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I was fortunate enough to spend about 18 months as staff assistant to my CEO, including access to their email and basically all meetings. This was a PE-backed r

I was fortunate enough to spend about 18 months as staff assistant to my CEO, including access to their email and basically all meetings. This was a PE-backed roll-up that was in the midst of acquiring several smaller companies, and then pursuing an exit. The experience really opened my eyes about the requirements for the job. The amount of code-switching required to communicate well with ownership, the other C-levels, employees, customers, and potential acquirers could make my head swim. The breadth and depth of technical, financial, and human expertise necessary to verify all the parts of the business and smell out where issues might be hiding. All of that before even getting to (in this case) integrating several businesses into a whole, identifying up-and-coming leaders, and keeping the employees happy; let alone actually having a strategy, getting buy-in, and implementing it. And then spending most evenings networking with the elite class that you need to know to have access to capital. You can never have a bad day. Ever. This was for an org that was comfortably under 1000 employees, all located in the US, where none of the VPs were the kind of political operators you get in meatier companies. I walked away thinking that there can't be even 100k people in the country with the ability to do even a non-laughable job as the CEO of a 500ish employee company. Not even do a good job, just do a job that doesn't look like one of those 80s child-parent-bodyswap movies where the kid tries to work in an office. I still think CEO pay is out of control, but I understand better why boards end up paying what they do. Any weakness in any of these skills is an existential threat, and you don't know for sure what will hit you this year.

