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Steve Jobs. Elon Musk. Mark Zuckerberg. These “rockstar” CEOs may catch the daily headlines, but becoming a chief executive officer (CEO) involves a lot of hard work. Research suggests you’re better off serving as a Chief Operating Officer or Chief Financial Officer before taking on the role of CEO. In this article, we're going to look at what a CEO does and the soft skills you need to succeed in this executive position. We’ll also discuss the qualifications and experience you need to make it to the top. Finally, we’ll look at the future outlook for CEOs.

What do chief executive officers do?

The position of CEO oversees the strategic vision and long-term plans of the company. They deal with high-level strategic decisions and manage the company’s growth. They're responsible for the following:

  • Keeping the company profitable
  • Managing the company’s structure
  • Creating and enacting long-term strategies; and
  • Working with the board of directors.

The CEO is the chief representative of the company to report to its board of directors. The CEO’s role is to report to the board about the performance of the company. They deliver updates about long-term plans.

The CEO is the public face of the company. They will speak at conferences and give media statements about the performance of the company. They may also take part in community events related to the company’s cause.

They work with the Chief Operating Officer (COO) to outline the culture of the company. The CEO delegates tasks including day-to-day operations such as payroll, recruitment and legal and administrative duties to the COO to carry out.

The CEO helps to deliver returns to shareholders by driving revenue growth. They work with the Chief Financial Officer (CFO) to oversee the company’s financial planning.

CEOs may work in both the public and private sector. Businesses, education providers, charities and governments have CEO positions. Founders of startups incorporated as companies can also be appointed as CEOs.

What are the skills needed to become a chief executive officer?

Effective leaders need to have both hard and soft skills to ensure they're performing the job to the best of their ability. Here are some common leadership qualities that are important for CEOs:

Leadership skills

Leadership skills are a pretty rudimentary requirement for CEOs! A true leader needs to lead with empathy and understanding to foster productivity within a team. They must value diversity, inclusion and belonging to get the best out of their employees. They should have emotional intelligence. These leadership qualities will make them more likely to understand team morale and pick up on non-verbal cues when managing a team.

CEOs must also lead by example about the social conscience of the company. They can help improve the social reputation of the company by aligning themselves better with their customers. who value companies who lead with purpose and integrity.

CEOs must have long-term thinking skills to direct an organization’s operations. They must not let short-term decisions jeopardize the organization’s bottom line.

Strong communication skills

A CEO must relate to a variety of stakeholders inside and outside of the business. They must include the right amount of detail in their business discussions with their C-suite team. A good CEO can have an affective communication style to discuss and explain their vision to employees and board members. They have to learn to communicate in a way that is clear and persuasive.

Decision-making

CEOs need to have great decision-making skills informed by qualitative and quantitative evidence. Often, their decisions are based on how well they're able to shape and define a long-term business strategy. As a senior executive, CEOs need a deep understanding of business. They should be able to exercise evidence-based decision-making. They leverage analytical skills to translate data-informed research into actionable plans. CEOs should also have great commercial awareness to make decisions for the company. They must be able to analyze situations and find solutions to keep the company moving in the proper direction. An indecisive leader may miss out on crucial business opportunities and lose out to competitors.

Organizational skills

The CEO has many competing tasks and needs strong organizational skills to keep on top of their workload. For example, they will need to be able to form a long-term plan for their organization. This type of planning requires taking into account the plans of other employees, the plans of the board and the plans of others in the C-suite. They must also consider the financial position of the company and current trends and insights in business.

The CEO has the largest overview of the company’s resources. They're responsible for allocating those resources efficiently to achieve company outcomes. They must know how to manage their time effectively to take care of urgent tasks.

Problem-solving

CEOs need to have great problem-solving skills as companies face a myriad of challenges that require solutions from the top. These problems can include a PR disaster, being outcompeted by a competitor or going through a recession. CEOs need to know how to respond to these challenges in business. People management and keeping a cool head are also key qualities for CEOs as they have to juggle the requirements of stakeholders and shareholders.

Develop these important chief executive officer skills

A wide range of soft skills are critical to your success as a CEO, such as being an effective leader.

At Fingerprint for Success, we have over 20 years of experience in using our people analytics tools to study these types of soft skills. We’ve identified 48 motivations needed to succeed. Our people analytics tools offer insight into the attitudes and behaviors needed to succeed.

