A CEO, or Chief Executive Office, is usually the title of a man or woman who has the top position in a company or its board.
The term ‘President’ is sometimes used with the same meaning, depending on the type of company and which country.
In the UK and some other Commonwealth nations, ‘Managing Director’ is commonly used with the same meaning, although more and more companies today have Chief Executive Officers than in the past.
The dictionary Merriam-Webster defines a CEO as “the person who has the most authority in an organization or business.”
Data source: Joel Trammel, CEO and Founder of Khorus.
According to Harvard Professor Joe Bower (who appears on the video at the bottom of this page), a CEO should have intelligence, a great deal of energy, persistence, patience, courage, and communication skills.
A good CEO needs to be both a great manager and leader.
The CEO is the highest-ranking executive manager
The Chief Executive Officer of a company or organization, its highest-ranking executive manager, is responsible for its overall success.
Within that organization, the CEO has the last say, the ultimate authority to make final decisions.
The CEO is also the main link between the Board (board of directors) and the organization’s or company’s various levels or parts. The company’s success or failure is the Chief Executive Officer’s sole responsibility.
A popular point-of-view is that CEOs should focus on just three things and delegate all other duties to their team.
The three things are:
- Set the company’s overall vision and strategy and make sure that all stakeholders know what it is.
- Recruit, hire and keep the best people for the company.
- Make sure the company has enough cash in the bank.
Can a CEO do whatever he or she wants?
Stever Robbins, who co-founded FTP Software and was CEO of JobTacToe.com and several other companies, says “CEO is one of the most coveted, and least understood, jobs in a company. Everyone believes that CEOs can do whatever they want, are all powerful, and are magically competent.”
Stever goes on to explain that this is not the case at all.
A CEO has to meet the needs of all:
- The law
Although some of a CEO’s job can be assigned to other people, there are several elements that can only be done by him or her. Robbins outlines four main duties linked to the job of CEO:
- Setting strategy and vision – although senior management is involved in developing strategy and investors can approve a business plan, “it is the CEO who ultimately sets the direction.”
- Building culture – the people in the company, those who get the work done, “are profoundly affected by culture”. If the workplace is unpleasant the company’s high performers will drift away.
- Team-building – the CEO hires, fires and leads the team at senior management, who in turn do the same further down in the organization.
- Capital allocation – the organization’s budget is set by the CEO, which “funds projects which support the strategy, and ramps down projects which lose money or don’t support the strategy.”
Who do CEO’s look up to for inspiration?
According to PwC, most Chief Executive Officers need role models to help them through challenging times, to communicate across boundaries, imagine creative solutions to problems, etc.
PwC (PriceWaterhouseCoopers) carried out a survey asking them who in history exhibited the most leadership.
Below are the top ten people (in order) named by CEOs from more than 60 countries:
- Winston Churchill
- Steve Jobs
- Mahatma Gandhi
- Nelson Mandela
- Jack Welch
- Abraham Lincoln
- Margaret Thatcher
- Ronald Reagan
- John F Kennedy
- Bill Clinton/Napoleon Bonaparte
The qualities of a good CEO
Doug Bruhnke, CEO of Growth Nation, gave a lecture at Utah University and explained that great leaders must have the following attributes:
- Authenticity and transparency
- Ability to delegate
- A good communicator
- Be positive
- Be able to learn and adapt
- To have a feel for the ‘bigger picture’
Central Banks tend to have different terms for the leaders. The head of the US Federal Reserve is called the Chairman, while in the UK the Bank of England is led by the Governor.
Video – To be a great CEO