ADAPTING TO
A COMPLEX WORLD
Spring 2018

Adapting toa Complex World
Becoming a Chief Executive Officer is a seminal event. It’s the culmination of a career
and a lifetime of advancement, the ultimate achievement for many.
And yet it is as much the beginning of a new journey as it is the end of the last one.
This is particularly true in the current atmosphere of disruption and volatility,
extended pressure from internal and external stakeholders, and a general lack oftrust in leadership. The role of a CEO is more challenging—and more scrutinized—
than it’s ever been.
In this turbulent era, a leader’s capacity to grow and evolve is as critical to successas is meeting financial targets. Indeed, if the person in the corner office is not able
to develop and change, he or she will fail—and that failure will ripple throughthe entire organization.
While CEOs have been studied and surveyed many times, past projects have notfocused on the human side—on what it actually feels like to take on the responsibilityof the CEO. These studies measure priorities and strategies; they look at what
behaviors successful executives exhibit and how their careers developed. But they
do not focus on the critical elements of preparation and adaptation. This is theuntold story.

How are CEOs coping with this increased pace and pressure? Are today’s CEOs
sufficiently prepared for this journey? What do they wish they had known before taking
the job? Do they have the support network they need to succeed and adapt?
As leadership advisors at Egon Zehnder, we partner closely with CEOs on thischallenging journey. So rather than making assumptions, we decided to ask themthese questions directly.
Between November 2017 and January 2018, we conducted a global research project,surveying current chief executives from a wide cross-section of industries, countries,
and corporate structures. A large number—402 of them—responded, sharing theirperspectives on what the job entails, the level of preparation they felt they hadreceived, their succession planning process, and how they lead and copein these volatile times.
The most compelling results and insights appear in this report, The CEO:A Personal Reflection. This project sheds new light on what it means to be a CEO
today—and what these executives require in order to succeed.

Kati Najipoor-Schuette

Dick Patton

Global Practice Group Leaders, Egon Zehnder CEO PracticeExecutive Summary“When you become the final decision maker,”
wrote one CEO, “everything changes.”
We found that Chief Executives are, in general, quite confident in their skills andabilities. At the same time, they also admit that certain parts of the role have provenmore challenging and isolating than anticipated. Being CEO, they say, is a position
that one can partially prepare for, but that one must also inhabit and embody
to truly understand.
CEO respondents shared the obstacles and the opportunities they face—somethingthat’s incredibly difficult to do in a role that often requires the projection of total
confidence. They wrote honestly about the ways in which they felt prepared for therole and the ways in which they have struggled. They discussed the state of succession
planning in their companies and how some processes could be improved. And theygenerally—across countries and sectors—expressed the importance of taking the time
to pause and reflect while in their role.
This need to pause and reflect, as existential as it may sound, goes straight tothe heart of what it means to be a Chief Executive today. Our work as leadershipadvisors, along with the results of this project, underscores the difference between“being” a CEO—meaning embodying leadership—and “doing” the job of CEO,or executing the operational requirements of the role.
These are two equally important sides of one coin. Yet they require completely
different mindsets, approaches, and skills, and are sometimes at odds with eachother. Our CEOs say that they have had to transform themselves while at thesame time transforming the business. They are on what we call a dual journey,
and navigating it correctly is critical to success.

2

Here are some of the most striking findings:
Only

79%

of Chief Executives
agreed or strongly
agreed that they need
the capacity to transformthemselves as well as theirorganization

28%

of internally selected
CEOs said they felt fully
prepared for the job

38%

vs.
of external hires

Only

28%

of CEOs said theyturned to their Board
directors for honest
feedback

44%

47%

of our respondents
said developing theirsenior leadership team
was more or much
more difficult than
anticipatedof the CEOssurveyed said that
their appointment was
not part of a planned
and formal succession
process

Our findings are divided into three categories: Mindset for Success, Preparation andSuccession, and Expectations vs. Reality. We have also highlighted gaps in theimportant relationship between the CEO and the Board of Directors, and significant
differences in responses among CEOs from different countries. We found importantdistinctions between first-time and experienced CEOs and uncovered some major
gaps in the preparation of internally promoted executives.
We share these insights with great enthusiasm and hope that you find themas valuable as we do. To discuss the contents with a leadership advisor at Egon
Zehnder, or if you would like to take your own deep, interactive dive into allof the data, please visit: www.egonzehnder.com/CEO-study-20183

Demographics

Our survey’s 402 respondents hail from companies located in 11 countries anda wide cross-section of industries. Of the respondents, 82% of them run companies
with more than USD $1 billion in revenues, 30% run companies with more than
$6 billion in revenues, and 10% lead companies with more than $20 billion inrevenues. First-time CEOs made up 61% of the pool, and just over half (53%) wereinternally promoted into the role.

