Identifying What Companies Look For in CEOs

www.alleywatch.com

I just read an interesting research paper from Steven Kaplan from the Booth School of Business, along with Mark Klebanov and Morten Sorensen, that looks at the desired traits of future CEOs.

In their report, "Which CEO Characteristics and Abilities Matter?" they evaluated 316 CEO candidates for posts at companies funded by leveraged buyout firms and venture capitalists. The paper found that companies funded and supported by buyout firms and venture capital have different preferences and screening processes for potential leaders.

For candidates assess by buyout firms, general talent and ability is important. The study found that success was largely a function of efficiency, organization and high standards, among other things. "These characteristics appear to reflect execution and resoluteness," the study determined. "The magnitude of the performance differences are large."

Venture capital tends to gravitate toward younger companies, which have "greater needs for specific knowledge" instead of general management talent, the study found. Proactive management takes precedence over teamwork, and coordination- and communication-related skills are less relevant. "The interpersonal-team factor is generally negatively related to performance," the study found.

The entire study, including voluminous data to back the findings, can be found here.