The C in CEO should stand for "custodian of the vision"
Up until a couple years ago, I equated the job of CEO with serving the needs of various stakeholders (customers, employees, investors, etc.). Like most CEOs, I learned that it’s virtually impossible to serve all of these, at times, competing interests. Not only is it impossible to please everyone but many stakeholders are notoriously short-sighted and reactionary. They’re like a customer with a broken muffler demanding a louder stereo when what they really need is a new muffler. Keeping stakeholders happy is not the job of the CEO but the byproduct of delivering on his real responsibilities.
First and foremost, the CEO is the “keeper of the vision.” Every successful company has one. Mark Zuckerberg has to stay true to Facebook’s core mission: making the world more connected. For Google, it’s “organizing the world’s information and making it universally accessible and useful.” But it’s easy to lose sight. At my first startup, I was so focused on growth and day-to-day operations that I sometimes forgot why we were in business. If I couldn’t remember, how could I expect my team to? It’s why in my current company I constantly remind myself of our true mission: to help retailers maximize their customer lifetime value.
But having a vision is irrelevant if I, as CEO, can’t convince stakeholders (especially my team) to buy into it. I need to find a way to inspire the right team to row in lockstep towards a common crazy goal. This begins with the realization that I’m ultimately responsible for every hire, resignation, and termination. Even if I do not directly hire employees, the management team that I put in place did.
Once the team is assembled, the CEO sets the tone for the company culture, which dictates the type of talent a company can attract. Though culture alone does not “make” companies, a festering culture prevents otherwise/formerly great companies (like Yahoo and Kodak) from achieving their potential. (Dogs at work and yoga are great perks, but they don’t make a great culture.) At my business, a core pillar of our culture is to “be comfortable in the face of difficulty and uncertainty.” We invite (non-management) team members to attend bi-weekly management meetings – and occasionally even board meetings – because the people we hire want a role in solving our challenges, not hide from them.
It can be helpful if a CEO knows how to code but being a great engineer does not necessarily make a great CEO, who can also be a designer or marketer. A CEO who can contribute to the code base can be helpful, but that component of the job isn’t something that only she can do, nor is it scalable. Far more important to the company’s survival is capitalization. A compelling vision and capable team means nothing if a CEO can’t make payroll. Ben Horowitz and Marc Andreesen had the vision in 1999 to offer software as a service through LoudCloud, which is what Amazon Web Service and other cloud computing giants are today. After investment capital dried up as a result of the dot com bubble bursting, they had to “pivot,” changing the name to Opsware and adapting their mission to providing IT automation services to e-commerce and consumer sites. In July 2007, Hewlett-Packard acquired Opsware for $1.6 billion.
Even when a CEO manages all of the above, hurdles remain. Perhaps the original vision may need to evolve to reflect current market conditions or its limited resources – that was Opsware’s challenge – or the culture isn't scalable and the company’s mission becomes diffuse (Yahoo). Navigating these challenges is the CEO’s job. He must figure out what he doesn’t know and what he needs to know. That means casting a wide net for information and taking the time to reflect before making big decisions.
Being a CEO is far from glamorous, but the opportunity to lead a world-class team in solving real problems can offer immense satisfaction. Done right, it’s the best job in the world.
[Illustration by Hallie Bateman]