Are you dreaming of climbing the proverbial ladder and becoming a top-earning professional? You can turn this dream into a reality with sweat, smarts, and commitment to the climb. Whether you’re working for someone else or you’ve started your own business, you’re going to face and overcome many challenges while preparing to position yourself for success. Embarking on the journey towards becoming a CEO requires high-impact expertise, sufficient industry experience, and enough patience to understand that this journey is a long-term process. Here’s everything you need to know about how to become a CEO.
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What is a CEO?
CEO is short for Chief Executive Officer, and this is typically the highest-ranking executive in a business. The CEO is primarily responsible for guiding and managing every aspect of the business, as well as ensuring long-term success. However, a CEO can also form part of a top-down hierarchy wherein the CEO is guided by a Board of Directors and Chair of the Board (COB). Should a business appoint both a CEO and COB simultaneously, they determine the level and weight of their strategic inputs, as well as who signs off on final decisions. Depending on the CEOs executive weight and leadership style, they may ask for strategic input on major decisions, but they maintain ultimate authority in making the final decisions where the business is concerned.
What are other titles for CEO?
CEOs can form part of primarily two types of businesses: (1) One with a corporate structure and standardised approach to culture and strategy, or (2) one with a modern structure and innovative approach to culture and strategy. Depending on the type of business, as well as the leadership style of the CEO, they will adopt either the standard “Chief Executive Officer” job title or something that speaks to the culture of the business, such as “Chief Everything Officer” or “Chief Happiness Officer”. When the leader of the business is following the entrepreneurial route and is managing their own business, they would typically label themselves as “Founder” or “Co-founder” of the business. Ultimately, there’s no universal golden rule when it comes to selecting your title as the leader of the business. In the end, it’s what you do with that title that counts.
What does a CEO do?
As mentioned earlier, a CEO is primarily responsible for guiding and managing every aspect of the business, as well as ensuring the long-term success thereof. However, this is only the tip of the iceberg when it comes to the daily decisions and duties required by CEOs. Whether you’re running someone else's business or your own, becoming a CEO and effectively adopting the responsibilities of this role is no easy feat. Although the responsibilities of a CEO depend on the requirements of the business, there are five universal responsibilities CEOs typically adopt.
- Guiding strategic direction: A business’ strategic direction includes its vision, mission, objectives, key performance indicators (KPIs), and critical success factors (CSFs), as well as milestones and roadmaps. It’s the responsibility of the CEO to identify, execute, and oversee the implementation of various activities to reach this overarching strategy. This would also include forecasting, managing, and streamlining the various resources allocated to these activities.
- Managing daily operations: These daily operations include everything from human resources, software and systems, and processes and controls to identifying, managing, and tracking the overall performance of the business.
- Identifying growth tactics: Apart from understanding the business’ past and current performance, the CEO would also identify various growth opportunities within and external to the business. This would include expanding the business’ internal operations activities, product/service offerings, and go-to-market strategies. These growth tactics would also include establishing and nurturing various partnerships, including general and financial partnerships.
- Building business networks: A CEO would take responsibility for building a network of professionals, typically business-to-business (B2B) stakeholder relationships and partnerships. The CEO would thus typically serve as the face of the business and the primary spokesperson targeting stakeholders who could work with or contribute to the success of the business.
- Tracking business performance: The CEO is also responsible for tracking the overall performance of the business, as well as every business unit or department and their allocated activities. As a result, the CEO is responsible for measuring business performance against the overall strategy. Once the performance has been measured, the CEO would then implement various tactics to streamline and improve where necessary.
What do CEOs earn annually?
The annual salary of a CEO is typically based on the nature of the business, payroll funds available, duties and risks assigned, expertise and experience, accreditations and qualifications, and other requirements as needed by the role and the board of directors.
The salary structure would typically also be influenced by the current stage of the business within the business lifecycle. As the business progresses through the business lifecycle and obtains access to additional capital, either through investment, partnerships, and profit, the salary of the CEO typically increases - along with the salaries of employees.
According to Statistica, the average annual compensation in 2017 for CEO-related positions in the United States and the United Kingdom are $14.25 million and $7.95 million respectively.
How to become a CEO in 5 Steps
Step 1: Set the foundation via education
There’s no universally accepted educational route for CEOs. However, unless you're the founder of a business and become the CEO by default, your chance of stepping into this position without a recognised qualification is virtually impossible. Most CEOs have completed various relevant degrees, as well as garnered years of experience in their field.
According to a Forbes report, 40% of Fortune 500 CEOs have a masters degree in business administration, otherwise known as an MBA. Although obtaining a recognised qualification is essential to boost your skills and credibility as a future CEO, there’s, fortunately, no need to spend your money on expensive institutions. It’s about identifying the qualifications required within your field or industry and conducting research to find suitable institutions within your budget.
