The 5 Responsibilities Of A CEO | Ep 247
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- What's up guys and welcome back to Build. And today I want to go into deep, the five key responsibilities of a CEO. I wanna cut through the noise and I wanna cut through the BS of what people think

it takes to run a company and what you're supposed to do. And I really wanted to distill it down into the five things that I actually consider my responsibilities. And, you know, the way that I've come to those responsibilities has been through a decade of researching some of the top performing CEOs and how they act and what they focus on with most of their time. And so I want to break that down for you because here's the thing. Most founders don't fail because they have a bad idea. They fail because they don't actually understand what their job is.

And so it's like they get caught in the weeds. They're answering emails. They're sitting on these endless, ridiculous, pointless meetings. They're reacting to fires. Meanwhile, your business is not growing, right? And so instead of driving the company forward, they let other people's problems, other people's opinions, and other people's thoughts dictate where their time goes. And here's the truth. If you don't own the five responsibilities that I'm about to talk about, nobody else will.

Nobody, okay? And if you don't set the vision, your team is gonna guess what it is. If you don't build leaders, you're stuck making every decision. If you don't control where the capital goes, it's gonna disappear. If you don't drive culture, mediocrity creeps in. And if you don't remove the bottlenecks, the business is gonna slow down.

And so as a CEO, your job is not to do more. It's to focus on the things that actually drive the business forward. You don't get paid to be busy, okay? You get paid to create clarity, to drive execution, and to make sure the right things happen at the right time. And so, you know, this was top of mind for me because I had two of my CEOs reach out to me

in the last week asking about their responsibilities and where their time's going. And when I audited it, I was like, gosh, you're doing the job of a head of HR, of a head of sales, of a head of marketing. You're not doing the CEO's job.

And it's funny because people who have not run a business before and maybe not held the title of CEO before or studied it, they don't understand that it is a job on its own. And that if you're doing that job to the best of your ability, you don't actually have time to do the other things as well. And so it's something that I have to constantly check myself on because one of the points I'm going to go over here is that you are the top problem solver in the company. However,

the way in which you go about these things and how you balance them, I think is kind of key to being successful. And so this is a really tactical episode that I wanted to make for you guys.

Not broad, so if you don't run a company, I don't think this is gonna apply, but I do think this applies to more than just CEOs. Like I do think this applies to leaders in companies because eventually if you run a big enough department, you actually become like a mini CEO of your department. I also think that a lot of CEOs, these five responsibilities I'm gonna go through, eventually they might pass off one or two, or they look to a COO or a president to help them execute on these responsibilities.

Like I know for myself, what I've noticed is that in the world of business, some of these terms get conflated. Like people don't really understand the difference between a CEO and a COO. And here's the reality of that. It's whatever the fuck you want it to be. But there are traditional, more traditional roles and responsibilities for a CEO versus a COO. Like I would say for sure, setting and communicating the vision, that comes from the CEO. Picking the executives, CEO.

Allocating capital, CEO. Driving execution, that can be shared. Solving the biggest bottlenecks, that can be shared. And so that being said, like I'm not saying that this is written in stone, but I am saying that these guide me to figure out how I as CEO of acquisition.com can run my company the best way. And, um,

You know, it's also extra top of mind for me because as I look and I'm bringing in more people to my C-suite right now and I'm looking forward at these key roles that I need to hire to expand my C-suite so I can do my best job as CEO. These are the things that I am trying to do more of so that it essentially like starves out some of the things that have been distracting me.

