No matter how successful or seemingly secure any business appears, there are no longer periods of calm seas for leaders in any industry. A broad statistic reinforces this fact emphatically: More than half the companies that were industry leaders in 1955 were still industry leaders in 1990. But more than two-thirds of 1990 industry leaders no longer existed by 2004.
Leaders today need to be at home navigating a ship through 40-foot waves — oceans that will never again be serene — and still be able to guide their crew safely from port to port. They must remain highly effective in an environment of extraordinary, ongoing stress.
In researching my new book, Better Under Pressure, my colleagues and I sought to identify the qualities that define leaders who excel in this environment of duress. We gathered performance data for approximately 200 candidates being assessed for the CEO role at major U.S. corporations. These candidates were divided into three groups, with the top-performing quartile labeled "highly successful," the middle two quartiles characterized as "average performers," and the bottom quartile as "highly ineffective."
What emerged was startling. Certain attributes — three in particular — were highly consistent within the top performers, regardless of industry or job type. Clearly, this mental architecture was responsible for the execution ability of the most effective executives operating under pressure. What's more, these attributes were almost totally absent among the bottom-performing quartile.
To further my investigation, I then conducted in-depth psychological interviews with more than 60 current and retired CEOs to help clarify the role each of these factors played in their leadership. One core conclusion emerged: the best CEOs had been, and continued to be, distinguished by their ability to manifest the very best from their workforce. In my interviews with the CEOs, it became even clearer that the three attributes had become even more important by the beginning of the 21st century.
To perform their best in today's turbulent atmosphere, leaders must possess this highly unusual set of three traits that often run counter to natural human behavior. These attributes are catalysts for the mastery displayed by the world's best CEOs — and, together, they add up to a new definition of leadership:
- Realistic optimism. Leaders with this trait possess confidence without self-delusion or irrationality. They pursue audacious goals, which others would typically view as impossible pipedreams, while at the same time remaining aware of the magnitude of the challenges confronting them and the difficulties that lie ahead.
- Subservience to purpose. Leaders with this ability see their professional goal as so profound in importance that their lives become measured in value by how much they contribute to furthering that goal. What is more, they must be pursuing a professional goal in order to feel a purpose for living. In essence, that goal is their master and their reason for being. They do not ruminate about their purpose, because their mind finds satisfaction in its occupation with their goal. Their level of dedication to their work is a direct result of the extraordinary, remarkable importance they place on their goal.
- Finding order in chaos. Leaders with this trait find taking on multidimensional problems invigorating, and their ability to bring clarity to quandaries that baffle others makes their contributions invaluable.
In my work assessing candidates for CEO positions in the country's top companies, I look for people who demonstrate all three capabilities. No organization should hire or promote into a leadership job someone who doesn't have the full suite, and each is a must-have for any aspiring leader today.
The good news is that these three capabilities can be learned. People can change. By learning about these attributes, you can become aware of them and choose to build them in yourself. And this can help you bring out the best in those you lead.
Real leadership is recursive: It's a continuous process that starts with a leader and is echoed in that leader's people. My research has shown that the best leaders work with the people they lead to seek their mutual maximum potential together; they co-create their success.
Leaders who embody realistic optimism, subservience to purpose, and the ability to find order in chaos can use these catalysts to craft contexts in which they and others can realize potential. We are all born with an innate urge for triumph, but are not born aware of this need or how to meet it. It is up to a leader to create a work environment in which every employee can experience the deep satisfaction of triumphing in pursuit of a worthy goal.
The most critical responsibility leaders have is to help their people flip the switch of engagement toward realizing their potential as human beings. When leaders create a context for people to realize their potential, they create a virtuous cycle that elicits people's best selves — the selves that induce the gratification we all feel when we overcome significant challenges and realize our potential.
This is how a leader creates an organization that harnesses the utmost effort and resiliency from all employees. In today's business environment of ever-escalating competition, such an organization is the only kind that is built to survive.
Justin Menkes latest book, Better Under Pressure, has just been released by Harvard Business Review Press.
Acknowledgement: this article first appeared here on the HBR blog.