5 Traits Every Successful CEO Needs | Entrepreneur

Opinions expressed by Entrepreneur contributors are their own.

Have you ever wondered what it takes to be a successful CEO in today’s fast-paced business landscape? The role is evolving, with average tenure dropping to less than 24 months in Q1 2024. In recent years, there has been a growing conversation about the changing nature of the CEO role.

So, who is the CEO of 2024 — even 2025? In this article, I will explore the CEO’s evolving role and the key characteristics that define successful leaders in today’s world.

1. Ability to build trust

Since nearly half (48%) of a company’s reputation is attributed to the CEO, building trust is paramount in today’s competitive business landscape. As agility, collaboration and innovation become increasingly essential, traditional command-and-control leadership models are no longer sufficient. Effective CEOs must foster trust as a cornerstone of their leadership approach.

Trust-based leadership shapes organizational culture, creating a psychologically safe environment where employees feel empowered to take risks, express their opinions, and innovate freely. This not only drives employee engagement and satisfaction but also propels organizational excellence in the face of uncertainty.

Building trust extends beyond internal relationships. Successful leaders understand that trust is the bedrock of strong relationships, contributing to business growth and sustainability. Effective communication and interaction with external audiences are essential for building and maintaining trust.

Satya Nadella, CEO of Microsoft, is a prime example of how a leader can build trust with external stakeholders. Under his leadership, Microsoft has successfully transitioned from traditional software to cloud solutions and AI services, requiring a shift in communication strategies. Nadella’s openness and transparency have been instrumental in building trust with customers and partners.

2. Growth mindset

The dichotomy of ‘founder mode’ versus ‘manager mode’ in the startup realm is a topic that has piqued my interest. I lean heavily towards the ‘founder mode’ approach, finding it most effective when my team executes operational tasks seamlessly and consistently.

As a founder, I often find myself in a mentorship role, guiding my team, directing their energy, identifying issues, and allowing them to learn from their mistakes. Founders possess a distinct entrepreneurial spark that can ignite the same passion in others. While managers may excel at creating more managers, founders have the unique opportunity to cultivate mini-founders within their teams.

A leader operating in ‘founder mode’ can maintain a thriving entrepreneurial culture as a company grows and becomes more structured. By fostering an environment where everyone can absorb this energy and flourish, founders can ensure that the company’s innovative spirit endures.

3. Effective communication

As leaders navigate complex challenges and strive to inspire their teams, the ability to deliver clear, inspiring messages and actively listen to feedback is paramount, as 82% of employees value regular updates from their leader. Transparent and inspiring communication fosters trust, boosts morale, and enhances productivity. Moreover, nearly a third of employees believe effective CEO communication positively impacts financial performance.

Patricia Poppe became CEO of Pacific Gas & Electric in 2021, and right from the start, she led PG&E through a period of challenges by rebuilding trust, promoting a new, environmentally focused mission, reassuring stakeholders and demonstrating PG&E’s commitment to a sustainable future.

Poppe’s ability to communicate complex ideas clearly and persuasively was evident in her announcements regarding major investments in green energy and the shift to renewable sources. By fostering an atmosphere of open dialogue and transparency, Poppe encouraged employee engagement and inspired confidence in PG&E’s ability to navigate challenges successfully.

4. Difficult leadership decisions

As businesses grow and scale, leaders often face tough decisions involving their teams. While early employees may experience a shift in their level of involvement and struggle to adapt as the company evolves, it’s essential to focus on individual responsibilities and career development. These decisions, though challenging, are essential for the company’s continued success. Think of it like a football team moving from a lower division to a higher one. Not everyone is prepared for the increased demands of the new level.

As companies transition from small, informal teams to larger, more structured organizations, it’s crucial to maintain a strong sense of connection and purpose. By creating clear systems and fostering a supportive environment, leaders can ensure that everyone feels valued and engaged as the company scales.

5. Strategic vision

A CEO’s role extends beyond day-to-day operations. It’s about shaping the future of the business by strategically managing resources, fostering teamwork, and developing leaders. Flowwow continues to expand its reach across the MENA region, Spain, and Brazil. Our focus is on adapting and localizing our platform in these new markets while continuously increasing the number and quality of sellers and acquiring new customers. As the business grows, the CEO will increasingly focus on long-term strategic initiatives.

This strategic perspective is crucial for anticipating the future of the company and navigating the pitfalls of modern business. Former eBay executive Donahoe’s experience at Nike highlights the importance of a well-crafted strategy. His initial DTC strategy, while well-intentioned, ultimately proved ineffective. Recognizing this, Nike made a strategic shift and appointed a new CEO with a focus on online commerce.

Successful CEOs are known for their ability to anticipate future trends, make strategic decisions, and adapt to change. This ability is their compass, which guides the business towards a prosperous future.

The CEO’s role is multifaceted and essential for a company’s success. By combining strategic vision, resource management, adaptability, and resilience, CEOs can navigate complex challenges, inspire their teams, and drive sustainable growth.

Source link