My experience as CEO was that my job was to keep everyone focused and pulling in the same direction. The best way to do this was to communicate clearly and on multiple levels the reasons for doing something and also outline the opportunities the expected outcomes will create.

A good CEO is one that needs to play the CEO card as little as possible due to a mastery of the referent, expert and reward power. If you have to use the threat of punishment to get someone to do something it's already too late.

(OP here) I wholeheartedly agree. Obviously you can't run around firing people willy-nilly. Once you realize that that's really your only recourse, and that it has to be a bastion of last resort, you can focus your time on the real meat of your job: hiring and inspiring.