Does a CEO’s Fitness Level Matter on the Bottom Line?

Pillar 1 in my SpartanCEO Series will be released next week. Here's an excerpt of what you can expect from Pillar 1: Fitness... 

So one of my Executive Coaching clients asked me recently: “Does it really matter if a leader is physically fit?” Great question, and here’s the short answer: you bet it does. In a decade-long study of 1,500 executives, Limbach and Sonnenburg (2015) demonstrated that a CEO’s physical fitness is associated with higher firm profitability and higher M&A announcement returns, in line with other known benefits of physical fitness such as stress management, cognitive functioning, and overall job performance. The bottom line is fitter leaders make more money, for themselves and their shareholders.

What do we mean by fitness? Well, to the point, we mean fit to run, not fit for golf. The study mentioned above measured firm performance in companies whose CEOs had run a marathon in a given year. Limbach and Sonnenburg showed that physically fit CEOs “are associated with significantly higher return on assets and more free cash flow”; additionally, “abnormal stock returns to M&A announcements are significantly higher, and are less likely to be negative, when the bidding firm’s boss is fit”.

In contrast, golf-playing CEOs were studied by Biggerstaff, Cicero, and Puckett (2017), who found that the 25 percent of CEOs who played the most rounds of golf each year were associated with significantly poorer-than-average firm performance (i.e., less money). So, no, we’re not talking about a walk around the block every night leader or a Saturday morning golf game type of leader; we’re talking about leaders who are fit to run. Spartan leaders. 

Here’s the tough truth: if you’re in good physical health, you’ll think more clearly, have greater concentration during tough meetings and decision making, have more stamina during a negotiation than your counterpart, and be able to keep up with all the millennials driving you nuts at the office. All of that will lead to better motivation modeling for your team and higher-quality decision making for you. End result: better firm performance (i.e., more money for everyone).

So if you want to improve your net margin this year, how about you start by dropping a couple of inches on your waistline? No, I’m not kidding. I just wrote a book called Spartan CEO, so you knew this was coming. It’s fair play.

As a good business leader and good manager, you might want to encourage the same in your staff. One of the managers I know takes her team to run a half marathon twice a year. Another manager friend of mine takes his team to a Spartan or Tough Mudder race every year.

Some businesses are improving the physical fitness of their employees by changing the environment in which they work. They are adding sit/stand desks and exercise balls or backless chairs for seating. Some have fully functional gyms in the building. Many companies have recognized the benefits of having a higher quality of air and light in the workplace. These small changes influence the physical well-being of employees through small adjustments to the environment. These changes result in higher attention spans and better productivity, not to mention improved loyalty to the organization. When people feel cared for, their health improves, and productivity goes up. 

For your own personal fitness, I recommend exercising for no less than 45 minutes, at least three times per week. This is the minimum unless you have a medical condition that prevents you from doing so. Actually, now that I think of it, Nick Vujicic is the CEO of a small company, and he swims, surfs, skydives . . . and he has no arms and no legs. So, yeah, all of your excuses are lame. If you want more tips on executive performance, and the relationship between physical and mental health and business outcomes, pay attention for the release of Pillar 1: Fitness sometime next week.

And if you’re in need of Executive Coaching to improve your overall performance, please send me a message. Let’s sort this out once and for all.

Biggerstaff, Lee, David C. Cicero, and Andy Puckett. "Fore! An Analysis of Ceo Shirking." Management Science 63, no. 7 (2017): 2049-395.

Limbach, Peter, and Florian Sonnenburg. Does Ceo Fitness Matter? Cologne: Centre for Financial Research, 2015.