Korn/Ferry | Whitehead Mann Releases New Report:
Korn/Ferry | Whitehead Mann Releases New Report: Discover the DNA of Future CEOs
- Report Identifies Shortfall in Companies Succession Planning and
Complex Mix of Qualities Desirable in Future CEOs -
Results informed by interviews with more than 70 top business people, including many FTSE Chairmen and Chief Executives.
Only eight percent of respondents rated their companies succession planning as excellent. Improvements must be made in the UK following the SEC ruling in the US stipulating detailed disclosure of succession plans, and a real possibility that the UK could follow in the same vein.
Cerebral characteristics such as judgment, strategic thinking and learning agility were rated as more important that outwardly visible strengths such as drive and energy.
Report shows that confidence is a misleading quality with aggression, arrogance and egocentricity undermining, rather than leading to, success.
CEOs are made not born. Some raw materials need to be in place but the moulding of the future CEO is felt to take place early in the career with exposure to varied functions and geographies as well P&L responsibility over a number of years.
Newly formed Korn/Ferry | Whitehead Mann, part of the global talent management firm Korn/Ferry International, today launches a report that reveals the complex and challenging task of identifying future CEOs.
Discover the DNA of Future CEOs has been developed from a series of in-depth interviews with more than 70 senior business leaders in the UK and Europe. The survey base included many chairmen and chief executives of FTSE 100 and FTSE 250 companies.
With CEO tenure shrinking and shareholder expectations increasing, the report concludes that companies must have the right leader in place but as importantly, have successors in waiting in order to give themselves the greatest number of possible options.
In terms of the top drivers for potential CEOs, the report shows that 74 percent see achievement as the number one motivation. Challenge and recognition were also cited by over half the respondents. Surprisingly, power and money were only mentioned by 21 percent and 18 percent of people respectively. When asked whether they felt this was different for women and men, social responsibility increased for women from five percent to over 30 percent.
The report suggests that the vast majority of potential CEOs are cerebral, not competitive. Intelligence, courage and influencing skills were rated significantly higher than competiveness and assertiveness which hardly featured as important for potential CEOs. As Adam Crozier, CEO of Royal Mail, said: The key characteristics I look for are calmness under pressure and the ability to focus down onto whats really important.
Areas that were thought to hinder those with CEO potential from making it to the top were indecision and being a micro-manager. Arrogance and aggression were also mentioned as serious issues that can get in the way of progress for high-potential individuals.
Korn/Ferry | Whitehead Manns research shows that while the CEOs of the future may have been born with a certain amount of drive and talent, their genes alone will not take them to the top of the corporate ladder. The report argues it is critical to develop CEO potential in the right way by testing adaptability and learning agility in a variety of roles. Specifically, many interviewees talked of the need to give would-be CEOs the kind of experience that would demonstrate their capabilities, citing P&L experience as especially important.
Given that CEOs of the future are very hard to spot, it is troubling that just eight percent of CEOs and chairs felt that their companies had excellent CEO succession planning. The survey respondents were keenly aware of this issue, agreeing that boards need to take CEO succession planning more seriously. This is of particular importance with the recent SEC ruling in the US removing exemptions from detailed disclosure of CEO succession plans, enforcing transparency for all publicly listed companies. With the potential for similar legislation in the UK, it is of critical importance that UK firms tackle this board room challenge.
Lynne Nixon, Project Leader and EMEA Head of HR Centre of Excellence at Korn/Ferry | Whitehead Mann, said: We have identified that CEOs are rarely driven by money, status or power but rather by achievement, challenge and recognition. These drivers are hard to spot and need to be identified using scientific methods, developed and supported in the right way.
The impact on those organisations having to react to the departure of their CEO is all too easy to see. Against this backdrop, it is truly shocking that fewer than one in 10 of our survey base the best of British business talent felt their firms had excellent CEO succession planning. As the economy moves into a recovery phase and a greater turnover of CEOs takes place, firms that do not focus on succession will be left behind.