What exactly does a CEO Do?
In the simplest terms, the job of the CEO is to make their company succeed and win. More specifically, this means that the CEO’s job is to lead the company to achieve its long-term goals (3-yr to 5-yr goals) and short-term objectives (quarterly and 1-yr) which are strategically planned by the executive team and then finally reviewed and approved by the Board of Directors. And to boil this down even more, in a nutshell, the CEO’s job of hitting short- or long-term goals ultimately means attaining specific financial goals.
But that’s easier said than done – the job of a CEO is complex. As a CEO, you’re ultimately responsible for “everything”. The key to helping the company succeed and win starts first with assembling an A-level group of people, giving them clear objectives to point them in the right direction, leading them effectively (being situational and adaptive as a leader), and then consistently helping them be effective (i.e. unblocking obstacles, serving as a sounding board, offering insights based on your experience, etc.). That foundation is: People, Strategy (which comprises direction & objectives) and Execution.
The CEO is a leader who has to “know the way, show the way, and go the way” (John Maxwell).
Here are the 9 core areas of focus for the growth-stage CEO:
- Culture / Organizational Health
- Cash / Finances
Please note: this is based on my professional experience as a CEO and this is primarily about the role of a CEO running a high-growth company from an early stage to expansion and growth-stage private company (think of the stage as Series A, B or C stages of financing) and not a Fortune 500 company. The approaches to these types of companies are different. For example, a CEO of a Fortune 500 company manages very senior and very experienced corporate executives and GMs under them and therefore will also lead them differently – this CEO will be doing what is typically called “Management by Exception” (MBE). This means that they will lead their senior executives with a mission and vision at a much higher level rather than with specific MBOs or regular quarterly objectives or day to day huddles (i.e. and that’s what a CEO of private high-growth and mid-market company does daily). So, when I refer to a CEO here, it’s in the context of a high-growth private mid-market company and not a Fortune 100.
Let’s get more specific with the fundamental responsibilities of the CEO:
As the CEO (again, the CEO of a high-growth mid-market company), you must attract and recruit talented executives and professionals. You need to attract them; they should want to join you and be led by you. Then you must lead these people effectively. You must also, over time, develop a deep bench of talent in case some of the folks leave so it’s always on top of mind.
You must set a *correct* strategy and a great vision. And you must get everyone to understand the vision and get them to believe in it and get passionate about it. As the CEO, you have to get everyone to see and believe in your vision.
You have to get your team aligned and then laser-focus on execution to achieve the intended results – i.e. attain measurable goals. A CEO must execute for the shareholders – generate attractive investment returns for the investors in a disciplined manner, building a world-class talented team, driving growth and value creation through impeccable execution and all while investing their own equity and even money alongside the capital of its investors which is an additional level of commitment from any CEO. Finally, you have to be proactive as a CEO and not reactive – you need to constantly review leading indicators and talk to your teams to have your finger on the pulse of execution and performance, and then know how to get in front of the problem before it snowballs and derails your ability to achieve the goals and results.
Culture & Organizational Health
You have to create a good culture and get everyone to understand it and then proactively manage the culture. Furthermore, you have to ensure you have “organizational health” which has a lot to do with the culture you build.
The CEO must be the ultimate customer advocate and must work to create an environment where everyone is focused on providing exceptional customer experience.
As the CEO you are the top evangelist and everything you do should help promote your company’s brand and help you sell your product.
Because the CEO at a high-growth company is the one designing the Go-to-Market (GTM) Strategy (i.e. connecting the product to the market), the CEO therefore must enable the clear communication between the Sell-side and the Build-side (the Product & Engineering teams). The product’s direction should be determined by the customers’ needs. The CEO is responsible for making sure this is done well so that the Product can be built. This is critical to helping your company become a Category Leader.
Cash & Financial Health
The CEO must make sure the company has its finances in order and that there is sufficient cash to continue to operate and grow. This requires planning proactively and effectively and managing all the key decisions vis-a-vis the budget. This part of the job requires the CEO to also know when raising capital is necessary and to do so way in advance of running out of cash. On this note, I have from time to time heard some folks define the CEO’s job defined as follows: “the CEO’s job is to make sure the company doesn’t run out of money” – However, I am conflicted on this definition. As I wrote above, there is a lot more to this job and such a definition is incomplete because it doesn’t focus on Winning yet emphasizes not losing (i.e. not running out of money). Succeeding and winning as a company certainly depends on not running out of cash – that’s common sense. But there are many companies that are not running out of cash but are really not succeeding and not achieving their intended objectives. Therefore, as I stated in the beginning, the job of the CEO is complex and complicated and there is more to it than meets the eye. Of course, to do it all – the company definitely needs to have healthy financials and sufficient cash in the bank to keep growing and succeeding.
A Few Thoughts on the CEO’s “Day to Day”
Operating at a High Level (EQ and IQ)
The CEO job is really hard work day in and day out and requires the CEO to operate personally at a very high level as a leader (and at all times).
The “Day to Day” of Execution
You need to ensure everyone is executing and is focused on the right things: you need to fundraise to not run out of money, you need to be the best salesperson on your team to promote and sell the product, you have to evangelize the company, you have to obsess about the customers, oh and take out the trash if needed as well. As the CEO, you need to make sure everyone understands how you want to get things done, how you need things done so you can all be successful. There are always personal or competing agendas. In order to do that, you have to really want to understand people and understand the roles well so you are aligned. This is also hard because you can’t understand everything at a deep expert level. But the CEO has to get it well enough to be able to communicate to your executives and teams what you need them to understand. You have to have that necessary insight into people’s positions and roles to lead those people successfully. This takes a lot of proactive and intentional effort and a ton of hard work and passion for the job and the company.
