Today, I want to ‘Pull the Chute’ and look at the role of the CEO by asking the question: What makes a good, successful, and effective CEO? Before we answer this question, I decided to look into the history of the CEO and when it started.
The term Chief Executive Officer is thought to have first come into being around 1917, roughly the time when the modern managerial form of corporate business was established; with people hired to run functions and business units.
It is thought that Henry Ford was the first true CEO based on the following story from back in 1914. Imagine a chilly mid-November afternoon, the place: a sumptuous fifth-floor salon in the new Beaux-Arts Renaissance Hotel in Chicago. A few of the early captains of industry were together in a room decorated with red velvet couches, a long mahogany table, deep Persian carpets and a fire crackling in the marble fireplace. In the room was a slim, pale-eyed, 51-year-old Henry Ford along with John D. Rockefeller, Julius Rosenwald, the head of Sears Roebuck & Company, Harvey Firestone, and Frank J. Fahey of Gillette. The topic of discussion, Ford’s decision to pay his workers $5.00 a day.
“You’re paying your assembly-line workers —a minimum!—of $5 a day!” raves John Rockefeller, waving his arms. “That’s more than twice what the average assembly-line workers make. And you’re sending them home after only eight hours!”
“You’re mad, Henry,” mutters Julius Rosewald. “You’ll drive Ford Motor Company straight out of business with this decision.”
“John’s right, Henry,” says Harvey Firestone, “We cannot begin to fathom how—you, of all people, who have single-handedly opened new frontiers of this country with your mass production of automobiles—can believe it wise to share half of your $25 million in profits with your workers.”
“Especially when the unemployment rate is 15 percent!” huffs Frank Fahey. “Droves of people are immigrating to the United States each day. All of us are faced with an ample supply of able-bodied men all willing to take whatever jobs and at whatever pay they can find in our companies.”
Ford, with his back to the group, has so far listened politely without reply. Finally, he takes a deep breath and spins on his heel to face his fellow moguls. “Answer me honestly, Frank,” Ford says, fixing him with a stare. “How do you expect men to be able to purchase your Gillette razors if they don’t have money to afford them? Or you, John—how do you think Standard Oil will make a profit if only a handful of people can afford to drive Model T cars?” Ford walks slowly to the roaring fireplace. “Gentlemen, the way I see it, we all want the same thing. We all want to sell more of our goods, services, and products to the public so that our companies can make more money. Correct?” Everyone nods reluctantly. “Then logic demands that if we are to achieve this goal, we must first produce more products faster. But then, we must also have many more people who can afford to buy those products.”
Henry Ford’s decision to increase his workers’ wages while reducing their workday shocked the business community—and for a good reason. Back then, the founder/owner of a company was like an absolute monarch, and Ford’s decree appeared to pass power to the people. But his actions proved to be correct. His workers repaid him in productivity and loyalty, and his decision turned him into a national hero.
As pioneers and experiments, this first generation invented the role of CEO. Over the last 100 years, although the strategies may have changed, the qualities have not. Just as Henry Ford displayed back in 1914, I believe that even today those same 5 qualities are the same qualities that all successful CEOs have in common, they are as follows:
Confidence
There are additional traits and abilities that come with confidence. When a CEO has confidence in themselves, they should also have confidence in the company they are in charge of, its employees, and the work everyone completes to bring even more success to the organization. With confidence comes focus, strong leadership, and vision.
Professional/Personal Life Balance
Work/life balance is key in two ways. First, it keeps the CEO balanced and focused. It is critical for good vision, clear thinking, and understanding. Second, when a CEO walks the walk for work/life balance it shows the rest of the company that it’s ok for everyone in the company to have a healthy work/life balance.
Humble, yet Dignified
There is something to be said when a CEO walks into a room and he/she immediately owns the room. People flock to them, they provide positive energy to everyone around them. They are humble in their actions, conversation, and expectations. They never demand respect, based on their behavior and presence it is earned by just being transparent and themselves.
Strategic
Strategic thinking means you're able to make decisions for the company based on clear thought and a lot of foresight. With the responsibility of managing the business and making sure it succeeds, CEOs have to look at data and factors like the economy and competing businesses to forecast what the company could have to handle in the future, then plan accordingly.
Inspiring
When your staff feels inspired by you as their leader and the leader of the company, you may notice that they work harder to meet their goals, show more commitment to their job, have improved communication, increase productivity, and think more creatively. They may also collaborate more. Inspiring leaders invest in their company's employees, acknowledge their strengths, help them work on any weaknesses, and create a culture in the workplace where everyone feels like they belong and contribute to something worthwhile.
Henry Ford proved that these qualities can create a successful company. My list is by no means exhaustive. Leading an organization is a complex job that demands all kinds of skills. The strategies and processes may have changed over the years, but the qualities are still the same. What’s important is to seek out the feedback and advice you need to develop all the critical qualities of a CEO. Being a CEO can be a lonely place, But it’s important not to be alone. Either have confidence that you can share thoughts and ideas with, or hire an executive coach to walk you through the trials and tribulations of being a CEO. Either way, it is important to continue your growth as a CEO. So, whether you want to be the next Bill Gates, Steve Jobs or Mark Zuckerberg is up to you. Continue to push yourself to be the best CEO you can be and always be open to learning about how to become a better CEO. Study examples of leadership to emulate and examples to avoid. Remember, the best CEOs are the ones people want to work with. Having all five qualities featured here, you’re well on your way to inspire and retain your best people and stakeholders.
To get the strategies and coaching to succeed from someone with years of experience, feel free to reach out to me at jeff@pullthechute.net. We can personally walk through your goals and create a plan that is right for you to see the results you need. Whether you need a business coach, executive coach or employee coach, I am here to help.