What makes the ideal chief executive? 120 Scottish bosses spill the beans

Fewer than half of Scotland’s bosses believe that talent to take the top job exists in their firms, prompting calls to step up succession planning efforts.

The finding has emerged from a survey of more than 120 chief executive officers (CEOs) and senior leaders in Scotland as part of a research partnership between executive search outfit Livingston James Group and professional services giant EY UK.

The study - aimed at identifying the skills required to be a CEO of the future - also quizzed other senior leaders and potential CEOs heading up departments including finance, operations, technology and human resources, along with non-executive directors and chair people across the public and private sectors.

Jamie Livingston, Mark Lewis, Sophie Randles, Hazel Wynn, Derek Lauder and Ali Shaw. Picture: Elaine Livingstone

Just under half - 47 per cent - of the CEOs surveyed said they could see somebody in their current leadership team as potential future CEOs of theirs, or another organisation. Just over half - 56 per cent - of the functional leaders responding to the survey believed they have the potential to take the top job in future. The research project, which was centred around a blend of surveys and interviews, also asked respondents to identify key challenges and priorities going forward, and what they believe the CEO of the future will look like.

Participants said integrating artificial intelligence (AI) into their business, keeping on top of tech regulation and compliance, risks associated with cybersecurity, and attracting and developing tech-focused talent amid significant skills shortages were among the key issues “keeping them awake at night”. Aside from technology, participants singled out a need to improve workplace culture and diversity as a key challenge, alongside balancing profitability with improving long-term values including ESG (environmental, social and governance).

Alistair Shaw, director at Glasgow-based Livingston James Group, said: “With more than 50 per cent of current CEOs believing the talent to succeed them doesn’t exist within their organisations, investing in proactive, long-term succession planning for the C-Suite and ‘C minus one’ roles is paramount, identifying leaders with potential early on in their careers, ensuring a motivational career path for the best talent whilst focusing on nurturing and attracting more diverse talent pools to potentially become future CEOs.

“The traditional CEO playbook has evolved, and the qualities that led to CEO success in the past are no longer adequate. The environment in which CEOs operate is undergoing a fundamental shift, rendering some traditional leadership approaches obsolete. This impacts what CEOs need to accomplish, how they go about it, and what essential characteristics are required for success in this new era.”

Alistair Shaw, director, Livingston James Group. Picture: Elaine Livingstone

He added: “Our analysis of how leadership styles of CEOs have trended in the last few years and commentary from our survey confirms the move away from the traditional top-down style. There is a growing recognition that a sense of purpose can inspire and motivate both leaders and employees, fostering a more engaged and dedicated workforce.

“Organisations with a clear and meaningful purpose tend to attract and retain talent more effectively, and consumers and investors are placing greater importance on corporate social responsibility and ethical practices.”

Asked for the top attributes CEOs will need to succeed in future, 100 per cent of those CEOs questioned identified resilience as the most important, as did chief commercial officers and chief operating officers. High emotional intelligence also ranked highly with CEOs - with 80 per cent naming it a top trait.

The study also asked CEOs to identify the most important characteristics for the role of future CEO, with being a “transformational leader”, “being the face and voice of the organisation”, and “setting the tone” the top three responses.

Shaw added: “It’s also clear that those softer, intangible, human attributes - voice, vision, resilience, and the innate ability to bring the technical skills of others together - remain essential to leaders of the present and future.”

Tricia Nelson, consulting leader at EY Scotland, said: “Rather than time spent in a particular industry or job function, it is now more critical to accumulate a range of relevant experiences and attributes such as resilience, vision and determination.

“While the role of a CEO has always been demanding, contemporary challenges such as AI, ESG and increased stakeholder expectations may contribute to an overall perception that the job is becoming more difficult. The role of a CEO can be lonely, which makes your chosen network of advisors, coaches and mentors so significant. Success in the role often requires a combination of strategic vision, adaptability, effective leadership, and a deep understanding of the business landscape.

“Developing the future CEO, with the new required qualities and an increased focus on emerging internal talent, is a critical responsibility of the chair and board,” she added. “By operating in Scotland, they already have a massive recruitment advantage - the business community plays on an international field but is effectively networked into the strong local ecosystem of education, industry and government which, in turn, attracts a truly global C-Suite talent pool.

“Fostering and building on the competitive advantage, along with a passion for innovation, will mean organisations can do what they do best with a local footprint in a global market.”

Chief executives overwhelmingly named improving customer value proposition (CVP) as their number one priority, while chief financial officers, chief operating officers and chief commercial officers favoured employer value proposition over CVP. The human resource leaders quizzed as part of the research placed ESG as the top priority.

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