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What A CEO Does (avc.com)
129 points by mgrouchy on Aug 30, 2010 | hide | past | web | favorite | 39 comments



The interesting thing about this is that it boils down to sales. The CEO sells/evangelizes a vision internally and externally. The sell the idea of working at the company (recruiting). Early they sell the dream to investors and the earliest revenue deals (whatever they are). Later, their sales efforts might be limited to bigger deals/partnerships and recruiting other leaders for their company.

I wonder how many founders on Hacker News (who are aimed at big growth) want to be this type of CEO. And I wonder if there are any other types of CEOs at the top. I've never met any.


You're looking at it through your own prism. Selling is just a prerequisite (along with multiple other skills), it's not the most important part of being a good CEO.

Discovering the right strategy/vision of the company is not a sales job. Communicating it to people is though.

Choosing the right people to hire isn't sales either. Convincing them to join is though.

I think it's very harmful to boil down the role of a CEO to merely salesmanship. There's so much more that matters at least as much.

Thought experiment: Where would Steve Jobs be now if all he had was his master salesmanship, but none of his design and product skills?


Your examples illustrate my point (which was not that being a CEO is MERELY salesmanship, but that it-- in terms of time spent-- is mostly salesmanship.) Of course it'd be silly to say that it's merely salesmanship. If I had a crappy vision and I was an epic salesman, I'd be a pretty lousy CEO, right?

In all of those tasks, how much of your time are you spending selling? Discover/find your vision, spend the rest of your career selling it. Deciding who you want to hire and the persuasive dance (where you have to persuade them that working at your company is a good idea AND sell them your vision to boot!) takes a lot more time.

Steve Jobs is a great example. As product-focused as he is, what % of the time do you think he spends tinkering or wireframing? I'd wager he's selling/reinforcing ideas for most of his day. Steve Jobs is different because he spends 99% of his sales time selling vision/product ideas versus all of the other types of persuasion he could engage in. Oh, and because his ideas are unusually good. ;-)

edit: I'd add two things. Once, I've run 2 different companies for about 70% of my 13 year tech career and two: I really don't enjoy sales as much as I enjoy other work tasks. So if I am looking at it through my prism, it's the prism of my experience.


You don't discover your vision in a month and then spend years selling it. You spend years discovering what your idea should be, refining the idea, making the idea happen, and selling it.

Selling is just a single component. If you had to single anyone of them out it would be "making the idea happen" and most of that is not selling, it's a thousand concrete decisions and problems to overcome about the product and marketing.

Hiring is even less about salesmanship. Convincing someone to join (or not) takes weeks at most. Finding the right people and making them effective takes months or years.

I think outsiders probably have a very skewed perspective on Steve Jobs and most other CEOs because we only see them when they're selling. To outsiders it looks like 100% of their time is spent selling, so it's natural that people think that's primarily what they do.

What you don't see is how Jobs is spending his time during the 364 days before a Stevenote.


From bitter experience, I think the statement about setting "overall vision and strategy" should have a qualification so that the vision and strategy stays in place for at least as long as it takes to actually build something and deliver it to someone who uses it.

If your company "vision and strategy" changes more frequently than a development team can react then you are doomed.


That's one reason why a business must have a competent CIO on the management team.

Sometimes you can let the apparent changes ride, since they are politicing between other senior members of the team; sometimes you can simply say, "No"; and sometimes you must explain the cost of what will be thrown away, how it will affect morale, and how long pivoting the team, re-motivating them, and delivering will cost.

You average CEO, finance, marketing, and sales honchos will not understand these things without an interpretation into their language.


While that sounds reasonable, by your suggestion no policy can ever be changed if it is found to be too expensive to complete.

Thats no good either.


A former colleague of mine used to say that their role was to "align individual goals with corporate goals."


For that to work properly, the CEOs goals have to be aligned with the companies goals in the first place. Like founder-CEO, not like Bank-CEO with no interest in long-term outlook of the enterprise.


"Determines a vision and strategy..."

...and for this nebulous MBA speak, gets paid 40x as much as the people who actually do work.


Well, it's not always 40x. Here in Norway, it's more often 3x-5x (except in the largest companies.)

And don't knock the value of determining a vision and strategy: people don't just wake up in the morning knowing what they should be doing at the office today/this week/this year. If you don't think a clear vision and strategy matters, just ask Yahoo.


I don't think we neccesarily disagree about that, it's just that "setting a strategy" by itself means diddly-squat, so giving that as your task description is needlessly vague. "Proactively implement executive paradigms"


I'm glad it's like that in Norway. You're a lot saner than most countries. Here in America 40x is closer to the mark. And i'm not knocking the value of thinking carefully about the next step. That's an obviously important thing. I just don't see why someone should be paid so much more to sit around thinking about the next step than the people who actually implement the "vision."


I suppose it's for the same reason that buildings are attributed to architects, and symphonies to composers, rather than to builders and musicians.


Having spoken to actual CEOs, I think it's a bit of a stretch to put them in the same class as famous architects and composers. The latter are identifiable, and to some degree quantifiable, skillsets that require training and a certain degree of talent. I'm not so sure you can say the same thing about being the guy who makes sure that cross disciplinary paradigms for excellence synergize with the vision's core values.....


Wouldn't "setting a strategic vision" be more akin to "let's write a happy little ditty about love in the spring" than actually sitting down and composing a song with notes for all the various instruments?


The reason is that the market value of companies who pay 39x is less than those who pay 40x. 40 may not be the perfect number, but the market is working toward finding it.

In other words, CEOs get paid X under the premise that they will cause the value of the company to increase by more than X.


