When companies go looking for a new CEO, they either turn to professional search firms or develop their best candidates within the organization. The company — often the board of directors and major shareholders — is looking for a very special individual who will not only have the capabilities to perform certain responsibilities, but will also fit the specific needs and culture of the organization the next CEO will be hired to run.
While the CEO doesn’t (and shouldn’t) operate in a vacuum, the decisions he or she makes can mean the difference between the success and failure of the organization.
In general, we find that many of the characteristics of the CEO are the same in any organization or industry, but there are some significant differences to consider for the construction industry.
Ron Magnus – head of FMI’s Center for Strategic Leadership – organizes the list of CEO responsibilities and competencies into four buckets. He states, “We focus on the four roles of a VUCA1 leader, which include: 1) alliance builder; 2) master strategist; 3) talent developer; and 4) changer leader.”
According to Magnus, “The CEO role is to assure that the culture of the company doesn’t stop good ideas. The CEO must remove obstacles and encourage ideas that capitalize on and align with the company’s purpose. The CEO must be actively involved in this process. In my experience, 90% of construction company CEOs don’t do this very well.”
While there may be a large percentage of CEOs in the industry that “don’t do this very well,” several executives interviewed by FMI agree that the CEO must “align new ideas and company strategy with the company’s purpose.” The CEO must carry the torch for the company’s culture, purpose, strategy and beliefs. Based on our research, this is as important as making money.
Some of the must-have skills and characteristics to look for when hiring or promoting a CEO include:
- Director: Set direction for the company
- Decision-maker: Make high-level, critical policy decisions
- Leader: Provide vision for the future of the organization
- Motivator: Motivate employees and shareholders
- Driver of change within the organization
- Promoter and head salesperson for the company
- Manager and facilitator of operations: Presides over the organization’s day-to-day, month-to-month, and year-to-year operations
- Advisor to the board of directors
- Communicator: Within the company and with the rest of the outside world as needed
- Visionary: Lead strategic planning efforts and oversee the plan’s execution
- Listener: Surround himself or herself with the best people for advice
- Recruiter/mentor: Select and nurture his or her successor
- Fiduciary: A CEO’s legal responsibilities to his company’s shareholders are broken down into three distinct fiduciary duties: the duty of care, the duty of loyalty, and the duty of disclosure
- Ethical leader for the organization
The list of responsibilities that a CEO must carry out is long, but FMI has discovered in its interviews that although responsibilities are important, having the skills and competencies to carry out those responsibilities is critical to the success of the CEO and the company he or she leads. In practice, it is rare to find all of those competencies in one person. That is why one of the most critical skills for a leader is the ability to understand his or her competencies and find a core group of trusted advisors and supporters to provide those competencies that the CEO doesn’t naturally exhibit.
In our upcoming blogs, we will touch on the importance of the CEO in forming a culture of success and additional characteristics of a successful CEO. We will also comment upon some characteristics of those who might not become successful CEOs.
1Note: Experiences over the last decade suggest that operating environment will become increasingly Volatile, Uncertain, Complex and Ambiguous in the years ahead – the future will be defined by VUCA.”