This piece was cowritten with Ben Dattner and Anne C. Mitchell.
There are many reasons why people and organizations might endeavor to “profile” a CEO from afar. Whether you are an investor considering buying a stake in a company, a counterparty contemplating a deal, or a job seeker deciding on a job offer, being able to evaluate the CEO’s competence, personality, decision-making style, and overall leadership ability can help inform whether you should buy the stock, make the deal, or take the job. Although the science of leadership assessment is well-established, it is obviously more challenging to evaluate candidates without putting them through a well-designed assessment, though this is still routinely done by the CIA to profile world leaders and inform military and diplomatic policy. In fact, while the reliability and validity of the “profiles” that expert assessors can provide suggest the process is more art than science, there is still value in having a consistent and considered set of “questions” to ask when trying to profile a leader from afar. In line, here are five key questions you may want to ask (and answer) if you want to decode the profile of CEOs without being able to rely on automated tools or assessments:
Which life experiences or events influenced who they are, what they think, and what they do?
Early life experiences almost always have a formative effect on a leader’s character and personality. Biographical information is often available for leaders of large, global organizations, and profiles in the press often mention how a CEO’s parents, siblings, teachers, community and culture helped inform what he or she values or abhors, and what he or she finds important or irrelevant. One CEO may have been taught by a parent that hard work and persistence pay off, while another might have learned by witnessing the failure of a family business that at times you have to “know when to fold ‘em” and just move on. An example of a CEO who was resilient in the face of challenge is Indra Nooyi, the CEO of PepsiCo, who has described how her mother instilled confidence in her when she was a child. This healthy degree of confidence enabled her to rise to the top of corporate America, and to successfully prepare for and meet the challenge of an activist investor once she got there. Note, however, that as with any other exceptional achievers, her confidence was beneficial only because it was coupled with similar levels of talent and hard work.
What is their “mission” in life, e.g. what drives them and their careers?
Everyone is cast as the lead in his or her personal psychodrama and is on one or more “meaning quests” in life and work. CEOs often give clues during interviews, or in books or articles they write themselves, about what drives, energizes and motivates them. Some CEOs are driven by feeling like being an outsider, needing to prove their personal worth, wanting to challenge the status quo, or simply enjoying beating the competition or disrupting established industries. Other CEOs want to help others, amass wealth primarily in order to be able to give it away, and pick a cause to support such as health, the arts, the environment, or education. Some highly successful leaders, like Bill Gates, transition from one mission to another over time. If you are a job seeker, it’s important to work in a company lead by a CEO whose mission you understand and embrace, and to consider the likely duration of his or her tenure in the top job. CEOs values will shape the culture of their organizations, so what CEOs want will determine the environment in which you work, including what gets rewarded and sanctioned, and what strategic direction the organization embarks on.
How do they identify themselves and want to be seen by others?
Clues to a leader’s self-identity can be very helpful in understanding what he or she does or not, and predicting what he or she might or might not do in the future. For example, a leader who identifies as being irreverent, skeptical and a “maverick” may not always do what is in his or her economic interest, and may react impulsively and counterproductively to influence attempts by shareholders or activist investors, and may not be adept at making beneficial deals with counterparties. If the CEO’s identity is based on leading an organization, he or she may be reluctant to sell or merge the company, even if doing so makes economic sense. Some CEOs want to see themselves as bold risk-takers, while others identify as protecting their companies and stakeholders from unnecessary risk and uncertainty. It’s often easy to see over the course of a television interview what a leader is proud of, and this pride can provide important clues as to what matters to, and motivates, the CEO.
Which challenges, activities and outcomes do they find to be very easy, or very hard?
Some CEOs enjoy being in the public eye and on television, welcome the opportunity to be involved in drama, and accept any media invitation they receive. Other CEOs can’t wait to get back to their offices and get back to work, and try to stay out of the limelight. A CEO who likes to be involved in drama, change and challenge may not enjoy the daily grind of making incremental improvements to a business, and vice versa. Some CEOs treat failure as a positive opportunity to learn and grow, while others have more negative dysfunctional reactions to failure.
How open are they to feedback and how likely are they to admit their mistakes?
Taking responsibility to errors and bad company performance is hard for any CEO. However, those who do so are likely to build trust over the long term even though they might pay a short-term price for taking responsibility. In 2011, Reid Hastings took full accountability for mistakes Netflix made in trying to separate its DVD and streaming businesses while simultaneously raising prices. Doing so built credibility with investors, who in turn supported Hastings’ efforts to turn the company around, which were ultimately highly successful.
In short, asking these questions provides a consistent framework for trying to understand why CEOs act the way they do, and to predict what they might do in the future. This methodology can generate testable hypotheses, and any theory of who the CEO is and what he or she will do in various situations can and should be refined over time. While people are complex creatures and behavior is often affected by a range of unforeseeable situational forces, it is also true that human beings are creatures of habit. Paying attention to what CEOs do can enable you to understand their underlying motives and predict their future behaviors.
Ben Dattner is an executive coach and organizational development consultant and the founder of New York City-based Dattner Consulting, LLC.
Anne C. Mitchell is a Boston-based executive coach and consultant. A former venture capitalist, she now advises entrepreneurs, investors and start-ups.
