Over the past years, my colleagues and I at Egon Zehnder International have assessed tens of thousands of senior executives, including CEOs, all other C-level positions, vice presidents and directors, from around the world and from every major industry. We have found that, on average, the decisions that organizations make regarding the people they hire, promote and maintain in top positions have much room for improvement. Even at companies with above average performance and reputation, the wrong individuals are making it to the executive suites. Roughly a third of the executives we have appraised at these fine organizations are actually in the bottom half of the competence curve with respect to their peers at other firms in their industries.

When we analyzed CEOs against the specific competencies deemed critical for each particular job, the typical CEO was slightly below the target level. The gap between the average senior executive and an outstanding one is such that, even with the highest motivation and best development effort, achieving the required level of competence would be highly unlikely. And even if it were possible to close the gap, the process would take several years — time that most organizations can’t afford.

Of course, the hiring of people for top positions will always be difficult and prone to error. But we strongly believe that the process can be improved substantially if companies are aware of the many pitfalls and have implemented the necessary measures to avoid them. This article addresses those