Effective CEOs in large organizations prioritize three core activities—driving company strategy, representing the organization externally, and building and motivating a high-performing leadership team. By dedicating their time strategically to these areas, they avoid operational distractions and lead with greater impact and clarity.
Time is the CEO’s most valuable resource...
According to McKinsey, only 3 out of 5 newly appointed CEOs meet performance expectations within their first 18 months on the job. Undoubtedly, the role of a CEO is stressful and immensely complex. Simply contemplating all the responsibilities under time pressure can trigger spontaneous exhaustion. Therefore, it is crucial for CEOs to focus solely on the right activities and avoid wasting time on others.
With that in mind, what are the key activities newly appointed CEOs should prioritize, and how much time should they allocate to each?
Before we dive into the details, it is worth mentioning that the responsibilities of CEOs can vary significantly from one company to another, influenced by factors such as company size, culture, and organizational design. Generally speaking, smaller companies require more hands-on CEOs who manage numerous day-to-day tasks. In this article, however, we will focus on CEOs working in larger organizations, where their role is often supported by a fully-fledged CXO team.
After conducting extensive interviews with several CEOs who joined new companies and subsequently excelled in their roles over an extended period, typically after three years of tenure, we discovered some intriguing insights. While the outcomes of our research were interesting, they were not entirely surprising. The most successful CEOs tend to concentrate on three key areas:
- Setting and Driving Company Strategy.
- Acting as the Company’s Face.
- Assembling and Orchestrating the Best Team.
"Good business leaders create a vision, articulate the vision, passionately own the vision, and relentlessly drive it to completion."
Jack Welch
Former CEO of General Electric
1) Setting and Driving Company Strategy
The successful leaders prioritize defining the long-term vision and ensuring that the company’s direction aligns with this vision. According to our findings, effective CEOs dedicate around 30-40% of their working hours to this crucial activity. Despite the temptation to dive directly into operations and secure quick wins, such as landing new clients or optimizing cost structures, CEOs display remarkable restraint. They quickly realized that these operational tasks are better suited for their direct reports. Instead, they focus on the bigger picture, materializing the company vision and strategy, and then driving it through their teams.
2) Acting as the Company’s Face
A CEO must act as the public face of the company, both inside and outside its walls. This role involves interacting with a broad spectrum of audiences, including customers, employees, investors, potential hires, policymakers, communities, media, and other stakeholders.
Many CEOs acknowledge that external communication, focused on shaping a positive brand image, is one of the most demanding and time-consuming aspects of their role. The stakes are exceptionally high because effective communication can significantly enhance the company's reputation and credibility, while any missteps can result in immediate damage. Consequently, CEOs often dedicate a significant portion of their time - typically 10-20% - to meticulous preparation and rehearsal.
As one CEO of a leading bank in Europe succinctly put it, "Effective communication builds trust, and trust is the foundation of our success."
"When you're surrounded by people who share a passionate commitment around a common purpose, anything is possible."
Howard Schultz
Former CEO of Starbucks
3) Assembling and Orchestrating the Best Team
Achieving success is impossible without a great team, and it is the ultimate responsibility of the CEO to assemble and consistently motivate the leadership team. No one else can fulfil this crucial role.
According to most CEOs, while hiring top leadership talent is rather one-time effort, maintaining the motivation of the core team is a continuous and intense activity. This involves, among other things, transparent and effective communication, providing feedback, recognizing contributions, being flexible, empowering team members, encouraging collaboration, offering career growth opportunities, and maintaining a healthy work environment. Hence, it's no surprise that the CEOs interviewed devote approximately 40-60% of their time to people management.
A CEO of a major life-sciences company reflected that early in his career, he saw these activities as mere chit-chat with no immediate impact on the business. It was only later that he came to understand that true leadership involves being permanently connected with his team. Another CEO from a rapidly expanding internet company took it a step further, stating, "My ultimate goal is to become the most dispensable person in the organization. If I were to pass away tomorrow, the company shouldn't even notice. Everyone should fully understand their roles and responsibilities and be driven by their own initiative. Achieving this, though, demands substantial time and effort from a CEO."
Conclusion
There are no universal guidelines that guarantee how a CEO can be effective or what they should prioritize, as each CEO's situation is unique. A CEO might have been hired for their specific expertise and focus on particular areas, and they can still be successful. Alternatively, some companies may operate in crisis mode, requiring the CEO to be hands-on with crisis management.
However, based on our findings, we strongly believe that when a company operates under normal conditions, the most effective and successful CEOs exhibit specific patterns in their priorities and time management. These CEOs focus primarily on driving strategy, representing the company, and managing the leadership team. If a CEO finds themselves engaged in tasks outside these core areas, they should pause and consider whether they are wasting time on tasks that could be delegated. If delegation is not an option, the next question should be whether there was a failure in hiring the right executives to handle those tasks. By aligning their efforts with these priorities, CEOs can ensure they are leading their companies more effectively and efficiently.
