What does a CEO do?

I overheard someone the other day telling their friend that there was no way their CEO deserved a million dollars a year.  “What does our CEO even do anyway, ” she said?  “I wish I could come in late, play golf all day, and have no responsibilities.  I would do the job for $500,000 and do it better than him…”
I wish I could say I turned and scolded her about how her CEO probably was at a networking event while she was with her family, works most weekends, including holidays, and never shuts off the pressure of running a business, but truth be known, I didn’t know if that was the answer.

Until this year, I’m not so sure I didn’t think the same thing.  I have worked in large corporate companies where I never saw or met the CEO.  Maybe he did play golf all day.  So, I asked.
I called a friend of mine who went from being a VP at a small company in KC to now being the CEO of that company.    I asked what the main difference was.  He thought for a minute and told me that while he was a VP he made many decisions over the course of a month, hundreds probably.  Some were big, some were small, and all were important.  He had a success/failure rate he needed to keep to help his company succeed.  It wasn’t written down but he knew he had to make most of the decisions correctly.  Now, as a CEO, he makes only a few decisions a month.  And this is where most people stop with their understanding of what CEO’s actually do.   He said they make a few decisions a month, but, if they get even one wrong, the whole company is bankrupt.  Bankrupt was the word he used.  The whole company.  Now that, my friends, is the definition of stress.  Imagine if everyone at your office was standing around your cubicle while you picked out what the t-shirt design is for the golf outing this summer.  And, if you get it wrong, not only is there no golf tournament, but no one collects a paycheck anymore.  I know it sounds ridiculous, but this is exactly what they are tasked with.
He then went on to explain more about the decisions he has to make.  They aren’t regular questions about hiring or firing, or if what his company should bid on a project.  They were in fact questions that took immense wisdom about business, about where he saw not only the company going, but where the industry was going, and where the whole economy was going.  He was constantly tasked with how a competitor’s new product was going to affect their market share.  But instead of being asked if the company should be investing time and money to also have that product, he was being asked why they hadn’t already invested time and money.  His job now was to look into the future, find where the opportunities lay, and steer the company toward those opportunities, all without being wrong.  Where does he get the information needed to predict what is going to happen, you say?  Companies like Contemporary Analysis and IHS  Reports.
I had never looked at the role of CEO as this.  I, probably like you, thought the job to easy.  A simple management job with company jet perks and a low golf handicap.  I never realized the stress these guys and gals were under.  I also never realized the amount of time they spent at work.  They are never off the clock.  While I may see the empty spot in the parking lot during normal business day, I never realized they were at work on weekends, holidays, and were there thinking about problems all the time while I, on the other hand, had shut work off, and was having dinner with my wife.  He also said that the job came with obligations like giving speeches, being present at ribbon cuttings, and basically being a walking billboard for his company.  While it sounds like fun, and it is, he went on to say, being gone multiple nights in a row, wears on you.
He also went on to mention that since he is tasked with finding solutions to problems before they happen, he has a network of other CEOs he spends time with.  Guess where?  The golf course.  So while when I play golf, it’s about fresh air, chasing a white ball, and looking for the beverage cart, they are actually working.  Making deals, finding the answers to questions they didn’t know they needed to ask, making deals to buy cheap, making deals to sell high.  All because they saw the future and saw they needed to change something to keep the company profitable.
I asked the question too about money.  He said while he was not hurting, he was also not making $17.8 million a year (Alan Mulally of Ford).  He was also not in charge of a company with revenues bigger than some small countries.  He instead was in charge of 133 people.  He said that was enough for him.  He, as a sideways comment, said he would never take the Ford job.  The stress must be incredible.  He wouldn’t take the job.  Did you catch that?  Someone who knows what the top dog is charged with would not take the job.  There are $17.8 Million reasons and he wouldn’t do it.  I know I used to say all the time I would love to have that job, but after talking to someone who knew what the job actually was, and wouldn’t take it, maybe I should rethink my request.
So the next time you hear someone in the next cubicle over talk about how there is just no way your CEO should be making 100’s of thousands of dollars, take a moment to thank the lucky stars you don’t have to worry about whether the blue shirt was the correct shirt color so that everyone can get paid next week.
Until next time, work  smart.