I think it’s fair to say that in any organisation, the CEO position is among the most difficult and demanding, especially given the state of a lot of economies around the world right now. It is also among the most vital as well. According to research, a CEO’s influence can account for up to 45 percent of a company’s performance. But, who is assessing us? How are we performing?
As a CEO, I am aware of how easily the demands of my position can occupy me, which can make it challenging to take time off. Research shows that CEOs who dedicate time and resources to their personal development, including focused training and mentoring, experience an average increase in confidence.
It appears that their capacity to take risky strategic actions frequently and decisively and to accomplish social goals with effect has led to the most self-reported gains.
Historically, the evaluation of CEO performance has been an intricate and often discrete process, shielded from the public eye. However, we have seen in more recent corporate cultures, that there is a clear shift towards transparency and accountability at the executive level, which is not a bad thing, in my opinion.
A typical assessment of a CEO involves evaluating their leadership skills, strategic thinking, financial management, innovation, stakeholder relationships and the implementation of a corporate culture.
To ensure the growth and longevity of the businesses, our self-assessment has had to become more of a strategic necessity rather than a self-indulgent gesture, and there are lots of factors that have led to the changing face of CEO self-assessment.
We face increased pressure from our companies to navigate the complex global marketplace to meet the ethical and social expectations of our different stakeholders in addition to delivering financial outcomes. This is no mean feat. This requires taking stock of our actions and decisions and constant evaluation of our strengths and weaknesses so that the right path is created as we navigate the complexities of daily responsibilities.
CEOs can proactively identify areas for growth, strengthen their leadership competencies, and cultivate an excellence-oriented culture among their top managers by practicing honest introspection. We have to check ourselves regularly, and not let stress or success get in the way of that.
Notably, constructive self-criticism and effective self-assessment are not the same thing. We regularly have to balance a fine line between facing obstacles and appreciating accomplishments, and so the capacity to transform constructive criticism into useful insights is an indication of a CEO’s dedication to both professional and personal growth.
Here are some areas where a CEO is typically assessed:
- Leadership style: How a CEO leads and inspires and sets the vision and direction for the company. This includes motivating the team, communicate effectively and be able to make tough decisions.
- Strategic planning: Identifying market opportunities, anticipating challenges, adapting to changes in business environment are some of the key factors in creating a the best strategy for the business.
- Stakeholder relations: Assessing the CEO’s relationships with key stakeholders, including employees, customers, investors, suppliers, and the broader community. This involves evaluating their ability to build trust, manage conflicts, and represent the company’s interests effectively.
- Ethical leadership: Evaluating the CEO’s commitment to ethical behaviour, corporate social responsibility, and sustainability. This includes assessing their adherence to legal and regulatory standards, as well as their efforts to promote diversity, equity, and inclusion within the organisation.
- Communication skills: CEOs communication skills, internally and externally, are key traits to assess their performance. Their ability to articulate and engage with stakeholders and manage crisis situations effectively.
- Performance and goals: Reviewing the CEOs performance against specific goals and objectives provides a quantitative measure of their success as a leader and what drives the business forward.
To sum up, it is not just a rhetorical question whether CEOs evaluate their performance. In today’s business environment, where scrutiny of leadership is growing, CEOs are realising the need for thorough self-evaluation. This reflective process is an essential tool for leaders who are dedicated to guiding their companies through the turbulent and demanding waters of the economic world, not a vanity exercise.
As a CEO myself, my responsibilities will always adapt, and so too will our dedication to introspection and ongoing development. Self-awareness and reflection are virtues that every leader should be transparent about.