I’ve written a lot about the characteristics of a bad CEO, but I’ve not said much about what makes a great CEO. I’m sure other outstanding CEOs will have a different idea, but I thought I’d share my thoughts on the subject. Great CEOs are not all alike as much as TV shows try to paint the stereotype.

I recently had a conference call with an outstanding CEO who walked me through his growth plan for his midsize company. The first thing I noticed was how he captured trends to better identify where his business needed to intersect in the next few years. He saw product opportunities and new markets while continuing to test fresh ideas. He was someone looking far ahead and working back to where he is today. It was refreshing. He had a plan!

Great CEOs start with an operational foundation. It’s usually a vision based on a series of data points from a range of both internal and external sources to come up with a plan for the company’s future. Once goals are set, they work backwards to present to make sure everything will be in place at the right time. It’s like planning to bake a cake, and then assessing the necessary recipe and ingredient inventory to get the job done. Great CEOs know that without a plan, you can’t grow your business and you have to constantly compare plan-to-actual to make sure you’re on track, and if not, why not?  They are strategic rather than purely tactical.

Great CEOs are extremely dedicated to this plan and work very long hours to make sure they get their own job done. They have no problem making adjustments along the way to meet the objectives. The take full responsibility for the plan and work systematically, just like baking a cake to make sure everything comes together at the right time.

The outstanding CEO makes sure they have the resources to achieve their goals and possibly exceed their expectations. This means making sure the capital reserves exist, the team is in place, and that all elements that are necessary to meet the goals are at optimum. It’s not merely a point of declaring a goal, but knowing how to carry out the mission.  They understand the importance of not just profits but adequate reinvestment in the tools necessary to grow the company.

There are a lot of great CEOs with a wide variety of management styles and I don’t think any two are completely alike, but outstanding CEOs have this tendency to surround themselves with great people, and those people all do the same thing with their own teams. It’s well described in the outstanding book, The Power of Pull[1] which opens with a story about a group of surfers all helping each other to become champions.

Outstanding CEOs do the same thing within their organization- they strive to lift everyone in the organization to become something better than they ever thought they would become on their own. Great CEOs never surround themselves with sycophants and instead surround themselves with actual accountable talent. They also know the difference between loyalty and performance and are usually outstanding cheerleaders within their organization. They place people on their team in these strategic roles because of their talents and not because of any other factors, such as cronyism, nepotism, or any other political or social factor other than the talent to get the job done.

The challenge for the outstanding CEO is making sure that talent is consistently high throughout the organization. For CEOs, this is often easier to assess in a small organization than it is a large company because in a smaller organization the CEO can learn something directly about each and every employee and get a better read of the organization itself. It’s much harder when the company has offices scattered around the world with dozens of layers to access.

What I’ve noticed most about great CEOs is that they are typically very good at reading people and understanding their individual contribution to the company’s overall success. Great leaders seem to be finely tuned to the individual needs of their employees and have huge influence over the company culture. They see their employees’ contribution to the success of the company as something important, and above all, not treat employees as disposable objects. Great CEOs listen to their employees!!!

A great CEO also knows how to hire and retain top talent. Retention of top talent is critical. What’s common about the very best employees is that they are easily employable elsewhere and thus have options to do other things. Retention demands that they be treated well. Treated well includes the challenge to become something even better. A successful CEO knows how to retain the very best and often keeps that team together from company to company.

If a CEO treats their employees badly, it’s guaranteed that the company does not have the ability to run at optimum. I think some forget that the reputation of that CEO does circulate within professions. Any great CEO understands this implicitly and strives to work well with top talent and that talent exercises the same values throughout the organization.

A great CEO cares about quality of life for their employees and their overall job satisfaction. This is why employee satisfaction scores matter and why websites such as Glassdoor have become so important to companies who otherwise may not know what employees really think of the company. Internal surveys are not enough and HR departments are often reluctant to share negative trends within their organizations because of fears about how these negative trends reflect on them. A high Glassdoor score matters.

Great CEOs have a keen understanding of their customer and know how to deliver a product that exceeds those customer expectations. This is such a critical point and it’s so frequently missed. This what made Steve Jobs so successful. He clearly knew his customer. Great CEOs are in close touch with their industry, understand its trends and are years ahead of where their market is today. They also know when it’s time to pivot and don’t wait until it’s too late.

Great CEOs tend to be outstanding communicators and share valuable information with their employees.  Fairmont Hotels as an example, shares important information such as occupancy rates and average revenue per room with the front desk employees to get everyone thinking about solving the same problems.  While employees may think in the back of their mind that profits matter, they get their employees to live it.

On a more personal side, when it comes to character, it’s not just how they conduct themselves at work but how they live their private lives. Great CEOs understand the importance of their role and never ever do anything even in their private lives to risk the reputation of their company. This side of great CEOs is often overlooked. They know that they always represent the company, no matter where they are or what they are doing. They have a very strong moral compass and never ever compromise character issues. You will never ever find them risking the image of their company or doing anything to tarnish the company’s reputation. They hold a deep respect for the title of CEO.