To be decisive, a CEO needs to be empowered to make decisions and given the resources to implement those decisions. Time and again, we see struggling CEOs who simply can’t do their jobs because they have no authority to act. Requiring the CEO to seek the consensus of all the owners before hiring an operations person, for example, not only makes the decision-making cumbersome but defies the purpose of having a chief.

The test of a real CEO is ultimately his or her ability and authority to create discipline in the partner group. If the CEO’s actions are limited to those that don’t bother, inconvenience or threaten the partners, the firm will find itself paying for an executive and getting no leadership. CEOs who have to appease every partner are a lot like race car drivers at the wheel of a taxi—their talents are not effective when the passengers are telling them where to go.

So again, the firm that needs a CEO is one with a clear vision, one that gives the CEO authority to make decisions and one that’s ready to hold the partners accountable. It does not take a very large firm to require leadership.

But what kind of firm can afford a CEO? We can’t really answer that question without first answering another question.

What Does A CEO Do?
At the end of the day, a CEO must prioritize the management of a firm and not let her (or his) leadership responsibilities fall by the wayside because of, say, client responsibilities if we are talking about an advisory firm. In some of the largest firms in the industry, CEOs continue to spend time with clients. Such meetings give executives important perspective and connect them with the client base. But the CEO job is a big job. Consider this list of responsibilities:

• They must execute the vision and maintain the competitive advantage of their firms by managing resources at the highest level. (This is strategic leadership.)
• They must set an example and provide clarity in maintaining the culture of the firm (This is cultural leadership.)
• They must work with the owners, lead the executive committee or board of directors and help set the agenda and priorities of the board.
• They must communicate to the owners and other stakeholders the state of the firm and the progress on the strategy.
• They must set and oversee the general structure of partner accountability, including the management structure and departments/committees.
• They must assemble and manage the executive team, including the COO, CCO and other leaders.
• They must work with the partners to prepare and execute a budget and manage the financial health of the firm, including its profitability and uses of capital.
• They must lead the negotiation and establishment of key contracts and strategic partnerships, including those with custodians and other entities.
• They must sign contracts on behalf of the firm for those things that will have the greatest economic impact and strategic importance, as set by the executive committee.
• They must represent the firm in any strategic negotiations.
• They must develop community and industry relations that serve the long-term strategy of their firms.

Timothy Chase, CEO of WMS Partners and one of the true leaders in our industry, helped us develop the list above, as well as a more detailed CEO job description available at our Web site, www.ensemblepractice.com.

The list is long and the burden is heavy. Being the CEO may in fact require a leader to leave behind his or her entire life’s work. Jim Gaffney—a former managing partner of the Moss Adams office in Portland, Ore.—describes having to pass all of his client relationships to other partners in order to assume the leadership role. In Jim’s words, “It is really difficult because you have put a lot of time and effort and heart in those relationships, and it is something you know you are good at, while there is a part of you that wonders if you will be good at the leadership job.”