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

LeadershipC-Suite SuccessionAssessment and BenchmarkingDevelopment and TransitionTeam EffectivenessBoard Effectiveness
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12月 04, 2023
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LeadershipC-Suite SuccessionAssessment and BenchmarkingDevelopment and TransitionTeam EffectivenessBoard Effectiveness
Executive Summary
Our research shows that five critical factors influence C-suite performance. We explore what they are—and how global C-suites measure up.
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As CEO, surrounding yourself with the right executive team is crucial to navigating our increasingly complex business environment. Yet new Russell Reynolds Associates research shows that only two in five leaders feel confident about their C-suite’s ability to drive performance.

So, what’s holding C-suite teams back? And where should CEOs focus their energy to supercharge C-suite performance?

Based on our experience advising thousands of leading organizations globally, we know that the performance and impact of the C-suite comes down to five critical areas. Taken together, each component of C-suite performance has a notable impact on self-reported organizational performance.

 

RRA’s 5Cs of C-Suite Performance: The what, who, and how

When correlating the 5Cs of C-suite performance to organizational performance (as rated by leaders themselves), we found that each component had a notable impact.

 

C-suite-success-chart

Source: RRA Global Leadership Monitor, H2 2023, n=2,717, CEOs, board directors, C-level executives, and next generation leaders

 

To better understand the relationship between organizational performance and these components, we conducted a relative importance regression analysis. Via our H2 2023 Global Leadership Monitor, which reached more than 2,500 leaders worldwide, we found that:

C-suite performance drivers are interconnected: It’s important to consider all five components when looking to improve organizational performance and create a high-performing C-suite. Commitment, capability, and culture make up almost equal shares of influence on organizational performance, followed closely by composition and continuity.

There’s significant room for improvement across all 5Cs: Less than two in five leaders feel that their C-Suite completely embodies the elements that make up the 5Cs of C-suite performance.

Developing next-generation leadership talent is a must: Leaders need to make the greatest strides in improving continuity & succession within their organizations. Focusing on developing the next generation of C-suite leaders helps secure long-term C-suite performance.

 

Commitment & Alignment

Commitment & alignment is a critical component of a high-performing C-suite. But our research found that only 39% of leaders feel their C-suite displays a strong commitment to organizational purpose, and only 30% of leaders feel their C-suite demonstrates accountability and ownership of organizational performance (Figure 1).

When these are present, they can be a lever for organizational success. Leaders at high-performing organizations are 4.5 times more likely to feel that their C-suite demonstrates accountability and ownership of organizational performance.

Having CxOs who are committed and aligned enables C-suite teams to achieve both short and long-term goals, creates clarity in decision-making, and reinforces overall focus. Without a strong sense of commitment, the C-suite risks creating siloed teams with little motivation to reach performance goals.

 

C-suite Performance: Commitment and Alignment

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

 

Composition & Structure

The C-suite’s composition & structure is vital for ensuring a balanced representation of skills and experience that align with the size and maturity of the organization, accounting for 18% of impact on organizational performance. Even so, only 21% of leaders feel that the composition of their C-suite team aligns with the vision or strategy of the organization, and only 22% of leaders feel that their C-suite represents a breadth of skills, background, and experience (Figure 2).

This isn’t just about the size of your C-suite—it’s also about ensuring a diversity of roles, backgrounds, and thought. Skills like emotional intelligence and self-awareness are vital to fostering differing viewpoints.

CEOs who keep a close eye on their C-suite composition—and are intentional about incorporating diversity of thought—will be best placed to navigate uncertainty ahead. It’s easy to focus too narrowly on a specific role without considering its impact on the broader C-suite, but CEOs need to take a holistic view.

 

C-suite Performance: Composition and Structure

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

 

Capability & Skill

Capability & skill—which describes leaders who display adaptability in the face of uncertainty and feel equipped to make strategic decisions—accounts for 23% of the influence on C-suite performance, making it the second largest share. Yet only 28% of leaders feel that their C-suite displays adaptability and resilience through uncertainty. Furthermore, only 28% of leaders agree that their C-suite feels comfortable and informed to make strategic decisions (Figure 3).

