Can companies or countries survive without their leaders? The answer is yes. For years so much importance has been placed on CEOs and the troubles that would result if there would ever be a change in management (willingly or unwillingly). While CEOs are important, they are still very much replaceable, and hold less power than we thought in the first place.

CEO power greatly differs by industry

The power CEOs have to make decisions differs greatly depending on the sector and firm they are working for. For example, those running technology or manufacturing firms have more control over changes in prices, packaging, as well as the designing and distribution of products. This contrasts those working in the highly regulated industries like oil and gas.

CEOs have more power at younger firms

CEOs also tend to have more power when heading up smaller or younger firms than more established ones-- perhaps this is due to their openness to embrace the new. Either case, only 15-20% of outcomes at firms are actually credited to CEOs, meaning they have far less power than we thought.

The good and the bad of CEOS

The two most common personality traits of CEOs are overconfidence and narcissism. Though there are clear risks to these traits: buying overvalued companies and not embracing socially responsible behavior for example, these traits also make CEOs more innovative, precisely because they are comfortable exploring the new and taking risks. This is a classic example of the rose and thorns.

Every CEO needs his sidekicks

There are two important sidekicks to the CEO that give them a healthy dose of reality and pessimism, to meet the unbridled optimism seen with many CEOS: the Chief Financial Officer (CFO) and Chief Sustainability Officer (CSO). These two are much more focused on the details and checking if certain decisions make sense, as well as reducing irresponsible behaviors.

The future of work and the new era of CEOS

The future of work is about embracing better leadership on all levels, including CEOs. If held accountable, CEOs can implement wonderful practices like increased business innovation, digital transformation and work productivity. While it’s clear CEOs are far from irreplaceable, we should nevertheless take great care when choosing them.

Check out the course mentioned for more ways to embrace leadership that works.

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