Take our assessment today to better understand your personal motivations and whether they're a good fit for a career as a CEO. Once you’ve taken the assessment, Coach Marlee will provide you with personalized insights. You’ll receive feedback on your motivations and insights related to any blind spots.

Then set a personal development goal and use F4S’ free coaching to increase your performance and excel in your role as a CEO.

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How long does it take to become a chief executive officer?

Many CEOs have a business degree or other relevant education. This may include degrees in economics, accounting, or finance. Such studies allows prospective CEOs to grow their theoretical knowledge of the legal and ethical challenges of the business environment. Some CEOs also have degrees in science, engineering and humanities. For leadership knowledge, some CEOs complete bachelor degrees in leadership or complete a management certification program. 

They may also undertake further study, such as an MBA, or a master’s degree in economics and management to build on knowledge gained in their undergraduate degree program. An MBA can teach topics relevant to the running of a business, such as ethics, corporate strategies, project management and organizational behavior. The advanced skills developed in an MBA can help future CEOs to make well-informed decisions as strong leaders.

Some companies may also sponsor educational opportunities for employees. For example, they may support them to take on an advanced degree, such as an MBA, as part of a learning program within the company. This helps them build their knowledge base while continuing to work.

Future CEOs usually gain relevant managerial experience by working their way up the corporate ladder at a single company. As an entry-level employee, college graduates can start at a job, such as a marketing assistant, before being promoted to marketing manager after great performance. After gaining job experience at this level, they can move into a general manager position. This will help them gain a solid understanding of business operations. After spending several years in this position, future CEOs are in a good position to apply for the CEO position if it opens up. Strong business acumen is one factor distinguishing great CEOs from their competitors. Prospective CEOs may be promoted internally if a position opens up.

They can also gain job experience by applying for more senior roles at companies. A career path such as this is helpful for gaining extensive experience in different companies. The future CEO gets a broader taste of how different companies operate. They can then take the best bits of their experience and apply them to the role.

However, it's rare that CEOs are hired outside of the organization. Many companies prefer to hire CEOs from within a company’s own ranks. That's because the position is filled by someone who is familiar with the company environment and business structure.

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What are the career opportunities and outlook for chief executive officers?

In the US, the overall employment of executives is expected to grow by 6%1 from 2021 to 2031. About 318,100 job openings are projected each year on average over the decade. Many of these openings are expected to be the result of replacing CEOs who transfer to different jobs or retire from the position. According to Seek, there is a projected 4.6% growth2 in CEO jobs in Australia over the next five years.

Research suggests3 that 85% of S&P 500 CEOs in the USA come from four positions: chief operating officer, divisional CEO, chief financial officer or a second-layer management position leading a large business unit. For example, president of operations. These positions allow for a promotion to CEO when the right opportunity arises. Furthermore, 72% of new CEOs are promoted internally, with 8% being former executives or current board members.

CEOs can take on extra roles within their position. For example, they can become the chairperson of the board of directors at their company. Google co-founders Larry Page and Sergey Brin took on the roles of CEO and President respectively as well as sitting on the board. The chair of the board handles setting the board’s agenda and facilitates board meetings. They're responsible for protecting investors’ best interests and ensuring the company remains stable and profitable. However, many companies choose to separate the two positions to ensure independence of the board.

Where can chief executive officers work?

Prospective employers come from a wide variety of industries, from construction, manufacturing, consulting, gaming, beauty, pharmaceuticals, food, retail, media, technology, automotive and banking. Some famous CEOs include Bob Iger at Disney Corporation, Larry Page at Google, Tim Cook at Apple, Elon Musk at Tesla and Mark Zuckerberg at Meta.

CEOs are particularly in demand in industries that are reporting high growth4. In 2022, these industries include airport services, hotels and resorts, travel agency services, tourism, airlines, casinos and online gambling, commercial aircraft manufacturing, semiconductor and electronic parts manufacturing, deep-sea coastal and inland water transportation and cheese manufacturing.

Large multinational corporations are often in search of CEOs who can help steer the company to a successful long-term future, building on the success of previous CEOs. Smaller companies are often in search of CEOs to help set the agenda for future growth, taking the company from a promising baseline of growth to a future of enormous growth and immense profitability for the company.

How much can chief executive officers earn?

A CEO earns an average salary of US$807,3695, although the base salary for CEOs can range between US$610,258 and US$1,040,246. These annual salary ranges vary depending on factors such as education, professional certification, management experience, additional skills and how long you’ve worked in your profession.

