David Novak: How Top CEOs Identify Future Leaders

As a leader, you’ve got to have a great team in order to succeed because you will never achieve the long-term results you want without the right people.  When you get people capability right, then you are going to satisfy more customers and that’s how you make more money.  That’s what I call a formula for success.

The question is, how do you identify the best leaders so you have the dream team that will take your organization to the next level?

There’s no shortage of interview questions and assessments available.  The internet offers all kinds of solutions.  But what if you could tap into the minds of successful CEOs and learn what they look for in future leaders?

I love learning from top leaders around the world, and during my podcasts, leaders share their secrets to success. One of the questions I often ask is, “What are the must haves you’re looking for in future leaders?”  The answers shared are both diverse and full of wisdom.  Here’s your chance to sit at the table with highly successful CEOs to learn their secrets for identifying future leaders.

Jimmy Dunne, Sandler O’Neill + Partners, Senior Managing Principal, introduced me to a characteristic not shared by any other leaders I interviewed.  He calls it refined desperation.  This is something you can see in someone’s eyes—it’s hunger, combined with humility, which leads to an unbelievable desire to succeed.  This person has something to prove.  They are humble, determined and desperate.  I think Jimmy is really on to something here.

When I asked Dave Cote, Executive Chairman of Honeywell, and 2013 Chief Executive CEO of the Year, what he looked for when identifying future leaders, he was passionate about the importance of independent thinking.  He shared that while there are a lot of smart people in the world, independent thinkers are rare.  What differentiates an independent thinker from a smart person is their passion about questioning everything and talking about why a decision is right, rather than just asking if a decision makes sense.  Cote also looks for future leaders who are analytically strong with tremendous courage of convictions.

Larry Bossidy, retired Chairman and CEO of Honeywell, also won the CEO of the Year title in 1998 while leading Allied Signal.  He values humility when identifying leadership talent.  “I know if you don’t have humility, you don’t grow…  I always say that as you progress through a management system, you either grow or you swell.  The people who grow continue on to do great things, and those who swell stop growing and they fall off the ladder.”

Indra Nooyi, Chairman & CEO of PepsiCo, looks for people who throw their head, heart, and hands into the job.  It’s not enough to come to work and say, “It’s a job,” to her.  She looks for someone who sees their job as a passion.  She wants her leaders to be willing to bring everything they’ve got to work and throw themselves into the job because they love what they do.

Cultural fit and smarts are important to Ed Stack, Chairman & CEO, Dick’s Sporting Goods.  However, after conducting a study on the 50 most successful leaders at Dick’s, he discovered a unique characteristic in his top leaders – they have a desire to win, along with the humility to play any position on the team.  His top leaders are super competitive, yet they understand that the competition is outside the building, not within the organization.  He actually encourages potential hires to go home after the interview, look at themselves in the mirror and answer these two questions: “Do I have to be the smartest person in the room?  Do I have the humility to play any position?”  Their answers to these questions help them determine if Dick’s would be a good fit.

With major technology advancements all the time, there’s a haunting question about how humans will compete.  Geoff Colvin, Senior Editor at Large for Fortune, wrote a book about this dilemma called Humans are Underrated:  What High Achievers Know that Brilliant Machines Never Will.  His research uncovered the skills that will make future leaders valuable:  skills of deep human interaction.  The most important human trait is empathy, which is “…the ability to discern what someone else is thinking or feeling and then responding in some appropriate way.”  Another critical skill is solving problems creatively together – with together being the operative word.  The most effective teams have a social sensitivity that allows them to read each other and respond in the most effective way.

Refined desperation; independent thinking; humility; working with head, heart, and hands; a desire to win; and empathy – this sounds like a rock star hire to me!  There’s one more characteristic I would add to the list — being an avid learner.

Over the years, I’ve come to the belief that the single biggest differentiator between a good performer and a great performer is their desire to learn.  It’s important to find out just how passionate the person is about learning their craft and getting better and better every single day.  So, I ask people questions that will really probe into their learning ability and their desire to get better by learning from others and seeking best practices wherever they can.  When I find that avid learner, I guarantee you that I’ve found somebody who will continually raise their game and get better and better as we invest in them and our company.

Now that you know what top CEOs are looking for in future leaders, how will you use this information to help you create your winning team?  What characteristics would you add to the list?  Use what you’ve learned to create a strategy to select, grow and develop future leaders.