Top Three Traits of the Most Successful CEOs

George-Roberts by

For every startup and expansion stage company, the right CEO can mean the difference between a business that continues to evolve and grow — ultimately increasing the value of its exit — or falls painfully flat and fades into irrelevance.

After all, the CEO is responsible for almost every aspect of a young company’s development. They hire and cultivate the management team and play an integral role in setting the strategy, mission, vision, and values of the company.

Those are the building blocks that form the foundation of great companies. If a business is to be successful and see itself ushered to a lucrative exit, it’s ultimately the CEO’s job to helm the ship.

So what makes a good CEO?

That question obviously depends somewhat on your company’s makeup, philosophy and market. But there are a few traits that the most successful CEOs must possess.

Justin Menkes, who recently released his new book Better Under Pressure: How Great Leaders Bring Out the Best in Themselves and Others, uncovered three specific traits from his research on industry leading companies and CEOs.

Below are the three traits that Menkes thinks are most important, along with his thoughts on each one. You can read more about his research in a blog post he wrote for the Harvard Business Review.

1. Realistic optimism

Leaders with this trait possess confidence without self-delusion or irrationality. They pursue audacious goals others would typically view as impossible pipe dreams, while at the same time remaining aware of the magnitude of the challenges confronting them and the difficulties that lie ahead.

2. Subservience to purpose

Leaders with this ability see their professional goal as so profound in importance that their lives become measured in value by how much they contribute to furthering that goal. What is more, they must be pursuing a professional goal in order to feel a purpose for living.

In essence, that goal is their master and their reason for being. They do not ruminate about their purpose, because their mind finds satisfaction in its occupation with their goal. Their level of dedication to their work is a direct result of the extraordinary, remarkable importance they place on their goal.

3. Finding order in chaos

Leaders with this trait find taking on multidimensional problems invigorating, and their ability to bring clarity to quandaries that baffle others makes their contributions invaluable.

In today’s business environment, that last trait is particularly important.

According to Menkes, more than two-thirds of companies considered industry leaders in 1990 no longer existed by 2004. That’s remarkable because it shows the volatility of modern business. The most successful CEOs must be savvy, extremely committed, and realistic if they hope to navigate choppy waters and keep their companies afloat.

The good news is that if your company’s CEO is missing those traits, they can be developed and learned. But only if that education is accompanied by an intense desire to change behavior.

As Menkes points out, real leadership is recursive: it’s a continuous process that starts with the leader and is echoed in that leader’s people. Over the years, I’ve found that truth to apply regardless of the economy or business environment. People pay attention to their leader’s behavior and tend to mimic the things that are important to them.

To that point, I’m reminded of something Dov Seidman, the author of Why How We Do Anything Means Everything in Business (and in Life), said in an interview with esteemed author and Bloomberg BusinessWeek contributor Marshall Goldsmith:

“A leader is a model of behavior. A leader self-governs himself or herself by a set of principles and inspires others to do the same. A leader embraces the conditions of the new world and turns it to his or her advantage.”

Which begs the question: Are startup and expansion stage companies better off with what Fast Company cofounder Bill Taylor calls “Wartime” or “Peacetime” CEOs?

According to Taylor, Peacetime CEOs are gregarious and articulate leaders who are adept at expanding the market and reinforcing the company’s strengths. Wartime CEOs, on the other hand, thrive in fending off an imminent existential threat by demanding strict adherence and alignment to the company’s mission. They thrive in times of economic stress and unrest.

There are places for both in some circumstances (Taylor claims he was a Peacetime CEO when he founded Fast Company). But in 30 years as an executive, I have yet to witness a period of peace in the software market. So, give me the Wartime CEO.

Building off of Menkes’ points above, the most successful CEOs in the software industry need to be rational, purposeful, goal-oriented, and calm in chaos. And because very few expansion stage companies sail in calm water, they need a leader that inspires action and delivers results.

If you’re not there yet, don’t worry. There may still be time to make a change — either personally or organizationally.

George Roberts is a Partner with OpenView Venture, where he applies his executive management experience to the firm’s expansion stage portfolio. You can follow him on Twitter @GeorgeJRoberts.

  • Thanks for a great post. Maybe the “war time CEO” can develop some of the “peacetime CEO characteristics that will gain more real loyalty from his people. In today’s climate, “all or nothing” does not tend to work too well anymore.

    • Anonymous

      Dr. Ada,

      Thanks for your comments. Actually good wartime CEO’s like wartime Generals understand how to take care of and motivate their employees while they are driving the company strategy and execution.

      The difference between between the Wartime CEO and Peactime CEO in my mind is their focus on winning and willingness to make the hard decision to ensure their companies stay on top of their market space or win the new market space they are attacking.

      CEO’s like Larry Ellison, Marc Benioff and Steve Job’s all have found a way to build great companies that are at the top of their markets and still attract and manage great teams of people.

      All the best!

      G

  • Thanks for a great post. Maybe the “war time CEO” can develop some of the “peacetime CEO characteristics that will gain more real loyalty from his people. In today’s climate, “all or nothing” does not tend to work too well anymore.

    • 1GeorgeRoberts2

      Dr. Ada,

      Thanks for your comments. Actually good wartime CEO’s like wartime Generals understand how to take care of and motivate their employees while they are driving the company strategy and execution.

      The difference between between the Wartime CEO and Peactime CEO in my mind is their focus on winning and willingness to make the hard decision to ensure their companies stay on top of their market space or win the new market space they are attacking.

      CEO’s like Larry Ellison, Marc Benioff and Steve Job’s all have found a way to build great companies that are at the top of their markets and still attract and manage great teams of people.

      All the best!

      G