.

Under stress, or in positions of considerable power, the less desirable aspects of people do emerge. And we all pay the price.

So below is a good shortlist of competencies to put the fear into any challengers. Three select in and three select outs. Insufficient evidence of the former and too much of the latter means NO.

Select In

Integrity: This is honesty, trustworthiness, truthfulness. At some level you must be able to trust that what is being said is true. It takes courage to maintain integrity in politics.

Intelligence: This is more than street-smarts. It is being analytic, logical, quick-on-the-uptake. We have plenty of evidence of the shortcomings of the short-changed. Where people were educated is not a good indication of intelligence any more.

Inspirational: The ability to be uplifting, enthusiastic, positive… to create and sustain a following. All the more important in our multi-media age. This is more than reading auto-cues.

Select Out

Irresponsibility: Evidence of amoral, impulsive, selfish behaviour in the past that was more to do with fulfilling personal ambition than anything else. A good measure is how many friends the person has retained from past worlds (school, work, family).

Excessive self-confidence: Clear evidence of a narcissistic streak manifest in everything from dress to the number and types of individuals chosen to serve their personal needs.

Stress prone-ness: It’s tough at the top. A leader needs to be hardy not moody; resilient not unstable.

The above list could fit many different senior positions. The CEO clearly needs to be able and stable, hard-working and hardy. But then there is the sticky issue of values. After all, business is supposed to be informed by values, what we used to call ideology, nowadays the ‘vision thing’. Mission statements maybe out of fashion but fraud isn’t.

Selectors talk of values such as Recognition (the desire to be noticed, visible, seen to be in charge), Power (the desire to make things happen, make a difference), Altruism (the desire to help others, serve the community), Security (a desire to make things predictable, safe, secure) and Tradition (a belief in old-fashioned institutions and virtues). There are social, economic and political values.

We are not victims of our past but we are all products of our past. Early experiences are often telling. It is said CEOs can be spotted in the preschool playground. So a study of the biography of an individual is most telling.

Alas, a lot of the information you need is not on the CV. It has to be gleaned from interviewing others. That is why references are most important.Ideally you want to question all sorts of people who worked with and for the future CEO. Guarantee them anonymity and ask the tough and relevant questions.