CEOs hired in recent years are similar in terms of their overall ability and interpersonal orientation to CEOs hired earlier. The same four factors revealed by earlier research still explain roughly half of the variation in CEOs’ characteristics: overall ability and whether they are more execution-oriented and less interpersonal, more analytical and less charismatic, or more creative and less detail-oriented.

There is a sense in the media and among some academics that CEOs and top executives today should focus more on softer and interpersonal skills. In prior research, Steven N. Kaplan and Morten Sorensen use CEO personality assessments to show that CEO candidates with greater interpersonal skills are more likely to be hired. Additionally, they have shown that subsequent performance depends mainly on general ability and execution skills rather than interpersonal skills.  In our recent study, Have CEOs changed?, we expand on this earlier work and examine whether the characteristics and objectives of CEOs and top executives have changed over time.

We use a sample of over 4,900 assessments of executives covering the twenty-year period from 2000 to 2019. The assessments were performed by ghSMART, a leading executive assessment firm. ghSMART does not help with searching for candidates, instead they specialize in assessing top management candidates. The assessments, which are often requested by investors as part of due diligence evaluating a company, contain a detailed description of candidates’ backgrounds and personalities, including ratings for approximately thirty specific characteristics. These characteristics range from “Treats people with respect” and “Aggressive” to “Analytical skills” and “Persuasion,” to mention a few.

In our study, we analyze the assessments using a statistical method called factor analysis. Essentially, factor analysis takes the thirty specific characteristics and finds underlying traits that explain most of the variation in the characteristics, which helps focus the analysis on the most prevalent variation in the types of executive candidates.

We find that the most common characteristics among the assessed CEOs in our sample can be grouped into four underlying traits, which capture roughly half of the variation in the characteristics. These traits include the candidates’ overall ability, whether they are more execution-oriented and less interpersonal, more analytical and less charismatic, or more creative and less detail-oriented. Interestingly, overall ability captures roughly 30% of the variation, and another 10% is captured by the execution vs. interpersonal-oriented dimension.

Figure 1 presents the changes to the characteristics of assessed CEOs. Compared to the period before 2009, the average CEO candidate assessed during or after 2009 has lower overall ability and is more execution-oriented and less interpersonal, more analytical and less charismatic, and more detail-oriented and less creative/strategic.

In comparison, hired CEO candidates (as opposed to candidates who are assessed but not hired for a CEO position) have become more analytical, less charismatic, more detail-oriented, and less creative after 2009. At the same time, they remain similar in overall ability and interpersonal orientation compared to CEOs hired before 2009, suggesting that CEOs’ “soft skills” have not necessarily increased, as often suggested. Additionally, the fact that the pool of candidates has changed but that the hired candidates have stayed similar suggests that companies are actively screening candidates with high general ability and execution skills.

Looking at CFOs, we find similar patterns along the execution vs interpersonal dimension. While the pool of candidate CFOs has become more interpersonal, the CFO candidates hired to become CFOs have not changed over time.

Higher-ability executives appear to complement each other. There is a strong positive correlation between the general ability of assessed CEOs and other C-level executives considered for positions in the same hiring company. This complementarity is especially apparent when comparing different CEOs considered by the same company, where there are positive correlations for most of the traits of those CEO candidates.

Finally, we examine the relationship between the objectives for which CEOs are interviewed (most assessments include the objectives and challenges facing the hiring companies) and CEO characteristics. We find an increase in demand for CEOs with skills in organic growth, operations and strategy, and a decrease in demand for CEOs with skills in staffing (which also includes teambuilding). Hence, this analysis further indicates that “soft skills” have not necessarily increased. We also find a modest relation between the desired objectives and the characteristics of the assessed and hired CEO candidates.

In sum, our research does not reveal an increase in the importance of interpersonal skills for hired CEOs, contrary to a rising sense among academics and the media. Instead, we reveal an apparent deterioration in the supply of executive candidates in terms of their general ability and creative/strategic skills. The reasons driving these supply trends present an interesting question for future research.