When you advance in the mage's guild for example it is expected of you to show the required knowledge and skills with spells needed for you to hold your position and rank. You cannot become a high-ranked official in the mages guild if you have not even surpassed the adept level of spells yet. You should atleast show that you have fully mastered or are very well-trained in a specific school of magic such as conjuration that surpasses the skill level of any of your colleagues before advancing to any form of higher ranking within that guild. What happens if say for example you who is an apprentice and you do quests in the mages guild and for all the quests you have done your named Archmage? Well I'm sure one of your "trainers" who is far more skilled in magic than you are will be able to take you down and take for himself position of Archmage instead. Same thing with every other guild in the game. You can't become head of any guild until you have shown that you have a masterful skill in anything more so than your guildmates. Nor can a warrior become head of the mages guild because mages would disagree with someone who has no basic of knowledge of spellcraft and also warriors tend to show mages that they disagree with using magic to achieve their goals so how can a warrior fit into being head of the mages guild? It makes no sense...
One more thing I would like to note is that I don't fully understand the concept of being head of ALL the guilds is supposed to work? What happens if say someone challenges you for the right to become head of a specific guild? Well they would probably end up being head of every other guild in the game or he would be head of "his guild" and the other guilds would be derived into chaos attempting to name a new guildmaster for their guild. Does anyone else agree with the points I'm trying to make?

. I wont mention the DLC in detail but expect it to work in the same way the guilds do belive me.