The Role of a CEO

This post was written by Chris Tsakalakis, Venture Partner at Serac Ventures

What is the role of a CEO?

The role of a CEO is really simple. It’s really two things. One is to set a clear direction or vision for where the company is going. And the second is executing behind that vision to make it a reality.

The vision usually entails explaining how the company solves a problem or provides a great customer service or product. Execution typically involves building a team of people who can actually work on that vision. Those are the basics. Set a clear direction and a way to go after it. Because vision without execution is hallucination. You have to have both the vision and the execution. And that’s what a CEO does. They kind of bring it all together.

I want to leave this at a very high level because what I find is most of the information you find out there are long lists of things that CEOs need to do and I’d rather keep it simple.

What makes a great CEO?

A great CEO is able to both articulate a clear vision and execute on that vision effectively. As Bill Gurley, a partner at Benchmark Capital, once told me, “CEOs can be placed on a two-by-two matrix based on their ability to promote and execute. Great CEOs are both great at promoting and setting a vision, and great at executing.”

Some examples of great CEOs include Steve Jobs, who had a clear vision for the future of computing and was able to execute on that vision by building innovative products like the iPhone and iPad. Elon Musk is another example of a great CEO, who has set bold visions for companies like Tesla and SpaceX, and has been able to execute on those visions by building world-class teams and products.

In my own roles as a CEO, I have tried to spend a lot of time both on setting a clear vision and executing on that vision. At StubHub, we created a 10-year “big hairy audacious goal” (BHAG) to be THE source that fans rely on to discover, access, and share entertainment experiences worldwide. This goal excited and motivated employees, and we built plans to execute against it.

In addition to setting a vision and being able to execute, a great CEO must be able to overcome challenges. Sometimes, a company starts out well because it has the right product at the right time, but it can be difficult to sustain success over time due to competition or a saturated market. Great companies and CEOs can look ahead and see what is happening in the market, with competitors, and with customers. They can build a company that endures by anticipating changes to the market and developing multiple products and services.

Finally, a great CEO must be authentic. Being a CEO is a privilege but it’s also a difficult job that is stressful and demanding. When a CEO is clear and genuine, employees can see that. People are increasingly looking for CEOs who are honest, transparent, and able to explain what is happening with the company. This can be difficult, as sometimes the reality of the business is not positive. However, if a CEO can build trust by being authentic, employees will be more likely to follow their vision for the future.

What are some of the challenges that CEOs face?

Being a CEO is challenging. There are many expectations that people have of CEOs, and each employee may have their own list. As a result, there is a long list of things that great CEOs are supposed to do. It is difficult to live up to all of these expectations. The other difficulty is that we live in a hero culture where the CEO is either a hero or a zero. If the company does well, all of the success is ascribed to the CEO, and if the company fails, all of the blame is ascribed to the CEO.

One difficulty that I have tried to overcome is not trying to check every box on the list, but to be clear about what I am good at and to double down on those things. I also try to identify the things that are getting in my way and tackle those one at a time. For example, in 2009, when the recession was hitting, I received some tough feedback that said I was being too dictatorial with my team and not listening to their input. I worked on that, but I only worked on one thing at a time because that was all I could handle.

The ultimate test of that came later that year when I had open heart surgery. I was in the hospital for 10 days and at home for two months. I found that my team could make decisions, set budgets, and do all of this great stuff without me. That was when the light bulb went off for me. I realized that I didn’t need to do everything myself; I could actually rely on my team to do it.

So, the first challenge is really not trying to be all things to all people and not trying to do everything.

The other challenge of being a CEO is the balancing act. I once heard a story about Elon Musk from someone who worked at Tesla. The person described Musk as a circus performer who spins plates. You may be familiar with this act, in which the performer balances multiple plates on sticks and keeps them spinning at the same time. The person said that Musk was like this, constantly running from plate to plate to keep them from wobbling and falling. This is a good analogy for the job of a CEO, which is full of challenges and requires constant attention to detail.

A CEO must be able to troubleshoot problems, think about the long term, keep the board happy, and keep employees happy. This is a lot to balance, and it can be difficult to keep everyone happy at all times. It is important to prioritize and focus on the most important things.