First CEO Role?

Promotion• Externally promoted• Internally promoted

61%
Yes

39%
No

Is this your first CEO role?

47%

53%

Were you internallypromoted or externally appointed
into the CEO role?

5

THEME 1

Confidence and Self-Awareness

The majority of our CEO respondents believe that they have the skills to do their job;
three-quarters (74%) said their prior achievements and experience prepared them
to be CEO. Among experienced CEOs, 87% felt prepared; for first-timers, the number
was 72%.
Yet at the same time, they understand that they need a particular mindset in order
to be successful—a “continual growth” approach that requires introspection, selfawareness, and the ability to adapt. It is not easy, and their open-ended responses
reflect this.

“As CEO, I need the capacity to transformmyself as well as my organization.”
Self-Transformation Is Critical
The statement above is one that you’d think might make some CEOs uncomfortable,
given that they are supposed to embody the organization they lead, with little room
for the individual. But that was not the case. Remarkably, 79% of Chief Executives
agreed or strongly agreed with the statement above (in India, 93% did). Today’s
leaders see a link between self-transformation and organizational transformation—and believe that both are required for an executive to find success in the top role.
Yet they know that this is no easy task.

CEO perspectives
80% previous
experience vs.72%
first-time CEO“[It’s about] stepping back and reflecting,”
said one CEO, “acknowledging that I do not have
all the answers and do not need to have them.”
CEOs know and accept the fact that their jobs are extraordinarily all-consuming—
they are extremely well-compensated for it, after all—and that they must give off
an air of omniscience, particularly with certain stakeholders. Yet most leaders wesurveyed were outspoken about their desire and need to work on their own personal
development because they see this as a critical element of both their own successand that of their organization.

79%

74%
54%

53%
How much do you
agree or disagreewith the following
statements?

• Disagree • Agree

19%

21%

11%

My prior achievements andexperience prepared mefor the unique demandsof the CEO role

8

23%

54%

5%
My biggest challenge
has been acquiring
the skills tolead from the top

Transitioning into therole of CEO required
an intense period of
personal reflection

The demands and paceof the CEO role makeit hard to be my best self

As CEO, I need the capacity
to transform myself as
well as my organization

9

How to balance “Being” the CEO
with “Doing” the job?
“Transitioning into the role of CEO required
an intense period of personal reflection.”
Overall, 54% of CEOs said they agreed or strongly agreed with the above statement.
For first-time CEOs, the number was 60%—giving support to the notion that
becoming CEO is a true step change away from the rest of one’s career trajectory.
You can be prepared, but that doesn’t mean that you are truly ready. To get at that
dichotomy, we asked the following question—and were impressed by the deep,
thought-provoking responses our CEO respondents shared, a selection of which
are reprinted here:

The Critical Need to Balance “Being” and “Doing”
As CEO, there is a tension between “being,” which means that the organization
feels your presence, and “doing” the job, which is executing the operational
requirements. Is there one habit that helps you achieve this balance and/or one
that limits your ability to do so?

O U R V I E W:

Tone Comes from the Top
At Egon Zehnder, we believe that the CEO and the leadership
set the tone of a company’s culture. It has been said that anorganization cannot perform at a higher level than its leadership’s
consciousness. This means that to be successful, CEOs mustembark on what we call a “dual journey.” They must have thecapacity to transform themselves while doing the same to thebusiness.

10“Being brutally honest and truthful to myself to the point it
hurts. There are times I have not been able to do it and admitting
the same publicly has helped.”“Stepping back and reflecting, acknowledging that I don’t
have all the answers and also do not need to have them.”“The most difficult issues are physicalstamina and mental control.”“Frequent and transparent communication at every level.”“Showing presence.”“Constantly reminding myself to ask questions rather thanproviding solutions.”“If the ‘doing’ doesn’t lead to ‘being,’
then delegate.”“Having an outside coach helping to identify when you
are “being” and “doing” the job has been extremely helpful.”What do you do to regain yourpersonal energy?
O U R V I E W:

Getting to Personal Growth
Knowing that one has to become more self-aware is not thesame as actually doing it. Our leadership advisory experiencesuggests three paths to opening oneself up to personal growth:1.
CEOs should show curiosity and challenge themselves bymaking sure to be surrounded by people who speak honestly,
are strong, expand their knowledge, and empower themto do their work.

2.
They need to adopt personal habits that allow them the timeand opportunity to maintain their energy, reflect, and be mindful.
They need to be connected to themselves and to others,
listening not only with their minds but also with their hearts.

3.
They need to look outside of themselves and their organization
for ideas and learn to experiment from a zone of discomfort.

