Cognitive Time Horizons and Their Impact on CEO Performance, Capacity and Capabilities

This is not an academic paper so I will not follow academic protocol and academic writing style. At the same time, a good amount of the contents of this article is based on some academic research studies by the world's leading authorities in the fields of leadership and CEOship as well as publications by intellectuals, consultants and practitioners in CEOship and top leadership. It is important to note that CEOLOGY is a new field founded on a growing interest in studying the CEO position and in paying more attention to the CEO position because of its vital importance and the huge financial and business costs associated with hiring the wrong CEOs or by the underperformance of CEOs. This article comes at a time when support and attention given to aspiring, first-time, new and practising CEOs is still very low and information, with virtually no comprehensive training, education and development program for the CEO position in any university around the world. In other words, most CEOs are still rising to CEO positions and occupying them without any specialised preparation for the critical position that is like no other in the organisation. There are already some interesting facts and discoveries about the CEO position including the following;

1. The big disconnect between what most boards think makes a great CEO and what actually makes a great CEO.

2. The time that takes before a new CEO becomes productive is estimated to be at least 12 months and for large corporations, as much as 24 months to 36 months

3. Most CEOs overestimate their current performance and results and thus performing beow their potential

4. The absence of an evidence-based serious training education and development program for aspiring and practicing CEOs in business schools and universities around the world

5. The lack of evidence and proof that a degree in MBA and Finance separates between CEO competence and CEO incompetence.

6. The findings that many people in CEO positions have not a complete body of knowledge in CEOship to guide them; they are forced to figure out how to perform well.

7. The flawed perception that all CEOs are the same and have the same levels of CEO competence which competence is all based on traditional criteria such as possession of certain degrees and qualifications, experience, “attributes” and “competences.” Very few recruiters are actually clear and accurate on what exactly are called CEO skills, attributes and competencies.

Increasing research in the position of CEOship and studies of practising CEOs is beginning to yield meaningful discoveries for helping to improve the performance and results of people in positions of CEOship. There are some many interesting findings and theories that are emerging.

One of the most interesting findings relates to psychological factors in CEO performance including personality and cognitive and emotional factors. One dimension of these psychological factors relates to what is called mental time dimensions.

According to the cognitive time dimensions, different CEOs have different abilities in terms of how they think about time. It says that different CEOs are able to think and project comfortably only to a certain time future. In other words, ceteris paribus, some CEOs are able to think and plan, for example, to as far as five years, while others can do so to as far as ten years while others can go as far as fifty years or more. This means that different CEOs have a limit to the complexity that they are able to handle. It also means that in choosing positions for CEOship, it may also be important to assess the CEOs cognitive time horizon or else a company may hire a CEO with a wrong time horizon and render him or her incapable of dealing with the level of complexity of the specific role. Here is the key;

It may be fine for a CEO of a one-business unit to have a mental time horizon of five years, but it will be a disaster to hire the same CEO to be a group CEO of a global corporation in change of a billion-dollar-organisation. A large corporation cannot be expected to perform well under the leadership of a CEO who can’t comfortably think and see beyond five years!

I doubt that this aspect of time horizons is considered in the selection of CEOs. We are addressing this in our CEO training, education and development programs.

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?Simon Bere, 2023