In the world of business and business management, becoming the CEO of a company is the dream of the most qualified leaders. Being Chief Executive Officer represents having reached the pinnacle of professional success. For all those who still do not know what it is to be a CEO, in this article we will tell you everything, as well as the keys to becoming one of them. Keep reading!
What is a CEO in a company?
According to abbreviationfinder, the CEO is the top executive within a company. As I was telling you, people with the soul of a leader inevitably aspire to this position within an organization.
But all that glitters is not gold. It is true that being the Chief Executive Officer of a company carries great power, but it is also true that it carries great responsibility and great stress. And it is that, in a simplified way, we can say that the great role of the CEO consists in simultaneously satisfying the needs of shareholders, employees, clients, collaborators and legal and social entities. As you can imagine, it is not an easy topic.
The roles and responsibilities of a CEO vary depending on the characteristics of the company he represents. They depend, among other things, on elements such as the organizational structure and the size of the company.
On the one hand, in smaller businesses, the CEO assumes practical functions in certain departments of the company based on their experience and more technical skills.
In contrast, in larger companies, the CEO usually only deals with high-level corporate strategy and the most important decisions of the company, delegating and controlling the rest of the tasks to C-Suite level managers such as CFO, CMO, COO and CIO.
If you don’t know the meaning of these acronyms, don’t worry, consult our article CFO, CIO, COO and other acronyms of senior positions.
Functions of a CEO: Keys to becoming Executive Director
Now that we know what a CEO is, let’s see what are the main functions that every CEO should have and that we will develop in depth later:
- Great entrepreneurial and innovative vision
- Analysis capacity for decision making
- Leadership and management of large teams
- talent acquisition
- Bargaining power
- Motivational capacity
1# Establish the direction and strategy of the company
Setting the long-term direction of the company is one of the most important tasks of a CEO. We refer to establishing the vision and purpose of the company. That is, its reason for being and the values that will delimit the red lines that should never be exceeded.
Forming part of the company’s orientation, it is the direct responsibility of the CEO to build a healthy business culture, establishing insurmountable values and, in turn, assumed naturally by practically the entire organization.
In addition to setting the direction, it is also the direct responsibility of the CEO to design and define the strategy at its two main levels:
- Corporate strategy, which answers the question “Where will the company compete?”
- Competitive strategy, which answers the question “How will you compete?”
A good CEO is able to balance and keep the company focused, dedicating 70% of its resources to its Core Business, and being able to encourage and promote its directors to take the remaining 30% to areas of innovation.
2# Construction of the managerial C-Suite level
On the one hand, we know that a company should not grow faster than its ability to find the right people for the right jobs. And on the other hand, we have shareholder pressure on the CEO for growth. With these two elements, we conclude that it is indisputable that a main function of the CEO is to build the best of the management teams at the C-Suite level.
It is, therefore, the responsibility of the Chief Executive Officer to choose their directors, as well as their training and freedom of action. The CEO has the obligation to delegate, but he has to do it before the best management team.
3 # Balance of resources
An organization’s resources such as capital, people, or tools are limited. However, they are essential for the proper functioning of the various departments. A balance of resources towards one or another department clearly marks what the priorities of the organization are.
In this sense, it is also the direct function and responsibility of the CEO to carry out an analysis of resources between departments to achieve the desired purpose. They will also have to ask the shareholders for more financing, if necessary, through the board of directors in order to increase the available resources.
4# Balance of the generated value
The CEO of any organization is elected by the board of directors of a company, which are the representation of the shareholders. That is, the owners of the company. He is also usually part of said board of directors and, on numerous occasions, holds the presidency of it.
For this reason, the executive directors will be in charge of creating value for the shareholders, but also of creating value for the workers and for the society in general that surrounds the organization. This makes the CEO a true tightrope walker in value creation.
This is not at all easy, because in many cases there are conflicting forces in terms of objectives between shareholders, staff and society. Shareholders want growth to increase their profits. In many cases, that growth implies greater pressure on workers for productivity and efficiency. And furthermore, growth implies greater production, which on many occasions translates into an increase in pollution.
Finally, to these four main functions of the CEO we can add others such as the ability to motivate the workforce with a focus on objectives, the development of public relations activities with markets or public administrations, the management of human resources at a higher level, the control of financial and tax management, as well as the detection of trends that may pose an opportunity or threat to the organization.
What to study to be CEO?
As we have mentioned, there are people who are born with the soul of a leader and who stand out in all areas of their lives due to their strategic nature of planning and management.
However, to become CEO of a company it is necessary to have proven experience in leadership and management of people, resources or even markets. The business world is a very competitive sector where the added value and the competitive difference between people is very decisive.
Therefore, training is essential to highlight and validate knowledge that not all profiles acquire. Having an Executive MBA Online opens many doors, due to the reputation of this title, the associated networking and the quality of the training. The success of our students guarantees the MBA that we offer from the school and in which each call we work so that obtaining it leads you to the labor market not only because of its reputation but also because of the content and work that you are going to do.