You're a Real CEO When Your Company Is Bigger Than Your Title

Even if they founded the company, CEO is a pompous title for somebody supervising a handful of employees.

learn more about Joel Trammell

By Joel Trammell • Jan 1, 2017 Originally published Jan 1, 2017

Sam Edwards | Getty Images

Opinions expressed by Entrepreneur contributors are their own.

Are most CEOs just pretenders? Management consultant Steve Tobak certainly thinks so. In his article awhile ago -- Why Most CEOs Are Frauds -- he laments the trend of so many people giving themselves the title of "CEO." He wrote: "I'm being a bit facetious, but you know what I'm talking about. A position that used to be reserved for a real corporate officer with an executive team, a board of directors, an organization to run and mega responsibility has been hijacked by every freelancer and wantrepreneur on Earth."

This begs the question: When is a CEO a "real" CEO? Here are some specifics.

Related: Why Most CEOs Are Frauds

I believe the CEO job starts when the organization reaches about 20 employees. Prior to 20 employees, the job resembles more of a product management role. CEOs at this stage are trying to develop a viable product and generate some revenue. The real CEO position begins when there is a complete organization with all the major functions in place. This transition typically starts at 20 to 30 people and by 50 people there is a distinct full-time CEO role.

At this point, the CEO must stop acting in an individual capacity so much – pitching in where needed to write code, make a sale, develop copy, etc. – and start being the leader of the entire organization. This entails five key CEO responsibilities: creating and owning a vision, making decisions that impact multiple functions, providing the resources needed across the organization, building a culture, and delivering performance.

Some believe that, in order to scale the company, founding CEOs will need to be replaced at some point with a "professional" CEO. I do not necessarily believe this is true. While different stages of a company require different skills, founders can make the leap and are often the best people to grow the company.

An entrepreneur who has the skills to be an effective CEO at 50 to 100 people can certainly adapt and remain as CEO. Many founding CEOs have led their companies to the Fortune 500. Just ask Mark Zuckerberg, Larry Ellison, Bill Gates, or Jeff Bezos.

Related: 10 Bad Habits You Must Eliminate From Your Daily Routine

The single biggest factor that determines whether or not a given founder can be a permanent CEO is whether they can make the all-important transition from being a specialist to a generalist. Too many CEOs revert to their comfort zones -- the specific areas where they excelled as an individual contributor -- and ignore other parts of the business. They fail to take a balanced approach across the whole business.

The two most common backgrounds for early stage CEOs are sales or technology. Those who cannot make it as a CEO are the ones who spend too much time in those areas or others, taking on a "Super VP" role in their organizations. For instance, they spend all their time in sales trying to land the big deal, and don't care as much about the other areas of the business.

If a CEO spends the majority of their time as a Super VP, they risk undermining their executives wile failing to evolve and tackle the unique challenges of the CEO role itself. Jim Schleckser, author of "Great CEOs Are Lazy," says CEOs must find a way to get out of this Super VP or "player" mode. They need to bring in systems as well as talent to execute the same things they would do as individual contributors.

Related: Spanx CEO Sara Blakely on Writing Your Billion Dollar Story

As Tobak said in his article: "Chief executive officer is not a dumb title. It's a real job. A real career. A real profession. And it takes vast experience, knowledge and hard work to achieve what used to be the pinnacle of the corporate world."

However you got the title or if you aspire to have it, being a CEO is not something to be taken lightly. Understanding the CEO role's unique responsibilities is paramount. Another key to success is to never stop learning. Some of the best CEOs are those who constantly increase their knowledge and skills in service to their organizations.

Joel Trammell

Veteran CEO; CEO, Black Box; Founder, Khorus

Joel Trammell is CEO of Black Box, which provides IT infrastructure services, and the founder of CEO software company Khorus. He is also the author of the The CEO Tightrope.

Related Topics

Editor's Pick

This Co-Founder Was Kicked Out of Retailers for Pitching a 'Taboo' Beauty Product. Now, Her Multi-Million-Dollar Company Sells It for More Than $20 an Ounce.
Have You Ever Obsessed Over 'What If'? According to Scientists, You Don't Actually Know What Would Have Fixed Everything.
Most People Don't Know These 2 Things Are Resume Red Flags. A Career Expert Reveals How to Work Around Them.
Business News

Massive Fire At Top Egg Farm Leaves Estimated 100,000 Hens Dead. What Does This Mean For Egg Prices?

Hillandale Farms in Bozrah, Connecticut went up in flames on Saturday in an incident that is still under investigation.

Business News

These Two Cars Are Stolen So Often Insurance Won't Cover Them

Progressive and State Farm have dropped some older Hyundai and Kia models after learning that a design flaw makes them easy to start without a key.

Business Solutions

5 Procurement Trends To Keep on Your Radar for 2023

Procurement professionals must adapt to inflation and a shortage of skilled labor in the face of an economic recession. Investing in a workforce paired with retraining and development strategies will put your company on top amid economic uncertainty.

Business News

Out With the Kibble and In With the Steak. The World's Richest Dog Has a Net Worth of $400 Million – And a New Netflix Docuseries Too

'Gunther's Millions' is set to unpack the pooch's mysterious fortune and what those around him have done with his inheritance.

Business News

'This Culture Of Secrecy Is Not Okay': Former Apple Employee Celebrates NLRB Decision That It Violated Worker Rights

Ashley Gjøvik complained Tim Cook violated worker rights by telling employees not to speak to the media.