A great posting came across my desk ther other day that listed the top 10 CEO’s around the world that never went to college (uni for those in the UK and Australia). All the CEO’s are well known. Of course there is Richard Branson, Bill Gates and Steve Jobs on the list. However, some of the other names were a little surprising.
I have received the following question from Alain in Europe.
As a manager (thus as well as a CEO), the biggest part of your day is consumed by taking decisions. We can take decisions in different ways:
The question is : how do you balance “facts, facts, facts!” and “gut feeling”, because obviously, they often are opposite to each other. When do you know when you have to just look at the facts, and when you should trust your feelings even if the facts tell a different story? I reckon that experience plays a big role, because your gut feeling builds upon past good and bad experience. Sometimes, though, you’re up to an all new situation and you can’t really look back at anything similar in your past, but again, your belly somehow tells you what to do…
Decision making (along with communication) is probably the most important skill a CEO can have. First and foremost, a CEO needs to be seen as decisive. If they are not, they will be seen as being weak and the employees will be unlikely to support the CEO when the going gets tough.
I recently had the following question from one of the readers “I have tried my level best to rise to the position of CEO but in vain. What does it take to become one? I hold CPA, MICM,MKIM and a Post graduate diploma in Marketing Management. 23 years of working experience in seven organisation.”
This type of question raises another question – what is the core driving reason you want to be a CEO? Is it for the power, the money, the control, the desire to make things happen, the ability to get things done?
If your answer is along the lines of power, money, control etc then you are probably in the wrong game.
If the answer is about making a difference, challenging yourself, building something amazing then being a CEO is one way you can do that. You can also achieve the same result by being a leader at any level of a business – no matter the size of your team.
Now if you really want become a CEO, there are a number of ways you can do it or at least move in the right direction.
I received an email from Rachel in the US recently and i think it poses a good question that i would like to open up to the community – What are the top 10 issues facing a team of C-levels?
Rachel has started the ball rolling by suggesting the following:
I have had a think about this and from my point of view and have identified the top 5 issues that were facing me when i was the CEO of the REA Group. Read on to find out my thoughts.
Over the last 3.5 years i have been extremely fortunate enough to work with an excellent CFO – Georg Chmiel. Georg and his family moved from Munich to Australia in early 2005 to work for the REA Group. He and I had known each other from the McKinsey days and had kept in touch over the years. Having him come on board to the business was a blessing. He has a strong mix of strategic, financial and people skills that meant we were able to complement each other on our day to day running of the business.
The strong relationship and the mix of skills meant that we were able to share the work load of managing the business. Quite often when i was travelling, he was able to take over the decision making on the home front and i would trust his decisions while he was able to run past me financial issues knowing that i would be able to understand what was happening and that i would more often than not go with his recommendations.
Well all good things must come to an end. Last week I was fired from the CEO position at the REA Group. Now this was and was not a surprise. The Board and i have had differences for a while and they decided that they wanted someone else to take the business to the next level. This is their choice and i wish them all the best for the future. As the third largest shareholder, i will be watching eagerly from the sidelines at the future growth of the business.
Now i dont want to go into whether this was or was not the right decision for the busness. In many ways it is probably the right decision for the business. There is a gap between the culture of the board and the culture of the business and it is time for someone else to bridge that gap while maintaining the long term growth of the business. What i can say is that i am proud of my record of growing the business from revenues of $4m to over $150m, from EBITDA losses of $6m to EBITDA profits over $30m and increasing the market cap from $8m to over $500m … all in 7.5 years!
What is more interesting is how the whole process was handled. Now i am not going into the details however it would be fair to say that it was not handled well. I have been with the business for 7.5 years and have built it from a small, mainly Melbourne team of 25 people to a global team of 750 (or so). In doing this we have really injected a strong culture (see my previous entry on culture).
Now last week i was summonded to a hotel room in town, asked for my access pass and told not to go back to the office and that my desk would be packed up and couriered to me – 7.5 years over in a flash. I was not to say goodbye to the team. Now this is so different to the culture internally and caused significant shock and amazement amongst the team – i ended up with over a hundred emails, notes, sms’ and phone calls from team members around the world – many of them expressing shock and amazement at what had happened. Everyone wanted to catch up and go for a drink. So we ended up having to have “unofficial” drinks – a week of them!
The point is, i am still a large shareholder, i have lots of institutional knowledge and Australia is a small market – it would have made sense to discuss how to exit in an open way and ensure that there would be a smooth transition. This would have been best for everyone – most importantly the team.
