What is CEO? What exactly does it do?
The CEO (Chief Executive Officer) is the most desired but highly misunderstood position. Some of the duties of CEO can be done by other people, but some things can only be done by the CEO.
Everyone thinks that CEOs do whatever they want, they are very powerful, have talents that nobody else has.
But this is not quite true. The duty of the CEO is to meet the needs of employees, customers and investors. Some of the duties of a CEO can be done by others, but some things can only be done by the CEO.
Determining the strategy and direction of the company
Building company culture
Establishing and managing the board of directors
Managing the capital according to the priorities of the company
These tasks can only be performed by the CEO.
The CEO can get help from his consultants in these matters, but only the signature of the CEO is under these works. Apart from these duties, the CEO can use his time as he wishes. So but everything is secondary except the tasks, it is optional.
Being successful as a CEO requires more than knowing and applying the things in the job description. A CEO must be able to measure and evaluate his own success; should be able to improve itself over time.
What Does a CEO Do?
Let's admit it. The CEO title is very attractive. Power, salary, boss's seat, being a name that all staff fear… All of these are something that almost everyone wants.
Unfortunately, very few CEOs are doing their job successfully and well. Many CEOs do not know the exact terms of reference. What the CEO has to do is very clear and obvious, but also very difficult.
So what exactly is the CEO's role?
The CEO is responsible for everything in the company. Especially for startups, this is much more obvious. The CEO is responsible for the success or failure of the company. Operation, marketing, corporate culture, human resources, recruitment, firing, sales, public relations, partnerships ...
The CEO is responsible for all of this. In other words, being a CEO means being accountable to the board of directors for all activities of the company.
There are jobs that no one other than the CEO can do. Creating a corporate culture, determining the executive board, deciding how to spend money and assigning tasks to people… These are jobs that can only be done by the CEO.
Many startup CEOs see finding investment as their most important task, but this may not be quite right. Of course, it is necessary to find investors, but what kind of company the CEO will establish with the investment is much more critical.
Determining the strategy and vision of the company is also among the main duties of the CEO. The senior management team works to develop this strategy. Investors also approve the business plan. The board of directors can advise the CEO or request a correction of the strategy. However, at the end of the day, what the CEO says happens.
Which markets will the company enter? Who will it compete with? What types of products will be produced? What will make the company different from others? Low price? Flexible payment terms? Mass production? Is it custom made?
The CEO adjusts the budget, establishes a partnership, decides on the product range, makes a purchase and merger decision, employs appropriate personnel and turns the company around.
Another task of the CEO is to build corporate culture.
The work is done by people after all, and the values and sensitivities these people have are important. For example, a frivolous work environment causes good staff to quit. However, the opportunities offered and a quality work environment cause the best staff in the market to want to enter this company.
Corporate culture can be built in different ways, and the type of this culture is decided by the CEO. From the CEO's clothing to the color of the glasses he wears, many things give messages about the corporate culture. Factors such as the attitude of the CEO towards mistakes, who he hires, who he fires, what behaviors he rewards constitute the corporate culture.
This is very important because employees impersonate the CEO! The CEO should inspire his employees both physically and psychologically. In an article written on the persuasion of Robert Cialdini, it is stated that a lying CEO also negatively affected his staff, and that such a CEO's company also experienced corruption at the personnel level. In other words, we can say that the CEO is the person who sets the standards in the company.
Or if the CEO calls the web team on the day the company's website is renewed and activated, and congratulates and thanks this team, this team feels valuable. But in such a situation, if the CEO is on vacation and doesn't say anything, if he doesn't congratulate his team, this web team will refrain from self-sacrifice in the next project.
If vision refers to where a company is going, value refers to how the company goes there. The values that a company cares about are determined through actions and reactions. For example, the refusal of the company to ship its products on ships that do not meet certain standards shows the company's importance to quality. Employees derive values such as trust, honesty and transparency from the behavior and words of the CEO.
Among the duties of the CEO is also to recruit senior executives.
The boss personally hires, assigns and dismisses senior managers personally when necessary. These executives do the same for the rest of the company.
A CEO has the authority to fire people with poor performance. It is the duty of the CEO to solve problems between senior managers and to ensure that these people work in coordination. Senior managers implement the strategy drawn by the CEO. Thanks to a strategy known to all staff, the company goes further together.
