The 7 roles of a new CEO
Being a CEO is exciting and captures the collective imagination, inspiring notions of freedom, adventure, and genuine passion. If this is your first time in the role, what are you expected to do? You did not receive a job description, especially if you are taking over a family business.
To be successful, CEOs need to know where they want to end up. One of the most famous thinkers on management in the past 100 years, Stephen Covey, wrote the book Seven Habits of Highly Effective People. Covey explicitly states that one must begin with the end in mind in the second habit. Knowing the ultimate goal will make it possible to determine the best way of getting there.
Stop and consider
What is the end you have in mind? What’s your exit strategy? Do you want to sell your business in 10 years? Do you hope your children will take over? Is it a lifestyle business to provide you with income and autonomy? The primary role of the CEO is to make sure the organization fulfills its reason for existence.
In decades of experience with hundreds of businesses of every size, time and time again, a common issue is that people fall into businesses without a vision or the mindset of a CEO. They are almost immediately in over their heads and stuck in the weeds.
True autonomy comes from knowing what the business needs when it needs it and bringing in the best people. The key to growth for all enterprises is delegation and creating an executive team where only the best and brightest professionals execute their respective tasks.
This responsibility becomes a burden when poorly managed, but it can be freeing when managed well. The only alternative is to develop the mindset and vision of a CEO.
As a first-time CEO, there is a lot to learn. An approachable and effective way of getting started is to review the seven principal roles of a CEO and self-evaluate. The idea is to not simply identify areas for improvement but to engage with transforming those areas and connecting with the people who can support lasting change.
The seven roles are as follows:
As an architect, the CEO knows the WHAT of the business. This includes understanding the business model, organizational design and strategy. The CEO is responsible for ensuring that the organization is healthy, both financially and culturally.
They determine the direction, vision, and purpose. They create the best organizational structure and strategy to achieve it. They may get input, but the responsibility is theirs. The CEO is the orchestra’s conductor, determining the audience, music and direction.
CEOs who excel as preachers can inspire and motivate with a clear mission, purpose and vision. They are the greatest voice of the WHY behind the business.
It’s impossible to know how you are doing without knowing what you measure. The systems and processes, rules, and culture of a business all have to be designed, and it’s with the skills of an engineer that a CEO determines the HOW of a business.
This is the skill set best suited to determining WHO will be on your team and how to keep them there. The more people a business has, the more potential for problems, so there is nothing more important than your human resources. The CEO carries the chief responsibility of making sure the right people are on the bus, in the right seat and heading in the right direction.
All CEOs need to know WHERE their capital will come from and understand concepts like valuation and return on investments.
A CEO interacts with all pertinent stakeholders—investors, suppliers, clients and employees. Being responsible for the vision and mission of the company still requires interacting on a one-to-one basis and participating in essential activities.
This requires the CEO to be the most articulate spokesperson of the business, communicating the mission, vision, and values inside and outside of the organization. One of the essential practices of the leader is to manage the interpretation of events, or in other words, manage what things mean.
As human beings, we always seek to understand—it is part of our nature. We see change as a threat most of the time. When we are threatened, we don’t feel safe and don’t operate at our highest level.
A CEO can fail in many roles but not as a student. As long as the unknown is approached with the openness and curiosity of a beginner’s mind, all is possible. CEO must be the role model for learning, growth, and change. Everyone is watching what you do. Learning=growth and growth=life. The organization will grow at the pace of the leader.
How would you rate yourself in each role, with one being clueless and 10 being the gold prize winner? Whatever your strengths or failures, it is possible to compensate for weaknesses, learn, and grow into a genuinely outstanding CEO.
The seven roles of a CEO give a template for self-evaluation and a practical road map to grow from entrepreneur to CEO.