How to become a CEO
What competencies should a CEO have? Instructions for those who are not afraid of difficulties.
CEO, chief executive officer, and general director – this is the highest management link in the company’s management. He coordinates the activities of other top managers, works on business development, and seeks strategic opportunities for business development. In addition, he is the face of the company if the business plans to go public and sell shares. We tell you how to become a CEO and what skills a professional in demand on the market should have.
Who is the CEO
Becoming a CEO is quite simple – register an LLC and appoint yourself as a leader. But if we are talking about the CEO of a large company, then everything is much more complicated.
The CEO is the head of the organization, the person who is responsible for all processes and results. He reports to the company’s owners, often both the founder and CEO of the business. Often the founders form the company’s ideology and think about the business’s mission. The CEO is responsible for creating and implementing the business strategy.
In a small company, the CEO himself manages the main areas of operational activity – he sets up the processes of production and marketing, advertising, and economic support. When the business grows, the CEO begins to manage top managers – the operating director, chief finance, advertising and marketing, sales, and production and is also engaged in strategic development.
The CEO is hired by the board of directors, founders, or shareholders. Therefore, there is no universal instruction on how to become a CEO – it all depends on the characteristics of the business.
Job description of the CEO
The main responsibilities of the head of the organization are spelled out in his job description. To become a CEO, you need to understand every point before being appointed to this position. CEO:
- Manages all activities of the organization.
- Collaborates with business owners and the board of directors regarding the development of the company and the development of an activity strategy.
- Controls and coordinates the operational processes in the company.
- Participates in the development of long-term goals of the organization.
- Ensures the legitimacy of the company’s activities.
- Controls the efficiency of resource usage.
- Organizes accounting and office work.
- Responsible for increasing the performance indicators of the enterprise: profit, profitability, and turnover.
- Organizes the process of personnel recruitment and development, and controls the enterprise’s resource support and certification.
This is an incomplete list – depending on the company’s size and other top managers’ presence, the job description may change.
Basic CEO Skills
Before becoming CEO, you must work at other levels of the management hierarchy, such as commercial or operations directors. This is a good experience and will certainly come in handy in the CEO position, but this is not enough. The fact is that the work of the CEO is the responsibility of the entire company and processes. Therefore, you will have to master various skills that help improve the quality of management, increase the company’s operational efficiency, and the effectiveness of spending the budget.
The CEO must first understand how to manage and grow the business:
- Not just to use some management paradigm but to design a management system.
- Plan and measure resources, and know different frameworks for this.
- Understand what modern corporate management is, the product life cycle.
- Possess three leadership competencies at once – to be a researcher, designer, and organizer.
The task of the CEO is to improve the company’s operational efficiency. To do this, he must understand how to create a balanced system of goals, know the basic techniques for optimizing business processes, and understand methods for increasing income, including in times of crisis and uncertainty.
The CEO must be able to manage employees. This means that he needs to understand different motivation systems, attract people with the right skills, understand assessment procedures, and manage the development of employees. And not only line personnel but also managers. The CEO is the manager of those who manages.
In addition to current processes, the CEO should be involved in the company’s development: understand when to accumulate resources and launch intensive traffic. The owners of companies often consider it the duty of the CEO to create an “innovation factory” – you need to establish a process for generating and implementing new ideas, create a system for implementing and testing prototypes, analyze the results, and launch startups within the company.
The CEO must understand the essence and purpose of the business – quickly navigate what value propositions can be created from existing resources and which of them will be in demand in the market. A leader must manage the financial block and decide what resources and where to direct them. To do this, the CEO studies reporting, sets tasks for financial and commercial directors and manages the company’s financial cycle.
No less important for a CEO are soft skills. Like any effective leader, the CEO must be able to manage time and know how to concentrate on the task. It will be useful to recognize lies and the ability to use profiling methods. Finally, he should also develop emotional intelligence – the CEO often makes difficult decisions, which means he must be morally stable.
The CEO is a person who is responsible for the stable and, at the same time, intensive development of the company and knows how to respond to changes in the business environment and turn them to his advantage. It is difficult to learn this from scratch – a lot depends on the experience, quantity, and quality of the tasks already solved.