I was talking to a founder friend of mine the other day, and she made a comment about her startup’s search for its first non-founder (aka, “professional”) CEO. She said the following about the nearly one-year recruiting process:
“Because every person in the search process had veto power, the process was inadvertently designed to go slowly and not produce the best candidate. We passed on plenty of candidates superior to the person we eventually hired because someone had a problem with them and we assumed we’d find someone better in the future. Eventually, the combination of search fatigue with dwindling cash compelled us to act so we locked in to the best person we had in-process at the time. In effect, the process wasn’t designed to hire the most qualified candidate, but the least objectionable one.”
In this case the failed process was catastrophic. The candidate they selected took the company in a different direction and my friend the founder was pushed out a few months later.
Here are some thoughts on how to create a CEO search process that produces the best, as opposed to the least objectionable, candidate:
- Set up a search committee that does not include the whole board, so you are not creating a process with a large number of people who have veto power.
- Write down what you want in a candidate in the form of a must-have, nice-to-have list. Don’t delegate writing the core of the job spec for your new CEO to an associate at your search firm, cutting and pasting from the last spec.
- Be mindful about the sequencing and timing of candidates. Ask to see calibration candidates first to get people warmed up. Try to cluster candidates. Try to have sure candidates see the search committee in a different orders. Slow down highly-qualified early candidates and speed up highly-qualified late entrants. Like it or not, timing matters enormously.
- Check some references before passing candidates beyond the committee. Do some blind reference checking before moving candidates to the next step in the process. There’s no point in having the group falling in love with a candidate only to discover they have poor reputation or dubious claims on their resume.
- Let candidates ask for additional interviews beyond a relatively small core team instead of defining a process where every candidate automatically sees every board member and executive staffer. You can learn a ton about candidates by who they ask, and don’t ask, to see.
- Ask candidates to present their plans for the company. While all of them should include 90 days of learning and assessment (think: “seek first to understand”) before taking action, virtually any qualified and engaged candidate has an 80% developed plan in their mind, so ask them to share it with you.
Hiring a CEO is a classic case in big-time decision-making. Setting up a committee where each person has veto power is absolutely the wrong move.
Rather than veto power, a better way is to set it up like a trial. A trial gives both the prosecution and the defense ample time to present their arguments.
I’ve always recommended when hiring a member of the senior team, to select your top three or four candidates, then hold a “mock trial” where you gather all the decision-makers in a room and then present each candidate one by one and have one person argue why they are the best candidate and another argue why they’re not. That way you will be guaranteed that everyone is vetted properly and you will have the best arguments for and against.
No one is perfect and no one will be a perfect fit. But, some flaws will be easier to live with than others. Unless you have both sides of the equation covered you are making a big mistake.
I wrote about this topic recently on LinkedIn as a primer for CEO decision-making but your post is relevant as well. https://www.linkedin.com/pulse/primer-decision-making-ceos-bob-hatcher/