Understanding the Different Types of CEOs Will Make You a Better CEO
In this episode, I’m going to share with you one of the most important reasons why businesses run by really, really talented owners fail. Listen to this episode because I’m going to share the difference between the three different types of CEO’s. And I’m going to tell you how you can find out which one of those three types you are and what you need to do to make sure that your business thrives.
Hey there and welcome to another edition of my podcast. Today, I want to tell the entrepreneurs out there or the people who want to be entrepreneurs, something going to help you understand why it is business owners do what they do. And it’s a big part of the reason why some people succeed in business and some fail. And it’s the aspect of business that you really don’t read about.
What Exactly Does a CEO do?
You read business books; you read all those types of things about entrepreneurs. And you don’t really hear about this so for many of you; it’s going to be the first time you’ve heard of this. And the interesting thing is like I talk about this concept of the three types of CEOs. You’re going to identify yourself with one or two of those three, and it’s going to be so eye-opening for you to see why you possibly struggled from the past.
And why certain employees that you’ve hired had been so incredibly helpful for you while others you’ve clashed with. So here we go, the bottom line is this, there are three types of CEOs.
We Each Have All of the Different Types of CEO Within Us
Every single one of us has all of this 3 CEO’s sort of living inside of us, right? And every person who’s a business owner, entrepreneur, or CEO has these 3 living within them. However, we all have one of these types that is our dominant form.
It’s the one that consumes probably 70 percent of us and 70 percent of the decisions we make. Now some people are a little more exaggerated than that; some are a little bit less. But for the most part, we’re going to have about 70 percent of us be one of these types.
Then you have the second type. It probably consumes about 20 to 25 percent of you. And then the third type which is the forgotten type. That might be just a few percent of who you are inside and most businesses that fail, failed because of the 1/3 that the business owner or the CEO is missing. So instead of just teasing you, let me just give you what these things are.
Look, there are three types of CEO’s and we throw these words around but we actually wrong when we use some of these words. We don’t really know what this means. So I’m going to say some things and I’m going to define what they are for you.
Number one is the entrepreneur, number two it is the operator and number three is the artist. In every single business, you look at the CEO or the business owner and the business owner is going to be one of these three.
Now, for the rest of this episode, I’m going to refer to being one of these three and the way I’m going to use it is I’m going to pretend like you are 100 percent that thing but understand this you’re one of these three doesn’t mean that you’re not the other ones at all.
Type 1 – The Entrepreneur
It just means, for the most part; you portray more of this one than the other ones. So, here we go now we use the word entrepreneur, we always talk about so and so entrepreneur so and so is this, so and so is that. It’s not true.
Not everyone is an entrepreneur. In fact, being an entrepreneur doesn’t necessarily mean you’re a better entrepreneur than people who are not entrepreneurs, right? So let’s define this. Who is the entrepreneur in the business? The way I start is I’ll give you a brief overview and then we’ll dig deeper into what each of this types is. So let’s start with the entrepreneur.
The entrepreneur is the one who is a risk taker. It’s the one you wants to push the envelope. It’s the one who’s all about growing the business. And it’s like grow, grow, grow. Go, go, go. Take risk. Do this, do that. Push push push push push, right? And what we call ourselves entrepreneur or business owners. Not everyone is an entrepreneur. And when you hear the other two, you’ll start to understand why maybe it’s not so good to be an entrepreneur, alright?
Type 2 – The Operator
So, the second type is the operator. The operator is the one who is a manager who likes to manage systems, who likes to manage people, who likes to keep people under control, who likes to have systems for making sure that things are done the same way every single time. The manager is the one who is interested in making sure you get the best possible quality. And that everyone is going to be successful in the long term. They want that stability. They want the systems in place to ensure your business will thrive in the long term.
Type 3 – The Artist
Then you have the artist. The artist is the one who is all about the cause of the business. Now, we hear artist, and we think of people who paint or draw or dance, but in this case, it doesn’t have to be that. A dry cleaner can be an artist or restaurant can have an artist as an owner.
A recycling company can have an artist as an owner. It doesn’t matter. Whatever it is, it’s the person who is all about the art. They are all about the service or the product. They are all about the thing that people are buying from you, right? So they are all about quality. They are all about making sure that you stay true to what this thing is.
So, to help you understand this, I’m going to give you an example that I use in my book The Business Bible. By the way, if you haven’t read the book, check it out. It’s pretty amazing. Got some really incredible things that can help your business to the next level but in the book, what I talk about is this example of a chef, right? And I give different examples of how a restaurant can be run.
