Leadership development plans should include opportunities unique to a specific leadership role’s requirements and address competencies relating to risk factors. Identifying companies good at developing leaders is an old research topic, but competitive rankings don’t offer insight into what causes success and failure. Chally, in partnership with Chief Executive magazine, researchers and analysts from management associations, universities and talent management firms globally, surveyed CEOs and senior HR leaders at more than 1,000 companies on six continents to gather data in 2010, 2011 and 2012. The annual revenue of companies represented ranged from more than $10 billion to less than $25 million; they varied in size and participants from less than 500 employees to more than 100,000. This is the first of a series of postings outlining the findings of the ongoing Global Leadership Research.
Where Leaders Come From
Chally’s research revealed that leaders evolve from a variety of backgrounds, experiences and jobs. Determining which functions were most likely to produce C-level executives was of particular significance in this study, as researchers hypothesized this would reveal much about leadership practices and development. When asked to identify the functional areas most likely to produce C-level executives, 68 percent of participants in 2011 chose operations, followed by finance — 56 percent — and sales — 49 percent. Specialized functions such as marketing, human resources, engineering, IT, and research and development were equally less likely to provide a career path to the top. While leadership is often thought of as a singular capability, the study indicates clear differences in what competencies are necessary in each leadership role. According to respondents, capabilities most critical for the chief executive officer are different from those needed by other C-level personnel. Both CEOs and human resources leaders indicated creating a strategic vision, inspiring others and maintaining leadership responsibility, developing an accurate and comprehensive overview of the business, and decision making were key competencies for CEOs. Competencies that respondents considered most critical for other C-level roles varied.
While 91.7 percent of respondents saw creating a strategic vision as the most critical competency of a CEO, this did not register as critical for any other C-level position. Further, the next most important competency for a CEO — inspiring others and maintaining leadership responsibility — did not register in the top four competencies required of chief operating officers or chief financial officers, which the study indicated is the typical training ground for CEOs. The only competency viewed as essential for CEOs, COOs and CFOs alike was developing an accurate and comprehensive overview of the business. The fact that such little overlap exists between the competencies required of the CEO and other C-level positions may indicate that experience in other functional roles does not necessarily prepare one for the CEO role.