CEO responsibilities today are more complex and burdensome than ever. The novel coronavirus, talent shortages, the presidential election, digital transformation, competitive pressures: CEOs must confront a never-ending onslaught of issues and challenges, and 2020 will be no exception. While some of these disruptive forces aren’t new, they are increasing in “complexity and intensity,” according to anAccenture surveyof C-Suite executives.
In this rapidly changing environment, CEOs cannot rely on experience alone. A German C-suite executive told Accenture that: “In a linear world CEOs could project their experience into the future. Today, experience does not have that same value because the world is developing exponentially.”
Today’s CEOs must be more adaptable, humble, and willing to learn. To survive and thrive, they should be comfortable making bold decisions and moves. CEOs should recognize they cannot be experts in everything, especially as environments shift and disruptions occur faster than ever. Instead, they need to bring together disparate teams to collaborate on initiatives that move their businesses forward through the uncertainty.
Along with these traits, the most critical aspect for CEOs is to realize their job is unlike any in business and fulfill those unique duties.
CEO Responsibilities 2020
The good news in this world of turbulence is that CEOs have a stabilizing force: A framework of five CEO responsibilities that provide a consistent approach to the role – if they are willing to embrace it. Great CEOs know their distinctive responsibilities and stick to them. They understand where to spend their time and how to be most effective.
The following outlines my framework of these five CEO responsibilities, which are enduring and critical for 2020 and beyond. They provide an anchor for taking calculated risks while ensuring that the organization is reaching its strategic goals.
After each one, read examples of how the top 5% of companies fromPwC’s 2020 Global Digital IQreport are succeeding by fulfilling each responsibility – to the tune of 17% higher profit margin growth. According to PwC’s survey of more than 2,380 senior executives in 76 countries, these are the companies that are gaining the most value from digital, such as Sony, Liberty Mutual, Porsche, Amazon, Nestlé, Microsoft, AliBaba, John Deere, and others.*
Every company is a technology company now or working towards that goal, so these examples apply to all organizations large and small.
CEO Responsibilities 2020
CEO Responsibilities 2020– #1: Own the Vision
Mission, vision, values, and overall strategy
Without clear guidance on the vision, a company is simply a bunch of people pursuing individual or departmental goals, guided by their own values. In particular, lack of clarity on the strategic direction makes it difficult for the CEO to drive and measure performance. Too often, CEOs take ahands-off approachand think minimal communication with employees suffices.
CEOs must clearly and continuously communicate the organization’s strategy to employees, customers, and shareholders. They must keep it fresh and top of mind for everyone. For each stakeholder group, the CEO should delineate the WIIFM: What’s in it for me? Profit? Purpose? Career development? Business success?
Conveying timely stories and facts about the company’s progress is a valuable and compelling way to remind everyone of the vision. CEOs should not change the big picture vision much but adjust it in response to rapidly changing business conditions.
Own the Vision in Action : The top 5% of companies from PwC’s 2020 Global Digital IQ research are getting real value from digital by having a consistent strategy. Their corporate strategy IS digital as they integrate technology into every part of their businesses. Their employees have a clear direction for digital 96% of the time. As a result, these companies have 17% higher profit margin growth than their peers.
CEO Responsibilities 2020– #2: Provide the Proper Resources
Balance people and capital
Only the CEO can balance capital and staff across disparate groups and initiatives. Different departments will strive for the same limited budget dollars, for example. Skillfully making these decisions requires not only a clear vision but also a deep understanding of all aspects of the business.
The people side is especially important: Hiring and retaining the best talent, putting them in the right positions, and giving them the appropriate training is probably the single most important thing a CEO can do. With the right team, all things are possible. With the wrong team, nothing else matters.
Provide the Proper Resources in Action: The companies winning in digital provide the right resources for their digital transformations. These organizations spend 33% more than others on new technologies, processes, and other investments to drive business growth via digital, according to PwC.
For example,Porsche AGhas dedicated half of its IT budget to digitization and expects all company employees to be involved in the initiative: “The Porsche customer experience must be as outstanding as the vehicle itself,” said Klaus Zellmer, President and CEO of Porsche Cars North America. “This quality claim is paramount as part of our transformation from a pure sports car manufacturer to a digitally focused company.”
These companies also invest more on training/upskilling and have unique recruitment efforts that make them200% more likely to attract and keep top talent. Their employees are making a difference: The top 5% report having more innovative employees who are contributing to revenue growth.
