Leadership lessons from great CEOs

Gautam Kumra, Vikram Malhotra and Joydeep Sengupta 

CEOs matter. Those who rank in the top 20 per cent of financial performance generate, on  average, 2.8 times more total return to shareholders than average CEOs do. Companies in the  top quintile deliver 30 times more economic profit than the companies in the next three quintiles  combined. 

And for Singapore, as a regional business hub CEOs matter more than for most places. With almost half of global multinationals’ regional headquarters based here, Singapore has the  potential to play an outsize role in leadership development in Asia.  

So what does it take to be a great CEO? To answer that question, we identified 200 of them from around the world. Together, these 200 leaders created economic value in excess of their  peers of about US$5 trillion. Then we interviewed 67 of them at length. We found some broad common principles: Surround yourself with people who are not afraid to disagree with you. Ask  good questions. Think like an owner. Commit to service.  

There was another point that repeatedly came up that took us by surprise. Looking back, few  considered themselves ready. Half of CEOs say they are not fully prepared for the role when  they take it on. As one told us: “No one is prepared to become CEO no matter how much they  think they are. You have to grow into the job.” The pressure is greater; the demands more  diverse; and the isolation more intense than expected.  

At an official level, Singapore focuses on CEO leadership. For example, the Economic  Development Board is working to deepen the pool of Singaporean corporate leaders. So are  such organisations as the SkillsFuture Leadership Development Initiative, Singapore  Management University and the Human Capital Leadership Institute. 

There is also a personal dimension. While it may be true that almost no one knows what it is like  to be a CEO until they are one, there are ways to begin to prepare. Moreover, these lessons  apply broadly to those working their way up the corporate ladder. 

Prepare for a public role: While many aspects of the CEO role are constant, the context has  changed. CEOs are in the spotlight more than before, and there are higher expectations and  accountability around not only financial performance but also environmental and social issues. The CEOs we interviewed estimated that, on average, they spend about 30 per cent of their time managing external stakeholders. 

Prepare for the board: The board is the CEO’s boss. Love them or not, it is the CEO’s  responsibility to forge a good relationship. Successful ones highlight openness, honesty, and  promptness: bad news as well as good needs to be delivered quickly and forthrightly. Excellent CEOs know that board directors can be the best expert consultants out there and call on them for advice. 

They also have a clear agenda. Just about every CEO we spoke with could describe the company’s business strategy in the time it takes for an elevator ride up Raffles Tower. When  Piyush Gupta took over Singapore’s DBS Group in 2009, he established a clear goal - to  become Asia’s best bank - and detailed how to get there in a one-page visual. This  presentation, he says, “allowed us to all talk the same language about what we wanted to do  and, more important, what we did not want to do”.  

Prepare for crisis: While any specific surprise is, well, surprising, the unexpected is inevitable. So, companies need to be resilient. “When you have a crisis, it’s like a sailboat going into a  storm,” says Marjorie Yang, CEO of Hong Kong’s Esquel Group. “You’ve got to prepare your  boat before you head into the storm.” That means considering possible - and also implausible - scenarios. On that basis, leaders can establish early-warning systems and then practise the protocols, action plans, and communications approaches that may be needed when a real crisis hits.  

Prepare yourself. The demands of the CEO job are 24/7; the job will always be bigger than any individual. One message from our CEOs was the critical importance of managing themselves.  They prioritise doing things only they can do. They also create rituals to manage their time. One  common strategy is to oscillate between activity and relaxation, whether that is a 10-minute  break between meetings or playing the piano. Their schedule is typically tight but loose,  meaning there is time built in to reflect or respond to emergencies.  

It was interesting to us that few of the 200 CEOs we identified are well known outside their  industry, and while all were impressive, blazing charisma was not common. Instead, they were strikingly grounded, often humble. As one noted, “The ‘officer’ in your title denotes that you’re an  employee, who just happens to be sitting in that chair. That privilege is something you have to  earn on a daily basis.”  

That kind of perspective may be the best preparation of all.  

Gautam Kumra is chairman, McKinsey Asia, based in Singapore, and a leader of the  McKinsey Center for CEO Excellence. Vikram Malhotra is a senior partner with McKinsey in  New York, and co-author of 'CEO Excellence: The Six Mindsets That Distinguish the Best Leaders from the Rest' (2022). Joydeep Sengupta is a senior partner with McKinsey in Singapore and a member of its global board.