What does it mean to be a CEO? When you think of the acronym itself, you know that CEO means Chief Executive Officer. But what does that truly mean? What does a CEO actually do?
This is an intriguing question, and there are many schools of thought. Back in the day, many were satisfied with the understanding and belief that the CEO at their place of work was holed up in the back office, working on strategies to drive the company forward. Many employees, especially in larger companies, never saw their leader.
But today, expectations have changed for CEOs—a company’s front-and-center leader—in both what they do and the presence that they make. For this reason, we want to share our perspective on what makes a great CEO, especially for small businesses looking to make a name for themselves and the products and services they sell.
Is a CEO a Leader, and is a Small Business Leader a CEO?
It’s important to distinguish between the two concepts before we get into how to be the best leader and CEO for your small business. Titles like CEO, President, and Vice President are often used interchangeably with the term “leader,” but they aren’t the same. A CEO can run a company without being a true leader, just as someone can lead without a CEO title.
A CEO is typically accountable to shareholders or stakeholders and sets the company’s vision and strategy. They also manage operations, make major decisions, and act as the primary link between the board—when a board of directors is in place to guide the business—and the company itself. In a small business, the CEO often juggles multiple roles, from strategic planning to hands-on tasks like sales or marketing.
However, the title of CEO alone doesn’t make someone a leader. Leadership is about influence, inspiration, and guiding others toward shared goals. A CEO who isn’t a leader may manage operations well but struggle to inspire and drive the team forward.
Leadership comes in all forms and isn’t confined to a title. In small businesses, leaders can emerge from any level, whether managers, department heads, or team members who step up to guide and motivate their peers.
While not all leaders are CEOs, and not all CEOs are natural leaders, it’s important for a CEO in a small business to embody authentic leadership. A leader-CEO can create a vision, inspire their team, and drive the business toward success.
And without further ado, let’s jump into how you can develop these leadership qualities to become the best possible CEO for your small business.
Lead by Example
You’ve probably heard this term before about leading by example. And it’s true. In fact, we would argue that this is where it all starts. An excellent leader knows how to walk the walk and talk the talk, but they exhibit behaviors that they want their employees to follow. This sets the tone for the organization as a whole and the expectations of each and every one on the team.
For example, if you, as the CEO, prioritize punctuality and always meet deadlines, your team is more likely to do the same. If you value transparency and open communication, your employees will feel encouraged to share their thoughts and ideas. By modeling the behaviors and work ethic you want to see, you create a culture of accountability and integrity that resonates throughout the entire company.
In a small business, you can demonstrate that you know how to do much (though not all) of what your employees are paid to do. Showing you understand or even interest in what everyone on the team does can go a long way in building respect and unity within your organization.
Know Your Industry Inside and Out
If you are the CEO of a small business and you founded the company, think back to what got you started in the first place. You likely discovered a problem you could solve for others through a valuable product or service. So, you did research. You learned about the market. You studied the competition. You did all the homework necessary to understand the ins and outs of the business you were getting into.
And so, as time goes on, you need to continue to know what’s going on in the industry around you. The best CEOs pay attention to changing consumer demands, too. After all, what business leader wants to lead the company that will become the next Blockbuster, Blackberry, or Kodak?
Be Adaptable: The Key to Surviving and Thriving
If those examples we shared above that businesses that failed because they didn’t innovate don’t set the stage for this next strategy to becoming a great CEO, we don’t know what will.
Being adaptable means staying open to change and new ideas, especially in a constantly evolving marketplace. For a CEO, this might involve pivoting strategies, embracing new technologies, or adjusting business models to meet shifting customer demands. Adaptability is about being proactive rather than reactive, identifying trends, and being willing to evolve your approach to keep your business thriving in the face of challenges.
Build a Positive Company Culture
We hear a lot about company culture today. There’s an adage out there that says, “People don’t leave bad jobs; they leave bad bosses.” Think about that for a moment. It makes you think, doesn’t it?
If that got your mind spinning a bit, consider that a recent study suggests that 41% of participants shared they had left a job in the first 90 days because the culture was not what they expected. Yikes! That’s a pretty startling statistic, especially when you consider the cost of attrition to your business.
Creating and maintaining a positive company culture is not just about keeping employees happy—it’s about building a team that feels valued, motivated, and aligned with your company’s goals. As a CEO, building this culture can lead to higher employee retention, increased productivity, and a stronger, more cohesive organization.
