Chief Executive Officer (or CEO in short) is that fantastically sounding job role that feels like a dream role to many. I used to fancy being a CEO one day and now when I am one (of Wingify), frankly it feels exciting and overwhelming. In fact, it is a big responsibility. A responsibility to make sure company grows, payroll is met every month in years to come, customers are happy, a brand is built, culture is well built and tens of other tasks. A CEO (especially in a small company / startup) can quickly get overwhelmed with all the different kinds of work he has on his plate. After all, in a way, everything associated with the company is in someway his responsibility.
So, what must a CEO do?
In the last 2 years of being a CEO of a nascent and growing company, I have come to realize that if a CEO focuses only on two key tasks and does them really well, all the work he thought he had to do by himself will take care of itself in a very efficient manner. These two tasks are:
- Hiring
- Setting Vision
Allow me to elaborate.
CEO Task #1: Hiring to build a perfect team
A CEO cannot and should not do all the tasks by himself. I know CEOs (including me) generally obsess over details and perfection, and in desperation end up doing quite a many things by themselves. Initially when the company is small, this is of course necessary. But as the business grows, a smart CEO should bring in more capable people than himself for well-defined roles and then set them free. This ensures that the business slowly comes to comprise of a competent and independent team that executes on the company vision (see below). I’m trying to do that for Wingify by hiring people for sales, marketing, engineering, product management and customer service roles. (Shameless plug: if you are smart and are willing to work from New Delhi, come join us!)
So, a CEO’s role should be to obsess on hiring competent people continuously. In fact, a CEO should strive to make himself dispensable for almost all the tasks in a business. Instead of meddling into sales, technology, finance, marketing, branding, customer service, etc., why not hire specialized people for these roles? However, it is important to obsess on hiring the right kind of people because the team that eventually gets built also determines the culture of the company, and ultimately the brand the company projects to the world. Hire good people and set them free! Everybody loves freedom to perform and deliver.
CEO Task #2: Setting company vision
No team can work without knowledge of the final objective. Without a clear idea of what a team is expected to deliver, even the smartest of people will fumble and struggle to deliver results (because, of course, they have no clue what results are expected of them!) So, while assembling and expanding a world class team, a CEO’s second and final task should be to show them a clear, cohesive vision of what the company expects to be. I’m not arguing for micromanaging the team, rather I’m arguing for deciding a strategic vision for the company and then letting individual teams set milestones for themselves to achieve that vision.
Once a company vision is set, different teams interpret the vision according to their own functions. For example, if the vision of the company is make $X million in revenue in next two years, sales, marketing, HR, customer service and other departments will decide what activities they need to plan in order to make this goal a reality. They will also set their own milestones and benchmarks. A CEO would need to overlook cross-team talk and guide it, but even that can be delegated. Strategic vision of a company could be of release of new products, entering new global markets or becoming a leader in a particular domain. But whatever the vision is, it must be clearly and thoroughly communicated to the whole company so that all the smart folks that you have hired and the teams that are operating can set their individual goals and milestones.
Once you hire a good team and show them a vision to work towards, your role as a CEO reduces to making sure everything is on track and meddling only when something seems to be going way off-track (say if an unexpected event happens in the market: a new competitor emerges or a new game-changing technology is developed or global recessions starts).
Good far-sightedness. Any vision left after performing the CEO role multiple times (as having different visions)?
I completely agree with your views. If you are providing a service, your team is your core asset. But I also believe that if a start-up was initially successful based on the founders vision,ideals, and ways of working then these ideals and value system must be ingrained in the company, because the founders will not always be around. While it is always lucrative to hire the best people, every individual brings his own vision and set of ideals. This can get dangerous at times. While everybody should have the freedom to work in the way they are comfortable with, they must abide by certain principles the founders believed in. Hence, in addition to a clear strategic vision (in terms of growth, targets, revenues, etc) a set of company values or ideals must be laid down to ensure that these act as guidelines to how senior management or employees go about executing their responsibilities. If tomorrow Larry Page and Sergey Brin decide to step down from Google, the company can only function because they have built a culture (the Google way of doing things) and strong principles. All Google employees may not be able to meet them personally, but the employees experience their ideologies everyday. Let me know your thoughts.
@Gautam: you make a good point but that is precisely why setting a vision is important. Without a concrete and well defined vision, different employees will have different understanding. But a CEO who sets the vision clear aligns all of the company towards one goal.
I disagree. The job of the company is to maximize profits. The CEO acts as the hub of the company. As such, his job is quick “decision making” that has a good chance of maximizing profits.
Should he spend all his time in hiring? Not really. If he isn’t the best at hiring, he should get someone else to handle it.
In order to maximize profits, in the early days of the company, the CEO needs to focus more on marketing and sales. Everything he can do to increase cash flow.
And after that, the CEO needs to shift his focus on strategy and systems. Scaling to maximize profits.
I personally like how Derek Sivers systemized CDBaby to the level that he himself was not needed to maximize profits and grow.
Couldn’t agree more. This is a lesson I recently learned. Like you, and most CEOs I wanted to do everything, have my voice heard in all decisions, and really know what was going on at the micro-level. Only recently have I realized that in a growing company the CEO just can’t do all of that. My job is to find the right people, put them in the right place, and point them in the right direction (vision). The vision should be powerful enough that it impacts all micro-decisions without the CEO having to be involved in each one.
Great article, glad to see this philosophy spreading.
thanks a lot for this great blog