I recently reviewed a Harvard 12-year study that researched how CEOs of large companies spend their time. I related to the study because as an entrepreneur, I have often struggled with time management, not in productivity but in wondering if I was fully maximizing the effectiveness and allocation of my time.
Without something or someone against which to compare, I had no point of reference.
The study, therefore, validated how I was spending my time. Like me, CEOs in the study were spending a tremendous amount of time in meetings, either as a group or individually with stakeholders, and over half their time outside the office. Also, much of their time was spent as a "firefighter," regularly settling issues that could not be handled by staff.
Overall, it was a refreshing look at how business leaders use their time, and I offered it to other entrepreneurs as validation and as a comparison. As a response, however, an Inc reader responded on Twitter with a simple "CEO ≠ Entrepreneur" -- and that got me thinking.
It is true that the roles and characteristics of a CEO and an entrepreneur are not always the same. Entrepreneurs are often associated with creating the idea behind the company and acting as the visionary to direct the company into the future. Most entrepreneurs I know are rarely focused on the minutia of a business, preferring to spend their time thinking about the future rather than mundane daily activities like a chart of accounts or the next sales meeting.
On the other hand, CEOs are the type of people who spend a tremendous amount of time working with stakeholders to lead and direct, assuring that their companies stay on their mission. Moreover, CEOs need to have an understanding of all business fundamentals -- finance, sales, operations and HR management -- as well as understanding the macro-level influences on the business -- regulation, economic and social forces, etc.
Like a captain of a ship, CEOs need to keep a company steered in the right direction while avoiding icebergs.
Of course, a CEO is rarely a master of all of these skills and should delegate as many responsibilities as possible to individuals who are better qualified in specific areas -- freeing up the CEO to take on the role of leader and innovator.
So is a CEO an entrepreneur, or vice versa?
I believe an entrepreneur, if he or she is considering starting, growing and running a company, needs to understand the responsibilities of a CEO. Generally speaking, organizations follow a leader, and a CEO is naturally seen as the person who fills this role and leads its people into the unknown. Moreover, anyone running a company must understand the basic fundamentals necessary for it to function.
More importantly, if an entrepreneur is not willing or simply unable to fill that role, then he or she must be willing to allow someone with that talent to step in and do so.
On the other hand, a CEO of any company, in a large organization in particular, needs CEO and entrepreneurial skills -- or intrapreneurial skills. A recent podcast by NPR’s Planet Money, When CEO Pay Exploded, discussed the incredible rise in CEO salaries in the 1990’s and, in short, found that it was largely a result of tax changes that pushed companies toward performance-based compensation. With that, the role of CEOs evolved from acting as a figurehead to taking a significant role in growing a company -- like an entrepreneur.
So while "CEO ≠ Entrepreneur" is not wrong, is terribly vague and insufficient. A CEO is not necessarily an entrepreneur -- and vice versa -- but the two roles are intimately intertwined these days and, more importantly, anyone wishing to step into either role should understand which role he or she is willing to take on.
What do you think? Are CEOs entrepreneurs -- or vice versa? Please share your thoughts with others in the comments below.