Desperately seeking a C.E.O.—or other top executive? Ask hard questions to measure candidates’ soft qualities.
Everyone knows the right leaders can make or break a company. And no one wants to fire a chief executive and search for another. So why have one-third of Fortune 100 companies replaced their C.E.O.s since 1995? And why are chief executives appointed after 1985 three times more likely to be fired than those appointed before 1985?
Hypercompetition, market volatility, and billion-dollar mergers all worsen C.E.O. churning. But the underlying culprit is the self-defeating way boards select leaders. They pick the wrong people because they don’t understand what real leadership is—or how to find it.
Most boards—and many others hiring top-level managers—look for quantifiable evidence of candidates’ abilities: soaring stock price, slashed expenses, marketing wizardry. But real leadership is more nebulous: It’s the ability to move human hearts—to enlist and energize dedicated followers and create other leaders in the process; to provide meaning, trust, and values.
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