Regaining Energy
Not every CEO manages to find the balance. One-fifth (21%) say the demands ofthe position make it hard to be their best self, with internally selected CEOs
reporting a higher level of tension (27%). The executives shared different coping
strategies, as reflected in the comments below.

12“Maintaining personal energy and the sense of well-being
has been the most surprising and difficult part of the role.
I accomplish it in two fundamental ways: 1) creating time on
my calendar every day to just think and prioritize to maximize
my personal impact and 2) creating time during my weekend
to participate in an activity that takes my mind off of work.”“Communicating with other CEOs in order toget stimulation. It encourages my motivation.”“I do reach out to my coach (mentor) fairly often to encourageon the ongoing issues, and in times of need for any specificguidance and inputs–and he has always succeeded in elevating
me to a new high on energy.”“Be with people who give rather than drain energy as muchas possible. I relentlessly pursue my passions for learning(e.g., complexity theory, quantum physics, eastern metaphysics,
at present), personal fitness, and exploring the natural world.”“I take time to reflect on my purpose,
which is to actively and positively impact
as many people as I can.”Sources of honest feedback
For truly honest feedback, who do you turn to?

Feedback
Understanding how isolating the CEO position can be, we also asked CEOs whothey turned to for honest feedback. It’s critical that they reflect on who they havebecome—while at the same time getting input on that fact from others.
O U R V I E W:

Boards Must Do More
We believe that Boards must support the CEO’s personal
growth through the leader’s entire tenure. Boards too often
focus on CEO requirements and feedback during succession
and treat this process as a moment in time, matching business
requirements to candidate profiles. Only when there is adisruptive event—such as continued poor performance, ethicalissues or health—do Boards become active again.
The clear conclusion from our survey is that many Boards are
not sufficiently supporting CEOs. Boards and executives must
improve their relationship, in part because they have a fiduciary
duty to provide honest and constructive feedback to CEOs. If
CEOs cannot get honest feedback from a critical stakeholder, it
is hard for them to succeed.

51%Your senior leadership team

41%

Trusted lieutenant

39%

Partner or other family member

38%

Chairman28%

Independent board directors

25%

Mentor (external or internal)

24%

You have to rely on your own judgment

18%

Other CEO/Group of CEOs
External consultant
Someone else

15%
12%

The results revealed a stunning lack of communication among important
stakeholders. Just over half—51%—of respondents rely on their senior leadershipteam for that feedback, which implies that nearly half of them can’t or don’t.
Boards of Directors’ primary roles are CEO succession and governance. But justas important—and often missed—is their responsibility to advise and support their
CEO on his or her own development. When asked where they turned for honest
feedback, only 38% of CEOs named the Chairmen of their own Boards of Directors,
only 28% cited any member of their Board, and almost one-quarter (24%) said
“You have to rely on your own judgment.”

14

15

THEME 2

O U R V I E W:

Developing the Internal Leader

Readiness
Can you truly prepare to be a Chief Executive? Yes…and no. That’s what our survey
respondents told us. In general, they expressed confidence that they have the ability
to succeed and that they were ready to do the job: 80% of respondents indicatedthat they felt either “somewhat” or “fully” prepared for their current role, with only
9% saying they were either “somewhat” or “completely” unprepared.
It’s natural for CEOs to express confidence. They have spent their professional
lives aspiring to this role, and many of them have been conditioned to not admit
any kind of vulnerability. It is also an indication that they have acquired the skill
set needed on their journey to the top. Responded one CEO: “[I followed] a logicalprogression of activities—COO, strategic planning, exposure to Wall Street, earnings calls,
development of Board relationships.”

The vast majority of CEO successions today are internal. So
the relative lack of preparation for the role that the survey has
uncovered among internally selected executives is a criticalinsight. What we are hearing from our respondents is that for
all of their skills and business training, internally selected CEOs
need more guidance when it comes to preparing for the top
position. That can come from other executives, from the Board,or from outside leadership development organizations (or all
three); this lack of guidance is clearly affecting a large portion ofCEOs today and needs to be addressed.

Preparedness for the CEO role

1%

Completely
unprepared8%

Somewhat
unprepared48%

Somewhatprepared18

28%

of internallypromoted CEOs
felt fully prepared
compared to
38% of externallypromoted CEOs32%

Fully prepared
Do you feel you
were adequately
prepared foryour current
role as CEO?

Internally Selected Executives
Feel Less Prepared
Yet when you dig deeper, some intriguing contradictions emerge. Internal hires
expressed less confidence in their overall preparation for the CEO role, with only
28% saying they felt “fully prepared” for the job vs. 38% of external hires. That could
be because external hires are likely to have had more CEO experience, or because,
as many CEOs told us, it’s harder for internal hires to make the shift from being
an equal member of an executive team to supervising former peers and creating
followership. One executive said he wished he had been trained in “leading fromthe top.”19

What do you wish you had known
or been trained in before taking on
the top role?

