There’s no guidebook for CEOs. Succeeding as the head honcho requires the ability to set clear priorities and take bold action.
To evaluate chief executives, Andreessen Horowitz—a venture capital firm in California’s Silicon Valley—asks three questions:
1. Does the CEO know what to do? A top CEO masters a wide range of activities. From making wise personnel decisions to selecting an advertising agency to identifying the best financing opportunities, a leader with insight and good judgment produces superior results.
What’s more, it’s important to know what to do without dallying. A willingness to take decisive action separates great leaders from also-rans. They make decisions characterized by speed and quality.
2. Does the CEO get the organization to do what he or she knows? It’s not enough that the person in charge knows what to do. The real test is whether that person can influence employees to execute properly.
It all begins with articulating a vision. Everyone needs to buy into the vision, and the CEO must spark commitment and enthusiasm among the workforce.
Getting people to do what the CEO thinks best also demands a rigorous recruiting process. Leaders who ensure that the organization has plugged the right talent into the right roles to execute the strategy are well positioned to succeed.
3. Did the CEO achieve the desired results against an appropriate set of objectives? Part of a leader’s job is to measure results based on well-calibrated objectives that aren’t too easy—or hard—to attain. The size and scope of the objectives will vary based on the organization, the industry it operates in and the economic backdrop at the time.
— Adapted from “How Andreessen Horowitz Evaluates CEOs,” Ben Horowitz.