The importance of directing and giving direction should not be denied. In the training, which was attended by the new staff of Intuit in 1991, CEO Scott Cook stated that “computerized personal finance” transactions have a central role in the vision of the company. At that time, the company had 120 employees and a single product. Ten years later, the company has thousands of employees and dozens of products. Even today, Intuit is the industry leader in personal finance. This is due to the fact that all personnel understand the company's vision and strategy well.
Capital and how to spend money are among the main duties of the CEO. The CEO provides financial support to projects that contribute to the company's strategy, and cuts off financial support to startups that lose money. The CEO must know the most important expense items of the company very well. If the company is unable to convert the $ 1 from investors to $ 1.01, the CEO decides when the money should be returned to the investors. Some CEOs do not have a financial background, but in any case, the financial fate of the company depends on the decisions of the CEO.
The CEO Should Track His Performance
Knowing the job description is the first thing a CEO should do. Second, the CEO must know how he is performing, and establish a monitoring mechanism to measure his performance.
Unlike a regular job at the company, nobody told the CEO, "You have to work harder. I expect a better performance from you. " does not say.
Even when the CEO asks for honest feedback from employees, employees are frightened and hesitant to express their opinions openly.
The board can give advice to the CEO, but they are often unaware of the daily activities of the company. These people often speak about the financial performance and strategy of the company.
However, the daily behavior of the CEO also directly affects the future of the company. However, the fall of the company in the stock market is only the result. It does not give clues about the issues that caused this result. A firm that audits the company externally also gives an opinion about the general condition of the company, does not give an idea about the actions of the CEO, the reports of those audit firms.
If the CEO views his performance in the context of his duties, he can improve himself better. We mentioned that the CEO has duties such as determining vision and strategy, managing money and hiring. Among these, creating strategy and culture are quite complicated issues.
It is not enough for a CEO to have a vision. The important thing is to be able to express the vision correctly. When people understand the vision drawn by the CEO, they continue their daily business in accordance with this vision. If the vision is not fully understood, it means that the CEO has not expressed his vision clearly and clearly.
In any case, the CEO can understand the connection between the vision of the company and the state of the employees by listening to his employees and asking them questions, and he can measure his own success in this way. Creating culture is a delicate business, but there may be a difference between the culture the CEO claims and the culture the intern understands.
Surveys on issues such as transparency, values, and ethics can be conducted to see if the company culture is successful.
If 95% of the personnel in the company express that they are dying to come to work in the morning, then things are fine. If the turnover rate is low and people with bright CVs apply to the company, the company culture has a big share in this.
The success of the CEO in team building can also be understood by looking at the teams in the company.
I trust my teammates.
Everyone in our team does their job in a timely and complete manner.
If people in a team make such statements about each other, then things are still fine.
In-team evaluations are also important in showing the CEO how efficient and beneficial teamwork is.
The area where a CEO can see his own success most clearly is capital management, because 2 + 2 is always 4. The company's balance of income and expenses is clear, even this information is shared with the public every 3 months.
So, how is the relationship between the decisions made by the CEO and the financial situation of the company determined?
CFO (Chief financial officer) is the CEO's right hand in finance. Working with the CFO, the CEO can make important and effective decisions regarding the financial condition of the company. For example, the CEO can measure how $ 1 million spent on staff training has benefited the company after 2 years. If the trained personnel have increased productivity and earned an extra $ 3 million for the company, it means that the CEO has tripled his investment here. There is no point in doing business if this is not the case. If you don't invest $ 1 million and earn $ 1.1 million, it means the CEO hasn't done his job right.
Startups initially earn little or no money. In this process, the CEO can hardly receive any useful feedback in terms of financial strategy. So the CEO does not know if the 10 copiers purchased in the company are necessary or a beneficial investment in the long run. But a CEO who carefully monitors financial performance will make it easier for his company to reach a profitable company.
What are the Common Mistakes CEOs Make?
There are few positions that are stronger than CEOs in business. And too much power spoils people. Many companies today are run by CEO dictatorship.
Or it is very easy for a CEO to be called "idiot" without realizing it. Because these people are not people who have previously experienced what it is like to be bossy. A CEO can ignore thoughts he doesn't want to hear, and nobody can hold him to account for it. The CEO can set his own salary as he wishes, and unfortunately, no employee can make a noise between his salary and the boss's salary.
Staff: Can I get out a little early today?
Staff: I have to pick up my child from school.
CEO: Why are you doing this job with a caretaker?
Staff: We have no sitter.
CEO: What… (He turns and continues his own business.)
