Certainly, I have worked with a great many leaders who could attribute their success to hard work, keen intellect, a strategic mind and effective decision-making. But I have also met a lot of leaders who – for lack of a better term – were just lucky. They had, as the saying goes, horseshoes up their butts.
Perhaps you’ve seen this happen before. A leader takes over an under-performing business in a very difficult market. She makes all of the tough calls necessary to turn the business around. However, progress is slow and signs of a turnaround are elusive. Time passes, her organization loses patience, and the leader loses her job.
A new leader is hired to replace her. And it seems all of a sudden, this under-performing business has turnaround under his leadership. It’s almost miraculous. And as we typically do in our organizations, we proclaim this leader as the hero who turned around the under-performing business.
Have you seen this before?
I find what we fail to appreciate in these situations is that the new leader’s success is actually a result of all the hard-work and tough decisions of the former leader. Not to disparage the second leader, but he clearly lucked into being in the right place, at the right time.
Why do I bring up this issue of luck and leadership?
Well there is some emerging research that may show the two are more connected than we think. Just this month, Texas A&M Management Professor Markus Fitza released the results of a study he did on CEO performance and chance – factors outside anyone’s control.
Fitza performed a series of simulations to assess whether an individual CEO could have a bigger impact on the fortunes of their organizations than chance events: market lurches; economic uncertainty; acts of God and other unpredictable events that cause businesses to succeed or fail.
Fitza conducted simulations involving data from more than 1,400 companies involving more than 2,600 CEOs in 220 different industries. His conclusion? Chance plays a much, much bigger role in determining performance than the CEO alone.
One could conclude that it’s not really all that important who you pick to be CEO, particularly when luck or chance has more impact on results. But that’s not really a productive analysis of this and other studies on the CEO effect.
Perhaps what we’re seeing here is only the impact of an average CEO on organizational performance. Perhaps we should be asking – why aren’t we identifying and developing more impactful chief executives?
CEO compensation is so outrageous right now that most of us have high expectations for what CEOs can do for their organizations. So high, in fact, that we’re shocked when someone suggests that luck plays a bigger role in their success.
However, to assume that everything can be attributed to luck is too simple and even too extreme of a conclusion. Yet I have seen many cases that when a leader is successful, they attribute it to their personal capabilities. Yet on the flip side, when they are not successful, they attribute their failures to bad luck or external circumstances.
There are clearly leaders who are lucky. That’s not a problem to me. In fact, we all need a little bit of luck to be successful in our leadership roles. It’s not an easy job. There are days when we can use all the help we can get.
But we can’t forget that there are certainly great leaders who defy the odds, buck the trends and manage to make a significant impact on their organizations despite dealing with a stacked deck.
At the end of the day, it’s probably valuable for us to pause and reflect on this week’s gut check question: are you a truly great leader or just a lucky one?