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We’ve measured the core competencies of five thousand S&P 500 executives to find out which behaviors ultimately drive financial value creation!
One of the biggest challenges a CEO faces is building a team with the right blend of financial behaviors. Often, that comes down to deciding whether you require a strong results-focused individual or someone who is a natural relationship-builder. Well, as it turns out, you need both, and we’ve got some enlightening behavioral insights into how their combined strengths allow businesses to generate financial value.
Drawing a Map to Success
We recently looked at the financial behavior traits of all S&P 500 executives across 4,000 data points to better understand how these companies operate. A comprehensive report was created using the Pegasus Ratings platform (powered by DNA Behavior) that analyzed the data by industry, firm level, and executive position. This first-of-its-kind research uncovered how different human behaviors, especially Results Drive versus Relationship Engagement, equate to successful business performance. By understanding how S&P 500 firms balance their leadership teams, we now have a boilerplate to use for setting up other companies to reach their potential.
Our Findings on Results Versus Relationships
In our analysis, we took a detailed look at the Operational Leadership Capability of these highly successful companies. For the moment, we’re going to focus on the following two competencies:
- Results Drive - Leadership intensity toward achieving bottom-line results. Typically, these leaders are more take-charge, rational, logical, fast-paced, and structured in their approach.
- Relationship Engagement - Invests in building a psychologically safe culture for higher employee and customer engagement. Typically, these leaders are more cooperative, group-oriented, connective, enthusiastic, communicative, patient, approachable, empathetic, compassionate, and trusting in their style.
Not surprisingly, we learned that 71.31% of these key S&P 500 executives have a stronger Results Drive. If we just stopped our analysis there, we’d be tempted to say that result-oriented leadership is the gold standard.
However, we also looked at how these two competencies affected the bottom line of their respective companies. We found that each 4% increase in Results Drive equated to a 7.38% increase in profits. And since we know that sustainable business growth requires an investment in an engaging organizational culture, we checked the impact of a more relationship-oriented approach. The research suggests that with each 5% increase in Relationship Engagement, the return is another 11.43% increase in profits. Relationship-oriented leaders tend to invest in an engaging organizational culture that provides high psychological safety. So, as the data shown in the table below reflects, an investment in people can have a big payoff in reaching financial targets!
Financial Value Creation
As you can see, both behavioral competencies increase profits, and therefore both are required to build a brand that will produce long-term financial value. Since people will naturally lean more towards one strength or the other, balancing teams with leaders with complementary traits can be critical to success.
Identifying Behavioral Gaps
When it comes to Results Drive and Relationship Engagement, certain behavioral styles are more balanced while others are more polarized. Of the S&P 500 executives in this study, we learned that 69% of them are Strategists, Initiators, and Influencers (Read More). These happen to be the three most polarized styles, and they all lean heavily toward results. That leaves an obvious deficit on the relationship side, so the companies must rely on those who more naturally connect with people to bridge that gap.
Blog Post: Financial Behavior Traits of the World’s Top Executives
No company will be able to reach its full potential by solely focusing on results or relationships. People, whether they are employees or clients, need to feel like you care about them. But efficiency, deadlines, and budgets are obviously an important part of the equation. Knowing how people naturally approach work can help you strike that balance. They can also help you understand yourself better so you can lean into your own strengths and recognize when you might need to flex a little toward the other side.
Think about how a behavioral gap may impact a business in the financial sector. Wealth management firms naturally attract results-oriented styles, so they may need to invest in training advisors to enhance their client relationship-building skills. Or, if someone strong in Relationship Engagement is in a financial leadership role, they may struggle to achieve hardline results. They would benefit from having team members with a natural drive for results.
New Leadership Financial Behavior Model
Based on these findings, we have developed a new Leadership Financial Behavior Model to be incorporated into our consulting and training. Now, we can do even more to help organizations achieve higher financial performance. By understanding behavioral insights, leaders can better align roles with each individual’s strengths, leading to more effective, balanced teams, and improved client relationships.
Want Financial Behavior Data for Your Organization?
Behavioral insights can give you a tremendous advantage when developing business and leadership strategies intended to create financial value. It’s not just a person’s skills and natural talents that are important to understand. Knowing their financial behavior is just as vital, and it just so happens that it’s our specialty! We even have a new digital scan that provides instant access to those insights without administering individual behavioral assessments.
If you have a project in mind that could benefit from having our financial behavior insights, join our digital scan waitlist!
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Get a Copy of the Report
You can access the Pegasus Ratings Report to read our full analysis. The report provides detailed insights into the financial leadership behaviors of the S&P 500 executives and expert guidance on how this research can be used to strengthen other organizations.
Download the Pegasus Ratings Report
Related: Financial Behavior Traits of the World’s Top Executives