Of course, each organization’s definition of “the right skills” will differ. Generally, it comes down to ensuring that members’ capabilities and experiences—collectively and individually—align with the organization’s forward-looking strategy.

Above all, the C-suite must feel comfortable making decisions as a team. This ensures sustained progress toward organizational goals, while allowing each executive to engage with one another and the fast-changing environment around them.

 

C-suite Performance: Capability and Skill

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

 

Culture & Behavior

According to our research, culture accounts for the third largest share of influence on C-suite performance, at 22%. However, only 26% of leaders indicate that their team articulates an inspiring vision that aligns with organizational values, and only 22% of leaders feel that their C-suite displays a high level of trust that is visible across multiple levels of the organization (Figure 4).

High-performing C-suite teams are stewards of organizational culture that enable collaboration, trust, and psychological safety.

A lack of trust can result in a lack of motivation and accountability across the organization. It also leads to more transactional, versus collaborative, operations. A strong appreciation for organizational culture and clear articulation of that culture can lead to more productive employees, improved performance outcomes, and accelerated growth.

 

C-suite Performance: Culture and Behavior

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

 

Continuity & Succession

A deep, resilient, and adaptable pipeline of future leaders enables organizations to evolve their strategy alongside external pressures. While our research shows that continuity and succession account for the lowest share of influence on organizational performance (12%), this is also the area where leaders need the most improvement. Only a dismal 14% of leaders say the following actions “completely describes” their C-suite: regularly reviewing engagement, development, and retention plans. And only 11% of leaders feel that their C-suite team provides appropriate exposure to next generation leaders (Figure 5).

High performing C-suite teams maintain a strong level of engagement with next generation leaders, high exposure to the executive team, and robust succession planning.

When next generation leaders lack exposure and engagement within their organizations, they are more likely to grow dissatisfied and lose motivation.  Organizations can prevent this by focusing on continuity and succession to build next generation leader’s expertise and successfully empower them for future leadership roles.

 

C-suite Performance: Continuity and Succession

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

 

What’s Next?

While long-term organizational goals can stay relatively fixed, the strategy for achieving them rarely survives the realities of today’s operating environment. These critical business issues cannot be solved within an individual function or line of business; instead, they require collaboration across organizational silos and capabilities.

CEOs and boards should think carefully about the health of their executive leadership teams and the succession pipelines that sit below them. While the question “do we have the right leaders on the team to find and capture opportunities in a different environment?” is a hugely important one, CEOs and boards must also look at how those leaders function as a collective unit. To meet the challenges of today and tomorrow, organizations must build a roster of top performers who can quickly come together to address issues and opportunities across a wider range of skills than ever before.

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 & 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

We asked leaders to rate the overall performance of their organization, as well as the performance of their C-suite across several factors, which make up the 5Cs of C-suite performance. Using these measures, we conducted a relative importance regression analysis to better understand the relationship between organizational performance and these five components. Note that the degree to which one item influences organizational performance is relative to all other items in the model.

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

 

This analysis is derived from RRA’s Global Leadership Monitor, which is a global survey of boards, CEOs, CxOs, and next-generation leaders that tracks key threats to organizational health and leadership preparedness to face them.

Learn more | Methodology

 


 

Authors

Ela Buczynska, Tom Handcock, 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 two years. Their responses to the survey have contributed greatly to our understanding of leadership in 2023 and beyond.

Additional contributors

Peter Pickus leads Russell Reynolds Associates' Global Knowledge Team focused on Executive Assessment and Development.  He is based in Washington, DC.

Elizabeth Burn is a member of Russell Reynolds Associates' Global Knowledge Team for Executive Assessment and Development. Elizabeth is based in Washington, DC.