Other than the board of directors, the chief executive officer, or CEO, is at the top of the corporate ladder. The CEO primarily calls the shots for the company, and his or her decisions can have a substantial impact on its direction. The position is one of great power and even greater responsibility, and it usually offers significant financial rewards. Because of this, anyone researching how to become a CEO will learn that it requires a journey of many steps before being considered for the role.
What Does a CEO Do?
A CEO is a company’s highest-ranking executive, and his or her duties reflect this hierarchy. A CEO has to make many of a company’s biggest decisions while simultaneously managing its overall resources and operations. The scope of responsibility for this role depends on the size and structure of the company. A CEO of a small company may be involved in some of the mid- to low-level decisions so as to fill the gaps when the team is understaffed or to oversee a pet project. A CEO of a larger company may solely focus on high-level strategies involving corporate growth while delegating tasks related to day-to-day business operations to other managers.
In some cases, a CEO is also the main liaison between a company’s operations and its board of directors. Sometimes, the CEO has a position on the board and may even be the chairman. Even in these cases, however, it should be noted that the board of directors oversees the company as a whole and has the power to overrule CEO decisions.
Typical Steps to Becoming a CEO
Step 1: Earn a Bachelor’s Degree
The typical first step toward a career as a CEO is to obtain a bachelor’s degree. Except for those who launch their own companies, the prospects for becoming a CEO without at least a bachelor’s degree are virtually nonexistent. The tasks essential to successfully running a company and overseeing its growth require the development and sharpening of certain skills and competencies that are fundamentally shaped at the collegiate level.
While it’s possible for students to start this path by getting a bachelor’s in law or liberal arts, most interested in becoming a CEO pursue a business-related degree, such as in business administration. The coursework for these degrees teach students about the fundamental areas of business, such as operations, management, economics, and finance. They can also cultivate an understanding of the ethical and legal environments that typically surround the workings of any business.
Those intent on a future career as a CEO may be interested in pursuing a more specific leadership degree, such as a bachelor’s in organizational leadership. Students can start developing the skills a business leader needs with this degree and prepare to guide others through the ins and outs of corporate change. The coursework combines business studies with psychology courses, a mix that encourages students to develop their interpersonal skills. This expertise can make it easier for an aspiring CEO to tap into the human side of business, which translates to stronger leadership skills.
Step 2: Build On-the-Job Experience
The position of CEO must be worked up to on a professional level. For those who have earned a bachelor’s degree, building the on-the-job experience that’s crucial for corporate ladder-climbing usually starts with an entry-level position.
Entry-level positions for college graduates are generally in lower-level management or supervisory roles. After experience is gained at this level, candidates can advance to general manager positions and gain additional experience before finally advancing to the executive realm.
This climb does not happen overnight. A CEO typically requires several years of professional experience. The competencies honed throughout this lengthy journey typically relate to management skills, best business practices, and leadership — essential qualities that help build a solid foundation for CEO success.
It may be possible for people to make this climb by changing companies, as some corporations may be inclined to hire qualified candidates outside of their organization. However, many CEOs advance from within a company’s ranks, as that ensures the position is filled by someone familiar with the company environment and business structure.
Step 3: Earn a Master’s Degree (Optional)
While gaining on-the-job experience is a long process that requires several years of cultivation, the route to CEO consideration can potentially be shortened by earning a Master’s in Business Administration (MBA). Earning this advanced degree prepares students for business success by allowing them to take a deep dive into the workings of all the elements of any business, from accounting to human resources management. The advanced skills developed prepares students to understand corporate functionality from a top-level perspective, which can make it possible for them to make critical decisions as strong leaders.
For instance, those aspiring to reach the level of CEO may be interested in pursuing an MBA that focuses on running a business, such as an MBA in General Management. This type of concentration immerses students in topics fundamental to business leadership, such as ethics, corporate strategies, project management, and organizational behavior.
Earning an advanced degree like an MBA does not sidestep the need to build years of on-the-job experience. However, the degree is linked to success. Roughly 40 percent of S&P CEOs hold an MBA in any given year, and 25 to 30 percent hold some sort of advanced degree. An MBA can make graduates more attractive candidates to fill executive positions such as CEO, as it can demonstrate a high level of corporate-related competency to a prospective employer.
The Skills a CEO Needs
Having a degree and years of managerial experience are only part of the equation for success as a CEO. A CEO must also possess the fundamental skill set that makes it possible to apply the knowledge he or she has acquired to a wide range of real-world corporate situations.
For instance, CEOs must have strong management skills, since they are routinely tasked with directing an organization’s operations to encourage corporate growth. This skill goes hand-in-hand with keen leadership abilities, as CEOs must be able to facilitate this growth through the coordination of people, resources, and policies.
CEOs must have strong communication skills in order to effectively discuss and explain their vision to a wide range of individuals, from employees to board members. Furthermore, CEOs need to be able to communicate in a manner that is not only clear, but also persuasive.
Because CEOs are regularly required to make decisions that affect the company’s success, they must have strong decision-making and problem-solving skills. They must be able to analyze situations, recognize issues, and execute successful solutions to keep the company moving in the proper direction. These skills are often needed on a daily basis.
CEOs have a lot on their plate on any given day. Therefore, they must also know how to effectively manage their time to ensure urgent tasks are handled and goals are met.
CEO Salaries and Job Outlook
The job of CEO is a high-pressure, challenging one. However, it is also one that can be lucrative. According to the U.S. Bureau of Labor Statistics (BLS), the 2017 median pay for top executives like CEOs is $104,700 per year. The job outlook for the position is projected to have steady growth. BLS predicts an 8 percent job growth in the field between now and 2026, which is consistent with the average profession’s projected job growth.
Start Your Journey to Becoming a CEO Today
The lengthy process of becoming a CEO requires formal education and plenty of on-the-job experience. For those who choose this educational and professional path, their reward is a position that grants them the ability to make a measurable impact in the world of business. Learn more about how Maryville University’s online Bachelor’s in Organizational Leadership program can provide students with the critical first step toward this exciting and lucrative career.