Why do companies need people in charge of the entire company? I get that certain parts of the company (i.e. production, shipping, marketing, etc) need a leader / someone who keeps an overview. But why do they need someone at the top of the company, who’s just there to.. be someone to represent the company? In most cases I’ve heard of, the CEO is in charge of pretty much everything, but barely knows anything about every individual thing the company does. So why not have no CEO, and instead just leaders of individual groups? Why does someone have to be on top of everyone?
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Several answers here about how the CEO is supposed to tie all the different departments together, etc. None of the things said are wrong, but here is a slightly different way I see it:
The job of everyone in the company is to be good at their specific areas of responsibilities and to fulfill their tasks. So by definition, the various department staff and department heads take care of things inside the company. Everyone is looking *inwards*.
The CEO’s job is to look *outwards*. He is supposed to spend most of his time looking at the wider world, to see far, to understand the external situation, and to steer the company based on what he sees.
Certain departments will interface with the external world, of course. E.g. Sales, Marketing, PR and the like. But note, they only deal with the external world within the narrow confines of their department silos. For example, the sales people will only care about sales activities of competitors. They will not spend time analyzing factors like geopolitical events, public sentiment, etc. Sales people only care about sales. Same for marketing folks. They only deal with marketing related matters, both internal and external.
But the CEO has to be the one who keeps his head clear of specifics, and he has to take in the overall landscape. He’s the one who has to keep an eye on country level inflation and its effects on interest rates and how that weighs on the company’s balance sheet. He has to monitor the bond markets, and understand how that will impact the banking sector, and thus affect the company’s access to loans and credit lines.
So to summarize, the various department heads deal with their individual *narrow* responsibilities and they generally face *inwards*. The CEO has to take in a *broad* view and he primarily faces *outwards*.
Hope that contributes something to this discussion.
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