These days it’s easy to print up business cards with the title “CEO.” You’re in charge, and you want to show it. Your title can be whatever you decide to call yourself, right?
Well, maybe. Today, if you want to truly lead like a chief executive officer, there’s more to it. A great CEO knows:
(1) WHEN TO FOLLOW THE RULES
Make sure you don’t gloss over the legalities. After all, a good CEO has to be aware of many facets of a business including legal requirements. Let’s take, for example, that title.
If your company is a corporation, have you officially been designated as a Chief Executive Officer according to your corporate requirements? Typically, a corporation requires a Board of Directors, which in turn appoints top officers such as a Chief Executive Officer. In a small, closely-held corporation it’s not unusual for the sole shareholder to also appoint himself or herself as a director and a CEO. But what if there are more than one shareholder? Just keep in mind that you must observe formalities to preserve protection from personal liability, and if there are other shareholders you may have to involve them in appointing officers. Check your corporate bylaws for requirements.
If your company is a limited liability company (LLC), on the other hand, it may be less formal than a corporation but you still have requirements when it comes to designating officers. In an LLC the Members (that will be YOU if it’s your company, as well an anyone else with an ownership stake) have the right to appoint any managers. That means as the sole owner you can decide to appoint yourself or someone else the CEO. If there is more than one Member owner, however, then either your LLC operating agreement will designate what approval is required, or in the absence of an operating agreement, most state laws will require a majority vote to appoint managers.
(2) WHEN TO BREAK THE RULES
In addition to following the rules, a good CEO knows when to “break” them. This means taking business risk when you run and grow your business. No great business was ever built by taking the 100% safe route on every decision.
As the CEO you must be bold and take calculated risks. Need to stand out from the crowd? Take some risks with your marketing. Instead of plain vanilla marketing, go for an exotic green-tea-lime-sage flavor of marketing. Need to establish value in the eyes of your customers to justify a premium price? Provide a service that is extreme in making customers happy — even if no one else in the industry does it that way. After all, that is how you stand out.
Sometimes this may require following a “gut feel” or intuition rather than what your head tells you.
Every day presents you with opportunities to be bold and seize opportunities. Can you be bold enough?
(3) HOW TO GET OUT IN FRONT AND LEAD
According to entrepreneur and consultant Stever Robbins, the #1 job of the CEO is to set the vision and strategy for the company. But just having a vision isn’t enough. You have to communicate it to the team, he says:
“How does a CEO know she’s doing the vision thing? It’s hard. Having vision isn’t enough — that just takes a handful of mushrooms and a vision quest. Communicating the vision is the key. When people “get it,” they know how their daily job supports the vision. If they can’t link their job to the vision, that tells a CEO that her communication is faulty, or she hasn’t helped her managers turn the vision into actual tasks. Either way, a CEO can monitor her success as a visionary by questioning and listening for employees to link their jobs with the company vision.”
(4) HOW TO EXECUTE DAY TO DAY
It’s not all high level vision and strategy. Execution is critical. A great company executes well — and execution starts with the CEO. But your team is at the heart of it, too.
The kiss of death to a real estate business is an absentee landlord who drives the property into the ground through neglect, inattention and inaction. The same can be said for other businesses. A leader who is not visible, and who doesn’t seem to care if competitors are eating your lunch because the product is obsolete or the customer experience is subpar, will soon find himself without a business.
On the other hand, a leader who insists on making every decision and seeing to every detail, slowly strangles his or her company. You are doing nothing but training employees to drop every minor thing on your desk. Ever heard of the business owner who hasn’t taken a vacation in 10 years? It’s because he or she hasn’t built a team capable of acting on its own.
The management mantra “inspect what you expect” has been attributed to several famous people including management guru Edwards Deming and former IBM chief Lou Gerstner. Regardless of who stated it, there’s a lot to be said for inspecting the things you expect from your team and company. But the word “inspect” also implies that you are not doing those activities yourself.
Being the CEO doesn’t mean delegating everything and stepping away completely. Nor does it mean micromanaging. Somehow you have to find the right balance. Give your team clear direction and hold them accountable for results — yet give them the freedom to do their jobs and not become an obstacle by trying to do their jobs for them.
In summary, being the CEO is more than just printing up business cards. You have to act like a CEO.