When asked to define the role of a CEO, everything gets listed - from sales to operations and finances. But those aren’t responsibilities you should be taking on.
I've come across multiple articles online talking about the role (or, in most cases, roles) of a CEO. Most of them talk about managing relationships with clients and typically focus on organising funding. When you talk to other CEOs, many of them also mention some of their daily tasks include things to do with sales, finance, and operations.
To be honest, this baffles me. When you're doing any of those things or all those things, you're not actually doing the job of a CEO. What happens is that you might feel like you have to because you're actually filling in for somebody else you still need to recruit in your business. I believe there are six things a CEO should do; six roles to fulfil if you want to grow your business right.
Things That Are NOT the Role of a CEO
A few years ago I was at a Vistage meeting, and we did a brainstorming session. Everybody had to write down and share what they thought the role of a CEO was. What I found really interesting is that the list had everything in it. From sales and managing operations to product quality, securing funding, finances … There were over twenty things encompassing every aspect of the business. I looked at the list and thought: Well, this is amazing! All of these CEOs think this is their job!
Let me tell you now: None of those things is or should be, their job. Often you will indeed find a CEO working on sales. The problem is that, when they are doing that, they are actually not doing the job of a CEO! Those tasks belong to a salesperson or an account manager.
The person I was paired with, in fact, turned to me and said: There's only one thing the CEO is supposed to do, and that's to make sure you've got funding. And I thought: Well, no. That's not correct, either! That should be your finance director's responsibility, not yours. They are the ones making sure you have money, going and getting that money, and managing the ongoing finances. The same thing applies to the other supposed responsibilities people were mentioning.
If you're a large company and you're able to afford people to do these jobs, the CEO should not be fulfilling those roles. It's okay if they decide they need to fill in because a gap has appeared (say someone has left). It’s also okay if you’re a small company and the CEO has spare time to perform an additional role. But that isn't the job of a CEO.
What Is, Then, The Role of a CEO?
The essential, primary job of a CEO, no matter the industry you're in, is to be the leader of the business. To facilitate the setting of a vision and a strategy, to set up a good team, define how values are determined, manage relationships with the board, and just set the leadership.
Imagine a slide being pulled by huskies. If they are not all pulling in the same direction and they are working against each other, you won't get very far. That causes disharmony. The CEO’s job is to ensure they pull in the same direction and the direction is the right one. If the CEO wants to put on a harness and pull as well then that’s fine but it’s not their job.
If you make sure everyone in your company knows what the business is trying to achieve, then decision-making becomes much easier.
An Example: Choosing the Right Product Features
Let me give you another example, this time from my own experience when we were selling BoardPacks. The sales team proposed to the senior leadership team to add this new security feature our competitor had. According to them, we needed to have it, too.
We discussed it as a team, but I remember looking at their website and thinking: Their solution is all about security. We are actually selling governance. That feature makes sense for them. We are secure, but we shouldn’t be competing for security with them because if you are someone for whom security is of the utmost importance, then they are the right choice for you. However, if governance is more important to you, we are the best.
So, if everyone understands the direction of the business is to play governance, then decision-making becomes much easier. You know you shouldn’t worry about all these other features and spend time developing things that don’t fit your model.
The Six Roles of a CEO
We’ve gone through what are NOT the responsibilities of a CEO. Now, let’s dig deeper into what I believe are the six roles of a CEO and why they matter.
1. Communicating and Aligning the Strategy
The first role of a CEO is to ensure there is a strategy and people are working together to maintain it. The idea is not to say, "now we're going in this direction regardless of anybody else's thoughts". No; it's to bring together a leadership team to help set that strategy. Once that's done, it's the CEO's job to ensure that strategy is communicated to everybody in the business and that everybody is aligned around it. The goal is to provide a simple message, so everybody is pulling in the same direction.
2. Communicating the Vision
The second role of a CEO is to communicate the vision for a business. To make sure everyone in the company knows what you want to achieve and pulls in the same direction to do it.
Again, it’s not necessarily about defining these things to the letter but rather bringing together a leadership team to help set them right.
3. Setting Up the Team
The third job of the CEO is to put together a team and ensure that within that team, there is the right level of harmony. Now, what do I mean by this? Sometimes, teams need a little conflict. You shouldn’t have people fighting each other, but you also shouldn’t aim for too much harmony because you will want people to challenge each other.
Having a team where everyone agrees with each other is just not healthy. The right level is somewhere in the middle. So, your role as a CEO is to make sure the team is put together, and that team can work effectively for the good of the business.
4. Safeguarding Values
The fourth role is not to define the values of the company (if you don’t have them already) but to facilitate them. To make sure that those values are communicated, that teams are living up to them, and that they are enforced throughout the business.
5. Managing The Relationship With the Board
If you have a board, then the fifth role as a CEO is to manage the relationship with it. And by this I don’t mean that you must handle every communication. Just that you should always be the primary person involved.
6. Being an Ambassador for Your Company
As I mentioned above, people think the role of a CEO involves all kinds of responsibilities. However, you shouldn’t be the one handling sales, finances, operations, etc. Your job is to find leaders for those areas.
Of course, just because you don’t handle all PR activities and client relationships this doesn’t mean people don’t need to feel like they are talking to the company. Sometimes, it’s justified to become its public face. For example, when a large client has an issue or your main supplier wants to work with a competitor.
CEO’s often assume many of the senior roles in the business. They travel through these roles as they grow or lose people until they find people to fill them. This is particularly the case in start-ups because, frequently, the CEO will be the sales person to start with. The problem is that then, they begin to think the CEO’s role is, indeed, to sell. Or to manage funding, or to do all these other things. And what happens is that they get really busy, they get spread too thin, and they don’t do the job of being CEO. They fail to recognise that there’s a point where a CEO needs to find somebody else to do that job.
Even if you’re really good at it, you can’t do it all by yourself, always. Finding directors for sales, operations, finance, etc., is vital. Why? Because you can’t neglect the job of a CEO, the fundamental tasks that provide the foundation for the leadership and the whole business to grow.