The Shaw academy online mini MBA is the perfect first step to becoming a CEO
Step 2: Enhance and diversify your skillset
Professionals in leadership positions don’t necessarily know absolutely everything. However, they’re continuously broadening their knowledge and upskilling themselves in preparation for the role of CEO.
You must be able to identify the skills required to successfully adopt this role, compare them with your current skill set, and then search for credible institutions that provide courses or degrees, within your budget, that can fill those gaps.
Shaw Academy offers you the opportunity to upskill yourself and diversify your skill set through a variety of business-related courses. As a foundation, you could nurture your entrepreneurial mind and learn How to Start a Business. To ensure you’re ready to take on the role of CEO and lead both your business and employees to greatness, you could nurture your Leadership and Management, as well as your Organisational Psychology skills.
Check out the rest of Shaw Academy’s online business courses
Step 3: Do your research and become an expert
You must have an excellent understanding of the field or industry within which you’re working, or aim to work, if you hope to become a CEO in that field. This includes understanding the past statistics, present status, and future outlook of the field or industry. This means you’ll need to continuously broaden your knowledge throughout your career which requires a massive amount of dedication—and a healthy dose of inquisitiveness.
You must also be able to provide hard evidence of successes throughout your career. Consider the key success factors that will prove your capabilities and boost your credibility in the industry. Then dedicate your time to being an expert in those things. Becoming the CEO of a business won’t happen overnight - unless you’ve started your own business. Building a track record filled with evidence of your skills and successes requires years of experience. Build your portfolio, add to your resume, and gather testimonials from your network and colleagues. This is how you build a personal brand for yourself, so make sure you’re always building it.
Step 4: Identify and nurture your soft skills
It also takes a professional with very specific innate and nurtured qualities to successfully adopt the role of CEO. Although most successful professionals have similar qualities across the board, those in leadership positions should have, at the very least, a very unique sense of self, broad industry perspective, and business visioning capabilities
Step 5: Take risks and make leaps
The Harvard Business Review undertook a large 10-year study of 17,000 C-suite executives, to establish the quickest route to becoming a CEO. It takes an average of 24 years from your first job to become a CEO, but they found some common qualities among those who got there faster. 97% of these “CEO sprinters” made so-called “career catapults”: saying yes to big opportunities even when they weren’t totally experienced and ready for the task. 60% of “CEO sprinters” took on smaller roles during their careers, like starting a new division, moving to a smaller company with a smaller paycheck but bigger responsibilities, or launching their own company. These things can feel like demotions, but the right smaller role can lead to big things. To give you an idea of the importance of these two traits in CEOs, only 24% of CEO sprinters had MBAs from elite schools.
10 core qualities of CEOs
There are certain qualities and characteristics embodied by most professionals, but exceptional leaders possess these qualities and characteristics to an extraordinary degree. There are approximately 10 qualities that define leadership and assist in influencing the leadership process.
- Vision: The very first requirement for an individual leading a business is a strong sense of purpose. Being guided by personal purpose and business vision is the fundamental force that enables a leader to identify the end goal and put the wheels in motion to achieve that goal. These leaders share this vision and inspire other individuals to achieve that vision collectively, creating a common cause. You thus have to ensure that you have clarity and confidence in your purpose and business vision.
Ask yourself: Do you have clarity on your purpose and business vision, and are you confident that your employees will believe in your overall purpose and vision?
- Ability: A CEO doesn’t have to be knowledgeable about absolutely everything, but they should become well-versed in their industry and business. Although a leader values two-way conversations and input from their employees, employees seldom respect business leaders who continuously rely on them to make strategic decisions, provide guidance, and solve problems. Employees, guided by a new individual stepping into leadership, usually show patience, but will soon lose faith in the leader’s abilities if a solid understanding of the industry and business isn’t reflected within a reasonable amount of time.
Ask yourself: Are you competent and knowledgeable enough about your industry, business and field, and would you be able to serve as a resource for your employees?
- Enthusiasm: Enthusiasm is built on passion and serves as the cornerstone of exceptional leadership. Enthusiasm also serves as a vehicle of persuasion, encouraging others to proactively commit to a shared vision or common goal. Much like other human emotions, including laughing and happiness, enthusiasm is contagious. If you are passionate about the business, believe in your purpose, are confident in your business vision, and lead with that passion, belief, and confidence, you’ll generate enthusiasm in your followers.
Ask yourself: Are you truly passionate and enthusiastic about your industry, business, and its subsequent activities, and would you be able to project and ignite this passion and enthusiasm in your employees?
- Stability: Although the only constant is change, especially within the entrepreneurial environment, the responsibility falls upon the CEO to create and foster a stable working environment by continuously portraying a sense of stability. Although exceptional leaders are only human, it is of utmost importance that their personal issues don’t negatively influence their authority and abilities to lead effectively. A display of emotional instability places a leader in a precarious position among employees, as they will question the leader’s objectivity and judgment. Should the leader wish to share their personal challenges as motivation and resonate with certain employees, the emphasis should be on the solution and learning points of that problem.
