6 Challenges Awaiting You When Finally You Become CEO
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New CEOs face a steep learning curve. There are many things I wish I had known going into my first CEO job. Together with the help of two experienced CEOs -- Seth Birnbaum, the CEO and cofounder of EverQuote, and Phil Friedman, founder, president, and CEO of Computer Generated Solutions (CGS) -- I’ve put together six tips for anyone transitioning to the CEO role.
1. Understand the job responsibilities.
The CEO job is unique. There are five responsibilities of the CEO role that rest solely on the chief executive’s shoulders. Entrepreneurs who know the duties of the position will understand where to spend their time and how to be most effective.
2. Realize you won’t be prepared on day one.
Because the role is unique, very few are ready for it. Most people have risen to the top job because they had a stellar career in another area, such as sales, marketing, R&D, etc. Once they get to the CEO chair, they are bombarded with issues they have never had to confront.
“When I initially became a CEO, I felt a lot of internal pressure to know how to be a CEO out of the box,” Birnbaum said. “I think what I’m learning, especially as we scale and grow, is that you shouldn’t feel like there’s an expectation that you are going to know how to be a CEO on day one. It requires a ton of learning.”
What kind of learning? I’ve narrowed it down to 15 essential CEO skills, but CEOs should go into the job with a wide base of knowledge.
3. Cultivate a diverse educational background.
While no one can be fully prepared to take on the CEO role, there are many areas that candidates should study and be proficient in before taking on the position. These include fields such as emotional intelligence, game theory, communications, history and organizational development.
Friedman had this advice: “In today’s world, the role of CEO is very demanding. You are required to start with a base of knowledge. I don’t believe anyone is born to run a company. You have to have a good understanding of such things as the law (labor law in particular), finance, accounting and technology.”
4. Resist the temptation to micromanage.
Many new CEOs get caught up in the power of the top job -- or perhaps simply not knowing what to do -- and start trying to micromanage everyone’s time. Others fall into the trap of trying to put out every fire personally. Knowing and fulfilling the true responsibilities of the CEO job should help avoid the tendency to micromanage.
Friedman put it this way: “When I started CGS in 1983, we had five employees. Like any entrepreneur, initially you think that you can do everything yourself, such as sales, delivery, quality control, HR, legal. It takes some time to realize as the business is growing that you cannot. So if there is one thing that an entrepreneur or businessperson needs to realize, it’s to start delegating and surrounding himself or herself with a lot of smart people.”
5. Realize it’s all about people.
When I first started out as a CEO, I thought I could solve every business problem logically using my engineering background. I soon learned the error of my management ways. It’s all about your people.
“It’s shocking how much management of people and personality matters in terms of results and output," engineer-turned-CEO Birnbaum said. "From an engineering role, we tend to approach everything by asking what the problem is and coming up with a solution in terms of bits and bytes and force pounds per square inch. It was very novel to me that this had nothing to do with success. It was all about the people.”
Friedman agreed. “The most important element for a CEO is having the skill to interact and manage people, especially in a larger company,” he said.
6. Ask for advice.
One trait of the best CEOs is humility. Humble CEOs don’t believe they have to be the smartest person in every room. They aren’t afraid to ask for feedback and advice.
“It took me awhile to get comfortable with the notion that you can reach out to the cast of people around you and work with them to learn to be a better CEO and manager,” said Birnbaum. “There are a lot of people around you who want you to succeed. If you reach out to them for help versus approaching them like ‘I know what I’m doing,’ they’ll give you more help than you have any right to expect.”
One thing is certain. “The learning never stops,” Friedman said. Great CEOs have a zest for learning, which is a necessity in today’s world. He summed it up best: “There is no one single thing you have to do. You have to be well-rounded and keep up with things like the latest in technology. Things change very dramatically, very quickly. It takes time to be proficient at the CEO role.”