New CEO’s must be ready to face a multitude of challenges in today’s turbulent business environment. Some CEOs however have been able to navigate through their ever changing business environments to bring about exceptional returns to their shareholders. So we should ask ourselves, what is it that separates an exceptional CEO from an average one? Recent studies show that there are three lessons which we can learn from after closely observing these successful individuals.
Newcomer’s fresh take
On average it was found that CEO’s who were hired externally as opposed to CEOs from internal promotions are twice as likely to reap above 500% growth on returns. This may be due to their “outsider’s point of view” which allows them to observe strategic decisions with greater objectivity and question company culture. This means they can overcome any organizational inertia which sometimes dictate the pace of an insider’s action plan.
Strategic decision making
Research has also uncovered that an exceptional CEO was also much more likely to conduct strategic reviews and cost cutting programs. A strategic review explores any major setbacks that could affect the performance of a company. An exceptional CEO was 60% more likely to conduct a strategic review than the average CEO. This allowed this faction of CEOs to get clear insight on the future performance of their companies and helped them to make more informed strategic decisions.
Understanding the balance within the organization
A study of CEO’s show how organizational restructuring is an essential tool for unraveling the optimum potential of a company, management reorganization can be pivotal for CEOs overseeing lower-performing companies. Research shows however that the exceptional CEOs were less likely to restructure than average CEO’s, this could be because they inherited higher performing companies which could be hurt by re-organization. It’s important to understand when such processes are necessary to gain the maximum benefits from an initiative, such as after a strategic rethink.
As we can see, there is much that an aspiring CEO can learn from the best. An outsider’s perspective can provide an unbiased and objective view into business operations, conducting strategic reviews can help gain key insight to make informative decisions and organizational balance helps regulate change within the organization. These are some key characteristics that any zealous transitioning CEO can implement to gain an edge on the competition.
August 18th | 10:30 AM