Aperocky 4y ago
> weakness in any of these skills is an existential threat Feigned/false strength might be much more disastrous. I can think of a few household name companies whose CEO was widely lauded during the time, but might have fared better had a tree trunk was there instead.
- jdkee 4y ago
  Jack Welch comes to mind. "The New York Times business columnist James B. Stewart wrote in 2017, “Hardly anyone considers Mr. Welch a management role model anymore, and the conglomerate model he championed at G.E. — that with strict discipline, you could successfully manage any business as long as your market share was first or second — has been thoroughly discredited, at least in the United States.” The financial crisis of 2008 delivered a blow to G.E.’s fortunes. In the years before the crisis, the company had built sprawling lending operations that helped drive its growth. But the finance businesses became a crippling liability when, during the crisis, credit markets froze and borrowers struggled to pay back their loans. G.E., like many large banks, tapped emergency government loans to help it get through the upheaval. In the years following the crisis, G.E. sold off most of its lending businesses, but other problems emerged, some of which were in its large power unit. G.E.’s stock price now trades roughly 80 percent below the high it hit in 2000. The company has significantly lower revenue than it did that year. Last year, G.E. reported a loss of $5.4 billion." See https://www.nytimes.com/2020/03/02/business/jack-welch-died.html https://www.nytimes.com/2020/03/02/business/jack-welch-died....
  - CPLX 4y ago
    Worth noticing that in Jack Welch’s case it’s now a known fact that he was actively falsifying information about the company’s financial performance.
  - Aperocky 4y ago
    Short termisms that spreads through the traditional businesses are now causing them to die off. Whether it's rank and yank, diversification into the hottest financial markets, throwing away manufacturing because those weren't making a lot of money, killing of R&D because they are a cost center. You'll see so many "capable" CEOs who could handle the day to day gracefully but manage like this, and lead the companies to their doom. It's not about appearances.
  - ghaff 4y ago
    There are a number of CEOs--Mark Hurd at HP is another--who seemed for a time to really be delivering, especially prior to predecessors. But it turned out to be mostly about selling off the seed corn and otherwise doing financial engineering than streamlining and preparing the business for the long haul.
mbesto 4y ago
Super interesting insight and generally agree with the gist of what you are saying. > Any weakness in any of these skills is an existential threat, and you don't know for sure what will hit you this year. Hard disagree with this conclusion. I regularly work with businesses from 100~1000 employees and at a certain scale (number of employees might not be a great proxy), the engine of the company simply takes over - good or bad CEO. There are great CEOs that can do ALL of the things you mention, but I've also sat in board meetings with some pretty terrible CEOs of $100M revenue businesses. To the point where I would seriously question how the company still was operating, but alas, it chugged along. It's actually incredible to me how many businesses that do have poor leadership that continually survive. Once you've built a brand, a reputation, a network of clients and a somewhat steady book of business, it's surprisingly hard for most businesses to fail. Note - tech companies on a VC track are a bit of an exception to this, but thats usually because they are spending more than they earn, so they literally strangle themselves. It's important to remember in the grand scheme the number of VC backed companies is greatly dwarfed by the number of businesses that exist.
- ghaff 4y ago
  Certainly a well-established company can probably already tick along reasonably well with a so-so CEO who isn't actively bad in some way. After all, it's not like the wheels come off the bus if the CEO takes a vacation.
- remus 4y ago
  > It's actually incredible to me how many businesses that do have poor leadership that continually survive. Once you've built a brand, a reputation, a network of clients and a somewhat steady book of business, it's surprisingly hard for most businesses to fail. I suspect this is the case when there are competent people at other levels in the org. It seems like the rest of the company is often aware when leadership is bad and each push back against poor decisions in their own little way to try and keep their parts of the business running smoothly.
  - sawyna 4y ago
    This actually happens at all levels of organisation. Incompetent people trying to lead the teams often shifts the burden to individuals. P.S: I'm one of those individuals.
jbellis 4y ago
Completely agree. I've had about as much visibility as possible into the job of tech startup CEO from zero to 500+ employees, across two successful CEO transitions, and it's a very, very demanding role. Very few people have the skill and the experience to do it successfully, and they can make or break the company. (Corollary: I also have a ton of respect for technical people who become successful CEOs, like Jay Kreps, Peter Zaitsev, Aaron Skonnard. I have a high opinion of my own abilities and I don't think I could do it.)
refurb 4y ago
Yup, I had a similar experience and what CEOs spend their time doing was vastly different than what I expected. - Their calendar is often broken up into 15 minute meetings - Lots of external meetings because a big part of the job is "being the face of the company" - The 15 minute meetings are often just a final "sign off" on some important decision; CEO bring the company-level perspective and can highlight key issues identified by the board - What a department might spend 3 months working on, the CEO often has to understand and make a decision on in 10 min (see prior HN post "how to communicate to executives") - What people presenting to the CEO thought was important was often very different than what CEO thought was important (e.g. team thought product launch price was critical while CEO was worried about a $500M supplier contract that was in the final stages of negotiation and if this product launch could be leveraged to close the deal and save the company millions) - The political side was very important; HN likes to think raw intellectual horsepower matters, but ability to communicate and "get people on your side" is at least 50% of a CEOs job; your idea might be brilliant but if you can't convince the sales team of it, your idea is worthless
- calvinmorrison 4y ago
  > but ability to communicate and "get people on your side" is at least 50% of a CEOs job; It's gotta be 50% of every job. Heck, even on open source projects, you need to be lucid and explain what you are doing. Look no further than for example, the ANTS project, which has done some very cool work in the plan9 space but hasn't always gotten a good reception due to the author being somewhere between Terry A. Davis and a normal programmer. And it's in the communication that's key.
  - refurb 4y ago
    Very true, but instead of trying to sell your idea to a dozen team mates who understand the technical side, try and sell it to a 10,000 person company of sales, finance, marketing, plus board of directors and shareholders. And many of these aren’t people who will shy away from telling you “no, if you do that I’ll just undermine your idea so my idea prevails”.
- bjacobt 4y ago
geysersam 4y ago
I'm sure it's an incredibly difficult job. Interesting it's still such a common way to run organizations. Sounds like it'd be better, more scalable, cheaper, safer etc. to not depend on a single person with extremely unusual skills for the company to function.
- ghaff 4y ago
  Even just co-CEO organizations have usually been a disaster. Companies can and do delegate decision-making--even to the point of having relatively autonomous divisions. This can work reasonably well. It can also mean that the CEO is mostly involved in financial engineering (GE, private equity much of the time) or you end with warring fiefdoms competing with each other (Ballmer-era Microsoft). Large companies can accomplish things that smaller companies cannot but keeping the ship reasonably on course is a really hard organizational problem. When I was an analyst and spent a fair bit of time with senior execs at tech companies, I often saw how much fragmentation and lack of coordination there was among different groups. But my wonder wasn't that this existed but that the companies were able to function at all.
- crazygringo 4y ago
  Well, in a way you're simply describing the job of the C Suite minus the CEO -- the CFO, CTO, CSO, and so on. But each of the C Suite members can't spend all their time staying up-to-date and coordinated on everything each other is doing, and they'll also often disagree. So you need somebody to manage the C Suite, understand and integrate and make decisions... and that's the CEO. At the end of the day, somebody has to be in charge, or else it's either a) anarchy or b) incredibly inefficient as too much time is taken up in NxN communication and lengthy group debating and decision-making. And somebody who's capable of managing every C Suite member effectively, whose areas span the entire company... that's going to be an inherently fiendishly difficult and complex job.
calvinmorrison 4y ago
> but I understand better why boards end up paying what they do. maybe simple supply and demand?
Mezzie 4y ago
Yes and no. I think you're right about the number of people who could effectively do those things. I think you're missing a key skill that a CEO can have that can make them effective if they're lacking in one or two key areas if the company is big enough: delegation. I'm a generalist and have some leadership skills (nothing like what would be needed to CEO a company of a thousand employees, but I could do a decent job with a dozen or two), and one of the first things I do in team situations is figure out who in the group is good at things I am weakest in and whether or not I can trust their judgement/work ethic/etc. For example, if I'm working on/helping to manage a tech project, it's probably not a good use of my time to do get into the technical weeds even though I can do so, because that is something that a good, trustworthy CTO can do for me, and it's easier to find someone with technical acumen whose judgement I trust than to find someone with communication acumen whose judgment I trust. Team and bench-building is a key component to managing big companies well, particularly given part of reducing risk is reducing single points of failure, including making the company overly reliant on one person to function. This is also why somebody's network/reputation is a big deal - it signals what 'bench' they might have available if you choose them as a leader. So while it's very true few people can solo lead, there are a decent amount of people with ~80% of the skills needed and a network that can cover the 20%, so it's not completely dire.
mhb 4y ago
Competent Elites https://www.lesswrong.com/posts/CKpByWmsZ8WmpHtYa/competent-elites https://www.lesswrong.com/posts/CKpByWmsZ8WmpHtYa/competent-...
- drc500free 4y ago
  Great read, and as usual EY is more pithy and eloquent than I can be.

