What Makes a CEO Successful?

In our previous article “The Five Types of Luxury Consumers”, we broke down the different customer profiles in the luxury industry. Analyzing the traits of each consumer type, we highlighted the importance that businesses be aware of such characteristics, so to win the competitive battle of business. However, knowing the target audience is only half the battle in the absence of a skilful team to process this information and thus leverage on it. Indeed, a strong team is another significant component of a successful business. One, that boils down to a competent leader, able to coordinate and organise effectively. So, which characteristics compose such a leading figure? This is the million-dollar question we will be inspecting today inspired by research conducted over ten years as part of ghSmart’s CEO Genome Project.

There seem to be many ways accomplished CEOs around the world climb up the ladder. François-Henry Bennahmias began as a professional golf player before becoming the president of Swiss luxury watch manufacturer Audemars Piguet. Bocconi’s own Federico Marchetti, the founder of YOOX, turned a startup into a 2.1-billion-dollar company over just a few decades. Sotirios Bulgaris began his career as a jeweller in his hometown of Paramythia, Greece, before growing the Bulgari empire, now owned by LVMH.

When examining the lives of such successful executives, one often traces background or personality characteristics, such as an Ivy League education or extraordinary confidence, to what makes a CEO successful. Nevertheless, these qualities are not necessarily linked to successful performances. For instance, even though boards tend to hire extroverts, in the long run, introverts seem to outperform extroverts. Taking a closer look, however, one stumbles over certain shared characteristics which, may vary slightly from individual to individual yet, fundamentally stay the same.

The first distinctive trait consists of deciding with speed and conviction. Time is crucial when it comes to decision making, and usually, a wrong decision is better than no decision at all. A good CEO must always take the lead and pave the way for each step in the future. In most cases, mistakes will be made, and related consequences will be faced. However, these can be overpassed when the same leader retains control, motivates the team, and coordinates due solutions. When no decision is made, the associates lose their faith feeling the lack of decisiveness. In other words, they realize that without a captain to lead the ship, it will soon sink. However, when employees know that even in the most challenging times, they have a captain that goes down with the ship, they feel motivated to give it their all.

To be such a trustworthy leader, in charge of the ship, one must be fully aware of their position and, most importantly, follow a bottom-up, instead of a top-down, approach in everyday life. This means noteworthy leaders reach the top after experiencing every other job position in a business. This way, they are fully aware of the responsibilities, effort, and complications related to each of these positions. Then, after having the invaluable asset of their personal experience, they can organise their associates most effectively, earn their respect, but also avoid being deceived. In this process, they also engage with all the different stakeholders, obtaining experiential knowledge about them. Decoding the stakeholders’ behaviours and habits, these future leaders understand their needs and motivations, so that later, at executive positions, they can talk and relate to them having genuine influence.

Another trait that great leaders share is adaptability. In today’s society which is continuously changing, CEOs, as well as businesses, must be able to adapt to any possible change quickly and effectively. The aforementioned characteristic is, therefore, one of the keys for a leader’s success, who has to be able to deal with any situation, improvising if necessary. Particularly, outstanding, and adaptable CEOs tend to focus on the long run, which enables them to catch early signals, using them to make smart moves, increase productivity or deter future errors. Following this line of reasoning, top CEOs also know how to deliver consistently. As soon as they are hired, they start at a slow pace taking time to go through budgets and projects or getting to know the stakeholders; meanwhile, they quickly develop their ideas and orientation for the business. Rather than establishing overly impressive plans with short term results, most of the time, they opt for steady and long-term growth taking calculated risks.

Finally, appraised executives share the trait of being good listeners. As Maureen Chiquet, ex CEO of Chanel, expressed in an interview, the greatest piece of advice she was ever given was to learn how to listen. Reminiscing about her early career when she worked at Gap as a merchant in women’s denim, she recounts:

A year into this job, I came up with what I thought was a terrific style: a stovepipe jean, with a wider leg, in a great new wash. Both research and instinct told me the product could be huge. So, when our CEO, Mickey Drexler, called one day and asked if I could present my idea, I felt ready and pretty proud. The marketing chief loved the samples. But Mickey was not so sure. “Why wouldn’t we use that same wash,” he asked, “With Classic Fit jeans instead?” Now, I was a very confident young merchant, and instead of acquiescing, I began to argue my agenda, offering all kinds of reasons why that wash and style belonged together. Mickey kept asking questions, getting louder and progressively angrier. Finally, I shut up and slunk back to my office, wondering if I’d lost my job for talking back to one of the most prominent retail executives in the country. A few minutes afterwards, however, he called. “Maureen!” he bellowed, “I’m going to give you some important advice. You’re a terrific merchant. But you’ve gotta learn to listen!”