How Do You Evaluate What Makes a Great CEO?

Posted by Chuck Kocher
On January 22, 2013

Every year Fortune publishes a list ranking the 500 largest companies in the United States. This year is no exception, and you can look at the rankings for 2012 here. But does making the Fortune 500 list make you a great company? And what about the leaders of those companies? Are they great leaders? Can you emulate their leadership style? Should you? If your criteria is based on revenue and profits, then the Fortune 500 list can give you give you a standard by which to measure leadership. But is that the standard by which you want to measure—and be measured?

Of course Fortune also rates CEOs based on their salary and the stock performance of their companies. Again, the emphasis is on financial success. Should a CEO’s success be measured by the financial success he brings shareholders?

The folks at glassdoor.com have yet another set of criteria by which they measure CEO success. They look at a leader’s approval ratings to see who they think is top dog in the business world. You can check out their list of 25 highest ranked CEOs for 2012 here.

In my opinion, one of the more interesting—and practical—lists came from Profiles International. Chip Conley from Emotional Equations talked about the top 10 emotionally intelligent Fortune 500 CEOs. You can read Chip’s whole article here, but a condensed summary of his list. What I think is valuable is that the characteristics described here are things any CEO (or other leader) can develop.

1. Jeff Bezos (Amazon.com): His obsession with the hearts and minds of his customers and his long-term perspective on relationships (and business strategy) are legendary.

2. Warren Buffett (Berkshire Hathaway): Intensely loyal and relationship-driven, he asks his CEOs to run their companies as if they were to own them 100 years from now.

3. Ursula Burns (Xerox): Direct, yet respectful, her assertiveness is matched by a sense of mission that inspires her employees.

4. Jamie Dimon (JPMorganChase): At Harvard Business School, Dimon said: “You all know about IQ and EQ. Your IQ’s are all high enough for you to be very successful, but where people often fall short is on the EQ. A lot of management skills are EQ, because management is all about how people function.

5. John Donahoe (eBay): Donahoe’s disciplined self-awareness and his listening ability have created a deeply loyal team and a healthy, evolving culture.

6. Larry Fink (BlackRock): Fink created the largest money-management firm in the world based upon self-reflection, teamwork and direct communication. His senior leadership team embraces EI seminars to improve their skills.

7. Alan Mulally (Ford): Walk around Ford’s corporate campus and you will see office cubes featuring handwritten notes that Mulally has sent to employees praising their work. Great interpersonal skills and the ability to make you feel like you’re the only one in the room when you’re in a conversation with him.

8. Indra Nooyi (Pepsi): Nooyi is a conscious capitalist whose “performance with purpose” agenda has helped move employees from having a job to living a calling. She wrote the parents of 29 senior Pepsi execs to tell them what great kids they’d raised.

9. Howard Schultz (Starbucks): He says that the main reason he came back was “love”: for the company and its people. Very dedicated to generous healthcare benefits—inspired by his father losing his health insurance when Schultz was a kid.

10. Kent Thiry (DaVita): Leaders with high EI/EQ create culture-driven organizations that perform at their peak due to the power of mission and teamwork. Thiry took over a demoralized kidney dialysis center company that was almost out of business and, with a passionate spirit, created nearly 44 percent annual growth in earning per share in the past decade, 6th highest of any Fortune 500 company.

All of the things above are valid ways to measure and evaluate how well a leader is doing. The big questions are: By what standard do you measure whether or not you’re a great leader? And what concrete steps can you take to get there?