CEO’s influence accounts for 45 percent of a company’s performance

Research has found around 45 percent of a company’s performance can be attributed to the CEO’s impact, according to a McKinsey report.

The report looked deeper into issues around how CEOs are performing, issues they contend with and how to uplift performance [pdf].

The McKinsey Center for CEO Excellence (MCCE) undertook the report, using a new tool in its CEO Excellence Assessment Tool (CEAT). 

Using preliminary insights from data collected over 2023, comprising of more than 100 CEOs across 17 major industries with the majority of participants from companies headquartered in Asia.

The report said while still in the early stages, data is “already yielding rich and often counterintuitive insights into the challenges and uncertainties faced by Asian CEOs.”

Findings show “that CEOs generally feel confident about their ability to manage their own personal effectiveness but can struggle to manage the board and engage with key stakeholders, although high-quality training opportunities can improve self-assessed performance significantly, especially for early-tenure CEOs.”

“Interestingly, women CEOs appear to be more confident than their male peers in their performance across many key practices, though the number of women in our current sample is small,” the report said. 

In the report, data found the most common CEO challenges are engaging the board, allocating resources and connecting with stakeholders.

“Women CEOs tend to prioritise the ‘software’ of organisations more and rank themselves higher than their male peers on most behaviours,” the report also said.

From the results, more-experienced CEOs are said to “gain confidence by prioritising different things than early CEOs”.

It also found that “investment in targeted learning and mentorship interventions drives improvements across all behaviours”.

“Early interventions matter; training and mentorship can accelerate growth for early-tenured CEOs,” the report also said.

Ultimately, the McKinsey report found “developing a better understanding of the challenges facing CEOs and opportunities for progress. 

“While this article has begun to explore some of those issues, more work is needed.” 

“Going forward, we will marry the insights gained from our CEO interviews and interactions with the growing body of data coming from the CEAT, which will also enable us to provide more best practices and tips for improvement along the six dimensions of leadership.

“Our aim with this work—as with everything we do at the MCCE—will be to continue to shed light on the opportunities and challenges of the vital, demanding role of the CEO and how individuals can best position themselves to lead in today’s uncertain and evolving world,” the McKinsey concluded.