The CEO Job Isn’t The Same As It Used To Be

Apparently it’s regarded as a classic now — the 2010 post from Fred Wilson, What A CEO Does. He said there are just three things:

1. Sets the overall vision and strategy of the company and communicates it to all stakeholders.
2. Recruits, hires, and retains the very best talent for the company.
3. Makes sure there is always enough cash in the bank.

Mr. Wilson didn’t take personal credit for coming up with these points. He said he got them back in the 80’s from a guy who’d been in the business for 25 years.

They’ve been cited recently in a post on Medium.

It’s easy to see why these words have been been so popular:

1. They sound so simple. With only three things, they’re not hard to remember.
2. They’ve been around for awhile. Sayings that appear to have withstood the test of time build up a coat of credibility.
3. The message is reassuring. You can actually picture yourself doing them! You say, “Is that so hard?” Just what you need for those cold, lonely nights when you doubt you have what it takes to run your company.
4. The perspective is top-down and heroic. You can do them by yourself. Your vision. Your strategy. No need for messy consensuses. You just need to make sure you communicate the word to the troops so they can do the messy execution work. And make sure there’s money in the “bank.” Yeah! There’s an air of “I’m the big-picture guy.”
5. The presumption is “one-and-done.” It sounds like if you get these things right up front, you’ll be set up for success going forward.

But things are different nowadays for managers in general, and especially for the person who runs the organization:

1. The job itself.
2. The skills one brings to the CEO position.
3. The business environment.

The Job Itself. The top-down approach reflected in this spare job description reflects an old-fashioned, linear view of how things get done in business organizations. This sequential Vision – Alignment – Execution model, which held up for years, gave way some time ago to one that incorporates a more iterative, experimental and flexible Build – Measure – Learn approach as described in The Lean Startup.

The vision for today’s company is no longer something that’s crafted single-handedly in the corner office and then handed down to obedient worker bees, eager to do what the Big Guy says. Rather, it’s a dynamic thing, constantly being adapted, based on real-time information and feedback from a marketplace that is constantly changing and evolving, and from the people on your front lines.

Coordinating the work of a disparate group of people — permanent, temporary, full-time, part-time, employees and consultants, physically located all around the world and often connected solely via email and Google Hangout meetings — involves an approach different from the one that worked well to muster full-time troops all sitting in one location, happy to have a job, and then telling them what to do. Those great people you hired for today’s projects have ideas of their own and, to a large extent, make their own decisions about how their job gets done.

And just because they’re the very best for this initiative doesn’t mean they’re qualified — or even available — for the next one. Meeting today’s staffing challenges with smaller hiring budgets and different types of staffing arrangements requires that the CEO become an expert at the skills and competencies needed and the best players for every key role, and that she be able to bring together the right team for the job, every time.

And the part about always having money in the bank sounds particularly glib in today’s environment. There’s a lot of competition for funding these days. And once you get your first round, you’re not done. Going for loans or VC money, and meeting the conditions of a round of funding requires a compelling story and ongoing follow-up and communication that only an involved and engaged CEO with experience in the trenches, building, selling, servicing and monitoring, would be able to handle. And no source of funding is inexhaustible. The CEO has to be smart and relentless about allocating resources among competing experiments or initiatives.

The Skills One Brings To The Job. In times past, and still for some companies, the CEO was usually a career manager who worked his or her way up the management ladder, getting more and more experience heading up projects, communicating the message, hiring and firing staff, managing budgets, monitoring and reporting progress and all the other things managers do. In today’s start-ups, a CEO is likely to be a clever developer of some killer application that he or she is trying to turn into a business, and often won’t have the background of management experience a CEO is going to need.

The Business Environment. Whatever the tasks required, whatever skills are brought to the position, it’s often something “out there” that challenges everything — a new competitor, a new business model, a new technology. Maybe the first rumblings are so slight at first, most people aren’t even aware of it or its significance.

And THAT’S what sets up the real acid test of great leadership: The sensitivity of the entire organization to detecting, communicating, analyzing and responding to changes in buying habits, technology breakthroughs, competitors’ products, the regulatory environment.

I can see how it might be helpful to group the list of things a CEO must do into some general, high-level and time-honored categories – Vision, People and Money. Simple, right? But it’s important to resist getting lulled by the simplicity of the categories, and to recognize that the thinking and actions inside those categories are evolving rapidly by the day.