So I wanna break down the five responsibilities and explain how each one looks and how it might look whether you're a tiny company or whether you're a very big company or somewhere in the middle. So the first one is setting and communicating the vision, okay? What this means is that if people don't know where they're going,

They're not going to get there. Like, it's so simple, but like, that's what it is, right? The CEO's job is to make sure the whole company knows what's the mission and how are we going to contribute to it? Where the fuck are we going? Why are we doing all of this, right? And it's actually crazy. 70% of employees don't even understand their company's strategy. That means most businesses are running blind. And it's funny because people ask me all the time, like, wow, you must see so many great businesses when you're

you know, looking for deals. And I'm like, actually quite the opposite. What I realized in looking for deals and doing diligence on so many companies is that most companies suck. Most companies don't have somebody acting as a great CEO. Most companies don't do the basic stuff that's good. And if they do that stuff, then they have a terrible market opportunity. So it's like, it's really hard to get all of it right. You'd be surprised at how few companies are actually like really fantastic behind the scenes.

And not to say there's not a lot that are, there obviously are, but I'm just saying, like, I think a lot of people don't understand, like, if you do these things that I'm talking about, like, you are an anomaly in its own. But here's the thing. If you don't communicate the vision, that's where your team's going to get confused.

And your job is really to make the vision so clear that nobody has to guess. Because here's the thing, when people know where they're going, execution becomes much easier. And the thing is, is that confused teams don't execute. They just wander. They just like wander around, walk in circles, aimlessly take...

action, and that's not what creates a winning team. A winning team is created through alignment. It's kind of like, you know, if you look at sports, sports, it's such an easy analogy because everyone knows what the goal is. Everyone's like, well, we got to win the game. And then why do you want to win the game? You want to go to the championships. Do you want to get in the hall of fame? You want, like, it's so clear how to win.

I actually think that they're set up fantastically well for understanding the vision and everyone knows what they need to do to get there. Everyone knows we got to get the ball down the court and we got to score the goal, right? But what is scoring the goal for you?

It's different in every company. And really think about this. This is the one thing that nobody else in your company can do this for you. You can't rely on people. Sometimes people bring in outside talent and executives and they're like, oh, they're going to help me figure out what the vision... They can help contribute. But at the end of the day, you need to have some...

I know, like, seven years ago when I brought in the, like, higher level talent, I was like, what do you think the vision should look like? Like, what? I can't even believe I asked that question. Like, yes, of course I want them to contribute, but, like, I have to decide at the end of the day and I have to be okay with the fact that, like, not everybody's going to love my vision. But guess what? It's my fucking company, so I should do as I please, right?

Now, let's look at what this actually looks like because I get it. It's like I used to read these books and be like, set the vision. I'm like, what the fuck does that mean? Like, can you actually tell me tactically what that looks like? Okay, so say you're a small business. Let's say you've got five people and you meet every Monday to set priorities and you get on there and your job would be to remind everyone. Hey guys, I just want to start off by reminding everybody we help small businesses get more leads through better marketing.

And then every person knows what's our goal. In two years, we want to hit a million in ARR. That's it. It's that simple, guys. And then it's just every Monday, you're just saying it. Hey, guys, what's our goal? We help small businesses get more leads through better marketing. Two years from now, we want to be at one million ARR.

And like, you really want to think about it like this. When you talk about the vision, you talk about setting it, you're really like chief reminder officer. Like you're constantly reminding people of the vision because people tend to forget it easily. In fact, I noticed that when I go too long through a quarter without talking about the vision, people on the team are like, yo, what's the vision? Where's this all going? I'm like, wait, what the fuck? Like it hasn't changed. I would obviously say something if it changed, but it's just for the fact that I haven't reminded them that they ask.

Now, if we look at a big, big business example, okay, say you're the CEO of a thousand person SaaS company, and you're going to hold quarterly town halls to drive home the vision. And maybe that's, you know, we're building the fastest, most user-friendly CRM for enterprise sales teams. Then you roll out, okay, we're going to have every department have a KPI or a metric that drives towards that vision, right? And then you explain the impact they have.

