We’re just wrapping up our finance class, and our prof made a great comment. To be a good CEO, you need to know all aspects of your business, including the finance and accounting aspects. These areas are particularly important, as they allow you to really see how decisions in other areas affect the company’s bottom line.
So remember… CEO = Chief Everything Officer!! You have to know your business inside out to succeed!
PS – Sorry for the delay in posting here. I promise more reports soon! Lots to talk about in the last few weeks!
4 responses so far ↓
1 Martin Ritchie // Oct 25, 2006 at 2:39 pm
I must take a small issue with your prof about the role of a CEO/President in an entrepreneur environment or startup. In these sorts of companies I think that the #1 role of the CEO, far more than the other roles is to be the leader and the closer when it comes to Sales and Marketing. Yes the other stuff is very important but what differentiates startups is actually selling stuff. A CEO who can effectively push his/her product is worth 100 CEOs who can balance the books. Any accountant can balance the books but only the CEO can close the important first few deals for a startup.
2 Dan // Oct 26, 2006 at 12:57 am
I have a few points to make in response to this. Yes, sales are extremely important to a startup. However, there is a big difference between sales and marketing (ask our marketing prof). I don’t necessarily think the CEO has to be the best salesperson, but do have to know their markets and be able to set the company’s strategy in a way that will create sales.
Second, I think our finance and accounting profs will both tell you that these areas involve much more than balancing the books. By it’s definition, a “business” is a venture you enter into with the intention of making PROFIT. In business, it really is about the money. If you can’t understand the financial impact of your decisions, then your business is probably going to end up in trouble at some point. Sure, I can be a great salesperson, but if I lose money on every sale, where will I end up?
I think the important statement is that “you have to know your business inside out to succeed”. As CEO, you have to know the financials. You have to know your market. You have to be able to sell. Chief Everything Officer really does fit the bill!
PS – Thanks for the comments, they are great to stimulate discussion and get me thinking. Keep ’em coming!
3 The MBET Experience » Blog Archive » Chief Everything Officer Comments // Oct 26, 2006 at 1:01 am
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4 Martin Ritchie // Oct 27, 2006 at 10:51 am
The problem is that the CEO is the ONLY person in any compay, especially a start-up, who really has the ability to close a deal. It is fine for the CEO to delegate most of the sales effort to someone else, especially if that person is a better salesperson, but it takes the CEO to actually close the deal.
The reason is simple, only the CEO can truely commit the company to the contract. If the sales guy says, hey we can install our uber-crm software for $50,000, and he is wrong, the company goes out of business and the sales guy goes and gets another job. If the CEO guy says, hey we can install our uber-crm software for $50,000 and he is wrong, the company dies and the CEO is probably financially wiped out and loses all of his credibility. As a result the client knows that the CEO really means it when he signs the bottom line and that he will do everything possible to make the contract a success.
Here is another reason. When I went to buy a used car. After talking to the sales person for a while we came to an impass there I wanted to pay $9000 and he wanted $10,000 for the car. What happened? Was the deal closed. Not at all. I was moved to the sales manager where we agreed on $9500. If I was talking about a $150000 porche I would want to be talking to the owner, not just a manager, by the time I signed the contract. This is how almost all negotiations work from $1000 to $1 trillion. Clients will no sign until they know they are getting the final and best offer. Only the CEO can do that.
Most of the clients of a start-up are going to want to negotiate and negotiate hard. The only way to ever get the deal closed is when the know that they are talking directly to the CEO.
This is true for small medium, and in some cases large businesses. Here is a little rule of thumb, if the contract is for more than 1% of company revenue for the forseable future, the CEO better be the one signing it.