The size of a company may also be influential on the amount of compensation for a CEO. The salary for CEOs at smaller companies may be much lower due to smaller revenue turnover. However, most CEOs are expected to earn at least six figures for their work, regardless of the size of the company they may be working in.

The annual salary for CEOs can also vary depending on country. For example, in Australia, the salary for CEOs averages AUD$159,8066. This may be a reflection of the smaller number of companies in Australia.

CEOs can also earn bonuses on top of their usual salary, depending on how well they have performed for the company. These bonuses can be up to $1 million. They may also earn income from any dividends from shares they may hold in the company.

Frequently asked questions

How to become a CEO without a degree?

You can hold the position of CEO without a degree by starting your own business. As the founder of your own company, you have the ability to name yourself as a CEO. To grow into a strong leader, you will have to learn key business management skills on the job, or through mentors with CEO experience. You will also have to be proactive in making business contacts and developing professional networks to make up for your lack of management experience. 

But if you're trying to become a CEO of an established organization, you're better off obtaining an undergraduate degree in business studies or administration. An advanced degree or taking up other educational opportunities may also put you in good stead.

How to become a CEO of a hospital?

To become a hospital CEO, you'll need at least eight to ten years of administrative, people management, business management and healthcare experience. Some hospital CEOs start their career journey as healthcare professionals to build their understanding of critical daily operations. For example, they may start as a doctor, which can require up to ten years of medical school, residential on-the-job training and specialization. Others may start out as nurses, physiotherapists and other allied healthcare positions which all require years of formal training. After training in healthcare and working within that field of expertise for a while, you can get a masters degree in healthcare or public administration. It is best to get a degree where the primary field is healthcare, rather than a general MBA. Then it is about spending time in hospital management positions to gain the requisite job experience as a hospital manager. A combination of managerial expertise and qualifications would put you in a good position to become a hospital CEO.

How to become a CEO of a bank?

To become a CEO of a bank, you'll need to study finance or business as your undergraduate degree. Financial acumen is important to give you credibility. Then it is ideal to find a part-time job at a bank, either working as a financial clerk or accounting assistant, while finishing your studies. After graduating from university as an undergraduate, you can work for a few years in the bank and ascend through the corporate ladder into managerial positions. It would be ideal to apply to graduate school, to study a Masters in Business Administration or a masters degree that specializes in business studies, executive management, operations, marketing and project management. This can take place after finishing an undergraduate degree, or while working in a bank. Then it is a matter of attaining a C-suite position, such as Chief Financial Officer, as a stepping stone towards becoming a CEO when an internal promotion opens up.

How to become the CEO of your own business?

First, you should write a business plan about what you would like your business to be about. What will the business be called? What products or services will it offer? What are its operational costs? How many employees or contractors will you need to have to run the business? What are your goals and objectives for the business? How will you engage with potential collaborators? How will you measure up against competitors in your field? 

Then figure out how much money you will need to fund the business. Will you tap into your own savings? Will you borrow from friends or family? Will you have investors in your business? Or are you able to secure government grants to get your business off the ground? 

Don't forget to register your company business name. Make sure you obtain any necessary licences or registrations in order to run the business. If you are opening a physical store, make sure you scout for a good location where there is plenty of foot traffic. If you're running an online operation, make sure you reserve the website address. 

Once your business is up and running, bring on board contractors or employees to help your business run smoothly. Finally, consider ways to market your business. Can you market it via social media advertising or by traditional advertising?

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Show References
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  1. Top Executives Salary - US Bureau of Labor Statistics, https://www.bls.gov/ooh/management/top-executives.htm
  2. Chief Executive Officer - Seek AU - https://www.seek.com.au/career-advice/role/chief-executive-officer
  3. The Last Mile to the Top: Future CEOs Who Beat the Odds, Dec 2021 - SpencerStuart, https://www.spencerstuart.com/research-and-insight/future-ceos-who-beat-the-odds
  4. The 10 Global Fastest Growing Industries, 2022 - IBIS World, https://www.ibisworld.com/global/industry-trends/fastest-growing-industries/
  5. Chief Executive Officer Salary in the United States, 2022 - Salary.com, https://www.salary.com/research/salary/benchmark/chief-executive-officer-salary
  6. Average Chief Executive Officer (CEO) Salary in Australia, 2022 - Payscale.com, https://www.payscale.com/research/AU/Job=Chief_Executive_Officer_(CEO)/Salary

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