“A chief executive officer (CEO) is generally the most senior corporate officer (executive) or administrator in charge of managing a for-profit organization. The CEO of a corporation or company typically reports to the board of directors and is charged with maximizing the value of the entity”
Clearly, the CEO is a big job. Maximising value is tough and many variables can affect the outcome. Earlier this week I found myself asking this:
How long should a CEO be the CEO?
There has been some debate over this question in the press over the past few days regarding Harriet Greens 2 year stint as CEO at Thomas Cook before departing last week. Is 2 years long enough to execute a vision? Harriet Green says so but there are doubts in the press this weekend.
I like to think a CEO tends to move on if they really believe they can add no more to the business and some one else is the right person to take over, I see some altruism here. A CEO could stay and gain more financial rewards so to move over is a sign they have the businesses best interests at heart. However, a CEO can go for more reasons.
It’s clear that if a CEO doesn’t fit or isn’t delivering then they need to be removed as there is too much at stake, that spans from companies of 2 people to those of 20,000. However, it’s unlikely any business, never mind a plc, would employ a CEO without relevant experience or who wasn’t fit for the role. Therefore other things can interfere like a change in personal circumstances, a poor relationship develops between a CEO and the board or management team, market changes, an acquisition or merger can take place and more besides. So, even if a CEO has a long term vision they may never deliver due to variables outside their control affecting the tenureship.
I found myself asking how long would I be at the helm of my new business. It never occurred to me that in ‘X’ years I’d move on. I am in this for the long term all being well. I have a vision I’d like to see through (and I am sure that vision will change along the way). With that in mind I envisage myself in my current role for the next 10 years or more. Making a quick buck and getting out is not my plan nor interesting. I am interested in building something excellent and that takes time. Delivery on day one of launch is clearly not the final product.
I started to look around at other companies to gauge what was going on. The Wall Street Journal reckons a CEO’s tenure is around 10 years. I look at the successful companies of today and many have the founders at the CEO helm (Amazon, Google, Facebook, Alibaba etc) whilst others have very long term CEO’s (Expedia, Tui etc). My sense is that the longer a founder stays the better however, the founder doesn’t have to be the CEO. The founder has the vision, i think it’s their job to find a CEO (if needs be) who shares that vision and who can drive the company forward.
That being said it doesn’t always work. Steve Jobs hiring John Sculley is a famous example of where things can go wrong. Its interesting in this case that when Jobs returned, Apple soared. Why? well, because of great products like the iPod. Yet, the iPod wouldn’t have happened if it wasn’t for the CEO. Jobs cut back all the projects taking resource to four and roused on them, believing they were they key to the future. Thats a very bold step for a high profile listed company. Yet that vision is exactly what drove Apple to where it is today.
Vision and focus then are key. Suppose a vision is wrong ? I haven’t even contemplated that my vision is wrong for travel.co.uk. I believe in my plan 100%. If I didn’t, why bother doing it? I also think a leader must have conviction on the direction the team are heading. Without conviction comes doubt and doubt leads to uncertainty which kills businesses.
I’ve never been a CEO before but then no one is born a CEO (I nicked this from Ben Horowitz ‘The Hard Thing About Hard Things‘), everyone learns on the job. I hope my experience to date holds me in good stead. As winter approaches I am conscious change is coming.