How effect of the chief executive rubs down on entire firm

A smart boss (centre) talking to his employees. The effects of the chief executive can rub down on the entire company.

Photo credit: Fotosearch

What you need to know:

  • In present times, the role of the CEO has become more important than ever before.

How important is a chief executive officer to the business? Is there a link between a CEO and business performance and survival? What percentage of business performance is attributable directly to the executive’s influence?

To what extent do they impact profitability, growth and the reputation of the companies they head? Is the CEO’s character, presence, capabilities and experience crucial to business survival? How important has the office holder been during the Covid-19 pandemic?

These questions help us understand the concept of the CEO effect. Chief officers can affect a business both positively and negatively.

The impact is simply the variance in business performance that can be explained by the role played. In present times, the role of the CEO has become more important than ever before.

It is the ultimate responsibility of the leader to drive a business forward and deal with uncertainties along the way. As such, the leadership role of the executive in business is far-reaching.

Major decisions

Often CEOs make the final call on major decisions. Through such decisions, we have witnessed businesses either take a positive tangent, stagnate or go down the wrong path.

On matters strategy, CEOs are also the chief strategist. As such, they are expected to clarify the strategic direction their businesses will take both during the good and the bad times.

They do so by helping their teams paint a picture of the desired future in a world where that future remains uncertain.

To do this, they need to have in place the right team, be ready to show the way and lead the team towards creating the desired future. This strategic role can have a significant effect either positive or negative on the business. Has your CEO been showing the way during this pandemic?

In a rapidly changing world, chief executives remain the lead change agents. In the past five months, businesses across the globe have gone through turbulence never witnessed in our lifetime.

As lead change-agents, CEOs are expected to oversee preparations and communication needed to make change happen and support their team to cope with uncertainties. Further, CEOs need to be a source of inspiration for their team during change.

Desired change

They develop other leaders, involve them and empower those below then to make decisions seem to stand out at all times. It is easier for such CEOs to hold their team accountable for the accomplishment of the desired change. Covid-19 has been a major change process that businesses have had to manage.

There are factors within the CEO’s control and others outside their rein. The pandemic and government measures have been outside bosses’ control.

However, how businesses have responded has been within their sphere. I consider CEOs who have led from the human perspective during this pandemic to have had a larger effect.

 As role models, such CEOs are likely to positively impact their teams with certain values, behaviours, and attitudes that will deeply be entrenched in their culture moving forward.

This is the best time for every smart CEO to create a community of employees dedicated to the survival of their business.

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