What does a CEO do differently than a founder? title and the differences.
Since LinkedIn and XING, it has been en vogue to adorn oneself with various titles. It’s also understandable. According to abbreviationfinder, CEO sounds better than managing director and founder makes more than founder. But are these titles just a sign of the times and globalization or is it just some kind of name dropping? This is probably a question that cannot be answered here either. The only important thing is what these titles mean and what they say on portals like LinkedIn and what impression they make. Here we give a brief overview of the most common titles and which titles are most appropriate for which phase of founding a company.
A founder is a popular title, especially in the start-up industry. When a new company has been founded, it can also happen on its own. As a CEO and managing director, it is usually necessary to have employees to instruct. However, if you don’t have any comrades-in-arms in the new company, you can hardly give instructions to anyone. Here one should probably also leave the church in the village on the professional portals. Sometimes you have to appear bigger than you really are. But not at the expense of credibility. And it seems unbelievable when you set yourself too high and pretend to be the CEO of a huge company, for a company that has just been founded and where just one founder has developed an idea.
This title makes sense when there is more than one founder. Of course, you can also clarify the distribution of roles here right from the start. CEO, CMO, CCO, CFO,… but especially as a new founder, it is better to stack it a little lower here, too, so as not to raise expectations that are subsequently disappointed.
The CEO is the highest ranking title in a company and he has the main responsibility in a company. The CEO can best be compared to the managing director. He makes the most important strategic decisions and is responsible for managing the entire business. In smaller companies, the tasks can sometimes be more practical. In this way, the CEO can also be involved in the operational business there. While the title is similar to Managing Director, there are still differences. There is usually only one CEO, but there can be several managing directors in a company. From a legal point of view, the CEO has no relevance in German-speaking countries, but the managing director does. Although CEO is known worldwide, it has a different meaning in some countries.
The CFO is the chief financial officer. He is responsible for the finances. In Europe, a CFO has no legal significance. In Anglo-Saxon countries, a CFO is mainly employed in an AG. Therefore, legal relevance is also decisive. He also manages the commercial operational business to a certain extent. Thus, he is to be equated with the commercial director.
The Chief Marketing Officer is responsible for marketing. Not just marketing in the sense of advertising and brand communication, but especially in the area of price and product policy. A CMO should have good communication skills and a feel for customers and target groups.
In start-ups with a technological background, you often see a Chief Technology Officer. Here, too, as the name suggests, one finds the expertise of the CTO in the area of research and technical innovations. He also serves as an interface between management and the technical department.
If you are responsible for day-to-day operational decisions, then you are at home in the Chief Operation Officer’s department. The COO manages the day-to-day business, so to speak, and creates long-term structures in your company. And do not underestimate good structures, because we can confirm from experience that when large companies grow, the processes and structures rarely grow with them. This often leads to discrepancies within the company and to unclear role allocations among the various units and departments.
The acronym stands for Chief Business Development Officer. He is responsible for the strategic development of the company. If new business areas have to be developed or the international market is entered, he is in charge and integrated in the middle of the process.
The Chief Content Officer belongs to the Marketing Unit and is responsible for the content of the measures and campaigns. Website content and PR can also fall within his area of activity.
What used to be the head of HR is now the CHRO. Here it is probably clear where his field of activity lies.
He manages the company and bears overall responsibility for market success. With a certain type of company, it is legally imperative that a director be appointed. Normally, the managing director is also the owner, except in the case of stock corporations, in which case the board of directors takes over the management. This condition also separates the managing director from the CEO and the owner.
Unfortunately, the jungle of company titles is not getting any easier to see through. However, you should simply ask yourself how comfortable you feel with a certain title. Especially on portals like LinkedIn, there is sometimes very high gambling with various titles. In general, the approach is not bad, because especially in the start-up phase it is sometimes not a bad tactic to artificially expand a little to show that you have the capacity to meet customer expectations (of course only if you really have them). However, it makes very little sense to pose as a CEO if you don’t have employees or call yourself a founder when you’ve been running a family business for 15 years. The connection to the respective business is also important.