As the business world becomes more competitive, finding the right leaders to guide your organisation through times of uncertainty can be a challenging task. In the business world, it is common for executives to focus their attention on a candidate's experience when filling leadership roles. However, this emphasis on experience is a myth that needs to be debunked. Personality traits play a critical role in determining the success of business leadership.
Many companies prioritise experience when it comes to selecting their executives. However, recent studies show that personality traits are a more accurate predictor of success in leadership roles than experience alone. In this article, we discuss the personality traits that executives should look for in future leaders and explore why candidates that look perfect on paper are not necessarily the best leaders.
The Importance of Personality Traits in Business Leadership
When it comes to business leadership, personality traits are key to success. In fact, according to a study by Hogan Assessments, a leading personality assessment company, personality is the most important factor in determining whether someone will be successful in a leadership role. This is because personality traits such as emotional intelligence, adaptability, and integrity are critical to effective leadership.
Emotional intelligence, in particular, is a crucial personality trait for leaders. It involves the ability to recognize and manage one's own emotions and the emotions of others. Leaders who possess high emotional intelligence are more effective at communicating, collaborating, and resolving conflicts. They are also better at inspiring and motivating their teams. In fact, according to a study conducted by Korn Ferry, executives with high emotional intelligence (EI) generate significantly higher business results than those with lower EI. The study found that companies with higher EI leaders had 13% higher annual revenue than those with lower EI leaders. Additionally, companies with higher EI leaders had 50% higher levels of employee engagement and were 22% more likely to have lower employee turnover rates. These results indicate that leaders with high EI not only have a positive impact on the bottom line but also on the overall performance and culture of the organisation.
The Flawed Assumption of Perfect Candidates
Despite the importance of personality traits in leadership, many companies still prioritise experience when selecting their executives. They look for candidates who have the right credentials, education, and work history, assuming that these qualifications are enough to ensure success in the role.
However, this approach is flawed. The truth is that experience alone does not guarantee success in a leadership role. In fact, research shows that leaders who are high in certain personality traits but lack experience can be just as successful as those with more experience.
One reason for this is that experience can be limiting. Leaders who have spent their entire careers in a particular industry or role may struggle to adapt to new challenges and opportunities. They may be more set in their ways and less open to new ideas and approaches.
Consider the case of Elizabeth Holmes, the former CEO of Theranos, a medical testing company that collapsed amid fraud allegations. Holmes was a highly educated and accomplished executive, with degrees from Stanford University and a successful company that garnered significant media attention. However, her personality traits, including overconfidence and a lack of transparency, were ultimately responsible for the downfall of her company.
Perhaps controversial, Steve Jobs, the co-founder and former CEO of Apple Inc. is an example of a leader whose single-minded focus and strong personality traits compensated for a lack of business experience. Jobs had a tumultuous career, with significant setbacks and challenges along the way. However, his personality traits, including his creativity, passion, and vision, were critical to his success as a leader. Jobs' leadership style was undeniably unconventional, but it was effective in creating an innovative culture and driving the company's growth.
Whilst these examples might point to the extremes, they do serve to highlight the point that more than experience alone is needed to determine a candidate's potential for effective leadership. It’s another reason why the perfect candidate is a myth. It's simply impossible to predict how someone will perform in a leadership role based on their past experience alone. A candidate may have all the right qualifications on paper but may not possess the personality traits needed to be an effective leader.
Instead, executives should consider a candidate's personality traits and how they align with the organisation's culture and values.
Key Personality Traits to Look for in Executive Leaders
So, what personality traits should executives look for when selecting their leaders? There are several traits that are critical for effective leadership, including:
Emotional Intelligence
Emotional intelligence (EI) is the ability to understand and manage one's emotions and those of others. Leaders with high EI are better able to connect with their team members, understand their perspectives, and inspire them to achieve their goals. Research has shown that EI is a strong predictor of leadership effectiveness, and executives should prioritise this trait when selecting their leaders.
Integrity
Integrity is another key personality trait for leaders. Leaders who are honest, ethical, and transparent inspire trust and loyalty among their teams. They are also more likely to make decisions that are in the best interests of the company and its stakeholders. In fact, a study by the Institute of Business Ethics found that companies with a strong ethical culture outperformed their peers by 10.6%.
Resilience
The ability to bounce back from setbacks and challenges is vital in today's business arena. Leaders who are resilient are better equipped to handle stress, navigate change, and inspire their team members to do the same. Resilient leaders can also maintain a positive attitude in the face of adversity, which can be a powerful motivator for their teams.
