Luke Johnson: the ideal leader

15 November 2011

Risk Capital Partners chairman Luke Johnson reveals the ten key components that he believes make the perfect CEO.

The Bible tells us that from the Garden of Eden onwards, man is a fallen creature, blemished by original sin. Similarly, all bosses are flawed - the search for a perfect CEO is a doomed cause. But if one were to come across the ideal leader of an organisation, what attributes would he or she possess?

"Employees want someone in charge who has resolution, knows their mind and offers certainty."

I have itemised a personal list of the skills that I believe any great CEO should have. If they own the full set, then they are a remarkable individual - and are probably well on their way to corporate heaven. I have accumulated these top ten pointers during a quarter-century of observing, owning and partnering with CEOs of every description.

1. Domain knowledge. Every manager should possess a profound understanding of the company they run and its industry, markets, customers and competitors. I do not believe in 'generalist' bosses. In my opinion they should be steeped in the technology and detail of their business. An MBA in a classroom is no substitute for hands-on experience in the trenches.

2. Self-confidence. To direct people requires an extrovert with self-belief. There is no room for serious doubt in the mind of a proper leader. Employees want someone in charge who has resolution, knows their mind and offers certainty.

3. Self-discipline. No one succeeds in controlling others if they cannot control themselves. With willpower can come follow-through, reliability, calm under fire and many other necessary attributes. If bosses have uncontrollable urges, then they will surely fail before too long.

4. Decisiveness. Ultimately, being the boss is about making decisions, rather than prevaricating. Constantly hedging, instead of making a commitment and taking the plunge, is of no use at the top.

5. Numerate. A competent CEO should be good with figures and understand financial statements well. He or she does not need to be an accounting expert, but without a strong grasp of the financial issues, a leader will be unable to carry out the job.

"Leaders should be able to enthuse their team and encourage them, even if conditions are difficult."

6. A positive outlook. Leaders must know how to motivate people. They should be able to enthuse their team and encourage them even if conditions are difficult. Natural optimists make the best bosses - pessimists and depressives are not suited to the role.

7. Communicators. CEOs should be articulate and persuasive. They do not have to be a brilliant orator or highly charismatic (although both talents help), but they do need to be able to explain themselves clearly and convince others of the merits of their argument.

8. Hard-working. Any CEO who wants to achieve big things needs to be industrious. I don't believe a fantastic work/life balance is realistic if you want to manage a large enterprise. Idlers and skivers have no hope of ever rising to the summit.

9. Reliable. Bosses must deliver and carry out their promises if they can. Bullshitters only get so far before they are detected and discarded. The world of business is full of flim-flam artists, some of whom rise to considerable heights, thanks to charm and chutzpah. But eventually they always get discovered.

10. Pragmatism. At its heart, business is a practical art, not a theoretical exercise. Someone running a company cannot spend their time daydreaming - they must deal with real issues such as meeting payroll every month. The private sector faces the twin threats of bankruptcy and competition, which means a much tougher set of pressures than the public sector often faces.

Of course, there are many other proficiencies that the 100% CEO might command - the list could be almost endless. But any candidate I interviewed who could prove that they had the full complement from the above would get the appointment.


Luke Johnson, chairman, Risk Capital Partners.