I was having a conversation the other day with someone who works for one of our companies, and he asked me to describe what I considered to be the characteristics of an effective CEO. The conversation was informal, but what emerged out of it represented a consolidation of my observations as to what constitutes an effective CEO.
I thought I would share them with you here.
1. Unflappable. A CEO has to be unflappable with respect to everything that he or she does. Any number of individuals in the organization can get stressed out or fanatic or erratic, but the one person who cannot be any of those things is the CEO. The CEO has to represent the rock of stability in the organization.
2. Optimistic. Can you imagine a company in which the CEO is walking around with his or her head hung low? “Woe is me. Woe is the organization.” Of anybody in the organization, the CEO has to be the eternal optimist. That does not mean that the CEO has to neglect the state of reality, on the contrary, the CEO has to be fully immersed in the reality of the moment. However, at the end of the day, the CEO always has to be the eternal optimist, cheerleading for the future of the organization.
3. Realistic Visionary. The CEO has to maintain the state of the current reality in the organization as well as the future of where it is supposed to go. By definition, if the CEO is holding a vision for the organization, that vision is separated form its current reality. That vision always has to be checked against the current reality on a real-time basis. As long as the CEO is holding on to his or her vision and the organization’s current reality, the CEO will be driven to close the gap between the two.
4. Driven by Revenue. No matter what responsibilities lay elsewhere, the CEO has final accountability for making sure the organization has sufficient cash to handle its survival, operations, and growth. For that, the CEO has to be incessantly driven by revenue. He or she has to be following the money to make sure the organization is aligned with where its revenue production is coming from.
5. Sense of Urgency. Without a sense of urgency, not a whole lot gets done. The general tendency of any individual is to procrastinate for any number of reasons. However, it’s the CEO who has to create the sense of urgency that makes sure products and services hit the market on time, decisions are made on time, etc. If the CEO is not driven by a sense of urgency, the entire organization will languish and rarely be able to execute effectively.
6. Even Tempered. There are any number of people in the organization who can be moody. There are any number of people in the organization who might have an off day, a bad day, and so forth. However, the one person who cannot have any of those is the CEO. The CEO has to be even tempered at all times. If not, the CEO creates an environment in which individuals are reacting out of fear rather than thinking through the process.
7. Monitor, Measure, and Modify. A CEO creates an organization that incessantly monitors its environment, measuring everything along the way and modifying as is necessary to continue the survival and prosperity of the organization. The CEO creates an environment in which the organization monitors its own relationship to its marketplace and to its various influences, measures along the way, and when appropriate, modifies in real time against the changing environment. For a CEO to be effective, the organization should be evolving on a routine and regular basis.
8. Clear and Consistent Communication. A CEO who says one thing to one person and another thing to another person seeds his or her own destruction. Mixed communication results in a lack of clarity for the organization as a whole as well as a lack of trust on the part of the members of the organization and the organization’s Management Team. It is not essential that a CEO is articulate or a great communicator; what is essential is that the CEO is a consistent, clear communicator.
9. Fun. The CEO has to be the individual who is having the most fun. If the CEO isn’t having fun, the chances are very strong that no one else in the organization is having fun either. If nobody’s having fun, the longevity on the part of the CEO’s staff is simply not going to be there: turnover, not seniority, will be the primary characteristic of the organization. If the CEO doesn’t have fun, how can there be any expectation that anyone else would have fun?
My friend asked me whether all of those attributes were necessary to take the role of a CEO. I told him that my response came from my observations of what makes a CEO effective. If you begin operating as a CEO does before you actually have the role of CEO, it becomes a whole lot more appropriate to confer the title on you.
And, if you are currently a CEO, you may want to look at self-assessment against some of the attributes that I have described above.
Original writing date: March 2005