Isolation
CEOs were also extremely forthcoming about where they fell short in their
preparation and in which ways they wished they had been better trained. They
responded honestly and openly about just how different—and often lonely—
their new role had turned out to be, exploring some of the deeper reasons andfeelings behind that loneliness. For all of their preparation, there were some
aspects they said they simply could not appreciate until they were sitting in thecorner office.
When we look closely at the comments our respondents made, it is clear thatthe areas that they wished they had known more about hewed closely to the “being”
aspect of the CEO role. The largest number of open-ended responses (56)related to the parts of the role that were unique to being a CEO. The CEOs also
were particularly outspoken about needing more experience and skills training(45 respondents), help with communications and media (31), and assistancewith Board relations (25). The clear implication: CEOs need more guidance on
the human side of leadership than they are getting.

“ That no one is honest anymore, that
there are very few people you can fully trust.
That is the tough part.”“This job demands more patience than what I expected. …
I think one has to go through a maturity cycle. And I suppose
you can’t teach this.”“That you may become a role rather
than a person.”“How to manage the Board better.”“How lonely it can be unless one has a circle
of other public company CEOs to turn to.”

“The sometimes-not-intended impact
every move and statement have.”20

Guidance
Where do CEOs go to get this guidance? The executives shared a variety of typesof support—and also exposed a significant number of places where that support
was lacking. One issue that came up consistently was the relationship between
the CEO and the Board. Very few executives, it seems, feel ready to manage thosedynamics.

Ongoing feedback from direct reports, boss, and peers was the most useful measure,according to 31% of respondents. Sixteen percent pointed to job rotation. Only
8% of respondents chose leadership development programs, whether traditional or
bespoke—suggesting that many of those currently in use are not fulfilling their promise
to their executives. Yet this type of advice and support is badly needed, and here we
saw another interesting difference between externally and internally promoted CEOs.
Externals were more likely to rely on direct reports, boss, and peers for feedback,while only 25% of internally promoted CEOs cited this as the most important.
This suggests that internals are not getting the same level of feedback from theirown peers, which—given that they presumably worked together before taking on
the new role—is surprising and suggests a breakdown of communication. But why?
We hypothesize that it could come from discomfort either from the new CEO orfrom the former peers who are now direct reports.

Single most useful developmental
measure for CEO role31%

Ongoing developmental feedback fromdirect reports, boss and peers

19%

Other

16%

Job rotation

13%

Coach

12%

Regular mentor and/or sponsor
Standard senior leadership development
programs
Senior leadership development programs
designed for my team and me

22

38% externallypromoted vs.
25% internallypromoted

4%4%Which onedevelopmental
measure was mostuseful in yourpreparation
for the role?

O U R V I E W:

Feedback Alone Is Not EnoughAs we have seen in the survey, feedback from direct reports,
close colleagues, and others is absolutely critical. Yet this is
only the first step of a very complex process. Any truly usefulleadership development process must take that feedback andthen work closely with a leader to help them access previously
underdeveloped aspects of their personality and to consider
the habits and beliefs they need to change in order to succeed
as CEO. The bespoke program cannot be a single event; it must
be an integral and ongoing part of the CEO’s journey. And in
this complex world, one coach can no longer meet all of thedevelopmental needs of a CEO; a more holistic, sustained
approach is needed.

23

What aspects of your succession
process could have been improved?

Succession Planning: Still an Afterthought
Succession planning is undoubtedly one of the most critical drivers of a leader’ssuccess. And yet the reality, even today, is that in many major companies, succession
is a sudden and disorganized process rather than a carefully planned one. The clash
between ideal and real is borne out in our survey: 44% of the CEOs surveyed said
that their appointment was not part of a planned and formal succession process.

“Sharing more of the true challenges in theindustry, the company, the company culture,
the company leadership team. Would love
to see more honesty and reflection fromthe Board.”

Respondents’ Succession Experience
Of the 56% who did go through succession planning, almost one-fifth (19%) of them
rated their process as poor—suggesting that there is much work to be done in thisarea. There were some notable differences by country: Just 30% of Japanese CEOs
rated their process as good, while in India, nearly 80% did. Open-ended answers
to our question offer concrete suggestions for improving the process.

“Role definition, appraisal process,and constructive feedback loop.”“A smooth handover would have added
efficiency.”

Succession
Was your appointment partof a planned and formal succession?

How would you rate
the succession process?
79% India
30% Japan

44%

56%

No

Yes

19%

“Professional onboarding.”

