Difference between CEO and President
The CEO and the president are the two highest positions in most company hierarchies, and yet their roles are often confused. Most people know that the CEO is the head of a company, but commonly less is known about the role of the president.
The CEO is the highest-ranking executive at a company. All the C-level executives answer to them, and they answer only to the board of directors. The president operates directly below the CEO, so therefore answers to the board of directors as well.
The CEO serves as the public face of an organization and chief architect of the group’s overall strategy and vision for future growth. They’re the final word in most top-level decisions and are the only executive free to make decisions unilaterally (while remaining accountable to the board of directors).
The president is more involved in operations. They’re tasked with implementing the CEO’s vision for the company, by translating it into actionable steps that can be executed by the rest of the organization. While the CEO looks at the big picture, projecting strategy years into the future, the president focuses on a shorter term, actualizing the current phase of the CEO’s long term plan.
At its essence, the relationship between a CEO and a president is the difference between leadership and management. In general, the CEO is a leader and the president is a manager. CEOs create the grand strategy, and the president sees that it’s executed successfully.
In their operations role, presidents work to build efficiencies within an organization to increase profits. A CEO’s responsibility is more holistic, they are tasked with maximizing an organization’s overall wealth. They do this by finding new markets, guiding the direction of research and development, and setting master priorities.
Another way to look at it, is the CEO is responsible for making high-level decisions regarding the company, but the president is responsible for making high-level decisions regarding the company’s staff. As an example, the CEO of a mattress company might see a growth opportunity in pillows, so they direct the company to expand into that market. The president would then direct the staff with specific instructions, moving them toward the goal of realizing the CEO’s decision.
Therefore, the roles of CEO and president are different but complementary. They require different mindsets and distinct priorities, but both roles work to assist each other. An example of a famous CEO and President team is Larry Ellison and Ray Lane of Software giant Oracle. Ray Lane became president of Oracle in 1992, which was a difficult time in the company’s history. Sales had slipped badly after repeated mistakes upset a large share of the company’s hold on the technology market. Many of the problems facing sales and marketing were a direct result of weaknesses in the operations side of the business. CEO Larry Ellison was visionary, but apparently had issues executing his visions effectively.
Ellison recruited Ray Lane personally, and immediately put him to work realizing a vision he had for his sales department. During Ray Lane’s tenure as president at Oracle, the company boosted sales from $1 billion a year to $10 billion a year, resulting in a three times increase in net profits. This is what’s possible when a visionary CEO is paired with a skilled president.
The distinctions made above generally apply to large corporations. The differences between the two functions tend to bleed into each other more in small businesses, mostly by necessity. In many cases, the CEO and the president are the same person, because the organization simply isn’t large or complex enough to require separate positions.