Drivers for a High-Performing C-suite: What They Are and How Leaders Can Harness Them

Leadership StrategiesLeadershipBoard and CEO AdvisoryC-Suite SuccessionTeam Effectiveness
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7月 22, 2024
8 記事アイコン
Leadership StrategiesLeadershipBoard and CEO AdvisoryC-Suite SuccessionTeam Effectiveness
Executive Summary
Our research explores what makes a high-performing C-suite team, and the most impactful drivers for organizational performance.
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C-suite teams are the driving force behind a company’s strategy and overall success—they’re responsible for making strategic decisions, enabling collaboration, appropriately harnessing talent, and ultimately, driving the organization's overall success.

But what sets a high-performing C-suite team apart? RRA's 5Cs of C-suite performance identified five critical areas that influence overall C-suite performance: commitment and alignment, capability and skill, culture and behavior, composition and structure, and continuity and succession. We conducted a stated vs derived importance analysis to understand what specifically drives organizational success within each component.

We found that there were:

  • Key drivers: Factors that leaders rate as important to C-suite success that directly correlate with organizational performance.
  • Hidden drivers: Factors that are not top of mind for leaders, but greatly influence organizational performance. These are areas that leaders mistakenly overlook.
  • Table stakes: Factors that leaders state are important, but don’t correlate as strongly to organizational performance.
  • Opportunities: Factors that leaders don't state as important and have a less significant influence on organizational performance.

 

Figure 1: Stated vs Derived Importance

Stated vs Derived Importance

Source: RRA Global Leadership Monitor, H2 2023, n=2,729, CEOs, board directors, C-level executives, and next generation leaders

 

Key drivers

Key drivers include factors that leaders name as important and impactful toward driving organizational performance.

Our research highlights three critical areas as key drivers:

  1. Accountability and ownership in organization performance;
  2. Trustworthiness across the organization;
  3. Resilience through uncertainty.

Leaders at high-performing organizations (rated excellent or very good) are 8.1 times more likely to display a high level of trust, 4.5 times more likely to demonstrate accountability and ownership, and 4.1 times more likely to display adaptability and resilience compared to those at lower performing organizations (rated fair or poor).

CEOs who can harness these qualities within their C-suite teams form the bedrock of a high-performing team. In today’s uncertain economic environment, resilience is key. Teams must be able to adapt and guide their teams through ever-changing issues, like technological change, geopolitical uncertainty, and shifting regulations. By owning their actions and demonstrating accountability, leaders cultivate a culture of transparency and trust that trickles throughout multiple levels of an organization.

 

Hidden drivers

Hidden drivers reveal areas that may not be as top-of-mind, but greatly influence organizational performance.

Our research emphasizes two key areas as hidden drivers:

  1. Feeling comfortable and informed to make strategic decisions
  2. Displaying a high commitment to organizational purpose

While commitment and comfort in making decisions may be overlooked, our research suggests that these areas have a significant impact on organizational performance. Most notably, leaders at high-performing organizations (rated excellent or very good) are 4.7 times more likely to feel comfortable making strategic decisions, and 3.6 times more likely to feel that their C-suite team displays a high commitment, compared to those at lower-performing organizations (rated fair or poor).

Leaders who demonstrate commitment to their organization’s purpose can cultivate a shared mission and direction among their teams. Moreover, CEOs who focus on creating alignment related to the organization’s purpose help empower confidence in decision making. C-suite teams that balance purpose and goals with ambiguity in business environments lead to greater overall success. While often not top of mind for leaders, these are areas that can help move the needle from a low to high-performing C-suite team.

 

Table stakes

Table stakes drivers—the minimum requirement for a C-suite team to perform well—are those that leaders note as important, but don’t correlate as strongly with organizational performance.

Our research outlines two notable areas as table stakes:

1. C-suite teams that can articulate an inspiring vision;
2. C-suite teams that represent a breadth of skills, background, and experience.

Notably, leaders at high-performing organizations (rated excellent or very good) are still 4.2 times more likely to articulate an inspiring vision and 3.7 times more likely to feel that their C-suite team represents a breadth of skills, background, and experience compared to those at lower-performing organizations (rated fair or poor).

While these areas have a lower impact on overall organizational performance, when asked which factors are most important to a successful C-suite, leaders rate these areas almost as highly as our key drivers. Since these areas tend to be top of mind, our research suggests that these areas can have an immediate (or short-term) influence on C-suite performance. Therefore, CEOs should focus on building a diverse C-suite team, with a breadth of skills, background, and experience to not only help foster productive tensions, but also encourage innovation within an organization. A diverse C-suite team can ultimately support success in other areas, like displaying adaptability and resilience, encouraging effective decision-making, and instilling an inspiring vision and culture.