An Example of Each Type of CEO in Action
So let me give you an example of what an entrepreneur does in a restaurant, what an operator does and then what an artist does, ok? So, let’s assume you have an entrepreneur who opens a restaurant. It’s an Italian restaurant. So this entrepreneur opens a restaurant and they are doing really well. The business is growing and the people love the food.
This person is all about let’s grow the business. Let’s add more seats. Let’s expand. Let’s open another restaurant in another city nearby. Let’s expand to another state. Let’s franchise this thing. Let’s go, let’s go, let’s go. It’s all about grow, grow, grow, push, push, push, push. You know we’re making money. Let’s push it. Let’s make more money. And then they are taking risk, right?
They got a restaurant let’s say a thousand square feet. They are signing a lease on five thousand square feet because they believe it’s going to work. It’s ok. Let’s push, let’s push. And then one day someone comes and say “Gosh, you know, I really love your lasagna here. But you know what will make your lasagna even better?
What would make it even better is if you guys put mushrooms in it. If you put mushroom in your lasagna, it would be so much better”. And the entrepreneur would say “Really? Would you be willing to pay extra for the mushrooms?” the person will be like “Yeah! Are you kidding me? I would love it”.
Different Types of CEO Leadership Styles in Action
The entrepreneur will be running back and tell to people in the kitchen. “Hey, make me a lasagna with mushrooms in it. And you’ll serve it to the person and say “Hey, what do you think? The guy says “Oh my gosh! This is amazing. I’ll at least pay an extra $2 for this”. Then the entrepreneur would maybe make it a special the next day, right?
And say “Hey, we have this new lasagna with mushrooms”. And charge $2 more and see what kind of effect it has. And if a bunch of people are like “Yeah! We want it”. And then they are ordering it. Guess what? The entrepreneur is going to change the menu and he’s going to put the lasagna with mushrooms on the menu, right? Simple business. If it makes more money, if it makes sense, I’m going to do it. Now, let’s say you have the artist instead.
This is where the huge contrast between the entrepreneur and an artist comes in. And let’s say the entrepreneur and the artist, in this case, are business partners. So now let’s say the artist hears the same thing and the artist hears that this guy has started putting lasagna with mushrooms. And the artist comes out and says “Are you kidding me? That is my grandmother’s lasagna recipe. You know back in Naples where I came from.
We don’t put mushrooms inside of lasagna. It’s ridiculous to put mushrooms inside of lasagna. And the entrepreneur is like “You don’t understand. People are willing to pay an extra $2 for this. That could be a huge revenue for us”.
The artist is like “No! Are you kidding me? If you just want to stick everything in there that these people want. We’re going to ruin our food. We have to stay true to the Italian food that we represent. Look at the sign outside. It’s says Authentic Italian food from Naples”.
So, we got to make sure that we are true to the cause. And the entrepreneur says “You don’t understand. People don’t like our current lasagna”. And he’s like “I don’t care if they don’t like our lasagna. This is the way the lasagna is made and we’re going to make is this way because this is the way it is supposed to be done”. See an artist is all about the way things are supposed to be.
An artist is about staying true to the cause. And an artist is the one who will throw someone out of their restaurant if they complain about the food, right? Because the artist care so much about the art that the art goes beyond the business. Now, as the entrepreneur says “Let’s open another branch”.
The artist is like “Are you kidding me? We can’t open another branch. Because there is no way I can work at both restaurants”. The entrepreneur says “Don’t worry about it. We just hire people”. He’s like “ No you don’t understand.
The reason our food taste so good is because I make the sauce myself. There is no way someone else in another state or another city can make the sauce that I make it”. The entrepreneur says “It doesn’t matter. You just teach them”. The artist says “No! I’m not going to teach my recipe to someone.
Plus, if I teach it to them, there’s no way they can make it as good as me”. And while these two are arguing back and forth, back and forth, back and forth. Let’s say they have a third business partner. And this is the manager or the operator. The operator comes up and say “Hey, hey, hey. What are you guys arguing about? My goodness! You’re killing me here. What’s all the yelling and screaming about?”.
And the entrepreneur says “This guy the artist isn’t listening to me. He’s going to destroy this business because I’m trying to grow the business. I’m trying to make us a lot more money. And I’m about to sign a lease and I’m trying to make our menu better and he’s getting in the way”.