Like marketing, you're not just making content, you're driving qualified leads. Engineering, you're not just coding, you're building a product that makes retention easy. All of these things align towards building the fastest, most user-friendly CRM for enterprise sales teams. And so at the big business level, what's one step further that you have to do is you have to take that vision

And you have to explain how each department contributes to it. And then you measure that by creating KPIs that tie to that. So for example, you know, with acquisition.com, it's like we've got our big mission. And then I have, what's that look like in three years? And then I have, okay, what's my plan for the next 12 months? And then I take that 12 months and I distill it down into the next quarter. And it's like, okay, this is what the company is focused on for the next quarter. Typically, I drive most of those initiatives. Like I'm responsible for the big, chunky projects

terrible shit, right? Like the stuff that's hardest. However, then I say, okay, now let me show you how every department's tied to this. And every department also has their objectives for the quarter that tie to the quarterly company objectives that tie to the yearly company objectives that tie to the three-year company objectives that tie to the company mission.

And that in itself is what takes so fucking long every quarter to do. And so like as a CEO, like who the fuck else is gonna do this? Like you, it's you. And here's the thing, like the vision, the job of having a vision isn't just like to have some fancy mission statement that sits on the wall. It's a filter for every decision. And that's why it's your job to take that and to help every leader in your company distill it down so they understand how it applies to their department specifically.

And a lot of people just like to skip that work. They like to think, oh, my team's gonna take care of it. They don't fucking know. I'm so sorry, but like, good Lord, like even my highest level performers on my teams still need help taking the vision and distilling it into their departments. You know, something that one of my mentors told me recently is I said something to him and about the fact that,

I realized I was kind of skimping out on training one of my teams. And I said, you know, honestly, it's just because like, I'm not a marketer. And he said, shut the fuck up. I was like, what?

He was like, shut the fuck up, Laila. Yes, you're a marketer. Like, what are you talking about? He was like, you're better than everybody on the team. And I was like, oh, you know, the thing is, is that sometimes we like to be like, oh, my team might know better. Oh, my team. It's your company. You know how to do everything better than everybody. Maybe not at a technical level. Maybe you can't code, but you know what the coding needs to look like. But you know if it's better to do it in this one or this one. But you know what the product needs to look like.

And so it's just like, it's contextual knowledge that nobody else has. So that's the first thing. Now, what's the second thing? The second thing that a CEO does is build and develop leadership, right?

Okay, the reality is, is that the reason this is so important is because you can't scale if you're the only decision maker. Like a CEO builds leaders who can run a business without them. That's the goal. You need to have leaders who can do things without needing to constantly talk to you, constantly check in with you. And it's funny because you can see the difference in a leader by how much they reach out to their boss. I know it's really interesting, but

And it might sound paradoxical, but the people in my company who are the best leaders need to talk to me the least frequently. Now, that's not like a slight to say, oh my gosh, I shouldn't be talking to the other leaders. I have them in leadership positions for a reason. And so the fact that they talk to me more frequently, I assume in the future they won't need to. And so I understand there's an investment now. However,

You can't scale if you're the only decision maker. And so you need to have, especially an executive leadership team that can do things without you, that doesn't need your input at every step of the way. And it's really interesting. Companies that invest in leadership are 2.4 times more likely to hit their performance goals. What does that mean? That means that weak leadership is what kills companies.

And if there's one thing that I have learned in doing this, if you are the smartest person in every room, you have built the wrong team. Your job is not to do everything. It's to build people and hire people who can. And again, it's like, well, why? If I bring these people in, then what am I going to do? Then what you're going to do is the five things I'm listing in this fucking podcast, because maybe you're not doing any of them right now. And that's probably not great for your team. So let me give a small business example, okay? If you're a small business,

Say you only have a few employees. You might promote your best performers into leadership roles, even though they haven't managed before, because you can't get talent from the outside and you have the ability and the time to train people from the inside. And so what you do is you invest in coaching, you invest in courses, you invest in paying mentors to develop them into a strong leader, as well as you learn along the way as well. That's a great solution for people who have a smaller business.

