The Best Advice for Making an Executive Hire
The hard truth is that the vast majority of startups will fail. A business can live or die based on the right or wrong executive hire.
In business and in life, it’s wise to heed the words of Epictetus: “First, say to yourself what you would be. Then do what you have to do.” In building the best leadership team and making the right executive hire, the only question is: will you do what is required?
The wrong executive hire at a high-growth business costs significantly more than at a slower growth company. It can literally put your survival at stake when an executive leadership role is involved. When hiring an executive leader, does it really make sense to be penny wise and pound foolish?
Anything that slows down your ability to execute translates into lost market opportunity or advantage. Growth is crunch time: either leadership will have the capacity to grow organizational effectiveness, execution competence and performance agility, or the things that made your business a hot prospect in the beginning will wither and die. When it comes to hiring an executive leader, being thrifty or hasty is a sure recipe for loss of momentum and operational horsepower.
Moreover, the Society for Human Resources Management puts the cost of replacing a bad hire at up to five times their annual salary. And the costs rise steeply as you ascend the organizational ladder. Then there are the intangible costs. High turnover impacts morale, creates organizational drag and produces a loss in opportunity costs. Success in anything requires a full-time effort. When in high-growth mode, the costs of turbulence in your leadership team are especially disruptive and even devastating.
If you want to avoid being part of the vast majority of startups that fail, understand the high costs of making a bad executive hire. Then develop and invest in a smart plan, a process to evaluate the wide reaches of the market for top leaders, and recruit the top caliber executive leader that is right for you. Fear, greed and scarcity are all part of the same mindset and can break your entrepreneurial dreams. To grow a thriving business, the opposite is needed. Exercise your abundance mindset and the bold confidence you need to achieve your mission.
Everything bad that happens at a company is fundamentally a people problem. What’s also true is that there is an A+ player for every role in every company. Executive recruitment, done the right way, will uplift your business and bring it to the next level of success. Luckily, recruiting is a leadership competency and can be developed. Acquiring the top 1% of A+ executive leadership will require the same level of grit, sweat and indefatigable determination it takes to launch and grow your business.
You are determined to turn your vision into reality. You’re ready to disrupt markets, design entirely new ecosystems, conquer and change the world with what you’re doing. That’s why your business deserves the most talented executive leadership team.
So, how DO you recruit for key roles with precision and skill? Here are three important basics I can’t stress enough.
A Handy ABC:
This one may seem counterintuitive. After all, when searches languish for months as over-stretched executives spend their days firefighting and making it work (the everyday norm for growth mode), organizational chaos is not far behind.
You need to fill key leadership roles quickly. The need to get those empty slots filled can pressure executive teams to rely on paper indicators and make hasty decisions. That can be a costly mistake. Nature abhors a vacuum; your search will create opportunities for your team to step up and fill in some gaps. Reward initiative with battle pay. Then get the right hire fast, and be confident that your analysis was thorough enough to make sure it will last.
Brain Surgery, Don’t Perform it on Yourself
Bring in help. If you’re beginning to ask yourself if you need a professional executive recruiter on your side, then you should have hired one last month. The return on a proper executive search is 1,000%.
First-time CEOs often make the mistake of hiring a big name search firm. Look deeper into who you choose to partner with and select a master headhunter based on that person’s background and experience. Don’t settle for a recruiter running potential hires through a series of prefab tests or pushing leftovers from other searches.
Look at it this way: your enterprise value is scaling up because you value expertise. Expertise doesn’t start and end with technical know-how. Find an executive recruiter that has been in the trenches, gets culture, and — ideally — one that handcrafts every fit. If the cost of a recruiter has you in sticker shock , compare it to the costs of replacing a bad hire. Then go for a run or grab a coffee and rethink your math.
A high-level candidate’s skills and talents won’t count for much unless they can actualize those skills and talents within the culture of your team. Gut instinct isn’t a reliable guide, a time-tested proven methodology is. When your management team is a team of three buddies, then yeah — your instinctual liking for one another counts for a lot. As your organization grows, assessing cultural fit becomes a much more subtle and complex challenge. Recruiting for a seamless culture fit requires a fierce drive to find the ideal candidate — an elite, special forces approach to recruiting — and it takes strategy and expertise to expedite the search.
The best utilization of venture capital is to acquire the right human capital.