 

Opportunities

This quadrant includes areas that are lower on both stated and derived importance. Leaders are less likely to rate these as important and have a smaller influence on overall organizational performance, relative to other attributes listed. Despite this, these items create value in the long term, so while they don’t correlate strongly with performance today, they can affect the performance of future C-suite teams. Our research outlines three opportunity areas:

  1. A long-term vision/strategy for the C-suite composition;
  2. Appropriate exposure for next-generation talent;
  3. C-suite team that regularly reviews engagement, development, and retention plans.

A focus on succession and developing next-generation talent can improve organizational outcomes. Most notably, leaders at high-performing organizations (rated excellent or very good) are 5.5 times more likely to ensure the composition of the C-suite teams aligns with their long-term vision, 4.6 times more likely to regularly review engagement, development, and retention plans, and 4.2 times more likely to provide exposure to next-generation leaders as compared to those at lower-performing organizations (rated fair or poor).

While our research suggests that succession and developing next-generation leaders may not be top of mind for many leaders, it plays an essential role in developing a higher-performing team. Next-generation leaders are more likely to become dissatisfied when not given the appropriate exposure and engagement within an organization. Leaders can build high-performing C-suite teams by nurturing next-generation talent and evaluating the evolution of the C-suite composition as the organization matures.

 

What’s Next?

CEOs and boards should evaluate the strength of their C-suite team and the leaders who sit below them. While it’s important to consider organizational strategy, it is equally important to consider how your C-suite collaborates and operates. Organizations must cultivate a collective of high-performing individuals who can quickly harness opportunities and address issues in today’s dynamic business environment.

CEOs build successful C-suites when they...

  1. Hire CxOs who are committed and aligned;
  2. Proactively focus on their C-suite composition and take a holistic view of the team;
  3. Ensure that leaders have the right capabilities & skills for the organization;
  4. Enable collaboration, trust, and psychological safety that supports organizational culture and behavior;
  5. Continually assess and engage with next-generation leaders and develop robust succession plans.

Resulting in:

  1. Higher EQ in leaders;
  2. More nimble responses to uncertainty;
  3. Confidence in strategic decision-making;
  4. More productive employees, improved performance outcomes, and accelerated growth;
  5. Increased rate of executive retention and/or internal succession.

 

 

Methodology

Respondents were asked to rate the overall organization's performance on a 5-point scale: Excellent, Very Good, Good, Fair, Poor.

Respondents were also asked to rate their C-suite across a series of 10 attributes on a 4-point scale: Describes completely, describes mostly, describes somewhat, does not describe at all. The 10 attributes were then condensed into 5 components that make up our 5Cs, as outlined below:

Commitment & Alignment

• Displays high commitment to organizational purpose
• Demonstrates accountability and ownership in organizational performance


Composition & Structure

• Composition of the C-suite team aligns with the vision/strategy of the organization
as the organization matures

• C-suite represents a breadth of skills, background, and experience that contribute to strategic thinking


Capability & Skill

• Displays adaptability and resilience through uncertainty
• Feels comfortable and informed to make strategic decisions


Culture & Behavior

• Articulates an inspiring vision that aligns with the organization's values
• Displays a high level of trust that is visible across multiple levels of the organization


Continuity & Succession

• Regularly reviews engagement, development, and retention plans
• Provides appropriate exposure to emerging or next generation leaders


Using these measures, we conducted a relative importance regression analysis to better understand the relationship between organizational performance and these five components (The degree to which one item influences organizational performance is relative to all other items in the model.)

 

 

Methodology: Stated vs Derived Importance

A stated vs derived importance analysis helps us better understand the key drivers for a high-performing C-suite, while also revealing hidden drivers that may not be top of mind for leaders. Via our H2 2023 Global Leadership Monitor—a global survey of boards, CEOs, CxOs, and next-generation leaders that tracks key threats to organizational health and leadership preparedness to face them—we asked leaders to evaluate their C-suite team on a set of factors. We then asked them to rate how important they think those factors are to the performance of the C-suite (known as stated importance). Then, we conducted a relative importance regression analysis on self-reported organizational performance (known as derived importance). Derived importance helps reveal the underlying drivers of C-suite performance, which may be overlooked in stated importance.

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Global Leadership Monitor

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Methodology

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Authors

Ela Buczynska and Gabrielle Lieberman of RRA’s Center for Leadership Insight conducted the research and authored this report.

The authors wish to thank the thousands of leaders from RRA’s global network who responded to the Global Leadership Monitor over the last three years. Their responses to the survey have contributed greatly to our understanding of leadership in 2024 and beyond.

 

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How CEOs Can Build and Maintain a High-Performing C-suite