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The 5 Core Skills Every CEO Should Have

I’ve met with about 75 CEOs since Halloween when I left my CEO role at Hot Topic Media to pursue new ventures.

I’ve begun to notice a pattern of what makes for the best CEO. There are five general CEO skills I believe are most important to being an excellent CEO:

1) Vision…A Clear One

A good CEO must be able to provide a clear vision of what it is the organization is doing.

What makes a good vision statement? As I wrote in 3 Tips On How To Write A Good Vision Statement, it needs to be concise, specific and answer this question for the team:

“Are we working on the right thing?”

Examples of good vision statements include:

“Making the best possible ice cream, in the nicest possible way” (Ben & Jerry’s)

“To provide access to the world’s information in one click.” (Google)

“To provide freedom and independence to people with limited mobility.” (The Scooter Store)

Check out this List Of 50 Awesome Vision Statements I compiled.

2) Mastery Of The Business Model

A good CEO masters the business model of an organization.

A good CEO knows the answers to the 9 questions in the different sections of this "Canvas."

The above image is of a “Canvas” used to master a business model (in this case, Gillette’s) from the book Business Model Generation.

The Canvas pushes you to answer 9 questions that are imperative to mastering how a business should work.

The 9 questions to answer are represented above by a two letter acronym…such as KP for “Who are your Key Partnerships?”).

If found it most effective to answer the 9 questions in this order:

CS = Who are your Customer Segments?

VP = What are your Value Propositions to those Customers?

CR = What is the Customer Relationship you have with your Customers?

CH = What Channels will you use to reach your Customers?

KR = What are the Key Resources you need to deliver value to your Customers?

KA = What Key Activities do you need to perform?

KP = What Key Partnerships do you require?

C$ = What are the main costs?

R$ = Where is your revenue coming from?

Gillette’s business model (in the image above) is relatively straightforward as they have just one customer (people who shave).

Multi-sided “platform” businesses, on the other hand, have it much tougher as they have more than one Customer Segment (e.g. Google has at least three: users who search, advertisers and external Web sites (who carry their ads).

If you want to look at how multi-sided platform companies handle their different customer sets, check out my piece on how the San Francisco Chronicle, Google and Live Nation prioritize their customer segments.

3) Ability To Mobilize Resources

An important role of the CEO is to mobilize; in particular, these two things:

  • People and
  • Other Resources

A founding CEO, in the early stages of their business, must motivate other people to join them on a journey to build the business.

Such a journey may include substantial risks and so skills such as story-telling, concise communication, strong energy and even drawing are key to mobilizing resources.

Those people that need to be mobilized may include the founding team, customers, partners, investors, bankers, lawyers or accountants…all of whom the founding CEO typically has to persuade at some level.

Other resources the CEO must mobilize include actual assets such as cash, acquisitions, intellectual property, real estate, etc. Mobilizing those resources typically requires signficant organizational skills.

4) Strong Execution (a.k.a. Prioritization & Accountability)

Another key CEO responsibility is execution.

As Notre Dame football coach once said:

“When it’s all said and done, more is said than done.”

Two key aspects of execution are:

  • Prioritization — What are the top priorities of the business at any given time.
  • Accountability — Who’s accountable for what and how is performance measured?

A CEO could have the other four skills on this list, but if they were missing Execution, they would likely fail.

5) Consistent Values

Finally, a CEO must help define and implement a set of values.

As I wrote about in How To Determine Your Business Values: Exercises, Examples and Top Lists, values act as the compass for the team to use to figure out “the right way of doing things.”

Founders of companies such as Hewlett-Packard, 3M and Johnson & Johnson famously began their businesses with a strong set of personal core values (often before they had a Vision). Some of those companies, including H-P, have badly stumbled on their values in recent years (and their enterprise value has plummeted as a result).

Here’s an example of values from a new business I’m working closely with:

“Built To Last” — We take the long-term perspective about our business decisions. For example, we’re not building a “startup” — we’re trying to build a business that is still around when its founders have “moved on.”

“Coachability” — We believe that everyone can develop themselves further to help meet our respective goals.

“Data-Based Decision Making” — Wherever possible, we have a “calculator in one hand” when making decisions. We leverage existing data and logic!

“Family First” — Business is a means to an end — its purpose is to provide more fulfilling lives for the families of our customers, employees and shareholders. If something important comes up with family, business needs to take a back seat.

“Health” — We aim to support a healthy lifestyle — regular exercise, healthy eating and proper sleep — for our team.

“Honesty (aka Transparency): The Truth Will Set You Free” — When communicating, we always want to begin with the truth. If the recipient can’t handle the truth, we will work hard to “reframe” the truth but in the end it is the truth that we ultimately deliver.

“Organize What People Already Do” — Our product focus must be on helping our customers to better organize the activities that they are already doing — We do not waste time trying to get customers to practice new behaviors.

“Trust & Verify” — We believe people are inherently good. We begin relationships with trust, but we quickly verify that trustworthiness.

“Uniqueness” (& Copy-Catting) — As individuals, we all have our unique abilities. Collectively, our business has its own uniqueness too. We value unlocking the unique abilities of our team and business!(Note: It’s ok to be a copy-cat but only if we’re “copying” something that is consistent with our other values and objectives.)

Importantly, we didn’t write these values down as ones we hoped to aspire to.

Instead, we began building our business, started to notice the key values that the founders exhibited, and then wrote them down.

Values are about action…not just words!

For a more exhaustive list of CEO skills, check out this simple post from successful software entrepreneur Fred Gibbons: CEO Skills Inventory.