Empathy
Empathy is the ability to understand and share the feelings of others. Leaders who are empathetic are better able to connect with their team members on a personal level, which can foster loyalty, motivation, and engagement. Empathetic leaders also tend to be better at conflict resolution and problem-solving, as they are more likely to consider multiple perspectives and find creative solutions that benefit everyone.
Adaptability
Another important personality trait for leaders is adaptability. In today's fast-paced business world, leaders need to be able to adapt quickly to changes in the marketplace and the industry. They need to be able to pivot their strategies when necessary and make tough decisions under pressure. Leaders who are adaptable are better equipped to navigate uncertainty and lead their teams through change.
Vision
Vision is the ability to see the big picture and articulate a compelling future for the organisation. Leaders with a strong vision are better able to inspire their team members and align them around a shared purpose. A clear and compelling vision can also help guide decision-making and prioritise resources, which is critical for achieving long-term success.
Examples of Successful Leaders with Strong Personality Traits
The importance of personality traits in leadership is vital in the consumer goods and food and beverage industries in particular, where innovation, creativity and a consumer-centric approach are critical to success. In these industries, companies are constantly adapting to changing consumer trends and tastes. Leaders who are adaptable, creative, and customer-focused are more likely to succeed.
Whilst there are countless examples of successful leaders who have demonstrated the importance of personality traits in effective leadership. Here are just a few examples:
Indra Nooyi, Former CEO of PepsiCo
One example of this is PepsiCo CEO Indra Nooyi, who is widely regarded as one of the most successful and innovative leaders in the food and beverage industry. Nooyi, who stepped down from her role in 2018, was known for her focus on customer needs, her ability to anticipate and respond to industry trends, and her commitment to sustainability, health, and wellness, as well as her commitment to diversity and inclusion.
Under Nooyi's leadership, PepsiCo launched new products and brands, such as Gatorade and Quaker Oats, and expanded into new markets, such as China and India. Nooyi's approach to leadership was rooted in her personality traits, such as her strong emotional intelligence, her ability to build strong relationships with stakeholders, her commitment to ethical leadership and her ability to adapt her leadership style to suit the cultural and organisational context. Under her leadership, PepsiCo's revenue doubled, and the company's stock price increased by 78%.
Paul Polman, the former CEO of Unilever
Another example is Paul Polman, the former CEO of Unilever. Polman, who stepped down from his role in 2018, was known for his focus on sustainable business practices and his ability to drive growth while also reducing the company's environmental impact.
Polman's passion for sustainability, his ability to inspire and motivate his teams, and his commitment to transparency and integrity underpinned his leadership style and how he used his personality to drive positive business outcomes. Under Polman's leadership, Unilever launched its Sustainable Living Plan. Guided by Polman’s leadership, Unilever's Sustainable Living Plan has shown impressive results. According to the company's 2020 Sustainability Report, Unilever has:
- Reduced greenhouse gas emissions from its operations by 62% since 2008, and is on track to meet its target of being carbon positive by 2030
- Sourced 62% of its agricultural raw materials sustainably, and aims to achieve 100% by 2023
- Helped over 1 billion people improve their health and hygiene through initiatives such as Lifebuoy soap's hand-washing campaigns
- Achieved a 35% reduction in waste per consumer use since 2010, and is committed to ensuring that 100% of its plastic packaging is reusable, recyclable, or compostable by 2025.
Selecting Leaders Based on Personality Traits
So how can companies select leaders based on personality traits?
One approach is to partner with an executive search firm and use personality assessments to evaluate candidates' personality traits and identify those that are best suited for the role.
Personality assessments can provide valuable insights into candidates' strengths and weaknesses, their leadership style, and their potential for growth and development. They can also help companies identify candidates who may not have the most experience but possess the right personality traits and potential for success in the role.
It's important to note, however, that personality assessments should not be used as the sole basis for selecting leaders. They should be used in combination with other factors, such as experience, skills, and values, to ensure that candidates are a good fit for the role and the company culture.
Personality traits are critical for effective business leadership. While experience and qualifications are important, they are not sufficient on their own to determine a candidate's potential for leadership success. Executives must prioritise personality traits such as emotional intelligence, resilience, empathy, adaptability, and vision when selecting their leaders. By doing so, they can build a strong leadership team that is equipped to navigate challenges, inspire their teams, and drive the organisation's success.
It's time to debunk the myth of the perfect candidate and focus on the traits that matter most for effective leadership. By doing so, executives can ensure that their organisations are led by individuals who are not only qualified but also possess the personality traits necessary to drive long-term success.