And the artist says “Are you kidding me? This guy is going to ruin our restaurant. He’s going to ruin our food. He’s going to destroy it all for us and people aren’t going to like us. Plus, we’re not going to have a true authentic Italian food that we’re promising people. And what happens when a real Italian comes in here. They are going to see that we are a fake company that is faking this stuff”.
And the operator says “Listen. I don’t care how you guys do it. I don’t care if you put mushrooms in the lasagna or you don’t put mushroom in the lasagna. Let me tell you the feedback I’m getting from people. The feedback I’m getting from people is that our lasagna tastes different on some days than other days.
Because on the days that you’re here Mr. Artist chef, you’re doing things to the food that people are not doing on the days you’re not here. So the kitchen is not cooking the food consistently. Plus, Mr. Entrepreneur, I know you want to put mushrooms in there but you can’t just go and tell the kitchen to start putting mushrooms in there. We got to make sure we create a recipe of exactly how much mushrooms are going to go in there.
And if we’re going to put mushrooms in there, what else needs to go in there to blend with it to make it even better? And as far as signing all these new leases, hey I’m okay growing but we got to sit down and we got to do some strategic planning.
I want to do some budgeting. I want to see if we can afford this thing. And there is no way we can afford a five thousand square foot restaurant.” See, the operator is all about the consistency. It’s about making sure that the systems are in place to get something repeatedly, right?
They are not after quick results. Whereas the entrepreneur is just like grow, grow, grow, grow, go, go, go, go, go, go. And the artist is all about the art form. The operator is the one who wants consistency, and finally the operators says “Look, I don’t care if you put mushrooms in the lasagna or not. All I know is I want the food made exactly the same way every single time. And if we want to see what people like more? We’re going to do a survey. We’re going to serve 25 of them with mushrooms and 25 without. And let’s see which of them people like better. See, that’s the difference between those three.
What is Your Natural CEO Type?
Now, every single one of you listening to this, you are either an entrepreneur, an operator or you are an artist. And it is critical to identify which of those three you are naturally.
Because of those comes to you very, very naturally. And if you’ve been told your whole life you’re an entrepreneur. This is when you start having sort of this internal conflict. Where you want to believe you are an entrepreneur but if you are not a risk taker, let me tell you, if you are not a crazy risk taker, you are not an entrepreneur.
You are probably an operator or you are an artist. But because you’ve been told you are an entrepreneur for so long, you may have adopted that terminology. And you can use that terminology with other people but you’ve got to understand an entrepreneur is a crazy risk taker. See entrepreneurs almost have a disease.
Now, I can say that because I am an entrepreneur first in most of my businesses. And it is interesting because this is something that I had been taught in the past. And I thought people were born as one of these things and they stay at one of these things. And it turns out in a different business you may actually be something different.
See, as you are listening to this podcast, this is part of Titanium Success for me. But that is only one of six companies that I run. Ironically, Titanium Success is the only unprofitable company that I operate. And guess what? It’s the only company in which I am an artist.
In every one of my businesses, I am an entrepreneur first. When it comes to Titanium Success, I am an artist. That’s why I’m standing here, on a Friday morning. And I’m recording a podcast and it’s going out there to the world listen to for free.
Are you kidding me? In my other businesses as an entrepreneur “I would say, no! We’re not going to put free content out there. If I spent time recording something, it’s going to be something we can get paid for”. So the entrepreneur is trying to grow the business.
Pushing it, crazy, doing things that are out of this world. Now, what I can tell you is this, one of these things comes naturally to you. And there’s a second one that you can adapt to learn, right? And you could hone and you can make it better.
What is Your Forgotten CEO Type?
But then there is a third one that I guarantee you, I assure you, I promise you. There is no way you are going to be able to develop that third one to the level it needs to be at for you to succeed. And if you try, it is a complete way to waste your time.
Because guess what? There is someone else out there, who is that person. And if you’re going to bring them into your business, they will complete you as a CEO. And they will complete your business. So the key is you got to identify which of these you are, which one you can adapt to learn and then which one is the one that you’re just going to hire someone to take care off.
And then the best companies in the world whether they’re two people companies or two thousand-person company. You see that the top of the company, you have this thing were you have possibly someone who is an entrepreneur and can adapt to the artist. And then there is an operator.
Or it’s an operator who can adapt to entrepreneurship and then you will have an artist. It doesn’t matter. The mixture is not what’s important. It’s important that you as the CEO, as the business owner. Take one of those things and make sure that is one you’re born with.
