As a director, you will know that finding capable CEOs is only half the battle. The real challenge lies in ensuring these leaders will actually go on to succeed in the role and deliver sustained success in the face of unprecedented volatility and complexity.
This shift in perspective matters more than ever. In today’s business landscape, change is not just constant — it's often dramatic. Market conditions transform overnight, technological breakthroughs reshape industries and global events can fundamentally alter business paradigms within weeks. A CEO perfectly equipped for today’s challenges might find themselves struggling to navigate tomorrow’s landscape.
Russell Reynolds Associates research shows that, in 2023, 15% of outgoing CEOs from globally listed companies, including those in the S&P 500, FTSE 100, and Nikkei 225, lasted less than two years in role — up from an average of 9.6% since 2019.
In this complex operating environment, the critical question when choosing the next CEO is, “How can I understand if this individual has true staying power and can translate their impressive experience into long-lasting success once in the role?” Based on our research, we have identified three core capabilities that successful leaders possess that help them to evolve and unlock their potential and ability to flex in an ever-changing environment. The following list sets out what they are, why they are important, and how to cultivate them in both sitting CEOs and the next-generation leaders on the succession radar.
Self-knowledge. Leadership is a journey of continuous evolution. A CEO today will be quite different from the leader they were five years ago and very different from the leader they will be five years from now. Many CEOs, however, fall into the trap of not making their development a priority once they've made it to the corner office. The list of competing demands is just too long. But this mindset can lead to stagnation — and significantly undermine their ability to succeed in the role.
When we talk about self-knowledge in the leadership context, we mean leaders who not only know what their strengths are and what expertise they bring to the table, but also what their derailers are — what do they look like on their worst day as a leader and what conditions bring these derailers to the surface?
Leaders who lack deep insight into their capabilities, limitations and driving forces operate at a distinct disadvantage. They risk overestimating certain abilities while remaining blind to critical development areas. This lack of self-awareness often results in compromised decision-making, team dysfunction and suboptimal organizational performance.
Values and aspirations. Today's CEOs are expected to do so much more than drive the numbers. Organizational stakeholders — from employees to customers and investors — increasingly demand that leaders contribute to societal progress. Today’s CEOs must navigate and take positions on complex issues ranging from environmental sustainability to social equity, ensuring their organizations create value not just financially, but for society at large.
So, how can leaders ensure they do the right thing for their investors, customers, employees and the business? How do they keep focused during the arduous task of transformation, which inevitably includes many setbacks?
Successful leaders anchor their decisions in a robust value system. When faced with difficult choices — whether facing a crisis or navigating a major organizational change — a leader's value system acts as their North Star, guiding them forward and helping them maintain direction and purpose.
Wider impact and legacy. Today’s organizations face relentless challenges — from market instability and digital disruption to regulatory shifts and global uncertainties. These pressures can trap leaders in reactive mode, focusing solely on immediate problems while losing sight of their fundamental purpose: steering their organizations toward sustainable long-term success.
The most effective leaders recognize that, while it is critical to address immediate concerns, their true value lies in their ability to rise above the daily tumult and maintain a long-term perspective on the impact they can have: Why did they choose to become a leader? What do they want to accomplish? And what legacy do they want to leave behind?
These leaders see their position as a privilege and a responsibility, one that demands they leave the organization in a markedly better state than they found it — not just in terms of financial gains, but other metrics, including strengthening the organization’s culture, enhancing its resilience, fostering innovation, and ensuring its positive impact on society and stakeholders.
The Path Forward
Let’s be clear: there are no silver bullets in CEO selection and no board has a crystal ball. Choosing the next CEO will always be one of the highest-stakes decisions a board will make, carrying both considerable rewards and inherent risks. However, evaluating candidates through the lens of these three fundamental factors — self-knowledge, values-based leadership and commitment to lasting impact — can significantly improve the odds of selecting a CEO who will thrive in the role and deliver sustained success for your organization today and tomorrow.