What Does a CEO Do Anyway?
onlyonceblog.com
onlyonceblog.com
Suppose you have 20 employees. There are 19 people in the company who have a defined job. They come in, do their jobs, and go home at night. Of course you have to make sure those 19 people do those jobs, but when something doesn't get done by any of those 19 people, you have to do it. Sometimes this means the CEO washes the dishes.[1] Often, this means that you spend an increasing amount of time doing a certain job before realizing that you're spending most of a day doing something you can afford to hire someone else to do, so then you go hire that person.
Suppose you have thousands of employees. You have more executives than a startup has employees. You have to make sure each of these executives is world class. If you're Steve Jobs, this means that you have a world class head of industrial design, a world class ops guy in Tim Cook, brilliant engineering execs, and so forth. What do you do? You overlook the product vision, pay attention to detail, and teach the company how to operate the way you see fit. Now suppose you're Tim Cook. You have dozens of executives working for you, many of whom have been selected and trained by Steve Jobs to pay as much attention to detail and have the same product vision. What do you do? You overlook the operations and make sure the company has the technical ability to pull off what the designers and vision guys want to do.
In either case, the basic formula is the same. Take everything that needs to happen in order for the company to succeed, subtract everything that the rest of the company is doing, and what's left over is the job of the CEO.
On this list would be raising money, hiring and firing at top levels, setting the culture, and tackling leadership challenges that no one else can.
Obviously by the time you have hundreds of employees you can delegate most of the work, but at a 20 person company, there are a lot of little things that fall through that don't necessarily belong on anyone else's plate. And at a much larger company like Apple, the title of CEO probably doesn't mean the same thing with regards to Steve Jobs as it does with regards to Tim Cook.
The only constant is that the CEO is the final authority on day-to-day business. But if I think you followed around 100 CEO's at various sizes of company, you'd see 100 different workdays. Yes, there are similarities, and you've named four of them. But there are differences, too. Being the final authority, and having the final responsibility, means you do whatever it takes to do what needs to be done as well as it can be. Usually this involves delegation and hiring, and sometimes you can't afford to do that.
On the small scale, you will pay the bills, manage finances, and fill out paperwork.
On a larger scale, you will focus on recruitment and policy.
On the largest scale, you will focus on vision and direction.
Read: Golf.
But that doesn't change that great leaders do in fact provide vision and direction - like to "organize the world's information and make it universally accessible and useful." Or "to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity."
A far cry from golf in my book!
Lots of people think it's all about the idea, and they can just hire someone to "code it up" and that's the easy part. Lots of people also think that "vision and direction" is easy and anyone can be a CEO. But few people have legitimately good ideas that are connected to the ability of the organization to execute, the general competitive landscape, and the needs of the marketplace.
Try being a CEO sometime, startup or otherwise, it's not about golf. It's about the crushing responsibility of making hundreds of decisions a day and knowing you're the one who is ultimately responsible for the business being cash flow positive.
Thank you for pointing this out.
For startups, the truth is that it takes a lot more than vision to succeed. You need the ability to sell people (investors and employers) on something that doesn't exist yet, a certain tactical acumen, nerves of steel, and quite a bit of luck. You also need a deep technical knowledge because you can't evaluate your first technical hires unless you're technical yourself. This is a tough bill to fit, and vision alone is not enough.
Large-company vision is different, and the problem there is that the people who have the necessary skills essentially cannot rise to the top. They tend to be way too passionate to pay their dues, shut up when bad decisions are made, and plod along accruing influence at a pathetic, glacial pace rather than attempting to seize power (which doesn't work in a corporate context; you just get fired). Would Steve Jobs get to the top of any large corporation today? Fuck no, not a chance.
Generally, people who rise to the top of large companies are mediocre in terms of visionary ability but extremely reliable. They're not all political sociopaths or assholes; most are perfectly nice people. What they are is very good at performing well no matter what is going on, what kind of work they get, and how they feel about what is going on-- people whose performance has an abnormally low sensitivity to morale and who can therefore sustain middling to high performance, without faltering, over decades. People who have vision almost never meet that description, because vision comes with passion which is another word for getting pissed off when the wrong thing happens.
I'll add that it helps to have personal experience in every role in the company before you become a CEO. I don't think it's necessarily a requirement, but it sure helps.
My point is the usefulness of "personal experience in every role" is a bit, ah, debatable?
Obviously the Janitor example for Apple is a bit extreme, but where do you draw the line?
I hazard to say your statement is only applicable for small companies. Perhaps one where every role has a strategic or tactical impact?
Going on from that perhaps a better statement would be:
"It helps to have personal experience in every role of strategic or tactical value in the company before you become a CEO. I don't think it's necessarily a requirement, but it sure helps."
That said, I'm not sure that quite cuts it either...
Tim Cook wouldn't benefit from a more thorough understanding of the janitor's role. He would benefit from understanding operations, marketing, finance and technology. His ultimate responsibility is to recruit and retain the best people for those roles. He doesn't need to be world-class at each, but he needs to be able to identify what world-class looks like for each c-level role.
Bonus points for being able to remove stressful situations from the team, allowing them to be productive. If someone needs to be stressed out, it should be the CEO, not the team.
In a small company, the CEO job is so hard that only 1 person in 20 (if that) has the ability to do it. Getting the CEO right is crucial. In a large company whose founders have already left, you're talking about smooth-running machines and who gets the top jobs generally comes down to social climbing more than anything else.
I'm not sure why you think you're in the position to make a statement like that. CEOs of large companies work almost every waking moment, not something I think correlates well with an easy job.
I used to play a lot of poker at relatively high stakes. What I found was the people who didn't play at this level were the ones who were the most confident in their analysis of the game. How could that guy fold in that situation? Ah, if only they could scrape up enough money to play they'd show us how it's done. So they would borrow money from friends or grind the lower stakes games until they had a big enough bankroll to take a shot at the big game.
And then we'd take their money. Because their confidence was based on the fact that they didn't even know what they didn't know.
I'd gladly reward a CEO if he/she can outperform their competitors.
I think it's more that the amount a CEO makes is insignificant compared to the company's other costs. Supposedly GE has 304,000 employees worldwide. If the shareholders decided to pay the CEO $10m less they could afford to give every other employee an extra $0.63 a week. Whoopie.
And yet the CEO can mean billions of dollars made or lost depending on the quality of his decision making. As a shareholder if you think you're actually getting your money's worth you're not going to quibble over ten or twenty million for the chief executive when the company's market cap is over a hundred billion dollars.
Do the shareholders get their money's worth? I don't think there's any possibility you could answer this question objectively.