Harvard Business School Professor, Michael Porter, is one of those leading the research.... [+] (Photographer: Adam Rountree/Bloomberg News)
Given all the attention that chief executives receive for their supposed centrality to the success or otherwise of their organizations and the pay and perks received as a result, it is perhaps surprising that we do not know more about what these giants of commerce actually do. And yet, according to no less authorities than Michael Porter and Nitin Nohria, respectively the guru of strategy at Harvard Business School and the school's dean, research has been limited to surveys of small groups of leaders or large studies covering short periods. The study that forms the basis of the just-published report, The Leader's Calendar, seeks to go further by offering what is claimed to be the first comprehensive and detailed examination of CEO time use in large, complex companies over an extended period. Since the launch in 2006, it has tracked the time allocation of 27 CEOs—two women and 25 men—for a full quarter each. Their companies, mainly publicly quoted, had an average annual revenue of $13.1 billion during the study period. To do the work, the researchers worked with the CEOs' executive assistants to divide their bosses' time into 15-minute chunks and to then allocate to each of those chunks time spent on typical CEO activities - meetings, deal with investors, travelling etc. But because they collected the data for 24 hours a day, the researchers also gathered useful insights into how CEOs used personal time. Or at least time when they were not in the office, because the study reveals that they also conducted business on 79% of weekend days, averaging of 3.9 hours a day, and on 70% of vacation days, averaging 2.4 hours a day.
Such figures confirm the impression that the CEO's job is relentless. As the researchers point out, running a large global company is exceedingly complex, and therefore necessarily time-consuming. "The scope of the organization’s managerial work is vast, encompassing functional agendas, business unit agendas, multiple organizational levels, and myriad external issues. It also involves a wide array of constituencies—shareholders, customers, employees, the board, the media, government, community organizations, and more. Unlike any other executive, the CEO has to engage with them all. On top of that, the CEO must be the internal and external face of the organization through good times and bad," write Porter and Nohria.
Of course, CEOs can draw on a great deal of help and resources. But, in the end, they are deemed responsible for all that happens - whether good or bad. As a result, they are always constrained by a shortage of time. "There is never enough time to do everything that a CEO is responsible for," the authors say.
Part of the study involved relaying to the CEOs the findings and obtaining their reactions. There was a general view among them that managing their time was a key challenge. Most could see areas in which they could improve this aspect of the work. These included controlling their use of email (which took up a quarter of work time), limiting their involvement in routine activities and making meetings (which accounted for 72% of their total work time) shorter and more effective.
But perhaps the most dramatic - and disappointing - aspect of the study concerns customers - the people and organizations that are supposedly at the center of executives' thoughts. Porter and Nohria write: "Most of our CEOs were dismayed to discover how little time they spent with their customers—just 3%, on average. It surprised some even more to learn that this was less than the amount they spent with consultants." The authors explain that this small proportion is partly a result of the huge scope of internal responsibilities, which can lead to a decline in the opportunity for "customer-facing time". However, they point out that the CEOs in the study "clearly felt" that the 3% of time spent dealing with customers was too low. And they add to this view by saying: "Customers are a key source of independent information about the company’s progress, industry trends, and competitors. In the B2B space, meeting with customers’ CEOs is highly valuable, since peer conversations can be very candid. In B2C companies, there are also rich opportunities for customer contact. For retail CEOs, for example, store visits—especially unannounced ones—are an indispensable way to talk to regular customers, not just the company staff."
The authors point to various initiatives adopted by some CEOs in attempts to address the shortfall. These range from systematically scheduling time with customers to trying to build customer visits into their travel. But it is difficult to escape the notion that, much like those disengaged employees further down the line, CEOs are spending a lot of their time doing things that they must suspect are not really important and relatively little on what actually counts.
Becoming a CEO usually takes many years of moving up and understanding an industry. With so few CEO positions, this is a highly competitive position that requires strategy, adaptability, and resilience.
Step 1: Get a bachelor’s degree.
A bachelor’s degree is usually preferred to launch your career whether in a corporate, government, or health care environment. A bachelor’s degree in a business field is especially helpful to giving you a good foundation for your career.
Step 2: Consider working at a smaller organization.
Working at a smaller organization will help you gain upper-level management experience sooner. Startups and smaller organizations allow you to wear a lot of hats and work cross-functionally. With increasing leadership experience, you’ll set yourself apart from peers.
Step 3: Find an industry you’re excited about.
Try out different companies to see what kind of culture you like and learn as much as you possibly can about the industry.
Step 4: Make networking your priority.
Building connections is essential to your career development. Set up monthly coffee chats or lunch meetings with as many colleagues as you can. The effort you put forth will be well worth it; you’ll start to find connections growing deeper and doors opening for future opportunities.
Step 5: Start getting management experience.
Previous management experience can be found in over 90% of CEOs. You’ll need to have a progressive amount of management experience to become a CEO.
Step 6: Make strategic career moves.
Be open to making lateral moves—getting ahead doesn’t always mean constant upward mobility. You need experience in a variety of different roles and departments to understand different aspects of the business.
Step 7: Earn your master’s degree.
