There is no single, guaranteed, clearly defined path to becoming the chief executive of a large organization, and an impressive track record alone is not enough.
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 learning how to become a CEO and landing in the corner office.
“The CEO job is not just another senior leadership role. It is fundamentally different,” says Bill Pasmore, a CCL vice president and organizational practice leader, who has been working with ith top executives and board members from numerous Fortune 500 companies to improve the way companies prepare potential CEO successors.
He notes that it’s important to understand the 4 key areas of growth towards becoming a CEO:
- personal preparedness,
- network depth, and
- relationship quality.
“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, and know how to become a CEO for a new organization.
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 turnaround 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 leaders learning how to become a CEO 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. When learning how to become a CEO, leaders should work on maintaining 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.
These considerations are among the most important competencies for function leaders, and are even more important if you want to become a CEO.
3 Additional Tips to Help You Become a CEO
So as you can see, an impressive track record is not enough to prepare you to become CEO.
“The CEO job is not just another senior leadership role. It is fundamentally different,” notes Pasmore. “Many CEOs put it this way: Until you actually become the person in the corner office, you can’t imagine what the job is really like,” Pasmore explains.
This is the crux of the challenge to prepare CEO candidates — and maybe a clue as to why almost half of all CEOs fail and companies struggle with short-tenured chief executives.
He also says potential CEO candidates should seek out CEO-caliber experiences before they need it. He offers 3 tips that will make you a better senior leader, strengthen you as a CEO candidate and serve you well if you get the nod:
- Stop doing more of the same. Staying in your current role longer isn’t the key to readiness. Nor is round after round of career moves that build on what you already do well. Honestly assess your weak spots, identify skills you need and seek out challenges or roles that fill those gaps. If you need strategic planning experience, step up to lead the company’s scenario planning efforts. If you need more international experience, lobby to lead the company’s entry into a new geographic market. Note that you need to learn and lead as you go — the ability to succeed in unfamiliar territory is an essential CEO skill.
- Learn to take a direct hit. Until you are CEO, you have someone else to absorb some of the shock of a poor strategic decision or an operational problem. For CEOs, the shock absorber is gone. No one else can share the blame for poor performance. To get a sense of this, make sure you are taking personal responsibility for key, high-profile initiatives. Can you own the work without micromanaging it? Can you take the hits rather than looking for cover?
- Learn how to work with a board of directors. Few CEO candidates understand board dynamics, so start learning now by taking leadership roles on boards of local nonprofits. Ask your boss or mentor to help you gain a corporate board post where you can use your expertise, but also gain new experience and perspectives. And if you are on the short list of potential CEOs for your company, find ways to get to know individual board members: work with them on committee projects, play host when they visit your site, join them on trips to other company locations, ask for a walk-through of their own business. Understanding different board members’ experiences, perspectives and personalities will give you insight into the demands facing the CEO.
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