However, if you have a big business, right, say you've got, you know, 150 employees, you're going to be obsessed with succession planning. You're going to run executive training programs to ensure that the next wave of leaders is always ready because you don't want to have key person risk. And you're not just going to hire leaders, you're going to be constantly building them. So it's like you're constantly looking for leaders, you're constantly building your bench of leaders, you're constantly developing leaders, right?

is a major focus of people with bigger companies. And I will tell you, this is where a lot of my focus goes is like, how do I develop the leaders in my company? I will tell you this, one of the best ways to mentor or develop people is to let them shadow you. And that's something that I'm moving into a season right now where I'm like, okay, I need to figure out how I can get my team to shadow me more so they can learn more of how I do things. Because how you do things, you might think it's trivial and like it's

not that important and stuff. But like, I mean, it is. And you'd be surprised how much you know that other people don't know. Now, the issue with the building and developing leaders piece is a lot of CEOs are

The reason they're not able to do this is they either suck to work for and so you can't get good leaders. That's not uncommon at all. Like I just had a couple of people this last week. They're like, why can't I find anyone? I'm like, I don't know. You seem horrible to work for. I mean, if you're horrible to work for, it's going to be a little tough. You're going to have to pay them a lot more money. You're going to have to have a lot more benefits. And you're probably going to have to leave them the fuck alone because if you talk to them too much, they might quit. All jokes aside, that is one big reason why people have a hard time finding great leaders. I would say the other reason is because they're not...

speaking to the best leaders. Like if you want great leaders,

that are great for your company, it's going to be more than just compensation that they're interested in. They're going to be interested in growth. They're going to be interested in autonomy. They're going to be interested in being able to make decisions, not having to worry about red tape. Like there's a lot more that goes into what great leaders want than just, you know, the title and the job and, you know, some autonomy. So that's another thing to consider is just like, what's your full package that you're offering for people, especially smaller businesses. They tend to

to not get the leaders they need because they package the jobs as a small company, not a big company. And if you want big company leaders, you have to look at what are they offering. And now you don't have to offer the red tape and the corporate BS, but you can offer some good shit. Now, the third responsibility for a CEO is allocating capital and resources.

Okay, so what does that mean? That means that you decide where the company spends its time, its money, its energy. And if you allocate poorly, that is your fault if the business doesn't grow. In fact, really interesting, 90% of startups fail because of bad cash flow management. Not bad ideas, not a bad hire, not, no, bad cash flow management, right? And cash is one of your resources that you have as a company.

And the reality is this, every dollar, every hour, every hire all needs to drive growth. If you're spending time reactively instead of strategically, then you're gambling with your resources. You're not leading. You're not strategic with them, right? I heard this quote somewhere and it really stuck with me. It was a few years ago, but it was something to the degree of like every dollar needs a job. And if it's not making money, cut it.

And here's what this means. Like when you allocate resources and capital, I believe there was a study done by McKinsey, which it talked about the best CEOs prune three times more than they add.

Okay, what does that mean? They get rid of things more than they add things. Deciding what you're going to get rid of is incredibly important for your business because a business that carries dead weight is a terrible business. You don't want bloat. Bloat will kill your business more than starvation will. Less is always better than more. And this is something that took me having a bloated company, you know, seven and a half years ago, a year of just absolute misery to undo a

A lot, it just, it fucking sucked. It sucked. There was too many people. There was too many software applications. There was too many processes. There was too many, too much fucking everything was awful. You do not want that. You need to constantly be looking at where are we putting our time? Where are we putting our money? When are we putting our energy? And make sure it's only on the most important things. Saying yes is not a strategy. Saying no is a strategy. And that is for every department. It's not just you. It's not just the company. It's every department. They need to know how to say no.

They need to say no to initiatives because they have other more important ones right now. Again, this does tie to strategy, but the reason why it's so important for a CEO is what you will see is this. A lot of people in the company do not know what ideas to kill. They do not know what activities to kill, and they don't know what products, what positions, what processes to kill. Everyone's afraid of speaking up about killing something, and so they want to keep it. And so you're the one who has to decide, what are we cutting?