CEO Responsibilities 2020– #3: Build the Culture
The CEO is the culture
CEOs who respect culture are more likely to have engaged, high-performing employees. The most critical part of culture is values: Who you are and what you value as a CEO defines the organization’s culture. This is especially true in smaller companies where the culture grows organically based on the CEO’s personality. Any personal weaknesses will manifest in the culture, so it’s important to have the self-awareness as a CEO to mitigate this.
In larger organizations, the CEO must communicate a set of clear values and ensure that everyone applies them consistently, from top to bottom, across every department. Many CEOs become hypocrites when they discuss culture and values, because their actions don’t match their words. Constant vigilance is key here: CEOs should also regularly measure culture to ensure the organization is on track. Gallup has an instrument for this that I have found effective in my companies.
Build the Culture in Action: Digital transformation is embedded in the cultures of the top 5% percent. This is driven from the CEO down. Change is the only constant for these organizations, and they embrace what’s needed to fail fast and innovate. In fact, the PwC survey revealed that 67% survived a major disruption over the last two years – M&A activity, changes in business models, new leadership, etc. – and came out stronger because of it.
Microsoft CEO Satya Nadellahas masterfully lead a cultural shift by pivoting to cloud computing and encouraging his employees to have a “growth mindset.” During his tenure, Microsoft has become one of the most valuable companies in the world. According to Microsoft CMO Chris Capossela: “We went from a culture of know-it-alls to a culture of learn-it-alls.”
CEO Responsibilities 2020– #4: Make Good Decisions
Triage and act decisively
CEOs are often surprised by the breadth of decisions that confront them from day one. They must hone the skill of knowingwhich decisions to makeas CEO and which to leave to others. The CEO is often the only person in the company able to make decisions that impact multiple departments.
Other decisions should be left to those with the authority and/or expertise to make them. Otherwise, the CEO risks wasting time and undermining employees. The most successful CEOs train their employees to make good decisions at every level, which is another reason that communicating a strong, clear vision is so important.
In addition, speed of decision-making is critical. Too many CEOs delay, putting their organizations in limbo. Highly decisive CEOs are 12 times more likely to succeed according to theCEO Genome Project. The faster you make a decision, the faster you can correct it if necessary.
Make Good Decisions in Action: Speed of decision-making is paramount for PwC’s top 5%. Their leadership mandates change and keeps these organizations on the cutting edge: 90% are leading their industries in digital. Only 6% of leaders at these companies present a roadblock to innovation. This type of speed and agility is only possible when the CEO is decisive—and allows employees to make strategic decisions at the appropriate level.
CEO Responsibilities 2020– #5: Deliver Performance
The buck stops with the CEO
Because the CEO is ultimately held accountable for the organization’s performance, he or she must take an active role in driving it. The CEO sets the standard, which means helping each departmentset the right metrics and goalsand then consistently measure them. It is critical for an organization to know that the CEO will constantly hold everyone to a high standard. The best CEOs “trust but verify.”
This is not about micro-managing but instilling a culture of high performance where constant improvement is the norm. Two-way transparency is key here. The CEO needs visibility into performance at all times – not just once a quarter – to solve any issues and make course corrections.
Employees should have access to the performance metrics they impact and a way to update their progress frequently. With an understanding of how everyone is contributing to the company’s goals, employees are more likely to perform well.
Deliver Performance in Action: The top 5% of companies in PwC’s research are clearly delivering performance with 17% higher profit growth margin than their peers. Their leadership’s digital investments are engaging the staff to support the company’s goals: Employees are more likely to adopt new programs and technology (72%). This helps them be more active in driving business and innovating in ways that positively impact the bottom line.
Embrace the 5 CEO Responsibilities
It is very easy to fall into a tactical routine as CEO, confronting each problem as it comes your way. Prioritizing these five CEO responsibilities will sustain you in a world of uncertainty and rapid change. You can take a more professional approach to the most unique and challenging role in business.
CEO Responsibilities 2020:
#1: Own the Vision
#2: Provide the Proper Resources
#3: Build the Culture
#4: Make Good Decisions
#5: Deliver Performance
For greater detail on all five CEO responsibilities, read my book “The CEO Tightrope.”
*Disclaimer: I have made these connections between the five CEO responsibilities and the PwC research – not PwC.