What Qualities a CEO Needs to Possess?

The success of a CEO is usually judged by the financial results that he or she is able to deliver. Normally, other things being equal, strong financial results, especially short-term, would be expected to drive the price of the share up and in this way the interests of the shareholders would be expected to be served. The shareholders would therefore be happy, the board would be happy and the CEO would be successful!

But even management students know that financial results can be squeezed out of organizations to the expense of its long-term interests as well as of the interests of the various stakeholders too. Organizations do not exist for increasing their shareholders value only. They exist to serve a purpose and shareholders are rewarded when this purpose is served well. Shareholder value would therefore need to be expected to flow as a result of sustainable, profitable growth this is guided exactly by a strong organizational purpose. It is therefore important that organizations serve a purpose now and in the future and if this is the case, then the main qualities that a CEO would need to possess would be those qualities that make that happen, namely integration and entrepreneurship.

Integration is about how the parts of a system can operate in an organic, compared to a mechanistic way. When a system operates in a mechanistic way, then when one of its parts fails, the whole system fails. That may be the case when an organization is bureaucratic therefore working strictly on policies, procedures and systems. When a system works in an organic way, it can flexibly adapt to situations through the actions that are taken by its constituent parts. Integration can be defined as external, meaning the integration of the organization with its environment and internal, meaning the integration of its constituent parts. When am organization is externally-integrated, it can closely follow the changes in the environment and even stimulate them. The prerequisite for this is internal integration, for only an organization the constituent parts of which work together as one can turn its energy outwards rather than consuming it internally. The CEO of the organization should therefore be the ultimate integrator, since it is this role that keeps the organization together.

Entrepreneurship is about acting today for making the dreams of tomorrow come true. It is about setting the organizational purpose of tomorrow and making it happen too! It is therefore about envisioning the customer needs of tomorrow and getting hands dirty in order to develop new products, new solutions and new markets. By definition, the CEO occupies a place in the organization which allows the best view of the horizon. He or she should therefore be the one to be able to see clearly deep into the future, to define the course and to set the pace. At the same time, he or she should make sure that the organization follows willingly and enthusiastically.

An entrepreneurial CEO would be able to sense the needs of the market and to drive the organization forward towards fulfilling them. He or she would therefore be able to identify the purpose of the organization and in this way, he or she would in turn be able to motivate towards this direction. That however requires that the CEO be a successful external and internal integrator too! Sustainable growth and profits would then just flow out of an actionable, well-defined, richly-meaningful and well-served organizational purpose that genuinely flows out of the needs of the society.