Follow these steps to become the leader of a business.
- A CEO, or chief executive officer, is the highest-ranking person in a company.
- Some CEOs climbed the corporate ladder over several decades.
- Young entrepreneurs often become CEOs by founding their own companies.
- CEOs need business, financial, problem-solving and management skills.
- It can take years to become CEO unless you found your own business.
- A diverse career track is a steppingstone to becoming CEO of a high-profile organization.
Occupying the corner office is a hefty and ambitious dream, but it's possible. After all, every company needs a leader. If you're wondering how to become a CEO, the best place to start is by learning what skills a CEO needs and how different career paths can lead you to the executive suite.
What is a CEO?
Before you can decide how to become a CEO, it's important to understand what a CEO actually is. There's a rising trend in the gig economy for anyone who is self-employed to call themselves "CEO" of their own company. But the position is usually more involved than that and requires climbing the corporate ladder.
A CEO, or chief executive officer, is the highest-ranking person in a business or organization. This is usually the executive with final decision-making authority, the one who runs the company and establishes its strategic direction. Along with making major decisions – and generally the largest paycheck at the company – a CEO also has the most responsibility.
What are the responsibilities of a CEO?
Every company has different goals and missions, which means the responsibilities of CEOs vary. In general, a CEO oversees a company and should set overall goals for the organization. These executives represent their organizations, and they are often the face of a company in the press or when dealing with shareholders.
A CEO's responsibilities, according to MyCorporation CEO Deborah Sweeney, often include the financial, operational and technical functions of the business.
"The CEO should be responsible for setting the strategy to reach the vision," added Brad Hillier, CEO of ReBath LLC. "This also includes ensuring the company has the right team to execute the strategy. This involves identifying new roles that need to be hired for, roles that need to improve either through development or new staff, etc."
Did you know? CEOs typically oversee a company's goals and vision. This often includes being responsible for the overall financial, operational, and technical areas of the business.
How do you become CEO of a company?
Depending on the age and structure of an organization, the career path to CEO can take many forms. It's possible to rise to the position of CEO from a variety of professional and educational backgrounds.
In traditional companies, the CEO's career path generally began with a bachelor's degree in a related field, such as business, finance or management. Most CEOs spend their early careers learning how to manage the finances of a business and operational aspects of a team. In many cases, diverse career experience is a steppingstone to becoming CEO of a high-profile organization.
"When CEOs understand different industries and have worked in different environments, they can leverage that knowledge and experience to implement the strongest components of their experience and move beyond components that are not as effective in running their business," Sweeney said.
This isn't the case for every CEO – especially those in startups.
"Most CEOs of larger organizations have MBAs, but that does not always hold true with smaller organizations," Sweeney said. "CEOs' backgrounds are often varied as the businesses that they run."
How much is a CEO salary?
How much a CEO makes depends on these factors, among others:
- The industry and age of a company
- Financial stability of the organization
- Shareholder or board member input
- Length of time in the company or as CEO
- Previous salary, especially if coming from another leadership role
In the United States, the average salary for a CEO is just over $158,000. However, salaries for CEOs range from $74,000 to over $500,000 per year, according to PayScale. Companies that are not publicly traded often do not disclose their executive salaries, so their CEOs may make significantly more. Many CEOs also receive yearly bonuses, which can provide additional income in the thousands or hundreds of thousands of dollars.
Key takeaway: In the U.S., the average salary for a CEO is $158,000 but can range from $74,000 to over $500,000 per year.
Who is the youngest CEO in the world?
The answer to that question is in constant flux, as new businesses are started every day. Facebook's Mark Zuckerberg, Globals' Suhas Gopinath and Apex Infosys India's Advait Thakur have all been called the youngest CEO at various points in the last decade. (Zuckerberg is also one of the world's youngest billionaires.)
However, one of the youngest known CEOs is currently Cory Nieves, the founder and CEO of Mr. Cory's Cookies.
Cory was just 6 years old when he began selling hot chocolate in his neighborhood, and he soon expanded to selling lemonade and homemade cookies as well. At age 10, he turned his business into an LLC and was featured on various news outlets, including The Ellen DeGeneres Show.
When Cory was 13, Mr. Cory's Cookies appeared on The Profit, which ended with Cory taking a $100,000 investment in return for 40% of the business. The company used the investment for product development, package design, website updates and paying Cory's mother, Lisa Nieves, a salary. [Read related article: Companies Founded by Amazing Young Entrepreneurs]
How many years does it take to become a CEO?
As Cory and the other young CEOs around the world prove, there is no set number of years that it takes to become a CEO. How to become a CEO often depends on the company itself and where on the ladder you begin your professional life.
Young CEOs often get to that point by founding their own companies when they are teenagers or young adults. CEOs of high-profile businesses, on the other hand, may have spent the first 15-20 years of their careers rising to that rank. Ted Mathas, for example, became CEO of New York Life in 2008 at age 41, and at the time he was the youngest CEO of a Fortune 100 company.
In general, the type of business you want to lead directly impacts the number of years it takes to reach the executive suite.
What qualifications should a CEO have?
No matter what type of business you run or how old you are, part of becoming a CEO is honing the correct skills. You'll need both technical and interpersonal skills to climb the corporate ladder and become a successful CEO.
"Successful CEOs are often strong listeners and executors," said Sweeney. "Successful CEOs are strategic, but they are also calm. They traditionally have grace under pressure and think before they execute."
The success of a CEO depends on a variety of soft and hard skills, including the following:
- Management experience
- Knowing how to motivate a team
- Ability to make decisions quickly
- Business background
- Financial proficiency
- Understanding of growth metrics
- Initiative and idea development
- Big-picture, strategic thinking
- Problem-solving skills
- Media or public relations experience
"I think the ability to understand numbers and the financial implications is very important," said Hillier. "Having some legal understanding is also very helpful. There are a lot of contracts to deal with, so a better-than-basic understanding of legal agreement structures can be very efficient."
Whatever your background or skill set, passion is one of the most important traits of a successful CEO.
"You will never be successful, in my opinion, as a CEO if you don't have a passion for your company and what you do," Hillier said. "That passion is critical to coming up with innovative ideas, motivating your team and motivating yourself through the hard times."
Additional reporting by Saige Driver. Some source interviews were conducted for a previous version of this article.