The Four Things That Set Great Leaders Apart

What Makes Leaders Exceptional

The risks and potential consequences of executive leadership are far greater than other forms of leadership. As part of our 10-year longitudinal study on executive transitions, which included more than 2,700 leadership interviews, we did a rigorous statistical analysis that isolated top performing executives among the sample. Our intent was to identify the greatest executives from among the top, otherwise good, executives to detect what distinguished them. What we learned is that what separated the “best of the best” from everyone else is a consistent display of mastery across four highly correlated dimensions, while “good” executives may have only excelled in two or three. Executives who shine across these dimensions achieve the greatest success for themselves and their organizations.

Power in Breadth: Connecting Organizational Dots

Exceptional executives have deep knowledge of how the pieces of the organization fit together to create value and deliver results. Many leaders arrive into the C-suite having grown up in functions like Marketing or Finance and lean too heavily on instincts and cognitive biases shaped by their ascent within those disciplines. Leaders who ran one business of a multi-business enterprise often favor that business within the larger portfolio.  Exceptional executives defy such predispositions in order to integrate the entire organization into a well synchronized machine. They link the organization’s seams so that poor coordination and fragmentation are kept to a minimum.  They ensure key capabilities that exist only at the seams deliver differentiated results. 

Executives develop breadth by broadening their exposure to the full organization, taking assignments across disciplines, and paying particular attention to linking organizational seams.

Power in Choice: Constructing Great Decisions

Exemplary executives selectively choose from among various tradeoffs to resolve major dilemmas and focus on few priorities. The ability to declare their views, engage others’ ideas, analyze data for insights, weigh alternatives, and own the final call inspires markedly higher confidence and focus among those they lead. At the heart of great decision-making lies a balance between instinct and analytics. 

On one end of the continuum are leaders who “trust their guts.” They combine experience and emotion into well-developed intuition. On the other end of the continuum is the leader who relies on exhaustively mining data for insightful perspective to address the decision or problem they face. Exceptional executives function fluidly along this entire continuum. The importance of this can’t be overstated. In one McKinsey survey of 2,207 executives, only 28 percent said that the quality of strategic decisions in their companies was generally good, 60 percent thought that bad decisions were about as frequent as good ones, and the remaining 12 percent thought good decisions were altogether infrequent. 

In addition to a well-defined process for making and communicating decisions, exemplars ensure successful execution by sustaining laser focus on the choices they have made to avoid overwhelming the system with too many priorities. Executives develop choice by designing and participating in decision making systems that bring clarity and accountability to the organization. They must also know their own predispositions to impulsivity or paralysis when it comes to balancing instinct and analytics. 

Power in Context: Knowing the Playing Field

Exceptional executives maintain a solid grasp on the ever-changing context within which their business competes. Their natural contextual intelligence lies at the intersection of insights into how their organization uniquely competes and makes money, and what is most relevant to the customers they serve ─ even when customers may not know themselves. The ability to apply intricate wisdom of one’s business to emerging competitive threats requires the ability to see trends and emerging possibilities on a multi-year horizon. 

Too often, leaders are stymied by competing investment options or caught flat footed in the face of profit shortfalls. Lacking an understanding of how value is delivered to their market, they make suboptimal investments. More typically, they reflexively make across-the-board cost cuts that restrict their ability to maneuver in a shifting competitive arena. 

The exemplars were described as having innate curiosity and deep knowledge of their business context which they apply to wider economic, technological, and customer trends. Armed with a clear point of view, exemplars more readily addressed threats and took earlier advantage of opportunities. Executives develop context by grounding themselves in external realities of their organization, by remaining curious about adjacent industries, and seeking disconfirming data about commonly held assumptions regarding their company. 

Power in Connection: Deep, Trusting Relationships

Every organization has executives everyone wants to work for. These executives form deep connections with superiors, peers, and direct reports. They communicate in compelling ways and reach beyond superficial transactions to form mutually beneficial, trusting relationships. Their legacy becomes a positive reputation within the organization for consistently delivering results while genuinely caring for those who deliver them. Exceptional executives study and meet the needs of key stakeholders. 

It was no surprise that of the four dimensions, relational failure led to the quickest demise among second-best executives. While exceptional executives led with a humble confidence that graciously extended care to others, second best executives were inclined to manage perceptions, creating the illusion of collaboration while masking self-interested motives. Many have researched the importance of executive relationships. One study revealed that executives’ fears of appearing incompetent, underachieving, and political attacks from rivals accounted for 60% of bad behavior among executive team relationships. Another study supports our findings that among the high-failure rate of transitioning executives, failed relationships account for a disproportionately higher percentage of all executive failure. 

Executives develop connection by investing heavily in their own emotional and social intelligence, actively soliciting feedback about how others experience them, and learning to be vulnerable with their shortcomings to create trust with others. 

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While it may seem like a high bar to suggest being an exceptional executive requires mastery in all these dimensions, the data are undeniable. After more than 90 regression analyses, the correlations returned conclusively confirm all four are what distinguish top executives. The good news is that they are all learnable. The earlier in one’s career building these capabilities begins, the more likely that upon arrival into an executive role, leaders will thrive, making the impact their organizations are counting on.