Identifying, Recruiting, and Hiring Your Next CEO
March 14, 2016 | Human Resources IQ
Whether true leaders are born, made, or something in between, they are out there, but they may not be easy to find. From identifying potential candidates to conducting interviews and negotiating team politics, hiring a new CEO for your company is a huge task, but it’s also one of the most important decisions your company can make.
A search committee often has a perfect person in mind before they begin their search, but that perfect fit commonly varies between each member. In addition to the expectations of the new CEO’s qualities, committees often want to pay less than market value for the position.
At DHR International, we work with our clients to ensure everyone on the search committee is on the same page with what skills and traits a candidate needs to embody in order to be a successful CEO. But as we know, finding someone with every desired quality is impossible. For that reason, we tell our clients about the 85 percent solution: If you’ve found 85 percent of the qualities you’re looking for, you have your hands on the proper new CEO.
With that in mind, here is your guide to finding the right person to lead your company:
Create a search committee. Assemble a group of board directors and senior executives to manage the process of recruiting. Each member should have the trust of other board and operational leaders. The committee should be small enough to easily communicate, yet large enough that some diversity of opinion is possible. Designate specific areas of focus for each search committee member where each member’s individual expertise and insight will truly shine.
Set your expectations. Finding the perfect CEO is a shot in the dark unless you know who you’re looking for. Identify what you want your candidate pool to look like, and list clear, achievable goals you want your next CEO to accomplish. What should your new CEO achieve in his or her first six months? How about in the first year? What should your new CEO bring to the company in terms of return on shareholder value or diversification? Also, be sure to decide on a timeline for your search before you begin.
Revisit your succession plan. Look at the succession plan that’s already established by the board, and examine all internal opportunities. Could the president or the COO move up? Any potential internal candidates should be referred to the search firm or committee, and they should be measured up against the external candidate pool without bias.
Carefully bring candidates into the fold. At the CEO level, group interviews are often frowned upon by candidates. A one-on-one introduction to the company is often your best foot forward when making a first impression. When the time is right, feel free to get creative with how you introduce your chosen candidate to the remainder of the search committee. Think about hosting a lunch or drinks to show your candidate the level of interest and respect you have for him or her. Remember that the candidate’s decision is just as critical as yours — furnish each of your “finalists” with all of the necessary exposure they need to be able to make an informed decision.
Use discretion. Confidentiality is one of the most important things to remember when you’re recruiting a CEO. Before listing your open position, draft up a job description that’s informative enough to be of value, yet not so specific as to name your company. Then, have your committee decide upon the right time to reveal the name of your business to the candidates. Also, be sure to have an emergency action plan prepared in the event the process is compromised. Have a ready stable of interim CEOs identified internally, and be ready to discuss the impact of the breach with analysts and shareholders.
Keeping your process clean and confidential should allow you to find the most amazing candidates for your company, but if you still need help choosing, here are the three most important characteristics you should be looking for:
1. Leadership: Leadership is obviously vital, but identifying a great leader is more art than science. A track record of relevant, successful experiences will show you a lot about what a candidate is capable of. Any good leader will also be able to interact with other leaders in the company, including the chairperson of the board. Test out this interaction in the recruiting process to see what life would be like with that candidate at the helm.
2. Communication: A great CEO candidate is able to communicate clearly to all audiences. That means he or she can confidently talk about high-level market trends and strategies with analysts, and he or she can also break down these concepts into simpler terms for public consumption. You might find the smartest candidate in the world, but if he can’t express his ideas to a wide range of people — employees, officers of the company, board members, and shareholders — he’s going to have a very short-lived tenure.
3. Approachability: Being down-to-earth is an important — yet often overlooked — quality for a CEO. A good leader must be approachable and willing to listen to others rather than just following his or her own instincts. It’s also important to find someone who is humble and aware enough to understand that there’s got to be a succession plan. No CEO wants to think about his or her departure before even being appointed, but the ability to develop a viable and executable plan for the future is key.
Selecting a new CEO is a singularly important endeavor that should be taken with care and dispatch. Anything less will diminish you and your company’s chances for success. If you get your search methodology right, however, you’ll surely assemble a pool of high-quality candidates.
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