Unlike most other executives, directors and managers, a CEO is in charge of everything and nothing at the same time. CEOs don’t run a specific department like the others mentioned, so they don’t need a specific skill, such as an accounting degree, marketing training, IT certification or benefits planning knowledge.
So what does a CEO do? In essence, understand the business in and out, have top-notch people skills, understand how to communicate effectively and, well, we’ll stop there so not to bore you. Essentially, a CEO is the Swiss army knife of a company.
If you want to run a company some day, or start your own business, it’s a good idea to learn what CEOs do and how to build those skills. These are some qualities and traits of many top-level business leaders.
At smaller companies, a CEO might have expert knowledge of the company’s product or service. This is usually the case if the CEO is the founder of the company. One reason why small businesses fail is because founders, who are product experts, get too involved in HR, IT, marketing, sales and other areas where they have no training.
Of course, a CEO will need to understand his company’s product to run the company, but she doesn’t need to be an expert in the design, manufacture or technology of a company’s product. In fact, in many cases, product expertise is low on the list of skills a CEO needs to be successful. Many executives with low product knowledge become successful CEOs at companies in different industries, while many product experts ruin their businesses by trying to act as CEO.
Knowing how to motivate, coach, manage, direct, and lead people is probably the most important skill of a CEO, and one of the skills you can start working on earlier in your career than some of the other skills required by a CEO.
A CEO doesn’t run multiple divisions of a company, so he or she manages the highly qualified people who run those departments. Department heads usually have more skill in their area of expertise than their CEO does, so this means a CEO has to be comfortable working with people who know more than he or she does.
If you launch your own company some day, or link up with an entrepreneur who needs help running her new business, you might have the opportunity to become a CEO earlier in your career than you expect. This is why it’s never too early to start working on your soft business skills.
Understanding CEOs need to think beyond this fiscal year when running a business. They must be able to create three- and five-year plans that include not only financial goals, but also growth targets. This means having knowledge of the marketplace, possible future trends that could impact the business and ideas for diversifying the company’s portfolio of products or services. Remember, a strategy is different from a goal. A goal might be to diversify the company and make it less dependent on its core product or a few key customers. A strategy would focus on how to do that.
Knowledge Marketing is more than advertising, PR, promotions and social media. It’s the Four Ps of product, price, place and promotion. CEOs understand how to manage product development, pricing strategies and distribution chains, often leaving the final P (promotion) to the marketing experts. If you want to become a CEO some day, it’s a good idea to take a Marketing 101 course, in case you haven’t already. You might also read books by Phillip Kotler, nicknamed as the “father of marketing.”
Organizational Management Skills
While department heads run their areas, CEOs run the overall company. This means they need to understand how to create an organization that fosters good communication and interaction among its various departments. Successful CEOs avoid red tape, bureaucracies, too many layers of management and lack of coordination among departments.
Making profits is different than making widgets. This is why CEOs can move from company to company in different industries, even if they’ve never worked in the field or industry. CEOs are tasked with maximizing profits either through increasing sales or decreasing costs.
If becoming a CEO is something you aspire to one day, learn about pricing strategies, margins, economies of scale, cost-of-goods sold, sourcing, overhead, cost-containment and diversification.
Managing Key Stakeholders
A CEO is the face of a business and must communicate with board members, shareholders, the media, government officials and the public. Improving your public speaking and presentation skills, and learning how company boards work are skills to learn now to reach the C-suite level.
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