Setting Goals and Set Key Priorities
To achieve execution, you need to set priorities and set goals then measure the progress towards these goals.
For example, at Atiim we were an Enterprise Goals Management software and therefore our ability to set priorities and goals (OKRs) was a no-brainer. As the CEO there, I was an industry expert on organizational alignment, goal-setting and Objectives & Key Results because these are all very MBA-ish topics. However, other CEOs must know how to correctly set the 3-5 key annual and quarterly priorities and set measurable and quantifiable goals to achieve the results for these priorities.
Manage Cash/Capital and the Budget
As a high-growth company, your cash is a very limited resource and you are on the deep J-curve. In SaaS subscription model you’re always fueling the growth with capital and your sales deals are not even profitable for at least a year (for example, if LTV:CAC ratio is 12 or more). Managing cash and cash flow is ultimately on you. Not running out of cash is the key focus of your job as CEO. You have to be good at deploying your limited capital in attractive opportunities (product innovation, marketing campaigns that fuel the funnel, sales and enablement, etc.) and you have to be effective at raising capital with good terms that help the business in the long term.
Enable the Team to Win
A CEO must win consistently over a long period of time. Both large quarterly wins and smaller wins between quarters are necessary. It’s the consistency that is crucial. And to achieve that consistency, a CEO must operate 24/7 at a high level. And yet every CEO knows that in business it is very hard to win on a consistent basis and do it every year when your people change and when you have new challenges and new context and new ends and beginnings.
Identifying Opportunities and Growing Market Share
A CEO is the first one who must have the right strategy for growing the market share.
Day to Day Decisions
Everything is riding on your shoulders. Every decision, every communication from you – it affects results and stakeholders – every minute of the day, every day.
Volume of Work Coming Across Your Desk
A CEO has a large volume of things to deal with that come across their desk every single day; it’s overwhelming. Every meeting, every big decision, ability to prioritize, and delegate when you need to, and step in when you need to, and ensure you are doing the right thing each time. This is hard, it’s not for everyone.
Core Fundamentals That Drive Performance
Every quarter and month (and even week) you have to review whether the fundamentals are being followed. Do the fundamentals in place to continue to drive performance or must something be adjusted week to week (e.g. sales plays, lead generation campaigns, etc?)
You also need to be able to tell people things they don’t want to hear and get them to buy in. This requires really good communication skills, Emotional intelligence (EI), and empathy. Otherwise good people will not be attracted to the job and talented workers may leave.
Create a System and a Process
A good CEO also has to have a good system and process at the top and enabled in every area of the company to give you a chance to win consistently. You have to have a philosophy that is grounded in reality and in a proven track record of working. You need to have the experience, the intuition, and IQ to know where to adjust the process that has worked in other companies and customize your process to fit your company. And you have to evolve your philosophy, system, and process over time because things change. That requires intelligence/IQ and great intuition. If you are good, and you have the right process in place, then you have to be able to stick with it—stay true to your process. There will be people who challenge you when you know this process is right. When you are wrong, acknowledge this and listen to feedback and change—this is an important skill. You need to know when to remain firm and when to be flexible.
Working Hard and Setting the Tone at the Top
You have to work hard – real work ethic is hard to come by. Plus, you have to do it all with a positive attitude and grace, especially when it’s a difficult situation. You must lean into problems and not put them aside. That’s what all great CEOs do. This is hard too.
As a CEO you need to know how to adapt well. I am reminded of Charles Darwin and his Theory of Evolution: “it’s not the strongest of the species that survives, but the most adaptable.” If I didn’t know any differently, I would think he was talking specifically about the role of a CEO—adapt or die. This means not only in the market but also in the office, internally with your team. Everything changes all the time and you have to stay on top of it and adapt to ensure you succeed and win.
Now, some folks have emailed me and asked to go beyond the “The Job of a CEO” topic with a follow up question on what characteristics and traits makes a successful CEO. Here are some resources worth reading:
World Economic Forum – What makes a successful CEO? We analyzed 5 million leaders to find out by Clarke Murphy, CEO, Russell Reynolds
- Disruptive and pragmatic – disrupt the status quo and be pragmatics about focus and priorities
- Risk-taking: take calculated risks, be opportunistic
- Heroic and vulnerable: ensure perseverance and grit while soliciting input to continuously improve themselves and the organization
- Galvanizing and connecting: generate support with energy and inspiration, share credit, promote the success of others, and connect the organization to higher values and a mission.
Harvard Business Review – What Sets Successful CEOs Apart by Elena Lytkina Botelho, Kim Rosenkoetter Powell, Stephen Kincaid, Dina Wang
This is based on “CEO Genome Project” research:
- Decisiveness – decide with speed and conviction
- Alignment – engage others and get buy-in to execute effectively
- Adaptability – Adapt and adjust proactively to any changes
- Reliability – be reliable and follow through on your commitments
Finally, to do the job effectively, every CEO has to have a network built on other accomplished CEOs and mentors. A CEO should be proactive and intentional in their job – it’s important to realize the key gaps (i.e. “I know what I don’t know”) and plug them. You won’t have all the answer for everything but you must be intentional about finding people to help you get to the right answers.
If anyone reading this wants to be a CEO or a leader and is finding this insightful, then I’ve succeeded in sharing what’s important for others to understand this to help you increase your chances of success.
Additionally, if you are an employee of a company, then I hope this gives you the context of what your CEO is dealing with. I hope that this will let you offer them a bit of a “benefit of a doubt” when you question their decisions. I hope you will see the job is not as simple as it may look on the surface and that most CEOs are doing their best to do the right thing and help your team and you succeed.
What else? What are your thoughts on the complexity of the job of a CEO?