Aperocky 4y ago

> weakness in any of these skills is an existential threat Feigned/false strength might be much more disastrous. I can think of a few household name companies whose CEO was widely lauded during the time, but might have fared better had a tree trunk was there instead.

jdkee 4y ago
Jack Welch comes to mind. "The New York Times business columnist James B. Stewart wrote in 2017, “Hardly anyone considers Mr. Welch a management role model anymore, and the conglomerate model he championed at G.E. — that with strict discipline, you could successfully manage any business as long as your market share was first or second — has been thoroughly discredited, at least in the United States.” The financial crisis of 2008 delivered a blow to G.E.’s fortunes. In the years before the crisis, the company had built sprawling lending operations that helped drive its growth. But the finance businesses became a crippling liability when, during the crisis, credit markets froze and borrowers struggled to pay back their loans. G.E., like many large banks, tapped emergency government loans to help it get through the upheaval. In the years following the crisis, G.E. sold off most of its lending businesses, but other problems emerged, some of which were in its large power unit. G.E.’s stock price now trades roughly 80 percent below the high it hit in 2000. The company has significantly lower revenue than it did that year. Last year, G.E. reported a loss of $5.4 billion." See https://www.nytimes.com/2020/03/02/business/jack-welch-died.html https://www.nytimes.com/2020/03/02/business/jack-welch-died....
- CPLX 4y ago
  Worth noticing that in Jack Welch’s case it’s now a known fact that he was actively falsifying information about the company’s financial performance.
- Aperocky 4y ago
  Short termisms that spreads through the traditional businesses are now causing them to die off. Whether it's rank and yank, diversification into the hottest financial markets, throwing away manufacturing because those weren't making a lot of money, killing of R&D because they are a cost center. You'll see so many "capable" CEOs who could handle the day to day gracefully but manage like this, and lead the companies to their doom. It's not about appearances.
- ghaff 4y ago
  There are a number of CEOs--Mark Hurd at HP is another--who seemed for a time to really be delivering, especially prior to predecessors. But it turned out to be mostly about selling off the seed corn and otherwise doing financial engineering than streamlining and preparing the business for the long haul.

