There is no single, guaranteed, clearly defined path to becoming the chief executive of a large organization. But if your ambition is becoming a CEO, there are a handful of key areas you should focus on to prepare for the role.
These 4 areas of readiness can’t guarantee a board will appoint you CEO. But they can increase your chances of landing in the corner office.
CCL’s William Pasmore says the 4 areas of CEO readiness are experience, personal qualities, network depth, and the quality relationships. Pasmore — an international authority on organizational leadership — has personally worked with top executives from numerous Fortune 500 companies. He also draws on our 40-plus years of leadership research and hands-on experience developing leaders.
“These 4 areas of readiness provide a holistic and actionable way to decide if someone is ready to be CEO,” Pasmore says. “If they’re not ready, it can help them understand what personal and professional development they need.”
Let’s dig into each of these 4 areas of readiness, starting with the one that shows up on your résumé: Experience.
Though specific requirements will vary depending on the organization and the board making the CEO hiring decision, there are 3 things corporations often look for in a new CEO:
- P&L responsibility. Simply put, has the candidate had responsibility for profit and loss of a major business unit?
- A global role. With international issues playing a bigger part in nearly every organization’s strategy, many boards want executives who have experience outside their home markets.
- Functional flexibility. Finally, experience in more than one function is highly valued. Finance and operations are among the most valued areas of functional experience.
Some boards also will consider industry and company tenure, while other boards may seek a candidate from outside the company or industry to provide a new perspective.
Personal readiness encompasses a range of skills and traits, many of which don’t show up on a résumé. These are the characteristics that help determine whether someone is a “good fit” for a position, including:
- Beliefs and values. What someone thinks it means to be a good leader will vary based on personal experiences and core personality traits. But are their beliefs and values a match for the position?
- Personal skills. A CEO candidate’s comfort with being in the spotlight, public speaking skills, intelligence, and ability to think strategically are important.
- Personality characteristics. Integrity, high self-regulation, openness to new ideas, and other attributes are often considered by boards.
What personal factors will be most important vary over time and with different board members. The board is likely to consider the organization’s needs (is a turn-around effort on the horizon?), the culture (will the candidate be able to function effectively?) and even how they feel about personal interactions with a potential CEO (is this someone I’m comfortable sitting beside during a long flight?).
CEOs are expected to use their influence outside the organization they lead by interacting with key individuals. That may include the media, government officials, bankers, and other leaders in the industry.
Effective chief executives bring a network with them that can help them assess critical market conditions, influence regulatory actions, and connect the company with helpful resources. The size and quality (but especially quality) of someone’s personal network also indicates how capable they are of pulling together the right people to solve problems.
Aspiring CEOs need to develop strong networks with their current boss, direct reports, and peers inside the company. They should also seek to network with others inside and outside the industry, as well as board members. Candidates should keep in mind that professional networking relationships are formed when people can provide value to each other.
Working with others is at the heart of being a CEO, so boards often consider a candidate’s relationship readiness. CEOs should be able to maintain effective relationships — in good times and bad — with those they interact with regularly both inside and outside the organization.
Boards want CEOs who won’t drive away talented executives, who can build consensus, and who will inspire confidence. To assess this, they may ask relationship-focused questions about prospective candidates including:
- Does this candidate follow through on commitments?
- Can this prospective CEO mentor others and give tough feedback in a straightforward, respectful way?
- Are they open to being told they’re wrong? Do they listen to what others have to say?
- Are they sensitive to interpersonal dynamics related to diversity?
- Can the candidate work through conflicts productively?
Boards will often also consider how a prospective CEO has handled personal relationships. Has the candidate, for example, been able to sustain appropriate work and family balance? Insights from a candidate’s personal relationships can tell a board a lot about how someone might handle work relationships.
For more on these 4 areas of readiness and some ideas about how aspiring CEOs can better prepare themselves for a chief executive, download the white paper “Are You Ready? 4 Keys to Becoming a CEO.”