Poor

83%
Switzerland

62%

Good
46% externallypromoted vs.
64% internally promoted

Note: Rest to 100% = neutral/n.a.

24“More deliberate management andexit of prior CEO.”“More time explaining/showing what a CEOrole is like. It IS NOT an operational role.”

O U R V I E W:

Current Succession Process

A Board’s Guide to Succession Planning

We also asked CEOs whether there was a succession process underway to replace
them—something that most governance experts and Boards say should be happening
even if the CEO has just assumed the role.

Know your strategy
Determine which skills and experiences a new CEO should
bring to the company to lead it to where you want to go versus
where it is today. Think upfront about the tradeoffs you would
or would not make.

Almost two-thirds of respondents said there was some succession planningunderway, but only 32% of them said that there was a clear process in place. Elevenpercent said that there was no succession planning underway at all—but that
there should be. And only 27% of CEOs believed that their own successor would bebetter prepared than they had been (although American CEOs were more positive,
with 38% saying so).
There are two implications here: One, that Boards of Directors must spend moretime on succession; and two, that the CEOs themselves aren’t focused on thegrowth and development of their own replacements. Another possibility is thatboth sides think that the other side is handling it—which suggests, again, a gap
in communication.
When we asked executives to rank their two most important goals after building
a successful business, only 25% of executives ranked developing a group of potential
successors first or second (though for first-time CEOs, it was 30%, and for JapaneseCEOs, it was 53%). Succession must be a much higher priority than it currently is—
inside both the executive suite and the boardroom.

Know your options
Make confidential internal senior talent review and development
a standard Board procedure. It’s not just the CEO; the Boardand the incoming CEO have the responsibility to create a seniorleadership team, which may also be the source of the next CEO.
Don’t wait
CEO succession planning should begin at least three years
before a possible change and be part of the strategic review
process of the nominating committee or the full Board. Seniortalent reviews can help embed the concept of succession
inside a company.

Current succession planning
33%

Succession planning is underway, but there
is not yet a clear process and likely outcome

32%

Succession planning is underway,
with a clear process in place

17%

It’s not yet appropriate to think
about succession

11%

There is no succession planning underway
at all but, there should be
Other

26

6%

Which of thefollowing statements
best reflect how
you and yourorganization arepreparing for yoursuccession?

Have an emergency plan—just in case—and a long-term,
future-oriented CEO development plan. Its requirements should
be reviewed before the annual CEO candidate review and mustcover leadership qualities and traits in addition to experienceand skills. Internal candidates should always be benchmarked
against external talent.
Top CEO contenders must be supported with job rotation,
education, and deep personal development and access to bestin-class development experts.
Plan for retaining and supporting internal leaders who don’t
get the role.
Create a well-defined transition and onboarding plan thatincorporates the Chairman, the outgoing CEO, and external
stakeholders.

27

THEME 3

In your role as leader, how comfortable are you ...?
In your role as leader, how comfortable are you doing the following?
The CEO respondents really opened up in this section, sharing vulnerabilities andalso offering specific suggestions for how to improve the process of becoming Chief
Executive. In some cases, CEOs felt that they had adequately anticipated what would
happen; in others, they expressed frustration and even confusion.

First, the good news: CEOs feel comfortable with many
aspects of their job.

87%

82%

said they werecomfortablepersonally shaping andleading the overall
vision of thecompany

70%

said they werecomfortabletaking the heat for
unpopular businessdecisions30

said they werecomfortable speaking
honestly about thecompany’s various
challenges

Speaking honestly and openly about mycompany’s various challenges
Personally shaping and leading the overall
vision of the company
Acting as a role model and identification
figure for company values
Admitting mistakes
Having candid discussions with myexecutive team, Chairman, and/or Board
Proposing radical new ideas thatmight feel risky
Seeking advice

57%

said they werecomfortableshowing
emotions

Taking the heat for unpopular people orbusiness decisions
Showing emotions

Note: Rest to 100% = neutral /n. a.

87%

3%

82%

5%

80%

5%

78%

5%

77%

9%

73%

9%

71%

6%

70%

7%
18%

57%

• Comfortable• Uncomfortable31And yet, when CEOs were asked how various aspects of the role compared to their
expectations, we heard a much more nuanced perspective, with a clear message
that many things were more difficult than anticipated. This is particularly true ofthe human aspects of the role—supporting our belief that CEOs are not getting the
preparation they need in this area.

How does the CEO role compare to expectations?
How do the following aspects of being CEO compare to your prior expectations?

