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The Top 5 CEO Leadership Skills

Learn the five foundational CEO leadership skills needed for success, including tips for both aspiring CEOs and those in charge of selecting the next CEO.

Publish Date: January 19, 2022

Read Time: 12 min

Author: Andrew Gill

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What are the top CEO leadership skills needed for success? How can these skills be developed? And what do these top skills mean for CEO selection? I’ll answer these questions in this blog.

But first, let’s take a step back to understand why CEOs failed 20 years ago. And why 20 years later, much that’s written about the skills that make a CEO effective is still not targeting the critical building blocks of CEO leadership success.

Why CEOs Failed 20 Years Ago

In the excellent 1999 Fortune article, “Why CEOs Fail” Charan and Colvin told us CEOs failed not because of lack of strategies, but their inability to get their organizations to execute on those strategies.

That failure to execute was driven by:

  • Poor talent management. Specifically, the inability to put the right people in the right jobs and holding onto poor performers too long.
  • Decision and process gridlock. This leads to execution delays, missed market opportunities, frustrated employees, and loss of customers.
  • Lack of change energy, focus, and tenacity. This results in needed changes not happening quickly enough.
  • Narrow perspective. This comes as a result of having limited data/input, rejecting information that does not fit with their view of the world, and avoiding market reality.
  • Diffused energy. This can come about due to the CEO having multiple interests and activities that are not core parts of their role.

20 Years Later: How Does This Hold Up?

In the current literature, critical CEO leadership skills are either:

  • A laundry list that does not identify or prioritize the core or foundational skills that, if absent, will severely limit a CEO’s effectiveness.
  • A research list defining the handful of critical CEO leadership skills that drive success. While, on the surface, the “research” is appealing, it is often limited to examples that support their conclusions and ignore those that don’t. There are research and longitudinal studies that are the positive exceptions to this. (Check out the HBR article, “What Sets Successful CEOs Apart.”) But even these don’t distinguish between the foundational i.e., critical skill-building blocks, and the derivative leadership skills i.e., those that develop from or build on the foundational skills.

Effective CEO skills profiles are built on five foundational CEO leadership skills. Without these, CEOs will struggle to be effective and most likely fail themselves, the role, and the organization. These skills are a combination of behaviors and mindset. And people who effectively demonstrate these skills have developed both.

5 Foundational CEO Leadership Skills

The five foundational CEO leadership skills and their consequences are:

1. Self-Awareness

“Be yourself, everyone else is taken,”— Oscar Wilde.

Many of the CEO leadership skills lists include “authenticity” but not “self-awareness.” The problem with selecting CEOs for authenticity without self-awareness is that the CEO will demonstrate “authentic” behavior that does not consider (or even care about) the impact on others.

For example, a CEO who is known for “telling it like it is” can also be seen as not listening and talking over people. So, at a minimum, this results in poor leadership. But more often it results in significant derailing behaviors such as arrogance, impulsiveness, attention-seeking, and more.

Selecting for self-awareness is about identifying CEOs who:

  • Know who they are (strengths and limitations), have
  • Accepted who they are (taken ownership of their strengths and limitations), and have
  • Acted to leverage their strengths and improve/better manage their limitations.

When self-awareness leads to authenticity, it encourages the person to work to be a better version of themselves. Truly, self-aware CEOs:

  • Admit they don’t have all the answers so they seek broad and diverse perspectives, and are open to new ideas.
  • Surround themselves with talented people and effectively leverage that talent.
  • Have confidence in themselves and don’t feel the need to defend who they are.
  • Have a stronger learning orientation. They are also more open to feedback and are willing to act on that feedback.

Note: Beware of the executive who is false self-aware. For example, this is the executive who admits their limitations and even encourages feedback; but then spends their time rationalizing away criticism, defending who they are, and, again, continuing to embrace their dysfunctional behavior as a reflection of their “authenticity.”

2. Pausing

“Always in a hurry does not prevent death and neither does going slow prevent living.”— Ibo Proverb

This is not a skill I hear you say. Pausing is easy. If it is, then why do so many CEOs and other executives struggle with this? Deliberately pausing before responding has so many benefits. It facilitates:

  • Listening: When the CEO fully listens, they can “hear” both the content and feelings associated with what is being said—and in some cases the agenda or intentions behind the words.
  • Responding: Pausing before responding provides time for the CEO to consider how they want to respond. Doing this increases the chance their response will be more targeted and will resonate with their audience.
  • Acting vs. reacting (especially when under stress): When a CEO reacts inappropriately or prematurely to what is being shared, most likely their emotions have hijacked their response. This is a concept noted in Adele Lynn’s book the EQ Difference. They can’t take that reaction back—no matter how much they may later regret it. This “reaction” can damage a CEO’s reputation and, over time even cost them their career. Pausing lets the CEO’s rational side catch up to their emotions and enables them to act rather than react.

Also, successful CEOs pause to reflect on their actions and related reactions from others. They do this as a reality check. This is not about looking in the mirror to praise (a concept Jim Collins outlines in Good to Great) or about wallowing in self-criticism or judgment (a concept Shirzad Chamine outlines in Positive Intelligence).

It’s about building self-awareness, so they can continue to learn and evolve. For example, CEOs should be asking themselves, “What should I keep doing and why?” And, “What could I have done more or less of and why would that be more effective?”

3. Empathy

Our Global Leadership Forecast research continues to validate that empathy is the most powerful relationship skill available to a CEO—or any leader.

Empathy occurs:

  • Internally: Linked to listening, it is the ability to understand other people’s perspectives. This includes recognizing how others feel about issues. Empathy enables a CEO to understand the impact of words, changes, or actions from another person’s perspective.
  • Externally: The outward expression of empathy acknowledges people’s feelings, concerns, excitement, etc. in a non-judgmental way. It helps others feel recognized and “heard.” Additionally, it is a key component of any relationship skill and impacts a CEO’s ability to lead, motivate, inspire, build trust, network, and influence others.

