What Makes a Great CEO
When my youngest son was a teenager, he informed me that he wanted to be a CEO when he grew up so he “wouldn’t have to report to anyone.”
Any CEOs reading this will laugh at this notion of what it means to be in charge. My son has since learned that no one has a tougher, more varied set of reporting relationships than the CEO. Yet the worst ones don't realize this; they deal with issues as if they have no one to report to.
The best ones, however, understand that they have shareholders, customers, employees, suppliers, communities and lenders to serve. They generally do a bit more “tacking” back and forth, as in sailing, than those who power directly toward the distant shore in their high powered motor boat. They realize that their constituents likely have interests that are at odds with each other, and it’s the CEO’s job to make the right trade-offs.
For example, it would be easy to make customers happy by giving them free goods and services – but that would be hard on lenders and shareholders. Likewise, it would be easy to increase profit margins by abusing suppliers – at least in the short term – but in the long run, that would be the undoing of any business.
So, great CEOs are great jugglers. They’re great all-things-considered decision-makers. They hire right. They fire appropriately. They build teams. They remove obstacles. They empower people to be and do their best. They reward what helps the organization win in the short-, medium- and long-term. They communicate lavishly – bad news as well as good. They’re authentic. They have integrity; what they say and do are tightly connected.
They’re also politically savvy, but they’re not politicians. That’s because running a business is not a democracy. It works best with full participation in the decision-making process, but once the debate is over, everyone does their best to implement the decisions made by the CEO.
Having hired, coached and replaced a number of CEOs over the years – and having been replaced myself – I know that succession can be a sensitive issue. This is why the primary duty of the board of directors of any company is to hire the CEO, give him or her great feedback and coaching, and set up a thoughtful succession plan – even for brand-new CEOs.
The marketplace, with all of its vagaries, dynamism and intricacies, is the ultimate master of the CEO. Great CEOs have a sense for their customers and why they’re buying, what the value proposition is and where the market is headed.
****
To see upcoming posts from Joel in your LinkedIn news feed, connect to his account by clicking the "Follow" button at the top right of the page. Click here to follow Joel on Twitter: www.twitter.com/JoelCPeterson.
@JoelCPeterson's recent posts:
- If I Could Start Over, Here's What I'd Do Differently
- My First 90 Days: Listen Like It's Your Only Job
- Signs Your Company Suffers From a Toxic Culture
Photo: Justin Sullivan / Staff / Getty Images
BlonFx copy/Social Trading Platform
9 年Great man...
Landscape Architect
9 年Absolutely Gil
Ex MD HEIDENHAIN India, Ex consultant GROB India
9 年Absolute truth. The juggling becomes even more an act of serious judgement when your performing environment is complex and if you are in a country with a low ease of doing business index.
Deputy General Counsel at Braman Automotive Group
9 年Well said Gil.
Many years ago while working for you at Trammell Crow Company, I saw you display the attributes in your post, which together equate to "servant leadership". That style of leadership has served me well in my professional career, including my current gig as the "CEO" of a startup. One thing that I'd also add to Joel's list is something I learned from a post by Ben Horowitz-- namely that the most important skill for a CEO to master is the ability to manage ones own psychology, to be able to emotionally weather stormy seas and the inevitable ups and downs of anything worth pursuing. As mountaineers are fond of saying: it is not the mountain that we conquer, but ourselves, in getting to the summit.