From Fred Wilson (via Daring Fireball):
A CEO does only three things. Sets the overall vision and strategy of the company and communicates it to all stakeholders. Recruits, hires, and retains the very best talent for the company. Makes sure there is always enough cash in the bank.
Insightful quote, which has attracted some equally insightful comments.
I’ve condensed the first comment from JLM, a CEO with over 30 years of experience. It’s worth reading the whole thing, but here it is as twelve commandments:
The CEO is first of all a moneymaker.
The CEO has to set the tone of everything.
The CEO has to set a vision for the company.
The CEO has to be a good thinker, a better writer and a powerful communicator.
The CEO has to tranform the idealistic vision into bite sized specific objectives.
The CEO has to organize the functions of the company to accomplish the vision.
The CEO has to be a trainer.
The CEO has to be a disciplinarian.
The CEO has to recruit, inspire and drive talent.
The CEO has to be able to reduce what the company does to logical processes.
The CEO has to force the company to be “customer centric”.
Most importantly —
The CEO has to face down risk with a steady gaze which inspires confidence amongst the executive team. “Well, if he isn’t scared, then I guess I shouldn’t be scared.”
A short reinterpretation from Arnold Walstein
Exec with market vision, inspiration and who can manage to a P & L”
Translation by Mark Essel
A CEO is a master salesmen
1) selling a product that cannot be made, selling a service that cannot be provided, a vision is something that has to be described and sold to business owners before it is ever realized.
2) selling the opportunity of taking part in a legendary business to the brightest and most fanatic team
3) selling the product/service and everything else, including shares in the business to keep capital flowing into the business.
And of course the incendiary application to Obama (which triggered its own heated discussion):
Great post. My politics may be different from yours, but if the role of President is like that of CEO… Obama has three strikes.
Has he sets the overall vision and strategy of the country? FAIL (Far too many “top priorities”.)
Has he recruited the best talent? FAIL (Too many academics… And too many life-long politicians.)
And has he ensured that there is always enough cash in the bank? FAIL (Just look at the debt and deficit.)
The Veto Pen
Later on, the comments reveal an additional duty which may be just as important is to be the final authority on the product.
Fred, I like to feel that there is an additional role that good CEOs take on – that of the final authority on product utility, usability and quality. These functions need to be the responsibility of experts but ultimately the buck must stop with the CEO and he cannot run a company successfully if he is not on top of these areas. He should hold a veto on the launch of any product which he feels don’t match up to the standards he would expect in each of these areas.
You probably can’t be a great CEO without these things, but I think there’s more. Leaders like Bill Gates, Steve Jobs, Walt Disney, Jack Welch, Andrew Carnegie and J.P. Morgan all have a rich legacy of getting involved in managing operations beyond just leadership.
I agree in theory, with the most obvious example being Steve Jobs, but his model of intense oversight breaks down when applied to companies like GE, Procter & Gamble or SC Johnson where 1) the user base is very different from the CEO (e.g. women’s makeup is harder for a male CEO to judge directly) 2) there are too many products in the portfolio for one person to judge. This is why Steve Jobs decimated the Apple product range on his return: fewer products made it easier to to play the final gatekeeper.
In the end, a CEO should never miss a chance to eat their own dogfood.