How to Know if You Have the Right Executives on Your Leadership Team

Is your leadership team world-class?  Are some of your executives holding your company back?  Could you grow faster if you replaced your head of sales?

Does your board think you have the right leadership team?  Heck, does your leadership team think you have the right leadership team?  Do your rank-and-file employees?

When you stick with a VP who helped build the company but who seems to be past their sell-by date, are you demonstrating loyalty as a strength or conflict-aversion as a weakness?

These are some of the questions that keep founder/CEOs up at night.  While founders who’ve spent time at larger companies have some experience with SVPs and CXOs at different scale, for many founders this is entirely greenfield territory.  Think:  I’ve built this great $10M ARR company but I have never run (or been a C-level executive at) a $50M ARR company, ergo I really have no idea what the proverbial “next-level” team looks like.

Or, simply put, how do you know if you have the right people around executive staff table?  To determine the answer, do these 5 things:

• Evaluate performance.  An obvious sign that someone is in over their head is a lack of performance, missing targets (e.g., new ARR), OKRs, or hiring goals — either in terms of number or quality (particularly when staffing their own leadership team).  Someone who’s not performing is definitionally already in over their head today; we don’t need to wonder about tomorrow.
• Get 360 degree feedback.  From your team’s leadership coach (if you have one), from the e-staff peer group, from a formal 360 degree feedback program, from employee satisfaction surveys (e.g., CultureAmp), and from the board.  This informs you with a holistic view of how the executive is seen within the organization.
• Do calibration meetings.  Always be calibrating — always seek out next-level or next-next-level executives and have a coffee with them.  The only way I know to develop your own sense of “seniority” is to meet lots of senior people.  Use your board and your network to get access.  Ask questions about current issues you’re facing and the road ahead.  You’ll build your network, have people you can rely on for future advice, and — who knows — maybe one day you’ll come back and hire some of them.  The next time one of your board members says, “your CXO isn’t world-class,” ask them for three introductions to people who are.
• Listen to your gut.  Do you look forward to meeting with them?  Do they bring or take energy?  Are meetings more productive when they come or when don’t?  Do they suck the air out of the room?  Are they Eeyore or Pooh?  If you consistently don’t look forward to meeting with one of your direct reports, it’s an important tell of a major problem.  The e-staff is helping you build your company; you should be excited to meet with each and every one of them, every time.  If you’re not, you need to ask yourself why.
• Ask.  Sit down and ask the executive how they’re doing, how they feel about the organization and the road ahead, if they’re still having fun and enjoying their job, and if they feel like they are up to (and up for) the challenges ahead.  Sometimes, they’ll share their concerns and you can build a program to support them.  Sometimes, they won’t be candid, effectively denying themselves help or redeployment.  Sometimes, as once happened to me, they’ll say they’ve been thinking about going into real estate with their brother.  You won’t find out if you don’t ask.

The most important part of this process is realizing that you have options and using them.  Unless you want to create an up-or-out culture of disposable people, you need to consider all your options for an executive who has run out of runway:

• Redeployment.  Moving them to a different, senior post (e.g., taking your old VP of Marketing and having them go to London to help open Europe).
• Layering up.  Restructuring so as to add an additional layer above the executive.  People generally don’t like this but will try and/or tolerate it if they understand why you’re making the change and believe that they can potentially learn something.  (Unvested in-the-money options don’t hurt, either.)
• Benching.  Given them an important job but one below their capabilities until such time as you find something you really need them to do.  Think:  you’re still on the team but not playing this period while I figure out what to do with you.  Too few executives do this because it’s nominally expensive, but the cost of not doing it is a loss of talent and organizational knowledge.
• Leave of absence.  In some cases, rather than carry the player on the bench, both the company and the executive could benefit from a leave of absence for a few months where, in a good scenario, the executive returns into a needed role, refreshed and ready for a new challenge.

The more fluid and flexible your culture — e.g., defining jobs more as tours of duty while building the company than as functional empire building — the more options you will have.  But it all starts with answering the question:  do I have the right executives around the table?

Do the 5 actions above to figure it out.