Driving cultural change

Finding time for myself and for reflection

Developing my senior leadership team

14%
12%

48%

13%

Balancing the short-term financial
focus with the longer-term transformationof my company

12%Managing the impact on my family/
personal life

12%

Maintaining my physical health

50%

47%
40%
35%

14%
31%

Engaging with external stakeholders

25%

Engaging with my internal stakeholders

23%

32%
31%

18%
20%

Managing my stress levels

Connecting with my peers

18%

29%

• Easier• More difficult
32

33

Culture Change

Although it is often the first thing a new CEO is expected to oversee, 50% of
respondents said driving culture change was more or much more difficult thanthey’d thought (74% of Japanese executives thought this, compared with 21% of
Swedish executives). When asked what they wished they had known earlier on this
topic, CEO respondents didn’t hold back.
Open-ended perspectives included: “Awareness about the company’s culture,” “Better
understanding of developing a high-performing culture,” and “How resistant the culture wasto change. I would have moved faster on some changes as a result.” It seems clear that CEO
candidates need more preparation in terms of how to create and lead culture change.

Time to Reflect
Nearly half of our CEO respondents (48%) said finding time for reflection was moreor much more difficult than anticipated. In one critical insight, 35% said they had
not anticipated how hard it would be to manage the impact on their personal life.
It’s surprising, after a career filled with absolutely intense work and travel, that
executives would see such a difference, but many of them do.
This finding underscores the point that the CEO experience is, in fact, unique.
It is also notable that internally promoted CEOs reported more difficulty than
externally promoted CEOs in finding reflection time (39% to 30%).

Senior Leadership Team Development

As most executives know, a new CEO cannot and will not succeed without a strong
team. Said one: “Building, hiring, training, trusting a strong team allows me to delegate
most of the doing. My ability to make people decisions and act on them decisively is the mostimportant skill in this role.” So it was disconcerting to find that 47% of our respondents
said developing their senior leadership team was more or much more difficult than
anticipated. We saw a difference here between internally- and externally-appointed
CEOs, with 50% of internals citing difficulty vs. 41% of externals. This may possibly
be because internals must now supervise their former peers.
One new CEO expressed this struggle eloquently and painfully: “The impact of having
my peers become my direct reports changed the dynamic in a way that was much more
lonely than I had envisioned.”
We also found significant differences among CEOs from different countries—
suggesting that executives in certain cultures may need more help in this area.
In Japan, for example, 74% of respondents said senior leadership team development
was harder than they’d thought, compared with just 23% of Swiss CEOs.

34

Engaging with Stakeholders
When it comes to interacting with internal or external stakeholders, CEOs were
better prepared than they had been on other topics: 31% of executives said it had
been easier than they’d thought to connect with internal stakeholders, and 32% said
the same of external stakeholders. Counterintuitively, when it came to connectingwith internals, it was easier for the externally promoted executives (40%) thanfor the internals (24%), perhaps because externally selected executives had moreof a formal change mandate.

Purpose-Driven Business Objectives
Next, we asked executives what they wished to achieve in the role. Every CEO has
the same overall mandate—to lead a successful business. But what do they think are
the most important goals beyond that strict business mandate? We asked CEOs torank their two most important objectives beyond building a successful business—and received some fascinating responses.

Most important business objectives
63%

Ensuring long-term success by investingin the future

62%

Creating a value-based culture with purpose

27%

Creating shareholder and equity value formyself and others

25%

Developing a group of potential successors
Creating a personal legacy that will last after
my tenure
Creating a positive social impact for
my company
Building strong relationships with outside
stakeholders

11%
7%
5%

15% previous
experience vs.
30% first-timeCEO

Beyond building
a successful business,
which two of thefollowing work
objectives are mostimportant to you?

35

There were two objectives that CEOs ranked as equally important: “Ensuring long-term
success by investing in the future” (63% ranked it first or second, with 88% of Swedish
executives doing so) and “Creating a value-based culture with purpose” (62%).
Said one CEO: “As the CEO, I sincerely want to grow our company and make us a company
that is critical and indispensable for our society. I want to devote all my energy
to thinking about how I can contribute in this regard and acting upon it.”
Said another: “I am a builder. I draw the most energy from working on things that create
a better future for employees. I also am very energized by thinking about long time horizons
and multistep growth processes.”
These answers suggest that CEOs are looking more to the long term than many
stereotypes would suggest, especially for public company CEOs, who must manage
to quarterly earnings and expectations. Supporting that conclusion is the fact that
only 27% of CEO respondents ranked “Creating shareholder and equity value formyself and others” as a top-two priority—although 39% of U.S.-based executives did
so, demonstrating the pressure to deliver market returns in that country.
And although creating a culture with purpose is important, only 7% of CEOs
ranked creating a positive social impact for their company first or second—with
the exception of Australian CEOs, of whom 39% did so. This suggests that corporatesocial responsibility may not be gaining traction among current CEOs—or that it’s
simply not much of a priority at the moment.

