Like with any long road trip - you may have many drivers. Some get tired and fall asleep at the wheel, some simply don't know where they are going, and others drive too slow or too fast. Choosing the right driver at the right time is a key part of a successful trip. In the beginning of any venture it is less important to designate one person as the CEO, since you are focused on building a product and and everyone is working day and night and too busy to argue about roles and responsibilities. However, at some point a critical decision needs to be made on who is at the wheel.
Sometimes it is a difficult decision to make because everyone feels the title of CEO means "his way or the highway". But this is not the case. The role of CEO is to focus on execution and maximizing everyone's talent and capabilities. Sometimes a key decision needs to be made, and (yes) the CEO may need to make a tough call - but if the executive team is able to agree on a business plan - these decisions are far and few between. Much like a road trip - if everyone agrees on the destination - the driver has map to follow.
How do you know if you have the right CEO?
This is a tough question. If the company is a startup - the CEO needs to be a good communicator and evangelize the vision of the company. He doesn't have to be the visionary or the "idea" man - but he absolutely must be able to convince someone in 5 minutes or less that your company is the next big thing. Whether you are motivating partners to work late nights, or convincing a potential investor to write a check - the CEO needs to be a great sales person.
If the company is beyond the early years, driving revenue and in operational mode - then the CEO role expands. Some CEO's (rare) have the capability to sell the vision and execute the operational plan. Although "selling the vision" never loses importance, the ability to execute a plan and manage all aspects of a growing and dynamic organization is extremely challenging. Sometimes, a CEO balances their capabilities by hiring a good COO or CFO to help manage operations - but this only delays the inevitable - of having a CEO who can execute.
Here is a simple way to determine if you have the right CEO to help build a new company:
1. Has he been a CEO of a startup before?
2. Has he successfully raised capital in a startup before?
3. Does he speak with conviction and passion?
4. Does he solicit feedback and opinion before making important decisions?
5. Does he roll up his sleeves and work with the team to execute?
When choosing a CEO, set your expectations high, and make sure he is someone you would want to grab a beer with after work, because no matter how inspirational or experienced a CEO is - he needs to be able to bring the team together. Otherwise, he will be driving alone - and at that point - the destination doesn't matter much anymore.