Because you can be more ruthless because you understand everything that makes the business work and everything that doesn't make the business work. You have the most holistic picture of everything, so you should know better than anybody, right? At least I know that's the case for myself. Now, let me give you an example of a small business and a big business. So,

If you're small and you're a bootstrapped founder, instead of hiring for a full-time marketing team, you know, day one, instead, spend your money on high, you know, ROI contractors to get ads and content. You know, don't waste money on fancy software, on a fancy website, on a fancy office. Every dollar should go towards revenue-producing activities.

Especially in the beginning, this is so important to do because everyone wants to be fancy. They want to look like the company that they are not yet. But it's like simple scales, fancy fails. And especially if you do things fancy in the beginning, you're going to find yourself paying for them later. Now, when it comes to a big business example, let's look at like a $100 million company. And say you're deciding between doing more research and development or acquiring a competitor.

You are going to run the numbers and you're going to choose the move that's going to drive the fastest return on effort. Okay, so what move, whether doing it yourself or acquiring, so it's basically build or buy. Are you going to build this within your company or are you going to buy it? Which one is going to have the lowest risk, the fastest return on effort, and the highest ROI?

All right, that's an example of a bigger company. And I would say any company at all should constantly be looking at what products do you have are super low margin, really high effort, get rid of those products, double down on what's actually profitable. There's so many companies that, you know, they have these sacred, what is it called? Like a sacred cow. Like they have these products, they have these product lines. They have all sorts of things that take a ton of work and barely make any profit. But for some reason, they just feel like they've got to keep them. It's like, cut that shit.

You know, when I was running Prestige Labs, my supplement company, we started a meal line. God, never want to do that again. But we got into shipping meals. And, you know, it was this huge thing. It took like a year to plan. We didn't test it.

well. And we rolled it out. And it was a giant pain in the ass. And after about six months, when I looked at how much actual gross profit it made the company, it was essentially abysmal. Like it was like, it was like not even lunch money type of deal. And it was causing the most amount of customer service tickets of any other product that we sold in our entire company, all of which those products actually drove revenue growth in the business.

And so what did we do? We said, you know what? Fuck it. We're killing it. It was this idea we were romantic about. Yes. But like, we're not going to be romantic about keeping something that doesn't work. So we got rid of it. That's that. We have to spend our time, our money or resources where something is that moves the needle, not where things are that don't move anything forward. Now, the fourth piece to this and the fourth thing that a CEO needs to focus on is driving culture and execution.

Okay, now culture is not having a ping pong table. Culture is how your team operates when you are there and when you are not there. And execution is what they get done. Because here's the thing, the reason why this is so important is that people don't leave companies. They leave bad work environments, right? And your team doesn't do what you say, they do what you do. So you set the culture by being the example.

Weak culture means weak leader. Weak leader means weak execution, right? The reason why it's so important that you own the culture is because you are the culture, whether you want to be or not. The person who founds the company, the person who leads the company, you know, maybe you're both like me or maybe you're one or the other.

You are the culture and you set it by your example. This cannot be outsourced because here's the thing. It's the heart of the company. And so who you are is your culture. This took me a long time to understand. If I wanted to change my culture, I needed to change myself. I hope that hits for somebody. So let's think about a small business example and a big business example, okay? Say you have a small agency. You notice deadlines are slipping. Instead of yelling, what are you going to do?

You are going to show up early. You are going to hit every deadline. You are going to set high execution standards, right? And then what you're going to do is you're going to teach. You're going to teach everybody by a weekly accountability check-in to make sure that other people know how to hit their deadlines as well. You're not going to blame people. You are going to take the blame and you are going to give credit to them when they do a good job because that's what the best leaders do. The best leaders set the culture by taking the blame and giving the credit.

