CEO - Chief Executive Officer - sounds like a very corporate title and many business owners of small and medium companies are uncomfortable using it.
If that’s true for you, then try substituting “business owner”, “managing director” or “general manager” for CEO. The bigger question is not the title but meaning: what does the leader of a company actually do and what should they do?
In short, there is no “one answer fits all” because what you do depends on the stage of your company’s growth.
When you start a company you do everything and make all the decisions. And that's exactly what you need to do, because a “startup” is like a giant experiment. You need to try a lot of different things and your job is to figure out, as quickly as possible, the answers to a series of questions: which customers want your product/service? What are they willing to pay for it? Where do customers want to buy it – in a store, at a stand, in an office, via their mobile phone? How will you market your product or service? What roles are critical to the company to get it off the ground?
In short, your job is to figure out the product or market fit, how to get customers who are willing to pay for it and how to attract the right kinds of employees to enable the company to deliver your product or service. You will also spend considerable time thinking about how to finance the business.
“I thought my job was to be able to do everything and tell every employee what to do. But when I looked out my door one morning and saw eight people in line, waiting for me to tell them what to do, I knew we were in trouble; we could never grow if it all depended on me. And so I started asking them what they thought they should do and I got them to think for themselves. – and we began to grow more quickly.” CEO of a manufacturing company in the USA
As the company grows, you need to stop “doing” (the hallmark of “startup”) or “telling others what to do” and begin delegating tasks. Your job is no longer to solve problems but to prepare the company for growth by clarifying the company’s purpose, direction, structure and measurement; doubling down on the products and services being sold; figuring out how to find more customers and getting the right employees “on the bus”. Finally, you need to install integrated systems to track income, expenses and cash flow, which customers are buying what, the time and money it takes to produce your product or service, and whether tasks are being executed and completed on time and on budget.
Once the company begins growing rapidly, you have an entirely different set of roles and responsibilities! You need to hire people smarter than you who support the company’s mission, live and breathe the values and share your drive to achieve the vision. You may need to teach and coach them to work as an executive team, delegate, choose good people and be good leaders themselves.
“Working in fast growth technology companies is all about ‘being comfortable being uncomfortable’, and executing your plans...” CEO of a high growth fintech company in Australia
Somewhere along the way, you will experience turbulence. It could be from external events (for example bushfires, floods, changes in political parties, supply chain disruptions, etc). It could come from within the company (such as cyberattacks, a product that does not pass quality control, a major customer going bankrupt, several employees resigning). Or it could be personal (maybe you have a health issue, your partner wants to leave the business, family demands require you to step aside and take care of personal matters, and so on).
If you have a great team and strong systems, you should be able to handle turbulence. But if not, the going can get very rough. As the famous observation has it “what doesn’t kill you makes you stronger”. Some companies emerge from turbulence as stronger, more competent companies. But others are weakened beyond repair from falling sales which leads to employee layoffs, no money to reinvest in the business, more customer defections, and even less revenue – a downward spiral of decline and despair.
But assuming you navigate the turbulence, you eventually move to the stage we call continuous growth and your role will evolve once again. You will now need to be looking ahead several years at trends and developments and then determine how to position your company advantageously. You will need to be good at change management – because many people will be reluctant to change, having worked very hard to do what they thought was the right thing to do to make you and the company successful.
You will also need to reorganise and rebuild the organisation as people in your executive leadership team leave, retire or decide they no longer want to do that particular job. Finally, you will need to remind people about “the bright white line” in the organisation with regard to the company’s values and expected behavior. From time to time you will need to call out bad behaviour and focus employees on “walking the talk”, living the values, and showing how this contributes to a healthy and productive company that achieves its stated goals and outcomes.
So what does a CEO do? And what should a CEO do?
As soon as you figure out what products and services your ideal customers want, at what price, and where and how they want to acquire them, you need to STOP DOING those original tasks and begin delegating them to others! There are still lots of things for you “to do” but the CEO’s role changes from “doing the tasks yourself” to strategising, communicating, teaching, encouraging and rewarding others to do, execute, and achieve.
Your job will be more about setting and communicating the direction for the organisation and less about its day-to-day operations. You can only achieve this if you select the very best people for your executive team and then work through them to grow your company. And with company growth comes increasing responsibility for allocating the company’s resources wisely (people, finances, time, relationships and effort) in order to execute the plan.
Finally, you will find, as the company grows, you need to increasingly focus on the things very few people can do - primarily dealing with the exceptions! If you do your job right and teach your employees well, you will have a decreasing number of decisions to make - but they will be the most critical ones for the company. In short, rather than doing, you need to spend more of your time listening, teaching others, sharing your decision rules and helping the leaders in your company “stop doing”, start delegating and become better leaders themselves.
“One day I was sitting in a meeting, listening to the conversation, and realised I had nothing to add. My team was thinking about all the issues, assessing the risks and opportunities, and was making great decisions – without any input from me.”
And that’s the day that you open a bottle of champagne and say “Hip-Hip-Hooray! We’ve built a great company that can keep growing because I did my job as CEO.”
Dr Jana Matthews is Director of the Australian Centre for Business Growth, UniSA Business and ANZ Chair of the Business Growth Program.