Top Ten Tips For Hiring A Senior Executive
Posted by Mohammed Chowdhury on
TOP TEN TIPS FOR HIRING A SENIOR EXECUTIVE
By Bob Norton, Serial Entrepreneur and CEO Coach
There is no more important decision than choosing the people at the top of your organization. After all, they will hire or approve everyone else in the company, set the tome for values, and make virtually all key decisions that will mean success or failure every business day.
A structured approach to hiring that includes all of the following items must ALWAYS be followed for any senior-level hire (VP and above), where the cost of a mistake can often be a six-figure sum.
Understand the direction in which the Board of Directors wants to take the company over the next few years and how the requisite skills are represented or missing on the current management team. Understand and be prepared to provide the necessary resources for growth. These are not difficult to define at the macro level and the new executive will certainly fill in the details later. Consider the possibility of hiring a consultant to do a "quick and dirty" job on this to get it in the right ballpark. This will be money well spent as it will define who you will want to recruit and without it, you are basically shooting dice.
Develop a detailed job description, with specific attributes and personality traits, which will help the company to accomplish its goals over the next few years. If you do not a have complete vision/plan then you need to seriously consider an interim executive development one, taking into consideration the current management team's depth and skills. Specific personality traits and success at specific functions are the most important criteria, not education, name brand company experience, or popularity. Staying on track with these priorities is difficult and must be managed by the most senior person available.
Circulate this job description to obtain input and comments from your Board and those senior executives that will have to work for or closely with this executive.
Decide on the interview process and order. Who will interview the candidate? Who will have final veto power or ultimate hiring authority? Who will interview as a courtesy, but not be a large factor in the hiring decision because they do not have the necessary experience to provide valuable input? Many companies fail here because they use people to screen without any experience in the skill set they are looking for. You should be leveraging your Board and network for people with the exact experience you are hiring during a FIRST interview. Recruiters generally only compare criteria on paper, they have rarely done that job before and therefore typically can not give a very credible opinion on the candidate’s ability to perform. The senior executive should never be interviewed in depth by an HR or personnel person. This can discourage the best candidates who should not be made to think the organization is so political that they would be beholden to the staff person in charge of coordinating candidates. This person should only coordinate interviews; they do not have the skill sets to screen high-level candidates.
Have the team meet immediately after each interview, by phone if necessary, to review their feelings about the candidate. Have the senior executive in charge of the final hiring decision structure the meeting and review process to focus on the key elements needed to make the executive successful in that position. The focus should not be on personality or other softer attributes they tend to dominate group discussions and opinions sometimes. While the chemistry must work, and there is a threshold here, the skill set and personality type being appropriate to the specific position will be a larger success factor. For example, an accounting position usually requires a personality type with attention to detail and a conservation approach, while a sales position requires strong people skills, a personality that is not deterred by constant rejection, and an ability to manage their time and activity well to drive results.
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Network first, and then consider an advertisement as a second resource. Make use of an executive recruiter as a last resort only after the first look at available candidates and if you do have not found several good choices. I have been recruited for a huge fee after that same company got my resume and a direct phone call first. That was a wasted $50,000 fee by the company! Remember, less than 15% of positions are filled by executive recruiters. You can easily conduct a confidential search on your own using a PO box, directors' homes for interviews, non-disclosure agreements as well as other easy and convenient techniques.
Interview until you have at least 3 strong candidates, but compress them into as short a time span as possible because the best candidates will become unavailable the quickest. Using an interim executive can allow you to say "We do not have a GREAT candidate yet" and will allow you to wait for a better set. Repeat this process as long as necessary until the right candidate is found. Compromises here are very costly so you do not want to be under the gun.
Check references, less for the reference itself and more for a hint on the candidate’s strengths and weaknesses and an understanding of how to work with and/or manage them later. Also, get referrals to references the candidate did not give you through your own Rolodex or from the references they did give. These are MUCH better reference checks as they are not friends, prepped or hand-selected for the best or ideal work experience and perception. We all have weaknesses, if the reference is not providing you with any they are not a good reference.
Take your time to negotiate a package. The best candidates are going to want the best packages as they know what they are worth in the marketplace, no matter what the current conditions may be. You do not want someone working for your company as an executive that does not understand their worth in the marketplace. If they don't negotiate the best deal for themselves how could they do it for your company? -- The table will turn the minute they join the company and you will get back 10 fold on those negotiation and market knowledge skills, so be patient and be prepared to pay fair market value, at a minimum, to acquire the best quality candidates.
Don't be rushed by day-to-day problems and compromise. If you get this right, everything else will begin to fall into place. However, if you get it wrong there is NO WAY you can be successful. Use a temporary solution to fill the vacuum with a plan to allow 3 to 6 months for the person to start.
Too many people ignore the behavior, attitude, ability to learn, and other unchangeable factors in the selection process because these are harder to discern during an interview. However, in the long term, these are the most important indicators of success.
Knowledge and Experience are a Must For Certain Positions, But Behavior is where Exceptional long-term results can be created.
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Intelligence, work ethic, self-motivation, ability, and desire to learn make great long-term employee characteristics, not experience or knowledge.
Read: THE MOST COMMON HIRING MISTAKE TODAY
We also have a list of the best reference questions, made available only to clients because publishing these can defeat their purpose and value too quickly. Since it is impossible for someone without these skills to evaluate a candidate well, you must get help from someone with experience and significant success in that area of expertise and at that stage of company development. Mr. Norton will interview executive candidates and provide a report on qualifications for a $200 flat-rate fee. We also recommend an executive testing service that is a cheap and effective way to manage your hiring risk.
Advice From A Ground Breaker and Nobel Prize Winner on Human Capital:
Gary S. Becker, the winner of the Nobel Memorial Prize for Economic Science in 1992, is a Professor of Economics and Sociology at the University of Chicago and a Senior Fellow at the Hoover Institution and University. He is recognized for his expertise in human capital, the economics of the family, and economic analysis of crime, discrimination, and population.
I would start out with some obvious things that are still sometimes forgotten: the basic resource in any company is the people. Remember Bill Gates’ famous comment that if you took away the top thirty employees at Microsoft, it would be a pretty ordinary company. And what’s true for companies is true for nations as well. In the New Economy, the reliance on people hasn’t fallen but rather increased. We are much more a human capital-based economy than the economy was even thirty years ago.
The most successful companies and the most successful countries will be those that manage human capital in the most effective and efficient fashion—investing in their workers, encouraging workers to invest in themselves, provide a good learning environment, and yes, including social capital as well as skills and training.
I also think the best companies will set up human capital accounting systems. Companies don’t have to do that under present tax law because you can expense all your expenditures on human capital, but in order for a company to know more about just what human capital is costing and what the payoff is, they want to track and assess the return on investment. I can also foresee them publicly reporting what they spend and invest in this area. In this age when human capital is such an important form of capital, how could they not want to do that?
Bob Norton is a long-time Serial Entrepreneur and CEO with four exits that returned over $1 billion to investors. He has trained, coached and advised over 1,000 CEOs since 2002. And is Founder of The CEO Boot Camp™ and Entrepreneurship University™. Mr. Norton works with companies to triple their chances of success in launching new companies and products. And helps established companies scale faster using the six AirTight Management™ systems. And helps companies successfully raise capital.
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