Inspiration
Because the CEO role can be so isolating, we were curious about where CEOs went togain new ideas. We asked them, “Where do you get most of your inspiration for
fresh thinking?” and learned that the most popular response was “talking to people
outside the company” (54%), although that percentage varied by country, with 75%
of U.K. CEOs looking externally vs. only 39% of French executives. We also noted somereluctance to look at or imitate others: Only 36% of CEOs said they looked at how
other businesses are run (and that number was much lower for internally selected
CEOs, at 29%, suggesting that they are accustomed to thinking within their own four
walls).
One implication here is that internally selected CEOs should be exposed to external
thinking on a regular basis. Beyond that, all CEOs must understand that it is nota sign of weakness to look to others—even competitors—for great ideas. No man is
an island, and neither is a company.

Sources of fresh thinking
54%

Talking to people outside the company

45%

Talking to people in the company

36%

Looking at how other businesses are run

29%

Personal reflections

27%

External content
Other

36

3%

43% externallypromoted vs.
29% internallypromoted

Where do you
get most of yourinspiration for fresh
thinking?

37

In Closing
As the leaders of Egon Zehnder’s CEO Practice, we have spent many years working
with Chief Executives to support their success. This survey reinforces several
conclusions worth iterating—conclusions useful to not only current or futureCEOs but also Boards of Directors, executive teams, and anyone who works in
the leadership space. We welcome your feedback on both The CEO: A Personal
Reflection and our analysis below.
CEOs are purpose-driven, confident—and also vulnerable and humble.
This study shows, we believe, that as confident as many CEOs are, there are many
aspects of the role that they are not prepared for—and possibly cannot prepare forin the traditional sense. In today’s complex new world, CEOs cannot have perfectanswers to all of the questions and situations they will face. This openness comesthrough in the survey and conveys a humility that we did not see in years past.
This shift also means that we must create a more dynamic way to define therole requirements of a CEO and to evaluate fit for the role. The deeper aspects ofpersonality, growth mindset, and adaptability become significantly more important
determinants in an era of collaboration and volatility.
Being appointed CEO is only the beginning.
We believe that the CEO is on a dual journey, one that requires both personal andorganizational growth in order to succeed in today’s uncertain world. We also
believe—and the study confirms that many CEOs agree—that an organization is only
as evolved as the mindset of its leader. Our leaders must be able to continually learn
and grow, or they cannot succeed.
And yet while everyone actively discusses and builds strategies for organizationaltransformation, CEOs are telling us that they are not being supported on how tomake this parallel personal transformation. We must develop the tools to help themdo this.

culture and build strong teams. New conditions and opportunities demand thatthey leave their comfort zone—and that they understand that no one, not even the
Chief Executive, has all the answers. This shift will take time, but CEOs are alreadytelling us that they understand just how important this “being” element is to theirsuccess. In times of change, people need to feel the presence of a leader; there’s
no going back to the “command and control” CEO. Today’s Chief Executives mustembark on a journey, disrupting and transforming themselves in order to achieveorganizational transformation.
Boards must support the CEO through the leader’s entire tenure.

It’s more about “being” than “doing.”
We believe that the preparation efforts and programs available today focus on “doing”
rather than “being.” Especially in unpredictable times, the best way to prepare
leaders for the top role is to help them adopt a mindset of constant personal growth.
They must embrace curiosity, learning, adaptability, and the ability to influence38

One clear conclusion of the study is that there is much room for improvement in therelationship between Boards and CEOs. Boards think deeply about the choice of theCEO, but after that, they often step back. Only when there is a disruptive event—such ascontinued poor performance, ethical issues, or health—do Boards become active again.
Today’s world demands that Boards support the growth and development of CEOs,

39

which they must focus on in tandem with the transformational needs of the business.
This relationship only begins with the appointment decision. It needs to be a dynamic
process, matching the upcoming transformation of the organization with thetransformative mindset and capabilities of the CEO candidates. Indeed, this mindset
is critical to all senior leaders—some of whom will be the next generation of CEOs.
Internally Selected Candidates Need More
Consistently in this project, internally selected candidates expressed more concerns
about both the level of their preparation and the ability to build a group of both
inside and outside supporters. Ironically, although they are much more familiar
with the organization that they work in—having been there longer than any external
candidate—some of them are struggling with the shift from Senior Executive toChief Executive more than they expected to. There is an opportunity to make surethat insiders are not only prepared from a resume or P&L basis but also from apersonal development standpoint. The fact that this is not happening may explain
why so many chief executives do not succeed.

