How To Hire a CEO
Whether hiring a CEO for your company’s first non-founder CEO or replacing a current standing CEO can be a daunting task and create stress for your board of directors, executive leadership team, and senior management. The role of CEO is often one of the most common positions businesses rely on executive search firms for help. Their expertise will remove the dangers of not knowing exactly how to hire a CEO for your team.
Even if you know how to hire a CEO, an executive search firm helps you get the broadest range of competent candidates possible. Using professional help can seriously reduce the risk for the future of your business while also connecting you to other potential leaders who may be of value to your company in the future.
6 Best Practices of How to Hire a CEO
If you decide to work with an executive search firm or not, there are some crucial steps I have observed from my 25+ years in executive search that you should follow:
Network – Always be Looking for your Next Potential CEO
Before you even consider hiring a new CEO or replacing a CEO. It is always a good idea to be networking at industry events and with leaders in your industry and be present in your industry. This helps you know what other talent is out there and build your name in the industry.
Additionally, a leader from a competitor is far more likely to become your next CEO hire if they recognize your company or leadership. This can be from activities like talking on panels/ speaking at conventions, being featured in media, and having a presence at trade shows.
Develop A Search Team
You should never do an executive search alone, especially when you want to hire a CEO. You should involve most of your board of directors in the decision-making process and search. As well as other c-level executives currently in place and senior management, they may work with.
This helps your team do a comprehensive search while also helping to reduce biases and make sure no essential skills and qualities are missing and ensure they are a good fit with their team and directors.
Many companies and directors have established relationships with executive recruiters and executive search firms because they are valuable resources. Search firms recognize that in a company, large or small, getting the right candidate can be the life or death of a company
You will have a core team leading the process, often the chairman or other directors. Depending on the organization’s size, the board may designate a nominating committee.
Sometimes searches need to be confidential. Your board may want to replace a current standing CEO, and including the other C-level executives can be risky due to the sensitivity of the matter. This is where the board will often turn to executive search firms, who can carry out the search confidentially in the background. Most of the search process can be conducted confidentially until the last few days before the decision is made or the process is completed.
One of the biggest mistakes companies you do not know how to hire a CEO do is not plan ahead. But it is common for CEOs to leave unexpectedly, giving the company they are working for an average of 3.5 days lead time with unexpected CEO departure leaving them without a CEO for an average of 75.7 days. An average of 58% of boards do not have an emergency succession plan for their CEO. With only about one-third (35%) of board members saying an internal candidate would most likely be chosen.
Given this is an average time during a company emergency. If you are hoping for a clean transition, you should be prepared to have around a 4-6 month period to prepare beforehand to start the process of your CEO search.
Being prepared can significantly reduce the internal stress of a CEO change. For example, making time to transition, where one CEO mentors the replacement, or even just having a new CEO lined up and onboard to be the replacement immediately.
Develop a list of wants and do not wants for your CEO as Search Team
It is crucial for your team to develop a list of wants and do not wants. When hiring a CEO, your team needs to be clear on what they are looking for and as aligned as possible. There needs to be a clear vision that can be communicated well with your company, board of directors, shareholders, and the public.
Each candidate you approach may have different visions for the company, requests from you, and expectations. These may seem valid to some people, but they are red flags and instant concerns for others. This is why getting aligned on what you are looking for is vital. Being able to express clearly what you are looking for will help you hone in on the best candidates.
You need to be prepared to communicate your requirements with the internal or external executive search experts you may partner with so they can identify and recommend better candidates to you in an efficient manner. Time is usually critical, and clearly defining what is essential up front will pay huge dividends.
Work with Executive Search Firm
Managing the Process of Executive search is challenging and time consuming. Having a member of your leadership take on the responsibility can seriously tie them up for 3-6 months if not more. Offloading this work to an executive search consultant or a team at a external executive search firm can:
- Expedite the process significantly
- Take the workload off you leadership
- Find you better candidates, due to their expertise in the process
- Find you candidates in a confidential executive search
- Scale their search teams to meet you needs, be it multiple Senior roles/ a leadership team abroad or just find the next leader from a global search.
As you develop your relationship with them, they will understand your needs and preferences. Enabling them to find you even better future talent faster.
Want help with your executive search? Please Contact me! I can help you directly or connect you to the best person at my firm, Boyden, to meet your unique business needs.
Begin Your Search as a Team
With your search team aligned on how to hire a CEO, And the proper preparation in place. You should actively start approaching candidates you may know, candidates recommended by your board of directors, and get engaged with executive search firms. You will be grateful you have done this preparation, and so will the recruiter. Helping them do their job faster.
The Executive will have more questions for you, as they learn the inner workings of your business to find the best candidates for your business.
I hope this blog helped you understand the best methodology on how to hire a CEO. If you are interested in tailored advice or help in your executive search, please contact me.
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