Industry executives are responsible for the operational and strategic direction of corporations. A small business may have a couple of executives, such as the founding partners, while a large multinational may have dozens of executives all over the world. Executive compensation is higher because the demands and responsibilities are greater. Base salaries, bonuses and stock options are usually part of the compensation structure.
The number and types of executives depend on the size of the company and the industry. The most senior executives are the chief executive officer, president, chief operating officer and chief financial officer. Some companies combine senior executive roles. The chairman of the board of directors is usually a nonexecutive position, unless the president or the CEO is also the chairman. Other industry executives include chief scientific officer for pharmaceutical companies, chief technical officer for technology companies, chief marketing officer and chief information officer.
Executives are involved in strategic and operational roles. Strategic roles involve developing new products, expanding into new markets and making acquisitions. Operational roles involve the day-to-day management of manufacturing, design, sales and other functions. Roger Martin, dean of the University of Toronto business school, wrote in a February 2010 "Harvard Business Review" blog post that executive roles have evolved over time. In the past, executives could have a more intimate relationship with customers because they served local and regional markets. This remains true for small businesses today. However, with rapid growth and international expansion, the relationship between executives and their stakeholders -- customers, suppliers, employees and shareholders -- have become more distant and impersonal.
The success factors for executives are usually the same regardless of the industry. Executives should communicate strategically, writes Cynthia Morrison Phoel in a February 2007 "Harvard Management Update" article. She quotes former executive and author Scott Elbin who recommends that executives have a specific outcome in mind every time they speak because their words will carry more weight. Successful executives get the right people and rely on their teams to carry out the company's operational and strategic objectives. They establish credibility with other executives in the industry. Successful executives also learn to keep the big picture in mind and are not afraid to take risks to grow their companies.
Considerations: New Executives
The first few months on the job are usually the toughest for new executives, even if they have come up through the ranks. Leadership consultant John Baldoni wrote in a May 2008 "Harvard Business Review" blog post that companies should set clear and reasonable expectations because it takes time for people to come up to speed in a new setting. Coaching and mentoring by a senior member of the board or a retired executive may help, as would a formal transition process where the departing executive stays on for a few months to help the incoming executive.