Ask yourself: Can you convey stability to your employees and spur confidence in your ability to think and act objectively, or do you still need to go through the process of personal transformation?
- Concern: At the core of exceptional leadership is the embodiment of concern and empathy for others. It is of utmost importance that a CEO treats their employees as human beings, and not machines – replaceable and interchangeable, in other words. A leader that is genuinely concerned about their employees possesses humility, selflessness, sympathy, and empathy. They look at the bigger picture and keep the human element in mind, continuously. It certainly requires unwavering patience and active listening to build trusting relationships and loyalty. However, that being said, a well-balanced CEO knows when to wave a firm hand and manage where necessary.
Ask yourself: Are you a compassionate and uplifting person, and would you value your employees as human assets, or as replaceable and interchangeable tools, serving as a means to an end?
- Confidence: To overcome challenges, an exceptional leader embodies confidence in their own abilities and their business vision. The absence of self-confidence will lead employees to question the leader’s authority and even disregard their requests. Leadership thus requires a sense of emotional stability, resilience, and calm, especially in stressful situations. Through demonstrating a sense of grace under pressure, exceptional leaders encourage their employees to remain calm and act intelligently. However, confidence also stems from adequate preparation and dedication.
Ask yourself: What are your levels of self-confidence and have you embedded the necessary preparation and homework required to show your confidence in your actions?
- Perseverance: Drive and determination are also key, and exceptional leaders have the ability to push through various obstacles and ensure challenging tasks are completed. Their persistence is met with positivity and inspires other individuals to remain positive and productive, even when faced with stressful and challenging situations. These leaders keep the overall vision in mind to overcome adversity and encourage other individuals to keep the bigger picture in mind, as well.
Ask yourself: Do you have the necessary self-drive and unflagging persistence to overcome adversity and encourage perseverance, even when your employees lose their strength?
- Vitality: Should you have the necessary enthusiasm and perseverance to achieve your vision, strength and stamina are required to effectively fulfil your responsibilities as a leader. Effective leaders are typically described as individuals who are generally vigorous, proactive, and full of energy, irrespective of their age or physical abilities. To maintain tremendous energy, strength and stamina, however, you must value personal health and actively engage in self-care activities. This, in turn, provides you with the emotional and physical foundation to think and act effectively.
Ask yourself: Are you taking care of your emotional and physical well-being through self-management activities, and are you emotionally and physically fit to embark on the responsibilities of leadership?
- Charisma: Charisma is a unique characteristic and a special quality within leaders, which serves as the foundation for generating interest and a following. Charismatic leaders are generally optimistic, have a sense of adventure, are committed to a cause, and are considered merchants of hope. These are the qualities that unleash the potential of other individuals and evoke their energies. Charisma stems from a Greek word that means divinely inspired gift, encouraging admiration, enthusiasm, and loyalty of followers.
Ask yourself: Do you possess a positive/silver-lining attitude and the commitment required to transform your employee performance, as well as encourage personal loyalty?
- Integrity: Probably one of the most important qualities of leadership is integrity, which is defined by honesty, courage and strength of character. The absence of integrity enables the lack of trust, which is the primary element within the leader-follower relationship. Integrity is the cornerstone of trust, which should lead to respect, advocacy, and ultimately, action.
Ask yourself: Are you transparent and would your employees be able to trust you with the truth, as well as recognise your strength in character and courage in your convictions?
Leadership vs management
The type of CEO you are going to be depends on a lot of factors, such as the core qualities mentioned above as well as your leadership style. Leadership is both a current and timeless concept. In one way or another, the act of leadership has played a central role in human interaction since the dawn of civilisation.
Leadership excellence requires the ability to attract and retain capable individuals, motivate them to provide their best efforts and outputs, as well as face challenges proactively and effectively. These are certainly difficult tasks, which explains why effective leadership is both extremely rare and important. Leadership is a social influence, enabling a professional to leave a mark and build a legacy. It embodies initiating and guiding, with the ultimate goal of change, either in behaviour or outcomes. Primarily leading through example, their ideas and deeds guide the way and influence the behaviour of other individuals.
There is, however, a difference between leading and managing a business.
- Leadership: Leadership is considered the act of motivating and leading a group of individuals towards a common goal or vision. Entrepreneurs who are natural leaders embody three primary attributes: (1) They inspire individuals to share their vision, (2) they motivate those individuals to actively participate in reaching that vision, and (3) they encourage those individuals to overcome obstacles in pursuit of the shared vision.
- Management: Management is broadly considered the act of dealing with individuals or actively controlling them and/or their outputs. The focal point of management tends to be on the outputs, rather than the individuals producing those outputs. CEOs who are managers generally prioritise planning, organising, and coordinating a spectrum of resources. They tend to be methodical, meaning they embed deliberate systematic thinking into their approaches, and continuously evaluate these approaches to ensure progression is taking place as planned.
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