A CEO’s skill can indeed shape a company’s performance, but much of this value depends on how well they fit the company’s unique culture and needs. A recent study from Duke University offers a fresh way to measure CEO quality based on early-career data and years of employee and company records.

Using a rich dataset from Portugal, the researchers tracked workers’ career paths before they became CEOs, identifying signs of high-performing leaders by comparing their pay and promotions to their peers. This “quality coefficient” showed that a 1% increase in a CEO’s quality brings a 4-5% boost in firm productivity. But the study also found that half of this boost comes from a good match between the CEO and the company’s specific style.

Cultural fit

Consider two CEOs with the same background: one who likes to delegate and another who prefers control. The first might excel in a company with a flexible structure, while the second could be a better fit for a firm with a strict hierarchy. The research shows that pairing the right CEO with the right company can be as important as hiring a high-calibre leader in the first place.

While the study focused on Portugal, its findings may be even more relevant for the U.S., where people change jobs more often, giving firms a better sense of leadership fit. As the researchers put it, companies should ask, “Do we need someone who drives new ideas, or someone who organizes and promotes ideas from within?”

For smaller firms, the study suggests that even on a budget, businesses can use online hiring tools to target leaders whose skills and style match their needs. Instead of looking only for someone from a similar company, they might seek out specific traits—whether they need an innovator, a strategist, or a manager who values teamwork.

The takeaway: companies should think about leadership fit, not just resumes. To choose the right CEO, firms must first understand their own culture and goals.