What exactly does a CEO do? You may have asked this question whether you are a CEO or not (or maybe especially if you are a CEO!). I recently completed my blog series on the “Six hats of the CEO” or roles that provide high value on a day-to-day basis. In this series, I’ll cover what I think are the five overall responsibilities of a CEO.
Many new CEOs struggle because they don’t have a clear picture of what they should do in the job. Before taking the position, they have only observed a small fraction of the things a CEO does and can be overwhelmed by all the demands on their time. It is very easy to fall into a tactical routine as CEO, confronting each problem as it comes your way. This is exactly the wrong way to build a great company. The CEO must be looking out into the future as far as she can see to anticipate issues and take corrective action while there is still plenty of time to avoid the problem. In order to do that, the CEO must have a clear picture of the key responsibilities of the job and prioritize them above all other issues.
COMMUNICATE THE VISION
The first responsibility of a CEO in my mind is to Own the Vision. I use the word vision to encompass the mission, vision, values, and overall strategy of the company. As I mentioned in my post about how CEOs can balance total responsibility with limited control, the CEO must communicate the complete vision in a compelling manner. This allows everyone to understand how their contribution is part of the corporate vision and to make decisions that support it. Whether speaking to employees, shareholders or customers, the CEO should know how to engage each audience and clearly communicate the direction of the company. Part of this is conveying to each group what’s in it for them if the vision is realized.
TIE THE VISION TO STAKEHOLDER GOALS
For employees, the incentive is partly financial but it is also contributing to a growing organization that provides opportunity for increased responsibility and continuous learning. This works only if every employee knows where the company is going and how their individual job – including their daily routines – contributes to this. One question to ask is: Does every employee in your business know the goals of the company and how their personal goals relate to the higher level company goals? This interconnectedness is critical for employees to emotionally engage. By tying their goals to the goals of the company and pursuing a common mission and vision, the employees feel part of something greater than themselves.
Shareholders often easily buy in to the vision, since they will achieve a financial reward if the vision is achieved. Customers benefit as well from growth since more resources can be devoted to improving the products and services that benefit them.
Understanding that each group and even every person may be motivated by slightly different rewards is important to tailoring the message appropriately. You are not changing the vision for each group but merely focusing on the value that each group uniquely receives from accomplishing the mission. Great leaders find a way to rally a diverse group to a common cause by tailoring the message to each.
KEEP THE VISION FRESH
Another factor in the CEO’s care and feeding of the vision is preventing it from becoming stale. While the big picture vision should not often change, the details of the story must adapt to constantly changing business conditions. The CEO is in a good position to communicate how the company is living up to the vision with timely anecdotes and facts about success. Consistent direction from the top is critical to driving outstanding performance. The best CEOs enable communication about the vision to flow consistently both from and to the CEO.
The vision must be ingrained deeply in the culture of the company. All major decisions are contrasted against the vision to see if they move the company in the proper direction. While as CEO you may get tired of repeating these core principles, most employees will need to be reminded regularly for the vision to take hold in the company.
STRIKE A BALANCE
Another obvious challenge for the CEO around communicating the vision is how to balance the required optimism for the business while maintaining the credibility necessary to lead. Many CEOs shoot themselves in the foot when they talk about where the business is headed by over promising and under delivering. Balancing this messaging is critical to success as a CEO, and it is probably the most common mistake I see CEOs make.
The great CEO plans his time consciously instead of allowing the tactical problems of the day to hijack his agenda, and being the primary caretaker of the vision is a key strategic responsibility. Everything the CEO does must support the vision.
Stay tuned for the second of the five major responsibilities of a CEO: Providing the proper resources.