mbesto 4y ago

Super interesting insight and generally agree with the gist of what you are saying. > Any weakness in any of these skills is an existential threat, and you don't know for sure what will hit you this year. Hard disagree with this conclusion. I regularly work with businesses from 100~1000 employees and at a certain scale (number of employees might not be a great proxy), the engine of the company simply takes over - good or bad CEO. There are great CEOs that can do ALL of the things you mention, but I've also sat in board meetings with some pretty terrible CEOs of $100M revenue businesses. To the point where I would seriously question how the company still was operating, but alas, it chugged along. It's actually incredible to me how many businesses that do have poor leadership that continually survive. Once you've built a brand, a reputation, a network of clients and a somewhat steady book of business, it's surprisingly hard for most businesses to fail. Note - tech companies on a VC track are a bit of an exception to this, but thats usually because they are spending more than they earn, so they literally strangle themselves. It's important to remember in the grand scheme the number of VC backed companies is greatly dwarfed by the number of businesses that exist.

ghaff 4y ago
Certainly a well-established company can probably already tick along reasonably well with a so-so CEO who isn't actively bad in some way. After all, it's not like the wheels come off the bus if the CEO takes a vacation.
remus 4y ago
> It's actually incredible to me how many businesses that do have poor leadership that continually survive. Once you've built a brand, a reputation, a network of clients and a somewhat steady book of business, it's surprisingly hard for most businesses to fail. I suspect this is the case when there are competent people at other levels in the org. It seems like the rest of the company is often aware when leadership is bad and each push back against poor decisions in their own little way to try and keep their parts of the business running smoothly.
- sawyna 4y ago
  This actually happens at all levels of organisation. Incompetent people trying to lead the teams often shifts the burden to individuals. P.S: I'm one of those individuals.

jbellis 4y ago

Completely agree. I've had about as much visibility as possible into the job of tech startup CEO from zero to 500+ employees, across two successful CEO transitions, and it's a very, very demanding role. Very few people have the skill and the experience to do it successfully, and they can make or break the company. (Corollary: I also have a ton of respect for technical people who become successful CEOs, like Jay Kreps, Peter Zaitsev, Aaron Skonnard. I have a high opinion of my own abilities and I don't think I could do it.)

refurb 4y ago

Yup, I had a similar experience and what CEOs spend their time doing was vastly different than what I expected. - Their calendar is often broken up into 15 minute meetings - Lots of external meetings because a big part of the job is "being the face of the company" - The 15 minute meetings are often just a final "sign off" on some important decision; CEO bring the company-level perspective and can highlight key issues identified by the board - What a department might spend 3 months working on, the CEO often has to understand and make a decision on in 10 min (see prior HN post "how to communicate to executives") - What people presenting to the CEO thought was important was often very different than what CEO thought was important (e.g. team thought product launch price was critical while CEO was worried about a $500M supplier contract that was in the final stages of negotiation and if this product launch could be leveraged to close the deal and save the company millions) - The political side was very important; HN likes to think raw intellectual horsepower matters, but ability to communicate and "get people on your side" is at least 50% of a CEOs job; your idea might be brilliant but if you can't convince the sales team of it, your idea is worthless

