It is often difficult to truly understand what a CEO does. This is because there are so many factors that make their role vary. However, there are some commonalities. For instance, all CEOs are responsible for setting the strategy and vision of their organization. They are also responsible for setting the culture of their company, demonstrating it themselves. While all CEOs are very different in how they approach their various duties, Infor CEO Charles Phillips does things very differently than Facebook CEO Mark Zuckerberg, for instance, they do have striking commonalities in their specific duties. In fact, besides setting strategy and vision, and company culture, they have two other key duties.
- Team Building
CEOs are responsible for the hiring, firing, and leading of the senior management team. This team, in turn, is responsible for hiring, firing, and leading, their respective elements within the organization. But a CEO has to be strong enough to recognize which people are good enough, and which ones are not, and they have to do this at the top level. They have to make sure that they spot differences between different people and work at resolving those, so that the full team can continue to work together towards the common goal. The common goal, meanwhile, is set by the CEO because they communicate what the company’s vision and strategy is. Strategy is necessary for direction. If the direction is clear, a team can get together and achieve it. So, if a direction isn’t achieved, a CEO has to determine where in the team something is going wrong, and how that can be resolved. Sometimes, that means making a tough decision and getting rid of someone.
The power of setting direction is incredibly important. Infor is actually a very good example of this. Charles Phillips became its CEO in 2010. At that time, it was a relatively small company operating out of Georgia. Now, just five years later, it is one of the top tier tech companies, joining second place with Oracle (Phillips’ previous employer), after SAP, in making enterprise software. The way he has been able to achieve this is by making sure every employee at Infor, which now has some 70,000 employees, knows what the vision and strategy is, and works towards achieving that.
Vision tells people where a company is heading towards. Values, meanwhile, tell people how to get to that point. Values demonstrate what type of behavior is and is not acceptable. A CEO is responsible for making sure those values are clear through their own actions and reactions. For instance, by missing a deadline to create a product of higher quality, or by not celebrating a team’s achievement, the CEO is setting clear messages of value, showing people what to expect in certain situations. People look at a CEO for things like openness, honesty, and trust, which they base on the actions of their leaders.
- Capital Allocation
The second role of the CEO is to allocate capital. They determine whether certain projects should or should not be funded, and when certain expenditures should be cut. The CEO, as such, is responsible for the capital that the firm has, and reports directly to investors about this.