Essential CEO Qualifications (And How To Become One)
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A Chief Executive Officer (CEO) is the topmost executive in an organisation, responsible for its growth, revenue generation and profitability. A CEO is usually a highly qualified and experienced professional. If your career ambition is to become a CEO, knowing what qualifications they require may be beneficial. In this article, we examine common CEO qualifications, the knowledge and skills they require on the job and how to become one.
What are some essential CEO qualifications?
Typical CEO qualifications enable professionals to supervise the finances of a business operation and take strategic decisions that align with an organisation's vision, mission and objectives. A CEO requires a combination of formal education, knowledge of multiple business and management domains, industry experience and leadership skills. The management, founder or a board of directors may decide the mandatory or minimum qualifications for a CEO. Large organisations with a global scale of operations may prefer candidates with a master's degree in business-related majors.
How to become a CEO
There are three paths to becoming a CEO. A founder may choose to be the CEO of a company, in which case formal educational qualifications may not matter. Organisations may look for CEOs with master's degrees in management, business or finance and proven experience in decision-making roles. Some companies may consider professionals with a bachelor's degree, exceptional leadership skills, outstanding track record and extensive industry knowledge for the role of CEO. Becoming a CEO takes time and may involve multiple career milestones. Follow these steps to become a CEO:
1. Pursue formal academic qualifications
There is no specific degree that is mandatory to become a CEO. Companies may specify the qualification requirements based on their domain of work, number of employees and business goals and objectives. A CEO aspirant can gradually acquire degrees, qualifications, skills and experience to become eligible for this administrative role. If you want to become a CEO, you can consider pursuing the following qualifications:
A bachelor's degree in a relevant discipline and a specialised MBA
Young students who have a clear aspiration to become a CEO can pursue degrees in finance, management, statistics, business, mathematics, statistics, economics or law. Formal education in these streams is beneficial as it enhances a CEO's knowledge and helps them become effective and successful in an administrative role. After graduation, you can pursue a Master of Business Administration (MBA) in a specialised field related to the industry you want to work in. Some specialisations within management include general management, public policy, financial leadership, marketing, strategy, consulting, operations management and entrepreneurship.
An unrelated bachelor's degree and an MBA
Some candidates may develop an ambition to become a CEO during graduation, but may be pursuing an unrelated major. After graduation, they can pursue an MBA from a top-tier national or international university. The ability to graduate from a top-tier institute indicates a potential CEO's academic quality. You can select a specialisation in your MBA based on your interests and aptitude. For example, if you want to become a CEO of a fashion studio, you can pursue an MBA in Fashion Management. If you aspire to be a bank CEO, you can complete an MBA in Banking.
An engineering degree and an MBA
Large technology-driven companies may prefer to hire a CEO with formal qualifications in technology and management. For example, a software company may look for an IT engineer with an MBA, or a pharmaceutical company may look for a pharmaceutical engineer with an MBA. Combining an engineering degree and an MBA can help fast-track a career in administration, in technical fields. They may continue to gain knowledge in many business-related faculties like administration, human resources and law, as part of their job.
2. Gain work experience
A CEO may have worked their way to the top management of a company from an entry-level role. They may start with supervisory roles and rise to managerial positions and senior management roles based on their performance and leadership qualities. While some companies may choose a CEO candidate from their employee pool, some may hire an outsider to bring in a new perspective. If you want to become a CEO, you can try to acquire knowledge and skills relating to management, business and leadership.
3. Educate yourself on various business concepts
CEOs are senior executives who typically acquire knowledge from their work experience and formal education. They oversee functions in different departments like sales, marketing, finance, legal, human resources, accounting, supply chain and administration. Knowledge about each of these departments is important to analyse, review and take steps to refine their functions. If you want to become a CEO, consider acquiring knowledge in:
Administration and management: To perform their responsibilities confidently, a CEO requires knowledge of business and management principles, human resources management and leadership techniques. A CEO also benefits from knowing how the administration of a company functions, to optimise productivity, streamline processes and reduce wastage and expenditure.
Human Resource (HR) management: Knowledge about hiring and termination processes, statutory procedures and recruitment mandates are crucial for a CEO to implement the best staffing practices in a company. Their knowledge of labour laws, compensation, benefits and Human Resource Management) HRM software can help them implement good HR policies and systems within their organisation.
Customer service: If a company works in a customer-facing domain, a CEO's knowledge of consumer rights helps them set appropriate quality standards for their goods and services. They may also identify flaws or drawbacks in their customer service functions and devise strategies to fix issues.
Legal knowledge: A CEO's knowledge about relevant business and corporate laws and statutory guidelines can ensure that a company's operations do not deviate from mandates. They may also address lawsuits against the company and represent the company in a courtroom.
Economics: A CEO's understanding of economic principles, macroeconomics and current economic trends helps them develop long-term strategies for business growth. Understanding global financial risks, cash flow, marginal benefits, opportunity and sunk costs, demand and supply and differential pricing helps them make effective policies.
Financial management: A comprehensive understanding of a company's financial statements and short and long-term financial positions is vital for a CEO. Knowledge of financial management tools can help a CEO manage a company better.
Sales and marketing: A CEO with sales and marketing experience can participate in and monitor the work of those departments to refine their efforts. Brainstorming and ideation with the help of a CEO can motivate sales and marketing teams to work towards organisational goals.
4. Equip yourself with relevant skills
A CEO is responsible for the success, growth, profitability and sustainability of a company. A CEO serves as a leader, mentor and trainer for employees. They may also be the face of an organisation and may require integrity and high ethical standards to run it effectively. They are typically perseverant, dependable, sensitive, dispassionate and composed. Apart from these personality traits, a CEO also requires technical skills and knowledge to enhance their performance. If you want to become a CEO, consider developing these skills:
Communication skills: Clear communication with employees can motivate them to work towards their goals and objectives. Their ability to communicate with clients and shareholders is crucial for building and retaining credibility and improving business value and reputation.
Creativity: A CEO can bring a new perspective and help a company become competitive to face new and evolving challenges. The ability to think differently and innovate using the latest technology, tools and methodologies can help an organisation become a leader in its field.
Risk analysis: A CEO who can take calculated risks using disruptive technologies or ideas can bring about beneficial changes in a company's functioning. Risk assessment and analysis are important skills for a CEO.
Decision-making skills: A CEO considers multiple options, weighs the impact of each and chooses the best option that helps a company achieve its objectives. A CEO informs the management and employees about important decisions and promotes cooperation between individual departments.
Critical-thinking skills: A CEO's ability to be purposeful, rational and goal-oriented is crucial to problem-solving and making strategic decisions. Logical thinking, objective analysis and the ability to foresee long-term implications are important for a CEO.
Negotiation skills: CEOs may negotiate deals and contracts with clients, vendors and colleagues regarding functions of the company and resource or budget allocation. Negotiating and working out mutually favourable settlements without compromising on the interests of the company is part of a CEO's primary duties.
Time-management skills: A CEO's ability to plan and schedule their daily and weekly tasks, and work under tight deadlines can motivate employees to become more productive and efficient. CEOs may juggle a variety of tasks on a routine basis and may require excellent time-management skills to excel in their roles.
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