Author Talks: What separates the best CEOs from the rest?

Scott Keller: When we actually looked at the list, there was something that dawned on us. If we asked you, “Who’s the greatest athlete of all time?” you’d probably get Michael Jordan, Serena Williams, Tom Brady, Usain Bolt—these are iconic names that almost everyone could retrieve. If you did the analytics on who is the greatest athlete of all time, you probably get someone called Ashton Eaton. Most people haven’t heard of Ashton Eaton.

Ashton Eaton retired in 2017 as the decathlon world record holder. He set the record three times in the decathlon during his career. He won four world championships. If you go all the way back to Jim Thorpe, and you think about the decathlon itself, when Jim Thorpe won in 1912, the king of Sweden said, “Sir, you are the greatest athlete in the world.”

You have someone who in 2017 has eclipsed all the records, but no one’s heard of him. Why is that? He’s not actually the best at any one event. He’s really good. I think he was the 14th-best long jumper. He was among the 100 fastest people. But he wasn’t number one. When we looked at our list of names, there were, quite frankly, some names that we were loosely aware of, but they just weren’t the iconic names that you think of, the Jeff Bezoses, the Zuckerbergs, the Musks, the founder-led CEOs.

So there’s an element of celebrity that people gravitate to. Analytically, we were kind of excited to be able to tell the story of a whole block of amazing Ashton Eaton types. Often, the big names have already written the books, and that’s available out there. There was also a little bit of, how can we make the wisdom of this group of decathletes available, rather than just the sprinter who’s been the best in the world, whose name we all know?

Vik Malhotra: There was clearly a view expressed by a number of [CEOs] that’s, “We came into this role.” They certainly had to figure it out on their own. They typically would lean on the former CEO for advice. They’d lean on a few board members. Maybe they have an external counselor, a banker, a consultant that they get some input from. They might have other privileged relationships that they get some input from.

They may have gone out on a bit of a listening tour to two or three other CEOs, but they were essentially making up the playbook. Many of them got it right, by the way. Many CEOs did amazing things in their first year. They were bold in their vision. They went out with exciting direction. They pushed the organization in interesting and remarkable ways. But they didn’t have a playbook.

There was clearly a thirst for, “I would’ve loved to have seen something like this. So to the extent I can contribute to it, absolutely.” I do think that they’ve all got a great story to tell and they were eager to tell it, and everyone’s a little bit different. So it was our job to find the commonalities. But every story and every one of these 67 stories was unique. There were different things that worked well for one CEO versus another.

Carolyn Dewar: Absolutely. I also think they enjoyed it themselves. A number of CEOs don’t have a chance to catch their breath. You could see the wheels turning, that maybe they hadn’t had time to sit down and say, “Well, what have I done?” and “What were the lessons learned?” I think it was energizing as well as imparting wisdom.

Scott Keller: I thought it was amazing how, when we went out for endorsements afterward virtually, one of the lines in the endorsement was, “I wish I had this book when I took on the role.” Even Greg Case of Aon, when he heard about what we were trying to do and we were proposing doing the interview, said, “Wow. Systematic pattern recognition over a period of time from people who have done this successfully? That doesn’t exist, and that would be really helpful. Gee, I wish I had that back in 2005 when I took the company over.”

Be bold

Two of five CEOs fail in three years. How can this book help?

Scott Keller: We had a group of 20 CEOs together earlier today as part of a workshop. You look around and just the statistics would say that among that group, eight of them are probably to be considered failing when we get to that three-year mark. The CEO role, hard as it is, it’s commensurately high impact in the world. About 70 million people report to CEOs.

If you look at the 200 people we identified—we did the math on it—during their tenure, they created five trillion more dollars of value than their peers, $5 trillion. That’s the GDP of Japan, and that’s the third-largest economy. If you think about just contribution to economies, contribution to GDP societies, it’s an important role. Then you add to that all of the social, environmental aspects that are under the remit of these large companies, and you say, “If we can do anything to help move that needle from two out of five to even 1.5 out of five, that’s great for society. That’s great for humanity as a whole.” Our hope is that it does make a dent. How much of a dent? Who knows? But any dent it makes is well worth having put the time in.