That was one of the first lessons I learned over a decade ago, and it was one of the best things I could have ever done for my business. Now, the last piece, the fifth responsibility of a CEO is solving the hardest problems. Okay, your job is not to do more stuff. Your job is to remove what slows the company down. Your job is to resolve the problems that could kill the company. Your job is not just to make sure the company grows, but to make sure it doesn't fucking die.

Now, here's the thing. 80% of your impact as a CEO is going to come from solving just 20% of the company's problems. So if you're spending your day putting out small fires, you're missing the real, like life-threatening, burn your business down fires.

And so your job, and this is one that has to be done on a repeated basis, is to constantly find the biggest, hardest problems, solve them, and move on to the next one. I don't know how to explain this more, but it took me longer than I wish to admit to understand this. Nobody will solve them faster or better than you, and your company's speed of execution, the speed of how fast your company goes, and its ability to survive in the early years relies on this.

And you cannot be apologetic about the fact that you need to get in there and get in the details to solve these problems. Now, this can apply to also a departmental leader as much as it would a CEO, because if you're not getting in the weeds of your department when there's a big fucking problem, then you're the problem.

Same like for a CEO. Like if you're not getting in the weeds of a problem when there's a problem, it's your problem because this is your job and you can't apologize for doing your job to protect the business that feeds everybody there. Let's look at some examples. So say you're a small business, maybe like a coaching business, and you're struggling with churn, right? Instead of adding new features, because that's probably what your team is saying. They're like, oh my God, we're struggling with churn. Let's add these new features. Maybe people say,

You dig in and you realize that the real issue is that you don't have any client onboarding. People are churning because they're not onboarded properly after the sales process. So what do you do? You build out the onboarding. You do the first round of onboarding and then you wait to see if churn drops and then you hand it off to somebody. But you get in there, you put your CS hat on, you learn what needs to be done, you get your hands dirty.

Guys, every time that there is like a problem in my business like this, like unless there's a very competent leader in that position, I will get in there and I will get my hands dirty to figure out that problem. Now I will take them and put them along with me and have them help watch how I solve the problem. But I need to get in there and solve it if it's something that's keeping my business from growing or possibly going to be something that's going to kill my business. Let's say you're a big business, right? And let's say you're a hundred million dollar logistics company and you realize that you're having your delivery times have slowed down.

And your team's like, oh gosh, we've got to hire more drivers. We've got to get more trucks. Instead, you're like, okay, one of the hardest problems, how do we solve this? And you're like, you know what? Actually, let's invest in some AI route optimization software. Let's find a smarter way to solve this problem.

And then you find the software, you roll it out with the team, you see if delivery times drop and if the root problem has solved. So you see what I'm explaining here is that like your job essentially is on a continuous basis to figure out what is the biggest, hardest problems that your company faces at the moment and then how do you solve them?

And I suggest solving these problems in sprints. I suggest not trying to solve them all at once because what I have seen and I've experienced myself is that it just becomes, it's very difficult to solve like multiple very big problems at once because it's like it, it's the shower time. It's the time, it's the discretionary effort. It's like, it's really hard to wrap your head around like three big meaty problems. You need like the ability to go into a fucking hole and just figure out one at a time.

With that, those are the five responsibilities of a CEO. We've got set and communicate the vision because confused teams don't execute. We've got build and develop leadership because if you don't have leaders, you don't have leverage. We've got allocate capital resources because every dollar needs a job. Drive and culture and execution because culture is what you do. And then solve the biggest bottlenecks because speed is what wins.

So I hope this was useful for you. And even if you're not the CEO of a company and you're just a leader of a company, I do think a lot of these things can be applied to a department in general. And if you are not the CEO, but you work for a CEO, I think it's good to know where they should be spending their time because the great thing is that if you know where they should spend their time, you can try and take things off their plate that aren't those things. So with that, I hope this was helpful. If you have a friend who's a CEO and maybe they're struggling with clarity and what they need to be working on, go ahead, send this to them.

I wish I had known earlier in my career what five things I should be focused on, and I hope this helps.