CEOs’ Soft and Interpersonal Skills Have Not Increased over Time

The researchers employed factor analysis to compress the information in the 30 characteristics into four statistically more manageable factors or categories: one that measured general ability, and three others that represented opposing leadership skills—execution versus interpersonal skills, charisma versus analytical thinking, and creative-strategic versus detail-oriented approaches. This framework allowed the team to assess how CEO candidates strike a balance between competing focuses, plus enabled them to track changes over time and recognize emerging trends.

The researchers do not find much of a shift over time in the characteristics of hired CEOs. Both before and after the 2008–09 global financial crisis, hired CEOs tended to be stronger in the general ability, execution, charisma, and creative-strategic categories than other senior executives. In other words, interpersonal or soft skills did not increase over time for hired CEOs.

This contradicts the contention—supported by 2017 research from Harvard’s David J. Deming, as well as by a 2021 paper from University College London’s Stephen Hansen, Cornell PhD student Tejas Ramdas, and Harvard’s Raffaella Sadun and Joe Fuller—that as millennials and members of Gen Z enter the workforce, CEOs should focus more on collaboration and empathy to adapt to modern business environments.

While hired CEOs were more charismatic and more creative-strategic than other executives both before and after the financial crisis, the difference was smaller postcrisis than before. Hired CEOs became somewhat less charismatic and creative-strategic over time.

Businesses still care about strategic leadership, the researchers explain, and companies would prefer to hire CEOs who are strong in this area. But while companies continue to value strategic leadership, the trends suggest a deteriorating supply of executives with strong skills in that area, Decressin, Kaplan, and Sørensen write.