Carolyn Dewar: A huge part of the CEO role now is external. Setting your strategy, running your organization, and delivering for shareholders is only half the job. The demands being placed on CEOs to both manage external stakeholders and be thoughtful about their expectations of the company—whether it’s regulators, investors, customers, the public at large—that is part of the CEO role to think that through.

If you think about the past two years, and the pandemic, and all of the external shocks, ultimately it’s the CEO who is the integrator who has to think about how to navigate those moments. So how do you help the person in those shoes looking across all of the trends internally, seeing what’s happening in the world, and think ahead? There’s this phrase, “having a microscope and a telescope.” They need to manage the day-to-day and think ahead. It’s the CEO role that’s more important now than ever as we navigate all these twists and turns. That’s what makes it such a challenging role.

Vik Malhotra: If you’re going to move this needle on being an excellent CEO, I think the one thing you would take away is, regardless of context, regardless of circumstance, regardless of industry, there is an aspect around great CEOs: great CEOs are bold. You can be bold regardless of context. Or you can be bold within that context. If you’re not bold in that first year, you’re not going to move the needle. That is the crux that’ll actually let you conquer any context and any situation around failing. That is your one safeguard against failure.

Scott Keller: Any CEO in any given context is handed an endowment from the previous CEO. There’s a certain amount of R&D that’s happened. There’s a certain talent base that’s there. There’s a certain debt leverage that’s there. You’re saddled with some stuff when you take it over. There’s also trends in an industry or macroeconomic trends that you may or may not, but probably don’t, have a ton of control over, depending on your company. And those do account for 55 percent of what drives a company’s performance. If you pick a good industry to be a CEO in, one that’s growing, you’re naturally going to do better. What is interesting, though, is 45 percent of this is under a CEO’s control.

We found that CEOs who are truly excellent think about that 55 percent differently than most. They don’t really think a lot of that is out of their control, especially in this realm of boldness. One of the big things we learned is CEOs really thoughtfully migrate their portfolio into high-growth businesses.

So just because you’ve come into an industry that’s low growth and has certain trends, you have to ask, “How do I become an exceptional futurist and ride these trends like a surfboard rather than let them be waves that wash over me and drown me?”

Second, “How do I think about whether there’s a better beach to surf on? And how do I make my way toward that beach over time?” We saw chemicals companies become life-sciences companies. We saw old-energy companies become clean-energy companies.

Ajay Banga [of Mastercard] gave us a great example: “We thought of ourselves as a payments company until we realized only 20 percent of all transactions happened electronically; let’s kill cash.” All of a sudden there’s a completely broader playing field that you’re thinking about.

So they think of trends and they think of endowments, so to speak, as not just “what I’m given” but “How do I turn those into opportunity?” That’s where the bold mindset comes in. If you have a bold mindset, you think, “It might be a little bit of a risk, but I’m not risking the company. I can actually go, and test, and learn, and really drive something meaningful here.”

What does this book offer someone who is not a CEO?

How does this book address the changing role of the CEO?

Scott Keller: Let’s think about some of the aspects of the role. When it comes to setting direction, there’s vision, strategy, resource allocation. Let’s apply it to someone who’s not in a leadership role.

Do you have a vision for where your life is headed? Do you have a set of bold moves you’re taking to move toward that vision? Have you allocated your time, and energy, and resources to support those bold moves to take you toward that vision? Already those are interesting questions for someone to face. If you’re leading a team, those are interesting questions for someone to face.

Let me come back to someone who’s, like, leading a scout troop: “I want to be the best scout troop in the city.” There’s some measure for that. But why wouldn’t you reframe that to say you want this scout troop to be the most meaning-filled scout troop in the country? What would that mean? Is that a better vision? I don’t know. Maybe it is, maybe it isn’t. But it would prompt you to say, “Wait. Just because I’m leading a scout troop, do I have to define within the small arena that I’m taking over?”

One of the big insights is that these CEOs reframe the game. They actually just change the playing field on which we’re thinking about. So a lot of those questions are good questions to ask. And a lot of the answers are counterintuitive in the sense that they’re just not naturally where you would go.