For me, I have found that focusing on customers and what makes them happy is the best way to drive long-term value. At StubHub, we focused on our buyer net promoter score, which measures how likely customers are to recommend our company to others. We got specific feedback from customers and used it to improve our product experience, customer service, and pricing. This led to positive results for the business and this made my employees and boss happy.

A third challenge of being a CEO is that it is a lonely job. It is true that it’s lonely at the top. When you have problems with your board or employees, it is difficult to go to them and complain. Therefore, it is important to have a peer group that you can rely on. When I was at eBay and running StubHub, I had peers like Jacob Aqraou, currently a successful investor, Josh Silverman, who is now running Etsy, and Andre Haddad, who is running Turo. They were running different divisions of eBay, so I could go to them and talk to them. Similarly, outside of eBay, I joined YPO, which is the Young Presidents Organization. I am no longer a young president, but I was at the time. YPO is a peer group of 20,000 people around the world. The main focus of YPO is being part of a peer group of six to twelve people that meets for four hours every month. You share your experiences and the issues that you are facing, and the group helps you think through them. They do not give you advice, but they may tell you about a similar situation that they went through and how they got through it. YPO has been very helpful to me in helping me figure things out and getting over the loneliness of being a CEO.

A fourth challenge is keeping your team motivated during the down times. When facing short-term challenges, I try to focus on the long term. People join a company because they believe in its mission or vision. When things are tough, it is important to keep focusing on that long-term vision. For example, at StubHub, the long-term vision was to be THE source that fans rely on. This was a real motivator for the team who saw our purpose as serving fans. We measured customer satisfaction with the net promoter score, and we could make our progress against that metric even when we weren’t meeting our short term financial targets .

There is always a balance between the long-term and short-term, but it is important to focus on the short-term to get to the long-term. When facing issues in the short term, it is good to go back to the long term and ask yourself what the vision is and how to achieve it.

Another way to motivate your team is to try not to lay blame. If there is a problem, such as not meeting financial targets, it is important to act as if it is a mutual problem. Seek help and ideas from others, and make it an “us” issue, not a “you versus them” issue. Sometimes, people want to hold people accountable, but the reality is that if any part of the business is not doing well, it is not just one person’s or one department’s problem. It is everyone’s problem. If you approach it as “we” have this issue, and ask what you can do to help, you can get a better result.

When managing people, it is important to remember that they are motivated or not motivated depending on what you say and how you treat them. Therefore, it is important to carefully consider your approach. If you tell someone that they are not doing their job, they will become defensive. If you threaten to fire them if they do not improve, they will become scared. Neither of these reactions will help them perform at their best. In particular, in technology businesses, it is important for people to be creative and to think critically about problems.

At StubHub, I found that there was a demand for accountability. However, it seemed that people wanted me to hold other people accountable, not themselves. If I went to someone and said that they were not meeting their numbers, they did not react well. I found that accountability is not about punishing people for not meeting their numbers. It is not about letting them fail, either. Instead, it is about helping them if they are failing or not meeting their objectives. This is a much more collaborative approach, and it worked much better. If I said to people that they were not meeting their numbers, they would react differently than if I said that we could do better together and that we should figure it out together. It is as subtle as that.

The fifth challenge takes us back to the primary role of the CEO and that’s connecting the vision to execution. A high-level vision is just the beginning. It is like setting out on a journey from the ocean to the top of a mountain. You can see the mountain in the distance, but you need to figure out how to get there. There are many ways to execute a vision, and you need to find the best way for your team.

Once you have a high-level vision, you need to break it down into smaller steps. What are the first things you need to do to get started? What are your goals for the first year? Once you have a plan, you can start executing.

It is important to break down your goals into smaller, measurable steps. This will help you track your progress and make sure you are on track to reach your goals. It is also important to assign ownership to each goal. This will help ensure that someone is responsible for making sure the goal is met.

Execution is key to achieving your vision. By breaking down your goals into smaller steps and assigning ownership, you can increase your chances of success.

Thanks.

Chris Tsakalakis