Tips for Hiring at the Top
Robert (Bob) L. Pearson, Chief Executive Officer, Pearson Partners International
There’s no easy answer to the question of how to hire top executives for growth companies. It takes a lot of time, patience, and reference checking.
All companies want to make the right hire because they know that a bad decision is a costly mistake. It can cost up to two to three times a person’s salary to replace him.
The recruitment industry has many tools to help you hire good people, including personality and intelligence tests. While the tools can be helpful, they’re not a magic bullet. Simply put, it takes a lot of hard work to find the right person to fill a top spot.
Hiring at the top is labor-intensive, in part, because it means tracking a person’s entire career. It means talking to every boss over the past ten to twelve years, checking every reference, and doing background checks.
The CEO, especially, is the most demanding job to fill because the job requirements are amorphous. A CEO’s skill set is harder to reference than a skill set, for say, a CFO or the head sales guy. A company doesn’t always have a clear description of what’s needed in the top leader. I think a candidate for a CEO position should have the following skills:
- A clear demonstration of career success
- Experience in a public environment
- A strong network
- Excellent leadership ability
- Industry-specific experience – both domestic and international
- Key customer contacts
Some CEOs, with or without any of these traits, certainly can succeed and get the job done. A CEO with some degree of charisma, however, can better link their success with advancement of their company’s reputation.
Hiring the CEO is one thing. Consider entrepreneurs who need to hire their key employees. Entrepreneurs, unfortunately, often do a bad job in the hiring process. They can be so tied up in all aspects of running their growth companies that they don’t have the time or patience for the hiring process. They tend to rush it.
Having said that, here are a few of my best practices for entrepreneurs to consider in hiring their team:
Start with a Clear Job Description
The job description helps you know where you’re going in your search. It will help you get the right person. At Pearson Partners, we always have a specification for the job. We offer our clients, for example, fifteen candidates and ask the client who they’re preliminarily interested in from this initial group. Sometimes a client will say, “We won’t hire anyone from IBM; they won’t fit our culture.” This helps us better understand what type of person they’re looking for.
Check Every Reference
In today’s world, past employers aren’t open to much discussion about a candidate’s job performance, but there are ways to get around this. When you talk to a reference, ask something specific. For example, if you need to find an executive with a record of success in developing an international business, ask the reference, “I see that Mr. Smith has listed on his resume that he developed international businesses for your company. Can you tell me about that?” It’ll be hard not to answer a question like that. You can also offer that references talk off the record.
The CEO Has to be Involved and Know What He Wants
The CEO needs to know exactly what he wants in his hire, especially the softer characteristics. Do you want someone who has strong verbal skills? Or can the person be the quiet type as long as he has strong management skills. When I was CEO of Lamalie Associates, then the fastest-growing NASDAQ international executive search firm, my main objective was to get a team of people to make tough decisions without me there.
Develop a Coaching or Mentoring Program
Almost everyone needs additional coaching to get integrated into the business and to develop in the position. It’s rare that you can just say, “Go do it.” Most people need to be integrated. I’ve found that companies don’t pay enough attention to keeping people once they’re hired. People take jobs for two reasons – money and a challenge. It has to be both. But money and a challenge won’t necessarily keep them. They’ll stay because they’re enjoying success and see a clear strategic direction for the company. If a candidate doesn’t know where they’re going at a company, chances are they won’t stay. GE’s Jack Welch said that he spent 50 percent of this time coaching. Microsoft is another example of a company that integrates employees well into its culture.
Realize that Some Jobs aren’t Industry Specific
Companies like to have industry-specific candidates, but the fact is this is not always a necessity. A CFO, for example, is a position that I don’t think is industry specific. You can bring in a CFO from a different industry. If the company is a spin-off, however, and you’re looking for a division head, then you might want to look for a CFO from the same industry. Interestingly, in my experience, I’ve found that great leaders often are ex-military people. Don’t overlook these kind of candidates; they often provide great leadership in teamwork and trust. I never met someone who graduated from a one of the military service academies who wasn’t a leader, and I’ve placed many in various positions.
Get Out of a Bad Hire Sooner Rather than Later
One of the biggest mistakes companies often make is a bad hire. It’s human nature to try to do everything possible to make the position work out. Companies take all kinds of measures to avoid a firing. Sometimes a company will take person out of the loop just so he can’t do any damage. The best thing to do, however, is to cut him loose, as soon as possible. In entrepreneurial companies especially, you often see family situations going bad. A son, for example, may be C player and isn’t cutting it. I usually recommend a discussion about performance. Employees deserve guidance and feedback on their performance so they can become a contributor. Just don’t wait too long to do it.
We all know what a difference one person can make in an organization. He can turn a company that was in chaos into a winner. When a good team is in place, it can make all the difference for your company. The distinguishing factor? Great leadership.
© 2006 Ewing Marion Kauffman Foundation. All rights reserved.