Whitepapers

Top-Performing Chief Financial Officer Analysis With a Focus on Private Equity Firms

by Agota Alvarez
on

Background

There is a long history of research addressing the relationship between personality and effective leadership in organizations (e.g., Judge, Bono, Ilies, & Gerhardt, 2002; Hambrick & Mason, 1984; House, Spangler, & Woyche, 1991). Compelling evidence has emerged from a number of recent studies that suggest personality is a strong indicator of the types of individuals who ascend to executive levels and that personality helps explain how these individuals lead their organizations once they are established in these positions (Resick, Whitman, Weingarden, & Hiller, 2009). In recent years, Caliper has conducted a number of studies that investigated the relationship between effective leadership and personality traits. One such study included a sample of 293 successful corporate leaders across multiple industries.

The findings suggested a distinct model of executive-level leadership personality. In general, this group of successful leaders exhibited dynamics that are consistent with being adept at influencing and directing others, skillful at building relationships, and masterful at solving problems and making decisions. In essence, these leaders were extremely bright, assertive, driven to persuade, empathic, and resilient. They displayed a need to get things accomplished and, consequently, were willing to take risks. They were also moderately sociable, demonstrated a healthy level of skepticism, and were motivated to come up with new ideas.

In another leadership-related study, Caliper (2005) conducted research on the unique personality traits of successful women leaders. Among the findings from this study of 59 successful women leaders were that women leaders score significantly higher than male leaders in ego-drive (persuasive motivation), assertiveness, willingness to risk, empathy, urgency, flexibility, and sociability. The strong interpersonal skills possessed by women leaders enable them to read situations accurately and take in information from all sides. This willingness to see all sides of a situation enhances their persuasive ability. They can zero in on someone’s objections or concerns, weigh them appropriately, address them effectively, and incorporate them into the grander scheme of things when appropriate. These women leaders are able to bring others around to their point of view or alter their own point of view—depending upon the circumstances and information they uncover. They can do this because they genuinely understand and care about where others are coming from. This allows them to come at a subject from their audience’s perspective, so that the people they are leading feel more understood, supported, and valued.

In 2010, Caliper, in conjunction with Amrop Battalia Winston—a leading retained executive search firm—conducted a study to understand the leadership profile of top physicians in the pharmaceutical and biotechnology industry. The purpose of this research was to identify whether there are particular personality traits in these physicians that lead to behaviors that are consistent across the industry and demonstrate success. The results show that, similar to senior leaders, top physicians are strategic thinkers who recognize problems, issues, and opportunities. They are also persistent as well as willing to make tough decisions and challenge the status quo.

Now, once again in conjunction with Caliper, Amrop Battalia Winston has conducted a study to understand the leadership profile of top CFOs, specifically those in private-equity-owned companies. The purpose of this research is to identify whether there are particular personality traits in these CFOs that lead to behaviors that consistently demonstrate success. These personality traits can also potentially link into competencies already developed by individual organizations regarding their unique leadership definitions.

Method

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