A chief executive officer best known by the abbreviation CEO is the most senior executive in a company. CEO’s role may vary from business to business depending on the company’s culture, size and corporate structure, but is always associated with the management of decisions of the highest importance. CEOs are accountable for setting the company’s vision, goals and tone as well as being the face of the company that is presented to the public.
A CEO is rarely appointed but rather elected by the board and its shareholders. Thus it is CEOs in particular that often are the only ones who have a direct connection to the external groups, which affect the company. Being in the highest rank in a company requires a certain level of expertise to deal with those who have an impact on the company that cannot be managed from within.
This is why it is essential for CEOs to have the appropriate soft skills that would enable them to expand the business by establishing meaningful relationships with different business groups. This is especially relevant in the modern business world as multiple respectable sources such as Forbes have repeatedly stated that having a strong network is more valuable to a business’ prosperity than any other factor. Networking provides an avenue for greater opportunities and safeguards the business’ stability in a situation of emergency. Hence, for a business not only to move forward but even to maintain its current position, a CEO has to cultivate these 5 key long-lasting mutually beneficial relationships:
#1 Relationships with Current and Potential Customers
No matter what kind of business is in the question, the final goal everyone directly affiliated with it pursues is to make revenue. The only source of sales known in the business environment is a steadily growing substantial number of customers. For this very reason, the importance of cultivating a strong bond with not only existing customers but also potential ones cannot be stressed enough.
Although most mature companies have a professional sales team to deal with customers, it is vital for the CEO not to distance themselves too far. In fact, interacting with the CEO can increase the level of security of the customers doing business with the company. Apart from that, receiving a clear message delivered by the CEO is a nice gesture that allows the customers to understand that there is an actual human being behind the company that can be trusted.
In turn, through dedicating a part of their time to establishing a relationship with customers, CEOs can gain a better understanding of their needs and wants. It is often not enough to throw just a brief glimpse at the market research data provided by the marketing team to identify the current trends of the target audience. To fully comprehend where the company stands in the customers’ eyes, and to position it accordingly within the marker, CEO needs to get out there from time to time and analyze it themselves.
#2 Relationships with Experts
One of the biggest problems newly founded (or even longtime established) small companies struggle with is allocating enough money to cover the expenses related to expert assessments of the company. It is simply impossible to hire all the expertise with limited investment, so one of the key relationships CEOs should cultivate is that with advisors. It is often that more experienced executives may provide free of charge advice in return for a small favor or even out of pure benevolence. Having an advisor like that is very useful in unforeseen situations where urgent help is required.
#3 Relationships with Shareholders and Potential Shareholders
While CEOs can benefit from having a strong bond even with those customers that do not make a purchase (positive brand image, references to other customers), when it comes to shareholders it is crucial to convince them to invest into the business. There is no person other than the CEO who could be more efficient in achieving it. CEOs are often seen as figures of authority who can be trusted and can reason the purchase of shares.
Moreover, it is also essential for the CEO to maintain regular communication with shareholders to ensure they are confident in their investment at all times.
#4 Relationships with Vendors
Vendors are equally as important to the business as customers are as they facilitate the sale of the product the company produces. CEO needs to have a reliable relationship with its vendors to avoid situations where the latter ones dismiss the company in favor of another one willing to pay a higher premium.
#5 Relationships with Key Governmental Figures
Key people in the governmental structures can either make or break your business, so having a strong relationship with those is extremely significant for business growth. CEO has to make sure they are well-connected with the people who can affect the company legally, and that they will not hinder its development.
And last but not least, despite the importance of having strong bonds with external stakeholders, CEOs need to remember to cultivate relationships with the internal ones, too. The workforce of the company is what allows its progress, so it is pivotal for the CEO to ensure the workers of their own company are satisfied, and therefore remain loyal to the business.
Cheryl Hearts is a passionate journalist from Boston, Massachusetts. After obtaining a Master’s degree in Journalism, Cheryl started running her own blog CherylHearts.com where she’s covering topics of great interest to society.