No, the CEO role is turning abstract vision into concrete strategy and communicating that strategy especially to investoes, because money people always want to hear things from the horse's mouth. It's a good thing for the CEO to be the visionary rather than channel someone else's vision, if they can do the rest of the job, but they can't be stuck in an ivory tower and think that addressing the path from present reality to distant vision is beneath their dignity.
"But what I want to focus on is the power of a visionary leader to set out on bold ambitions and bring ideas to life."
Apart from single-product companies I don't think this is really a thing.
CEO's set the company culture, and maybe strategic direction (but it often doesn't need any kind of visionary genious to see which way the world is turning), and of course jump in on any 'big' deals or negotiations the company is dealing with, but are otherwise more curators than creators. IMHO.
> CEOs mainly sit in meetings with people reporting things to them and then the CEO providing very high-level guidance.
Isn’t that essentially the job of a film producer? You do see a lot of productions where there’s a ton of executive producer titles given out as almost a vanity position.
> CEOs make important decisions about how a company is run and its future.
I've yet to work in a (large) company where the CEO is actually relevant. Most of the decisions happen at lower, departmental levels.
In the initial years, CEOs can make or break a company, but after that it's pretty random. You can have a brilliant CEO that just gets stumped and the company goes bust. Or you can have an incompetent CEO that just stumbles from success to success.
In my experience, CEOs get hired because of their old-boys networks that will allow the company to participate to the pay-to-play games with e.g. financial institutes or similar industry handshake-wink-wink-partnerships. They know people that know people, that's it.
> who runs the company at the top is critical to the success of most companies.
I think it's culture and power/organizational structure that determines this. Culture is disseminated from the top down, due to the power structure. If you remove the power from the CEO, their value goes away. If you change the culture without the CEO, their value goes away. So you don't need a CEO if you can force the company to change its culture and power structure a different way.
> The main job of the CEO is to manage the board of directors (i.e. the shareholders).
Uh, no. Dealing with the board is indeed part of the job for the CEO, but a relatively small part unless you're doing poorly.
The CEO is also managing the direction of the company, and managing the top-level managers of the various departments. The CEO has to fight the fires, and allocate limited resources to where they are needed across all departments.
I love this comment. It gets to a fundamental question of what the role is for, what the value is, and what investors think they are paying for when they hire one.
In my experience the CEO does three things uniquely that other roles don't:
1. They are the ultimate authority in tradeoffs between internal interests;
2. they are the interface between ownership and the company; and
3. they are the driver of strategic change.
When the whole company is aligned and rolling downhill with product-market fit around a single offering, those functions aren't as necessary. It just works. When you start branching out, you need a final referee that can determine the exchange rate between the desires of internal kingdoms.
But it's the second and third functions that IMO drive the executive compensation bubble. Our economy is kind of hourglass-shaped, with an economy of wealthy asset owners barely joined to an economy of consumers. The thing that is supposed to tie everything together is that the value of the assets owned in one of the bulbs is tied to DCFs of the money circulating in the other bulb. The CEO is at the narrow opening between the bulbs, mediating between the investors in the equity-class-relationships economy and the actual operating business in the actual-humans-buying-things economy.
There has always been a "strategic" layer that insists upon its own inevitability, the BCG/Bain mindset that says that things can't just run on autopilot and someone needs to be looking Towards The Future. For any given company there's going to be someone out there who has an investment thesis for how that company could make more money with some changes, using whatever that decade's version of the Cash Cows/Dogs/Stars matrix is.
What's different (IMO) is the massive amount of inflation we had only amongst the asset owners, that hasn't until recently been matched by inflation in consumer sectors. Valuations have gone up simply because there is so much money to invest, and investors have been given basically two options: keep your money in cash because equity is over-valued, or believe someone with a thesis of how a company with a NPV of $300M can actually be worth $1B with a few changes. The CEO's job is to prevent the uninflated DCF from fully decoupling from the inflated company valuation.
So we get all sorts of businesses that are doing fine for what they are, but not doing fine enough to justify their new valuation. At a macro level it's driven by QE2 and other Fed schemes, but for this one particular company it's an intriguing and reasonable idea. Now the investors put the CEO to work implementing the thesis that will will justify the valuation premium. I think that's the driver behind a lot of the exec comp and the flailing about.
I wouldn't say a CEO is necessarily the visionary. The CEO's most important distinction is the fiduciary responsibilities he or she has to shareholders, namely increasing shareholder value.
> We know this role is important. We know that having a bad SRE team (or CEO or platform team) is expensive, it could cost us the 100% of the business. And we don't know how to measure the value a good one provides. Therefore we are willing to spend as much as we can afford to make sure we get a good one.
And who are "we" in this train-of-thought? If it's shareholders, that's where the root of any problem lies. If shareholders are real businessmen and entrepreneurs who built up the company or similar companies, they will have a clue as to what is a good CEO. If the shareholders are real workers who believe in the company they're working for, they will have a clue as to what is a good CEO.
Today, shareholders are no longer real businessmen or real workers, but retirees represented by bureaucratic investors. That's why they have no clue as to what is a good CEO.
What does that even mean? Optics as in internal and external perception and politics is fundamentally important to a company. Leadership only works with trust and respect.
> CEOs are largely just figureheads these days
Looks like that's the case at soundcloud but in normal healthy corporations, CEOs do actually make decisions and drive the company. They can and do become the face of the company but that's just part of the role but not the only thing they are.
> the job of a Chief Executive Officer is to run the company
Thats a very vague job description. Executive's jobs are to make investments that will maximize shareholder return and an executive of an engineering company will only be able to make the best investments if they understand the technology they are selling and their customers. People have been noting how engineers have been running more and more companies, thats because more and more companies rely on technology to drive their growth.
No, the CEO role is turning abstract vision into concrete strategy and communicating that strategy especially to investoes, because money people always want to hear things from the horse's mouth. It's a good thing for the CEO to be the visionary rather than channel someone else's vision, if they can do the rest of the job, but they can't be stuck in an ivory tower and think that addressing the path from present reality to distant vision is beneath their dignity.
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