How one leadership advisory firm measures a potential CEO’s agility

Evaluating CEO candidates’ ability to pivot can be challenging. This firm says it’s figured out how to measure CEO agility.

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In today’s business environment, uncertainty is the new norm: 70% of current CEOs surveyed by management consulting firm AlixPartners say their companies face high levels of disruption. To lead through such terrain, boards and recruiters searching for future CEOs need to focus less on a candidate’s résumé and start asking whether an executive has the capacity to be agile.

“When you’re working on CEO succession, with the clients we serve, there’s less of a debate about whether people are qualified,” says David Lange, a managing director and member of Russell Reynolds Associates’s (RRA) Global Board & CEO Advisory Practice. “It’s much more about: ‘Can they scale; can they adapt; can they evolve?’”

Measuring pivot potential

RRA has developed a methodology for measuring what it describes as a “leader’s dynamic quality to continue evolving and leading through change.” The firm does so through its Leadership Portrait, an assessment model it has been refining over the last 26 years. The portrait endeavors to quantify factors such as curiosity, drive, resilience, and social intelligence. It more recently has sought to measure “potential realization” by evaluating an executive’s values, desire to have an impact, and self-awareness of their strengths and limitations.

Indeed, Margot McShane, co-lead of RRA’s Global Board & CEO Advisory Practice, notes that a leader’s willingness to say, “I don’t know,” and seek answers from their team is an asset in a rapidly changing business environment. “We think some self-doubt with a CEO can be a very helpful thing, because it keeps them curious and aware of blind spots which can derail them and organizations,” she says.

Evaluating candidates on potential realization can lead boards to consider and anoint candidates who might have been passed over in a previous era. In an insight report on its Leadership Portrait, RRA shared the example of a client that passed over its chief operating officer (COO) and elevated its chief financial officer (CFO) to CEO. What the former CFO lacked in traditional operating experience, he made up for in a leadership portrait that showed he had courage, the potential to learn, and the ability to navigate risk. RRA says under the new CEO, the company’s stock price increased 60% over two years.

Meanwhile, the traditional CFO skill set—including mastery of financial data to make airtight decisions—may not necessarily signal agility. “That is no longer actually as important as the ability to make sense fast,” Lange says.

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