This staff can be very hard working. He may be working harder than the CEO. However, there is no budget to hire a caregiver. The CEO isn't stupid here, but he hasn't been able to empathize with his staff. Leaders who lack empathy have trouble getting support from their environment.
A CEO can also be arrogant enough to blame others. When things go wrong, the CEO can scold those around him, regardless of his shortcomings. “Why don't you understand? Are you dumb? ” For example, a CEO who speaks harsh words like he forgot that he himself hired these people. If employees are really incompetent, why did the CEO hire such people? Or why didn't he explain his expectations to his staff more clearly?
When the CEO fails to receive clear and honest feedback from his close circle, he may experience power poisoning and start to shirk his responsibilities and blame others.
There may also be an overconfidence of the CEO title. "If I'm the CEO, then I know this job better than any of you." A mentality like this causes great harm to the company.
It is not possible for a CEO to be an expert in all areas of the company. A finance-based CEO cannot fully grasp the engineering activities of the company. An engineering CEO may not fully understand the Company's legal responsibilities. So if a CEO knows the legal procedure better than the company's lawyers, he has hired the wrong lawyers. In other words, the CEO needs to deal with daily operations from time to time, but the main thing to do is to place experts in each unit and manage the company in general.
The CEO may also stop learning new things, improving himself over time. Without receiving any feedback and not looking at how daily business is going, he may have the delusion that he is doing his job fully.
The software company XYZ could have been a $ 1 billion company. But he insisted on a single product. It did not conduct market research, did not analyze rival firms well. The company, which is worth $ 300 million today, would have been 3 times bigger if it had made the right moves. Nobody could blame the CEO and senior management for this. These individuals earned 60 million per capita after the company went public and claimed they were successful. But with a good strategy and vision, the company could achieve much greater success.
In other words, a CEO's not doing his best, making a minimum of effort and filling his own pocket shows that he is not successful. The important thing is to develop and prosper the company, employees and investors.
How to Become a Better CEO?
Above, we touched on the mistakes made by CEOs. Now let's look at what needs to be considered in order to be a better CEO.
Think about what it means to be a leader and human, even for 10 minutes a day. In the meantime, consider the topics we will include below.
Communicate Well With Your Employees:
Make respect your communication primary. Those who work under you, or even as interns, make your vision a reality. Consider whether you have given them the space and facilities they need to do their job properly.
Visit the office every day, or at least once a week, and chat with an ordinary employee, try to learn something from him, teach him something.
Engage with personnel working in the field as often as possible.
Listen to people with an open mind and heart. Find out what they do. If there are any problems they are experiencing, identify them and take measures to eliminate these problems.
Chat with your employees about their life. Find out why they prefer your company and not another company.
Even a 10-minute chat can increase an employee's motivation by 10 times, don't forget this fact.
If there is inaccurate information about the company's vision and direction, correct it. Ask what kind of improvements are needed to improve the company and its daily operation, and draw a strategy based on the feedback you receive. Because a marketer working in the field can see a situation that you do not notice much better.
Humility Is Good:
You cannot make your dreams come true without your employees. Therefore, honor them at every opportunity. Publicly thank them for their contribution.
If there is a problem, it is entirely your responsibility. Do not hesitate to take responsibility. Taking responsibility puts you higher in employees' eyes than blaming others.
Choose your counselors from straightforward professionals, not flatterers. Take care that your consultants follow the entire operation in the company. The board of directors can also advise you, but these people may not know the exact situation of the company in the field.
Always ask for feedback from your friends, mentors and partners. Take the opinion of other people in the solution of the problem, do not act on your own.
In the company, everyone except the CEO is absolutely responsible to one person. Do not abuse this situation, be responsible for yourself.
Develop specific criteria to measure your performance and your senior management's performance. When these criteria are not met, for example, do not raise your salary or receive bonuses. Do not take a different attitude for yourself as you treat a staff member who does not perform as you expect.
Be sure to read the life of successful CEOs. Meet and chat with people you admire, invite them to your company and train your staff.
Read a lot. Remember that Warren Buffett reads 8 hours a day.
Have customer, market and competitor research done regularly. Analyze your competitors well, learn the profile, interests and needs of your customers. Find out why customers are using your products or why other customers are not using yours.
Raise the Bar:
Aim to achieve more each year than the previous year. Aim to do a job done in 1 hour in 45 minutes. Look for ways you can cost a product that costs $ 10 for $ 8.