A master’s degree will be key to help refine your leadership skills and stand out among the competition. Keep your skills sharp and challenge yourself to get a better understanding of business operations, management, and finance by earning your master’s degree or MBA. Popular master’s degrees for CEOs include MBAs or leadership and management focused master’s programs.
Almost half of Fortune 500 CEOs have an MBA. While every organization is different, most CEOs have a formal education. If you’ve got your eye on becoming a CEO, pursuing an MBA or MSML will help you refine your managerial expertise and develop stronger business acumen.
The chief executive officer (CEO) plans out a company's overall strategies and policies. This includes responsibility for all components and departments of a business. The CEO also ensures that the organization's leadership is constantly aware of key external and internal factors.
- The CEO is the highest-ranking executive manager in the corporate structure.
- The day-to-day responsibilities of a CEO vary due to the wide range of departments, projects, and tasks that a CEO oversees.
- The median pay for CEOs in 2021 was $179,520.
The job duties of a chief executive officer (CEO) in a company or organization vary depending on the organization's mission, product, goals, and operational needs. Duties also vary depending on the size of the organization and the number of employees, among other factors. In general, these responsibilities include:
- Creating, communicating, and implementing the organization's vision, mission, and overall direction
- Leading the development and implementation of the overall organization's strategy
- Soliciting advice and guidance, when appropriate, from a board of directors
- Formulating and implementing the strategic plan that guides the direction of the business or organization
- Overseeing the complete operation of an organization
- Evaluating the success of the organization in reaching its goals
- Looking at potential acquisitions or the sale of the company under circumstances that will enhance shareholder value
- Representing the organization for civic and professional association responsibilities and activities in the local community, the state, and at the national level
- Participating in industry-related events or associations that will enhance the CEO's leadership skills, the organization's reputation, and the organization's potential for success
The CEO is always the highest-ranking executive manager in an organization and has responsibility for the overall success of the organization, and is the ultimate decision-maker for a business. While the daily tasks of each chief executive vary, it is the overall vision of the position that provides the framework for the functionality of all departments.
The job also includes leading, guiding, directing, and evaluating the work of other executive leaders, including presidents, vice presidents, and directors, depending on the organization's reporting structure. In the process of leading these senior leaders, the CEO makes certain that the strategic direction the CEO filters down through the organization to ensure its achievement.
Additionally, the CEO must ensure that the organization's leaders experience the consequences of their actions whether through reward and recognition or performance coaching and disciplinary actions. Without responsibility and accountability that are actively expected and reinforced, the CEO will fail to attain desired success and profitability.
A CEO's salary can vary greatly depending on the industry, location, experience, and employer. The U.S. Bureau of Labor Statistics (BLS) collects salary data for CEOs across the country:
- Median Annual Salary: $179,520
- Top 10% Annual Salary: Greater than $208,000
- Bottom 10% Annual Salary: $60,300
People who are interested in becoming CEOs may also consider other careers such as financial management ($131,710 median salary) or human resources management ($126,230). Other potential careers include sales managers ($127,490) or construction managers ($98,890).
Education and training requirements vary greatly by employer and industry. Most employers prefer to hire CEOs with at least a bachelor’s degree and a considerable amount of work experience. Many companies prefer to hire from within the company rather than outside.
- Experience: CEOs usually need extensive experience in management, usually with a progressive amount of responsibility with each new position. In addition, companies often expect CEOs to have experience in the industry that the company is in.
- Training: Some companies require CEOs to complete training programs for executive development and leadership, as well as ongoing professional development.
To be successful in this role, you’ll generally need the following skills and qualifications:
- Interpersonal skills: CEOs need to form good relationships with other leaders in the company and get significant input from the organization so that there is little pushback regarding strategic decisions and direction.
- Analytical skills: CEOs must participate in evaluating the success of the organization in reaching its goals. They must make sure that each strategic goal is measurable.
- Leadership skills: CEOs must demonstrate the leadership necessary to make the organization's mission a success. This includes providing vision direction, attracting followers, and all other aspects of successful leadership.
- Management skills: The CEO is responsible for creating a culture of learning to help enhance and grow the skills and abilities of employees. When significant players continue to learn and grow the organization truly succeeds.
The U.S. Bureau of Labor Statistics projects that employment for top executives will grow 8% by 2030, which is about as fast as all occupations in the country.
Top executives work in nearly every industry in big and small companies. Regardless of company industry or size, the job of a CEO can one of high stress and pressure because they're essentially responsible for the performance of a company—both good and bad.
CEOs often work more than 40 hours per week, including on evenings and weekends. They also usually travel often for work.
The path to becoming a CEO is not usually an easy one, and there is not a single, well-defined path However, completing an executive development program can help ensure you get there. Here are three of the top-ranked executive development programs in the U.S.
The Kellogg Executive MBA Program: This program is offered by the Kellogg School of Management at Northwestern University.
Chicago Booth Executive MBA: The University of Chicago Booth School of Business offers this program, which it claims is the world's first executive program.
The Duke Global Executive MBA: The Fuqua School of Business at Duke University offers this program.
A top executive's median salary in the healthcare and social assistance industry was $154,650 in 2021.
A company's owners will choose the company's CEO. In many corporations, the board of directors will appoint a CEO, but all shareholders get a say in who sits on the board.