What Makes a Great CEO?

What Makes a Great CEO?

Leaders strive for greatness. They want to be the successful CEO who turned around the company or the person who leads the organization during its best years. They want to build a strong legacy, one that will be remembered for years to come. So, what is it that makes a great CEO? What is it that makes a good leader become a great one?

Kirsten Davidson of ERE Media, wonders the same thing about CEOs:

“CEOs are measured on everything. Company earnings, culture, leadership, employee retention, business trajectory, and so on. It’s no wonder the corporate executive role is ranked No. 7 on Forbes’ list of the 10 Most Stressful Jobs for 2016. But what leadership qualities actually make up a great CEO, and what defines great in the first place?”

According to a study by Glassdoor, What Makes a Great CEO?, there are three key elements to success. Employee satisfaction, a strong senior leadership team, and cultivating career opportunities.

“Employee opinion of the CEO can be very telling about a company, and Glassdoor data confirms there is a direct link between how employees view their CEO and how they feel about their company culture. CEOs and leaders who cultivate a strong company culture, offering career advancement opportunities for employees and management training for strong senior leaders, will typically gain more approval from their employees,” said Dr. Andrew Chamberlain, Chief Economist of Glassdoor, Inc. “And there’s no doubt about it – employees who are more satisfied are going to be more productive, impacting the bottom line.”

Study Findings

There are three key areas that help in determining what makes a great CEO. The study used a 5-point scale to measure CEOs effectiveness against:

  • Employee Satisfaction: Great CEOs have satisfied employees. A 1-star increase in overall employee satisfaction predicts a 36.9 percent improvement in CEO approval.
  • Senior Leadership: Strong leadership shows a CEO’s ability to put the right people in the right position. A 1-star improvement in senior leadership rating predicts a 37.7 percent improvement in CEO approval.
  • Career Opportunities: Providing career opportunities has a positive impact on employees view of their CEO. A 1-star improvement in satisfaction with career opportunities predicts a 3.1 percent improvement in CEO approval.
  • Company Performance: When a company is performing well and meeting its financial targets, CEOs tend to have higher approval ratings. According to the study, “a one-unit increase in company profitability predicts a statistically significant 10.2 percent increase in CEO approval ratings.”

There are also two elements that are linked to lower CEO approval ratings:

  • CEO Pay: Higher CEO compensation is linked to lower CEO approval ratings.
  • Work-Life Balance: Higher satisfaction with work-life balance is associated with a lower CEO approval rating.

Becoming a great CEO can be a balancing act. You need to balance the best interests of your organization, leadership, employees and what is best for your career.

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