That’s the one that is naturally inside of you. You’ll adapt to the second one. Learn the ways of that second one. Hone it and make it even better and then find someone for the third one. If you do that your business will get to levels you’ve never imagine.
Some Examples of CEO Combinations in Action
Now let me tell you, if you are missing the entrepreneur piece and you are an operator first and an artist second. Let me tell you what exactly what your business looks like. I can describe this to you, and if this is your business, this is what you are. Let’s take the case of someone who is an operator first, artist second and entrepreneur at last.
What your business is, I guarantee you, you have a profitable business. Number one, your business is stable, you probably work fairly normal hours but you probably can’t take long ridiculous vacations.
You have to be on top of your business but your business functions fairly well. You deliver good products, good service. You have high customer service reviews. And things in your company work fairly well. But I guarantee you if you’re in business for five years, you haven’t grown your business as much as you want. You’re probably not making as much money as you want.
You haven’t pushed the business to the next level. And that is because the entrepreneur in you is lacking, right? Now let’s say what if you’re an artist first, an operator second and an entrepreneur third. If you are one of these people, chances are, you either have business does not make you a profit or just barely pays for your living expenses.
However, I guarantee, you make a damn good product or service. If you own a restaurant, I want to eat at your restaurant. Let me tell you, if you are an artist first, operator second and entrepreneur third. I would like to eat the food that you make. Now, by the way, you might not have great customer service reviews, not as good as the operator and it’s odd. But the thing is you don’t care necessarily what the customer says.
You care about doing it the right way. So if you own a restaurant, I bet you, you make amazing food. But I bet, you’ll refuse to serve a customer if they do something that you feel goes against what you’re supposed to be doing.
Another Example of a CEO Combination
But that’s where you’re at if you are in that scenario. Now, let’s say you’re an entrepreneur first, an artist second and an operator third. I could tell you what this is because this is who I am. What you probably have is a business or businesses that have grown way to fast. That are typically out of control at all times. By the way, this is unless you’ve brought an operator to fill in that gap, right? And all these cases assuming you don’t have that third piece yet. So you have these businesses that are growing exponentially.
You’re doing incredible things. Some are making huge amounts of money, some are losing money, someones you win, someones you lose but it’s always up and down. It’s all over the place, right? And I guarantee you, you can actually get away from your business for a long period of time. But things start to fall apart, right?
There is no system in place necessary for you to see those things falling apart immediately. So when they fall apart, you notice them later, but in the operator’s world, those things are in front of you. Now, let’s say you have a business where you are two of these things and you bring in that third person. Now what it means is that your business, you’re growing at a steady phase. But see the entrepreneur can’t just put his foot on the gas pedal and go go go go go, right? Because grow, grow, gone. You’ve heard that saying before. That’s what happens for a lot of businesses.
The operator is going to come in and put a little bit of the brakes on and say “no, no, no. Let’s back up. Let’s slow down. Let’s not take crazy risks. And then the artist is going to make sure you stay true to your art form.
So if you have these three things in place you can thrive as a business owner. What I want you to understand here before I let you go, is you must identify which of these three you are and identify which of these you can adapt to the best. And then find the third piece that you are missing. And I don’t care if you are launching a company today.
Hire Someone Whose Dominant Type is Your Forgotten Type
Find the third piece. And when you find that the third piece you’re going to see exactly what it takes to succeed and you’re going to want to make sure you put those pieces together and even if you’re just bringing in a friend, if it is bringing in a spouse, if it is bringing in someone.
Just to make sure they put you in your place and they check you every once in a while. And if you have business that’s been going for a while, what you need to do is find that person, hire them, bring them in and give them control. Because here’s the trick of this.
The last thing I want to leave you with is if you hire that person who’s that third missing piece. I guarantee you, you will clash with them. But tell them that you understand you’re going to clash. And make sure you understand when you clash you can’t override all their decisions. Because if you are an entrepreneur and you bring in an operator. The operator is going to disagree with you often.
You’re going to have to back off and you’re going to let them win some of the arguments even though you are the big boss, alright? And by the way, any of you that have a business partner and clashed but you made a lot of money. This is probably why. You probably didn’t get along with the business partner but because they were two different personality types.
Your business probably thrives and you just didn’t even know it. You just didn’t realize it. All the horrible decisions that the other person is making are actually helping you be more successful. And the decisions that they think you’re making that are horrible, are making them more successful. So get out there. Put this stuff to use. I love you all. And I want to always remind you lead with your heart.