calvinmorrison 4y ago
> but ability to communicate and "get people on your side" is at least 50% of a CEOs job; It's gotta be 50% of every job. Heck, even on open source projects, you need to be lucid and explain what you are doing. Look no further than for example, the ANTS project, which has done some very cool work in the plan9 space but hasn't always gotten a good reception due to the author being somewhere between Terry A. Davis and a normal programmer. And it's in the communication that's key.
- refurb 4y ago
  Very true, but instead of trying to sell your idea to a dozen team mates who understand the technical side, try and sell it to a 10,000 person company of sales, finance, marketing, plus board of directors and shareholders. And many of these aren’t people who will shy away from telling you “no, if you do that I’ll just undermine your idea so my idea prevails”.
bjacobt 4y ago

geysersam 4y ago

I'm sure it's an incredibly difficult job. Interesting it's still such a common way to run organizations. Sounds like it'd be better, more scalable, cheaper, safer etc. to not depend on a single person with extremely unusual skills for the company to function.

ghaff 4y ago
Even just co-CEO organizations have usually been a disaster. Companies can and do delegate decision-making--even to the point of having relatively autonomous divisions. This can work reasonably well. It can also mean that the CEO is mostly involved in financial engineering (GE, private equity much of the time) or you end with warring fiefdoms competing with each other (Ballmer-era Microsoft). Large companies can accomplish things that smaller companies cannot but keeping the ship reasonably on course is a really hard organizational problem. When I was an analyst and spent a fair bit of time with senior execs at tech companies, I often saw how much fragmentation and lack of coordination there was among different groups. But my wonder wasn't that this existed but that the companies were able to function at all.
crazygringo 4y ago
Well, in a way you're simply describing the job of the C Suite minus the CEO -- the CFO, CTO, CSO, and so on. But each of the C Suite members can't spend all their time staying up-to-date and coordinated on everything each other is doing, and they'll also often disagree. So you need somebody to manage the C Suite, understand and integrate and make decisions... and that's the CEO. At the end of the day, somebody has to be in charge, or else it's either a) anarchy or b) incredibly inefficient as too much time is taken up in NxN communication and lengthy group debating and decision-making. And somebody who's capable of managing every C Suite member effectively, whose areas span the entire company... that's going to be an inherently fiendishly difficult and complex job.

calvinmorrison 4y ago

> but I understand better why boards end up paying what they do. maybe simple supply and demand?

Mezzie 4y ago

Yes and no. I think you're right about the number of people who could effectively do those things. I think you're missing a key skill that a CEO can have that can make them effective if they're lacking in one or two key areas if the company is big enough: delegation. I'm a generalist and have some leadership skills (nothing like what would be needed to CEO a company of a thousand employees, but I could do a decent job with a dozen or two), and one of the first things I do in team situations is figure out who in the group is good at things I am weakest in and whether or not I can trust their judgement/work ethic/etc. For example, if I'm working on/helping to manage a tech project, it's probably not a good use of my time to do get into the technical weeds even though I can do so, because that is something that a good, trustworthy CTO can do for me, and it's easier to find someone with technical acumen whose judgement I trust than to find someone with communication acumen whose judgment I trust. Team and bench-building is a key component to managing big companies well, particularly given part of reducing risk is reducing single points of failure, including making the company overly reliant on one person to function. This is also why somebody's network/reputation is a big deal - it signals what 'bench' they might have available if you choose them as a leader. So while it's very true few people can solo lead, there are a decent amount of people with ~80% of the skills needed and a network that can cover the 20%, so it's not completely dire.

mhb 4y ago

Competent Elites https://www.lesswrong.com/posts/CKpByWmsZ8WmpHtYa/competent-elites https://www.lesswrong.com/posts/CKpByWmsZ8WmpHtYa/competent-...

drc500free 4y ago
Great read, and as usual EY is more pithy and eloquent than I can be.