Filene report on CEOs: Personality matters more than ability
CEOs' personality is more important than CEOs' ability in influencing employee engagement and organization performance, according to a new study from the Filene Research Institute.
The study, "Leading for Credit Union Success: The Roles of Personality and Practices in CEOs," was based on a survey of employees at 84 credit unions across the U.S. and Canada. At each credit union, four senior management team members, four middle managers, four entry-level employees, and the CEO were surveyed.
Among the report highlights:
- CEO conscientiousness is the top trait when predicting employee engagement. High scorers in conscientiousness have a strong sense of purpose and urgency that leads them to achieve organizational objectives. While this gets reflected in their leadership behavior, the results show this one trait has a remarkably large effect on overall employee engagement.
- Emotional stability is the best predictor of organizational performance, while agreeableness is the best personality predictor of CEO leadership. Thus, CEOs who tend to be calm, hardy, secure, and confident (emotionally stable) are linked to more effective leadership and higher organizational performance.
- Successful CEOs do a better job of maintaining relationships, which is important to transformational leadership. CEOs who tend to be skilled at building and maintaining relationships (relationship competence) are linked to more effective leadership and higher organizational performance.
- Not all abilities are created equal. The study examined three key CEO abilities: Strategic change competence, the ability to accomplish tasks, and the capacity to build and nurture relationships. Although strategic change competence is the best way to predict a CEO's ability to be a transformative leader, relationship competence is a better indicator of organizational performance.
- Smarter hiring can make a difference. Credit unions should recognize the importance of these personality traits and abilities when hiring and factor them into the recruiting process, the report said.