In order to develop a successful and prosperous business, having a talented leader in place is key. These individuals are the figurehead of the organisation and the person that inspires and shapes its future development. It’s crucial to get these appointments correct and not doing so could potentially lead to disastrous consequences.
Different companies, different requirements
While the business world has become much more integrated and less segmented than it historically has been, it’s still vital for organisations to have an inspirational leader. Generally, it’s very difficult to tie down what skills are required from leaders (apart from apparently being called Peter or Deborah) because many of the requirements change depending on the type of organisation in question. However, there are a number of competencies that should exist in almost every CEO or business leader.
Firstly, and perhaps obviously, the perfect CEO needs to be commercially savvy. It’s no good simply appointing someone who has all the technical expertise and an understanding of the organisation without seeing whether they can give this a wider commercial relevance. Businesses are now much more inter-connected because of the growth of the internet and other technology and this has meant their actions can have a wider knock-on effect. Any potential CEO should be evaluated for their commercial expertise and their understanding of how the company’s actions could potentially affect the wider markets.
Matched with culture
The individual also needs to be able to grasp the company culture. Euan Sutherland lasted just nine months as CEO of the Co-Op before leaving over his “impossible” role. This does beg the question – why was he hired in the first place? Any business leader who is being considered for a role should identify with the organisational culture and consider whether they’re well matched to it. The fact that he wasn’t aligned with the 170-year old style of governance at the firm suggests that this wasn’t taken into account by either the HR team or Sutherland himself, meaning he was much more likely to fail in the role, as he eventually did. No individual is bigger than a business and it’s naïve to think that a new CEO or any individual would be pivotal enough to be able to alter the existing company culture alone.
Step out of the dark ages
A factor that has perhaps grown in importance over the past decade is that the CEO has to have an understanding and a functional knowledge of technology. That’s not to say the individual has to be a Steve Jobs-type figure, but they should grasp the benefits of working with systems that can aid their organisation’s output. Technology now has a hugely instrumental role in our daily lives both at work and at home. Utilising business-specific programmes and tools can save firms huge amounts of both time and money, and CEOs should be able to recognise its value. It may be painful to admit for the more ‘old-school’ leader, but in some cases it’s better to use a computer than a human. CEOs drive the activity of the entire company and by recognising the value of technology, this can filter down and can often significantly improve business performance.
Fits the needs of the business
Finally, and perhaps most importantly, business leaders need to be selected with the needs of the organisation in mind. Professionals have different strengths and weaknesses and HR teams should try and align the needs of the business with the skill set of a potential CEO. Some firms will require assistance in leading them into a new sector, for example, which means it could be valuable to hire someone with a track record in this field. Alternatively, some will want to develop a stronger online offering and so will take on a professional with expertise in this area. It can be a huge mistake just to hire someone on the basis of their track record and skill set without first considering if they can actually benefit the business. This is where the Co-Op went wrong hiring Euan Sutherland. To use Manchester United as an example, no one doubted that David Moyes was a technically competent manager; however he wasn’t suited to the needs of the truly global club which was calling out for an iconic, Ferguson-esque leader. By not aligning what was sought after and the qualities of the person it was appointing, the club set itself back both financially and in terms of results. And by being similarly rash, businesses can potentially suffer the same fate.
Unsurprisingly, it’s not easy to identify the skills required by the perfect CEO. As well as the aforementioned factors, they’ll need to have a large network and be tapped into the market. They’ll also need to be resilient and open to criticism as well not being afraid to make unpopular changes should they be required. However, as challenging as it may be, it’s crucial to business success to make the right appointment. Failure to do so means organisations risk making the same mistake as Manchester United, The Co-Op and countless others before them.
What skills do you think are required by the perfect CEO? Let us know by commenting below.
Damian Navas, Head of Otravida Search