Note that these first three skills (Self-Awareness, Pausing, and Empathy) are foundational to effective emotional intelligence, and all relationship and leadership skills.

4. Seeking

The fact that successful CEOs are obsessed with data is a given. What is less apparent is the frequency with which they consistently use seeking behavior to drive understanding and engage others to take action.

Successful CEOs are always:

  • Seeking hard data: No surprises here. CEOs leverage the relevant “facts and figures” to determine needed decisions and actions. This includes questions to clarify content and context; digging down into the layers to check details and accuracy. Creating the data tension that helps drive action.
  • Seeking perspective: To take action on the hard data, CEOs seek others’ perspectives. They question to increase understanding and focus solutions by getting to the “why” behind the data. They challenge others to get ideas and options that address problems and capitalize on opportunities.

CEOs that actively seek are more likely to keep an open mind. They leverage experience, but don’t narrow their options to past solutions that miss critical differences in the current situation.

5. Decisiveness

Being decisive is seen as critical in almost every article, study, or blog regarding CEO or executive leadership skills. Some authors will even say it’s better to be decisive and wrong than to make no decision. Whether or not that is true, decisiveness and seeking are the foundation for timely decision making and action.

Here are some considerations for CEOs when it comes to making decisions:

  • There is no "right" answer. Most of the time the option before a CEO is whether to act or not act. To take advantage of opportunities or address underlying issues CEOs often don’t have time to wait for the “right answer.” To capitalize on the circumstances, they must make a decision based on the limited data and perspectives they have. They know a lack of decisive action will stall forward movement and eventually erode confidence in their ability to lead.
  • Consensus is not an option. Collaboration is useful to gain perspective and build support for an idea. But successful CEOs know that trying to gain consensus is a slow and frustrating exercise that will result in the eventual solution being so watered down it fails to deliver.

Seeking and decisiveness are two skills foundational to the CEO’s ability to develop strategy, make decisions, and take action.

A Note About Adaptability

Nearly every CEO interviewed across much of the research highlighted adaptability as one of, if not, the most critical skill. However, adaptability is not a skill. Adaptability results from having the needed mindset and related skills—along with access to the knowledge and experiences relevant to the specific situation and demands.

For a CEO to demonstrate adaptability, foundational leadership skills are a critical component. They enable flexibility and the confidence to make decisions. Without them, a CEO will struggle with the constantly changing demands and react, rather than adapt.

What Does This Mean for Aspiring CEOs?

These five foundational skills take time to develop. For some people, they emerge out of their teenage years with a few of the foundational skills in place. Many, however, develop bad habits that work against these skills. They need to break these bad habits (a concept from Marshall Goldsmith’s book What Got You Here Won’t Get You There) and consciously develop new habits that demonstrate the foundational skills.

Intellectually this is easy; converting that understanding to consistent action and behavior—especially when under pressure—is hard. CEOs need to develop foundational leadership skill habits the same way athletes develop muscle memory. They should aim to make these positive skill habits unconsciously and automatically the way they do things.

8 Aspects of Self-Insight for Aspiring CEOs

Therefore, if you aspire to be a CEO, work on these aspects of self-insight:

  • Take assessments. Assessments help to build self-insight on skills and mindset (personality).
  • Seek feedback. Consider both formal and informal feedback, not justification, and thank people for it. But most critically, act on it.
  • Reflect on the impact of your words and actions. Think particularly about how others react to you—and adjust your approach.
  • Conduct project and solution retrospectives. Do this to identify what worked and what you could do differently. And note any trends.
  • Build your “cabinet” of advisors. These are people you trust to “hold up the mirror” and who can provide insight and guidance.
  • Learn to "let it go." When you identify a bad habit associated with one of the foundational skills—consciously have your Frozen moment and “let it go.” Replace it with a “good” habit (behavior and/or words) and find ways to reinforce that.
  • Take foundational leadership skills training (as needed) and apply it. Set three-month goals and, to add learning tensions, let everyone know you are doing that.
  • Surround yourself with people who have these foundational skills. Watch what they do, adapt it to your leadership style, and apply.

In Conclusion:

What Does This Mean for Selecting CEOs?

Bottom line, “grow from within” CEO succession strategies are preferable to external hires.

Growing from within enables organizations, over time, to observe and evaluate potential CEO successors’ typical behavior related to the five foundational CEO leadership skills. Objective behavior and personality evaluations should also be conducted to gain independent perspective and balance out any “halo” or “horns” effect.

In addition, time and focus provide the opportunity to develop or improve these skills, and demonstrate whether the person is willing to address any limitations, i.e., they can drop any bad habits and work to develop more positive habits related to these skills.

If an organization sees no clear internal successors, a robust selection system that includes the evaluation of the five foundational skills should be used to hire external talent into senior roles. And this should be done at least two years before the CEO plans to leave. As with internal CEO candidates, this provides the opportunity to observe and evaluate the external hires’ behavior and their willingness to develop or improve their skills.

As I highlighted in a previous blog, relying primarily on past performance to hire an external candidate for the CEO role is a potential trap. Hiring organizations need to ensure the person has the foundational leadership skills and other capabilities needed for their organization, its culture, and its challenges.

Learn about DDI’s C-suite services.

Andrew Gill is an executive consultant and former US Vice President of Consulting and Delivery for DDI. His work passion is assessing, coaching, and challenging executives to evolve their mindset and get the most out of their development. Andrew enjoys good food, craft brews and distilleries, science fiction, and anything to do with the ocean. One of his personal goals is to walk as much as he can every day.

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