Being the CEO or owner of a business isn’t easy. Many are thrust into the role unprepared and usually they have no experience being the CEO of a business. In my consulting practice I work almost exclusively with CEO/business owners. While it can be lonely at the top, the CFO is usually a person the CEO can trust and rely on.
The CFO must be the financial expert of the team and help the business owner with the financial aspects and challenges any business faces. The CFO must be willing to tell the CEO the unvarnished truth, the things the CEO does not want to hear. Does that mean that sometimes the messenger gets killed? You bet, I’ve seen it happen many times. But the CFO has absolutely, positively got to be willing to face the cold, hard facts and communicate them to the CEO/owner and the rest of the management team.
I’ve written previously about the roles of a professional manager: communicating, planning, organizing, staffing, controlling and leading. Let’s look at how they apply to the person at the top.
Communicating
When communicating to employees, the CEO needs to clarify the goal of the communication and send the message in the most effective manner. Multiple channels of communication can be important to be sure the message is received and understood. A wise CEO will understand that everything they say, no matter how casual, will carry weight due to the CEO’s senior position in the company.
Too often, we think of the CEO as just communicating to employees. It is my view that one of the most important traits of a good leader is being a great listener. Often the CEO’s subordinates will know the solution to a challenge. After all, they’re closer to the problem.
Planning
Planning at the highest level within the company is one of the most important jobs of the CEO. This involves knowing the company’s past, studying the present situation, designing the future (often in the form of a Vision Statement) and developing strategies. These strategies then lead to tactical planning, policies and procedures, departmental plans and setting budgets. Goals are generally set on the company, department and individual levels. The goals should be specific, objective and measurable.
Organizing
There are many ways to get something done. The CEO’s duties include organizing the company in a manner that is best for accomplishing the agreed upon goals. This includes setting the organization structure, defining roles and responsibilities, delegating and sharing responsibilities and authority and adjusting as conditions change.
Staffing
Staffing is the broad term that includes: recruiting, selecting, developing and retaining people. And if you’re like most companies, people are your most important resource. The hardest part here? People are complicated creatures! Just the process of motivating people is so complicated that many books have been devoted to the subject.
Controlling
As the plans are implemented, the actual results must be monitored. Actual performance must be compared to plan and variances should bring a reaction. Progress against the goals that have been set at all levels must also be monitored and people must be held accountable to those goals.
The accounting function becomes critical here as this is the source of much of the financial information for the company. The CEO must take action based on the results, both financial and non-financial.
Leading
This is a tough one for many people. How does one be a leader unless they are a natural leader? It can be done. As the leader, the CEO must see the big picture, the vision for the company, and be able to communicate it to others. A leader must also be able to learn the strengths of others and develop those strengths, especially if those strengths complement the leader’s strengths.
A leader must also set the example in terms of values and model continuous learning. A good leader will know themselves and will understand human relations. A good leader will build teams and involve others. It is helpful if the leader is humble and has a sense of humor while having an inner confidence. A bit of charisma never hurts and courage is great too.
The Importance of Delegation
In the end, the CEO/business owner is responsible for everything. That doesn’t mean they do everything. On the contrary, they need to delegate as much as is possible under the circumstances. In the startup phase, they might not be able to delegate much. But as the business grows, the ability to delegate becomes more and more important. At a certain point, everything the CEO accomplishes, s/he accomplishes through others. But the responsibility for the overall success of the business can never be delegated.
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