Leadership Characteristics of Highly Effective CEOs

When a leading research team began tracking results of privately held industry companies, a great deal of data was collected, analyzed, and compared. They began to look for patterns of performance over an extended period of time. Through a strict process, they made a stunning discovery.

A select group of companies outperformed the rest of the industry by a significant margin in key metrics including organic sales growth, value-added and profitability. And they did so consistently over more than ten years.

These leading companies were not a particular size in terms of sales volume or head count. They weren’t located in one area of the country nor were they concentrated in one type of product or service specialization. What then is the common thread that enabled these businesses to perform at such a high level, consistently and for so many years?

To answer this question, a comprehensive research project was undertaken with a special focus on the leadership characteristics of the CEOs of these high-performing companies. While this study was conducted as part of a doctoral dissertation, it became far more than an academic exercise.

The baseline comparative was based on James McGregor Burns’ theory of leadership which is centered around three distinct leadership styles: Transformative, Transactional and Passive-Avoidant (L’aissez-Faire). A brief description of each style follows.

Passive-Avoidant is considered the least effective style of leadership, evidenced by leaders who interact with their reports only when there is an obvious problem or serious issue/mistake. It focuses on punitive, even embarrassing measures as corrective action.

Transactional leadership can be an effective style but in a somewhat limited way. It assumes that leadership is based on a quid pro quo; that is, people work for remuneration and should expect nothing more. The working relationship is based on the idea that work is done, and there is an exchange of consideration in the form of compensation. Simple and straight forward.

Transformational leadership is considered as effective as it is rare. This style of leadership is focused on getting organizational results by maximizing the potential and unique ability of every team member. The leader is seen as a facilitator, educator, coach and mentor. Team members working with a transformational leader report high levels of personal and professional satisfaction and tend to contribute to significant organizational success in ways that are specific, measurable and reflective of their individual contribution.

The construct of the study included use of three survey instruments and in-depth interviews. Here’s what we learned.

Every one of the CEOs participating in the study rated their leadership style as transformative. Not a surprise; these are confident, self-aware individuals. However, what we did not expect to find is that in every case, the direct report groups (the CEO’s management team) also rated their CEO’s leadership style as transformative.

Is it coincidence that where there is a transformative style of leadership (recognized by the CEO and by their direct reports), organizational performance significantly exceeds that of industry norms and over an extended period of time? If not, what are the specific behavioral traits, beliefs, and characteristics of these transformative leaders? Can they be taught, learned, practiced, and improved by anyone willing to better understand and improve their own leadership behaviors/style?

For more information the traits identified and how they can be applied in your organization, contact me at joe@ajstrategy.com