CEOs Reveal What Makes a Successful Leader

Running a company isn’t an easy job. Just 60% of all CEOs live up to performance expectations in their first 18 months on the job.

But what is it about the other 40% that make them stand out? What do they do that lets them transform a company from an average one to a top-tier performer?

A typical CEO controls 45% of a company’s total performance, meaning whoever sits in the top office has to not only be nimble and able to react quickly to changes, but also must have the foresight to see trends on the horizon and be able to capitalize on them faster than ever.

McKinsey, which has spoken with hundreds of CEOs and reviewed the data performance of ten-fold as many, has broken down some of the key qualities of a successful leader. Here’s what they say are essential qualities that make a business leader more likely to succeed.

The first hurdle is beating the odds. To do this, successful CEOs will reframe the definition of success, reallocate resources and make bold moves early in their tenure. That might be intimidating, and admittedly can have negative results, but it greatly increases the chance that your company’s stature will improve.

“Making one or two bold moves more than doubles the likelihood of rising from the middle quintiles of economic profit to the top quintile,” says McKensey. “Making three or more bold moves makes such a rise six times more likely.”

You’ll also want to ensure your company is at optimal alignment. This might mean moving people around to ensure the best talent are in the roles that create the most value—and could mean cutting low performers. At the same time, make sure the company is agile enough to adapt to new challenges and technological opportunities.

A deep look at the company’s culture is also essential. CEOs that rigorously measure and manage a company’s cultural elements, triple the shareholder returns of most companies, McKinsey says.

If that’s wide ranging, focus on the one aspect that makes the biggest difference to the company’s performance.

Ensure that your management team is moving in a unified direction. And work hard to keep bias out of decision making. Recognize when you’re in a situation where one group could be overlooking others. The best way to do that is to have a diverse team that can listen to each other.

Ensure that any member of the team can succeed, but be objective enough to know when they’re not.

As CEO, you’ll have to work with your company’s board, so establish good relationships with the members and set a tone of transparency to build trust. Learn how each member can guide the business and work with them both individually and as a group. There are times you’ll have to follow their advice and others you’ll have to resist it. Both can be good calls.

In the midst of all this, you’ll have to regularly articulate your vision for the big picture—or the future. Interact with stakeholders and investors to keep them up to date on progress and have a crisis response ready in case things go wrong.

Finally, be aware of your own energy levels, taking time off when necessary and understanding that the goals you set might take a while to achieve. Watch for the trappings of the office and remember that as the leader of the company, things you say can be amplified to a level you didn’t intend.

“The best CEOs form a small group of trusted colleagues to provide unfiltered advice—including the kind that sometimes hasn’t even been asked for,” McKinsey says.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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