Vik Malhotra: We’ve taken the CEO Excellence lens. But it’s a book about many things in many ways. It’s a book about leadership broadly. It’s certainly a book about how one might excel in life more broadly.

You can pick out all kinds of lessons from this, which I think we all sincerely hope people get excited about. If great leaders can lead well, maybe I can learn something from this. Maybe I, too, can take away some nugget, some view, some wisdom that I can apply in my life broadly.

Carolyn Dewar: I think equally important is CEOs have extraordinary influence on our lives day to day, in the countries and in the communities that they serve and the teams that they lead. For us all to understand, what is that role, what does that look like, what does it mean to be a good CEO, and how do we collectively set these roles up for success?

They need to do well, because they have such an influence on so much of what we do. I think it’s a good contribution for all of us to understand that role better, so that we can collectively improve the odds. I also think at the end of the day, we have written a damn good story. It is an interesting, exciting read, regardless of which walk of life you’re in. There are stories of grit and resilience and hard work and what it takes to achieve extraordinary things.

Scott Keller: We’ve all had that experience of being part of a peak performance team, or hopefully we have in some place in our life. These are CEOs who have taken one of the most complex contexts in which to create high performance and found a way to do it.

Those lessons can be applied, then, into far less complex situations in highly relevant ways. I love what Larry Culp, current CEO of GE, former CEO of Danaher, told us: “You know, guys, this role is fun. This role is fun, because it feels like when I was on my high school basketball team. We had a group together who were running hard, we had each other’s backs.”

I think the promise of a lot of these learnings are, how do you take all the aspects of your leadership life and get that magic that the high school basketball team had that was actually fun to be part of it?

To me that’s a really exciting part about how translatable all of this is into the broader leadership arena. If it applies at the CEO role, it probably applies in most of the other contexts.

What’s new versus what’s true

How does this book address the changing role of the CEO?

Carolyn Dewar: The role of the CEO is only getting more complex and more important. Some people have been surprised that it was six dimensions. I do think some of those dimensions might not have been there had we done this book 40 years ago. But there’s the complexity of the role, the need to align and mobilize not just your own organization but also your board, your external stakeholders, these broad groups, at a pace unseen before—think about how quickly decisions are getting made and industries are getting transformed.

I worry it’s become a superhuman job. There’s so much in that one role to both internal, external, present, future—they’re wearing all these lenses. I think the need to be able to think through a whole system view and galvanize a whole group around you to get this job done is only going to be more important going forward. How can you spin all these plates? It’s going to take a village, and it’s a village that’s led by the CEO.

Vik Malhotra: I might take a somewhat different lens on it, which is perhaps with the exception of external stakeholders—where I think the demands from the CEO relative to history have grown over time—I think many of these lessons were always there. And to that extent, I believe they’re timeless.

The world will change, and the world will get more complicated. There’ll be new trends and all of that stuff will happen. But some of these lessons are timeless.

Scott Keller: I feel like we were quite purposeful in trying to not be timely but be timeless, to what Vik has said. I go to the sailing analogy. You know, those fundamental principles of sail trim, boat trim, course made good, all the jargon around just how do you keep the boat in balance, how do you manage the wind—those have been true since the first sailing ships on the Nile, however many thousands of years ago. A lot has changed in the meantime though. We have the keel.

But the fundamentals haven’t changed. And we purposefully try to stick to the fundamentals, and we believe the fundamentals apply to upcoming challenges. Like, what’s going to happen with cryptocurrency? What’s going happen with China–US relations? That’s going to have real influence on business. What’s going to happen with return to work and how the future of work actually evolves? What’s going to happen with all of these big challenges, like supply-chain resilience?

CEOs are going to have to set direction. They’re going to have to align organizations. They’re going to have to mobilize leaders. They’re going to have to deal with boards. They’re going to have to manage stakeholders, and they’re going to have to manage themselves in ways that are excellent through all of those trends. In 20 years there’s going be a whole new set of trends, and 20 years ago there was a whole different set of trends.

Watch the full interview

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