I was reading a management magazine the other day in which they talked about the top 10 worries that a Chief Executive Officer faces in their role.
Here is the list
1. Being stretched and expected to deal with a wide range of business issues
2. Dependence on technology and the reliability of technology in their business
3. Undestanding how customers behave and what drives buying decisions
4. How to raise work levels while keeping in mind people who have a great perspective and want to balance their lives
5. Attracting the right talent to improve business outcomes
6. How to stop losing great people
7. Protecting or enhancing brand reputation
8. Being able to adapt to change and respond strategically
9. Not having enough people to rely upon
10. Containing costs
What is interesting reading this list is that most of these are (from my perspective) actually exciting and challenges rather than concerns. If i was to look at my business, i would rate #5 – attracting great people – as the most pressing issue. Actually it is not attracting it is just finding them!!!
This is a common question i am asked – here is the exact question “What job should I get to get start so i can try to move. Does it matter what school u get your MBA in.”
Firstly, the simplest way to be a CEO is to start your own business. Take one of your ideas, register a company and away you go. Of course there is lots of risk but the returns are greatest too!
If you don’t want to start your company then you are opening yourself up to the world of competition for the role of CEO.
Now most Boards will look for a CEO who has a number of characteristics …
So how do you get these skills – well some are natural and some can be learned. Most CEO’s will come from a sales / operational background.
From my view, lawyers, accountants and consultants make the worst CEO’s … they just are not in touch with the “factory floor”.
The bottom line — find an industry you love, get an operational job (sales / marketing / ops) and work like mad. Business school helps but nothing is a quick replacement for experience.
Finally – you have to ask yourself – why does being a CEO matter? For me it is not the title – it is the ability to build something special!!!
I received the question below and it got me thinking about how you can become a CEO.
Right now I am studying Business Administration at a University. My ultimate goal to become a CEO of a large corporation. I know I will probably have to get an MBA. But what other things can I do to help get me there?
For this writer, the first i have a question – why do you want to become the CEO of a large company? There can be many reasons for this ranging from money, to power, to status or to actually making a difference. I would examine these first before deciding on the goal.
For me it is about making a difference and to fundamentally changing how things operate. I am less fussed about the size of the business and more about what we are trying to achieve. Being the CEO of any business has its downsides – you are often alone, there is resentment in the business (usually because of pay), politics, a Board to deal with and if you are public, massive scrutiny from how much you earn to everything you do. Oh — and everyone has an opinion as to what you should be doing.
So back to the real topic of discussion … “are CEO’s born (nature) or can they be created (nurture)?
I hate sitting on the fence however i am going to have to. I think it is a combination of both. Firstly i think that you need to naturally have some innate qualities. You need to be able to lead, to communicate and to be able to juggle lots of things at the same time. While in theory these can be taught or learned, i think really good leaders just do this type of thing naturally.
Secondly, i think there are a range of skills you have to learn. These are generally around finance, HR procedures, strategy, operations etc. The books give you theoretical guidance on how to do them but there is nothing like actually doing them.
So if you want to become the CEO of a large business. I think you need to have and do the following
Here is another question i received via email
“Hello. I am in the process of finishing college. What is the first step in becoming a Chief Executive Officer and do you actually start the position as a CEO? Hopefully you can thoroughly explain my question. Thank you.”
This is a great question and a tricky question as i am sure no two CEO’s have ever really taken the same path.
The most obvious way is to start your own business. Of course you need to have a good idea, great funding and a passion to make it happen. For most people this is not a good path as they may not have one of the above requirements. You could always buy one – but you need to have the money!
The other approach is to become the CEO of an existing company. Now either they are promoted from within – therefore you will have to join a company and work for a few years (or many) to work your way to the top and demonstrate that you have the ability to do it.
The other way is to build your skills and to then apply for CEO roles. I reckon a good CEO has a strong understanding across multiple disciplines – finance, marketing, sales, production, strategy, hr etc. To do this you can study (boring) or get real life experience.
I took a combination of these last 2 – i have an MBA and i have been in sales, marketing, technology, and management consulting. I have enough experience in each field to know which questions to ask and what the likely answer is to be (thus ensuring i am not bullshitted)
The bottom line – get a job in sales and marketing (the most valuable of skills) and then do an MBA … this will at least give you some experience and some additional training.
One last thing – you need LOTS OF LUCK and be prepared to TAKE RISKS!
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