Thank youfor your attention to this project. What we have discussed
here is only a small portion of the data and insights collected; if
you would like to explore the entire survey in further detail, weurge you to visit www.egonzehnder.com/CEO-study-2018 for more.
For more information, please contact:
Kati Najipoor-Schuette or Dick Patton, Global Practice Group
Leaders, Egon Zehnder CEO Practice
Kati.Najipoor-Schuette@egonzehnder.com
Dick.Patton@egonzehnder.com

About Egon Zehnder
Egon Zehnder is the world’s leadership advisory firm, sharing one goal: to transformpeople, organizations, and the world through great leadership. We know what
great leaders can do and are passionate about delivering the best leadership solutions
for our clients. As One Firm, our more than 450 Consultants in 68 offices and
40 countries bring our individual strengths to form one powerful collaborative team.
We partner closely with public and private corporations, family-owned enterprises,
and nonprofit and government agencies to provide Board advisory services, CEO searchand succession, executive search, executive assessment, leadership development, andorganizational transformation. We share a commitment to and pride in doing workthat contributes to successful careers, stronger companies, and a better world. For more
information, visit www.egonzehnder.com and follow us on LinkedIn and Twitter.

About Egon Zehnder’s CEO PracticeOver the past five years, we have applied our own future-oriented, proprietary
approach to more than 1,800 CEO mandates. We understand that the Chief Executive
role is unique, particularly in the current atmosphere of complexity and volatility.
These uncertainties require a future-oriented and aligned view on the business andleadership requirements of the CEO, one that must be reviewed regularly over thecourse of a transition.
We aim to partner with our clients in all aspects of the CEO leadership journey.
That journey begins by aligning with your Board regarding the company’s
future transformational needs and CEO requirements. We then help you build
a compelling internal pipeline of senior leaders with CEO potential by identifying,assessing, and advising them on their development journey.
The CEO transition process also means working hand-in-hand with your Boardof Directors to develop a clear, workable succession plan—one that helps internal
executives accelerate their personal development through our heralded Executive
Breakthrough Program, designed and facilitated in partnership with Mobius
Executive Leadership. Once you’ve selected your CEO, we can apply our “Accelerated
CEO Impact” program to assist in onboarding. This bespoke option begins before
the CEO’s first day and helps make their first 100 days and beyond a success.

© 2018 Egon Zehnder International, Inc.
All rights reserved.
No part of this publication may be reproduced, stored in a retrieval system, or transmitted
in any form or by any means—electronic, mechanical, photocopying, recording or otherwise—
without the prior permission of Egon Zehnder.

40

41

Appendix
Data

Main activity of organization
Which of the following represents the main activity of your organization?

29%

Industrial

Location of HQ
JAPAN

4.7%

Consumer

AUSTRALIA

4.0%

Financial services

USA

29.9%

GERMANY

13.7%

SWEDEN

3.5%

Services

INDIA

11.0%

SWITZERLAND

3.2%

Technology and communications

UK

9.0%

SINGAPORE

2.2%

Other

FRANCE

8.2%

Other

21.9%

BRAZIL

5.5%

Not stated

2.7%

20%
14%
12%
9%
9%
7%

Healthcare and pharma

Length of time in CEO role

Revenue (USD)

How long have you been in your current CEO role?

What is your company’s revenue in USD?

31 %

15 %

0 –2 Years7%

5 – 6 Years23 %3–4 Years

9 –10 Years10 %7–8 Years

16 – 20 billion

3%

11 – 15 billion

4%

6 – 10 billion

10+

1 – 5 billion

42

36%

13% 22% USA
94% AUSTRALIA

Less than 1 billion• Internally promoted• Externally promoted

10% 28% JAPANMore than 20 billion

14 %Percentage running $5bn+ businesses

51%

25%

18% 58% INDIA43

Ownership structure

Last role

What is the ownership structure?

What was your last role prior to your current role?

84% Japan
81% USA
81% Australia

60%
Public50% Brazil
40% India

23%

11%
8%

Chief Financial Officer

6%

Other

Deputy CEO

8%

Chief Marketing Officer

2%

Head of Sales

2%

Family-owned

Age and gender44 %45 –54

1%

7%

FemalePrefer not toanswerHead of Strategy

1%

Chief Technology Officer
Chief Information Officer
Chief Human Resources Officer0%

Previous board experience

92%

45%

Male

None

36%
Have served on morethan one board

What wasthe extent
of your board
experience
prior tobecoming
CEO?

44 %55– 6451% previous
experiencevs. 40% firsttime CEO

5%65 or more

44

19%

Chief Operating Officer
Other

9%

35 – 44

19%

Chief Executive Officer

Private7%

31%

President/CEO of Business Unit/Division

30% previous
experience vs.
56% first time CEO

44% externallypromotedvs. 29% internallypromoted

52% previous
experience vs. 26%
first-time CEO

19%
Have served on
one board45