I don't understand why people assume efficient markets. This is a good example of a market where I'd assume that the market is not efficient - there are poor information flows about CEO value; empirically, CEOs who are paid a lot don't often seem to steer their companies well; there are skewed incentives for the board since board members may very well be CEOs at other companies; there's very indirect shareholder control over pay; the company as a whole is unlikely to fail if they overpay since CEO pay is usually a small part of the whole budget, etc. Shouldn't you have to prove the surprising premise that the market is working?


All that "determines a vision and strategy" means is "deciding what the company should do next". Which isn't really nebulous at all, and its impact on the organization can be directly measured by success/failure.

E.g. Ben Horowitz "determined the vision and strategy" for Loudcloud when they moved away from managed services market and spun out Opsware, which led to a 1.6Bn exit. (http://voices.allthingsd.com/20100317/the-case-for-the-fat-s...) Its hard to argue that there was no value in that.


It's not really any more nebulous than coding and debugging.


Yes it is. Coding and debugging are concrete processes with measurable results. They require quantifiable skills and training.

Which one sounds more concrete:

"I cleared out the ticket queue and wrote tests for all outstanding issues"

or

"I thought about my vision."


Which one sounds more concrete:

"For our design brief I came up with ten design elements that fit with the message we're trying to sub-communicate on our website, and found five examples of each element used on various sites across the web."

or

"I spent three hours talking to my computer."

The point is if it sounds that nebulous it's probably because you don't understand what they're actually doing. To someone who doesn't understand what coders do, coding sounds just as nebulous as 'business stuff'.

Now it's possible that the business person isn't actually doing anything, but then again it's just as possible that the coder isn't actually doing anything either.


Any programmer who says "I spent three hours talking to my computer" is not a programmer. It's true that if you push someone on their vague talk they may become more concrete and specific. I'll grant you that there are CEOs out there who, once you get past the nebulous weasel-words, can articulate a clear plan for what the company needs to do and where it needs to go. Those are good CEOs.

I would bet the vast majority, once you push them on it, would respond with more of the same, and if you continued to push them on it, would ultimately defer to an underling for specifics.

It's not even the mumbo-jumbo that annoys me. It's fine if you want to say that a CEO sets the direction, goals, and overall plan of the company. I can believe that, and it's certainly valuable. What I cannot believe or accept is that they deserve to be paid an order of magnitude more money for doing so.


A clear ticket queue and test suite are indicators of good habits, but they have nothing to do with getting work done. You might as well promote a prep chef based on the cleanliness of their line station, or an accountant based on how many spreadsheet cells they filled in during an average week. Best practices and good intentions do not magically translate into value.

This is where you need a smart, ambitious CEO with a strong vision. They place the goalposts so that everyone can measure their own progress and contribution, as well as that of their group. It also gives investors and shareholders something on which to evaluate the company other than simple financials.


"A clear ticket queue and test suite are indicators of good habits, but they have nothing to do with getting work done."

Really? How's that? If the tickets and test suites (for example) where your task, then how is completing them not an indicator of getting work done?


And the lifetime financial reward one gets for doing the latter will dwarf what you'd get for doing the former. So make sure your children understand that. Being "on top" of a business will pay 10x+ than being "on bottom", even for otherwise comparably difficult tasks.



See this is why your CEO needs to be technically competent to some level. If they are hiring and setting the vision for the entire company, you can't build a good product if you don't have the basic technical understanding yourself.


Well.. I do that and I also code.


<joke>Well, you need to delegate the coding part then.</joke>


A CEO goes out and find the money to keep the executives happy so they go out and make the business work.


The CEO also makes the executives get along to work together effectively.


Steve Jobs has been listed as the #1 CEO in the USA. He seems to be doing a great job on 1 through 3, and has #3 particularly in the bag. He may do other things as well, but you couldn't say he has in any way shortchanged any of these three jobs.


[deleted]


Carl Icahn was probably talking about Fortune 500 CEOs, which are a different breed than startup CEOs.

It's common knowledge that founding CEOs usually cannot run a company well when there are hundreds of employees, and visa versa. They require different skill sets. Founding CEOs are likely do eschew processes and do things themselves when necessary and nobody else is around to do it. Fortune 500 CEOs are likely to insist on processes and delegate any work that needs to be done.

Also, startup CEOs cannot afford to surround themselves with people who are aren't as smart or smarter than themselves. With limited resources and capital, everybody needs to pull their own weight. A startup's success is not guaranteed, so every advantage helps. In a Fortune 500 company, the company is most likely not going to disappear anytime soon. The company was functioning before the CEO was promoted/hired, and they'll just keep doing their job assuming he/she doesn't interfere.


Trying to run a Fortune 500 company like other Fortune 500 companies is a bad idea.

"Sets the overall vision and strategy of the company and communicates it to all stakeholders." Is more than just picking the right people also it's noticing when your companies business is heading for a cliff. Unfortunately replacement CEO’s tend to be better at networking and golf than realizing the company’s pension plan is unsustainable.


I'm not going to comment on the content of the article, but I'd like to take a second to point out how clever the writing is. I like how the first paragraph tells you about what you're going to hear: it's something special from the real world. Then he talks about getting his start in, lets say, the mid 80s. About 25 years ago. Then we hear of another VC, very experienced, that's 25 years you know?

A nice way to say, "I'm experienced, listen to me." He's probably right too.


4. Come up with pithy slogans that will impress your underlings.


I was under the impression that a CEO:

Gets rewarded when their company does well.

Gets paid off when their company does badly.

(Golden parachutes: http://www.economist.com/node/16685706?story_id=16685706&...)


Those are things the company does to a CEO, not what a CEO does.




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