Prioritize Communication: Transparency is Key
Do you like being excluded from conversations? Probably not. So, think about things from the perspective of your employees in your small business. They don’t like being left in the dark, either. In fact, a recent study by Deloitte shares that 65% of the leaders included in their 2024 Global Human Capital Trends research shared that transparency builds workforce trust.
Of course, this isn’t to say that to be a great CEO, you need to share everything and anything. That isn’t realistic and can backfire. Rather, focus on being open and honest about the decisions that affect your team and the company’s direction. Sharing relevant information and being approachable helps build trust and keeps everyone aligned with the company’s goals.
Empower Your Team with Trust and Delegation
Let’s talk for a moment about micro-management. Remember how we shared earlier that in a small business, the CEO likely knows how to do or has an interest in, the things that employees are working on? Well, while that is true, let’s be sure to delineate the differences between being in the know and trying to control every employee’s goings-on.
True leadership means trusting your team to handle their responsibilities without constant oversight. Effectively delegating tasks allows you to focus on the bigger picture while empowering your employees to take ownership of their roles. By giving your team the autonomy to make decisions and solve problems, you build confidence and a sense of accountability. And this is a win-win for everyone on the team.
Stay Focused on the Customer: Know Your Audience
Consumer demands change constantly. Their needs and preferences change, and so does how they want you to communicate with them. As a CEO, staying connected to your customer base is essential for keeping your business relevant and competitive. Understanding your customers’ needs allows you to adapt your offerings and communication strategies to meet their expectations.
Tips for maintaining a customer-first approach:
- Regularly gather feedback: Use surveys, reviews, and direct conversations to understand customer needs and pain points.
- Monitor trends: Stay informed about industry trends and shifts in consumer behavior.
- Engage on social media: The average social media user spends 143 minutes daily on social platforms. So, be sure to actively participate in social media channels where your customers are most active.
- Personalize interactions: Tailor your marketing and customer service to address individual customer preferences and concerns.
Be Financially Savvy and Manage Your Resources Wisely
Ah, yes, the topic of cash flow. This is a big one. Did you know that 82% of small businesses in the U.S. fail due to cash flow? Yes, it’s true, and it’s a rather unfortunate—and startling—statistic.
To avoid this, it’s important to manage your finances carefully. Working with a certified accountant helps you keep accurate records and plan for future expenses. Additionally, partnering with a fiduciary financial advisor makes sure that your financial decisions are made with your best interests in mind, helping you safeguard and grow your resources.
Embrace Technology and Innovation
While it’s true that many small businesses, especially those of yesteryear, could be wildly successful using manual and what we would now call old-school processes. But today, those old-school processes aren’t going to be enough.
Embracing technology and innovation is key to staying competitive and efficient. Tools like CRM systems, cloud-based accounting software, and e-commerce platforms can streamline operations, improve customer interactions, and boost productivity. As a CEO, adopting these technologies shows your commitment to growth and adaptability and will position your business for long-term success.
Plan for the Future: Set Clear Goals and Vision
Last but certainly not least, let’s discuss the importance of thinking ahead. This goes beyond the need for continuous innovation that we discussed earlier. Here, we’re talking about how to grow and scale your company in a prosperous and manageable way.
A great CEO must be a visionary who can see the bigger picture and plan strategically for the future. Understanding what it means to be a visionary involves setting clear goals, anticipating challenges, and preparing your business to thrive in an ever-changing market. By doing so, you take the steps that your company needs to be successful today and well-positioned for continued success tomorrow.
The Impact of True Leadership on Small Business Success
To round this out, let’s go back to what we shared at the beginning—the differences between the role of a CEO and that of a leader. The thing to know here is that when it comes to a small business, no matter what industry you are in, great CEOs need to possess leadership skills. Few small businesses can staff the organization in a way that the CEO can simply hide out in the back. And times and expectations have changed.
Today, being a successful CEO means being visible, adaptable, and committed to leading by example. By linking and acknowledging these traits, you drive your business forward and inspire your team to reach new heights.
Established in 2008, the Small Business Expo is here to help small business CEOs become the best possible leaders for their businesses. Learn more today and take the next step in your path to becoming a great small business CEO.