In the last few posts, I highlighted the important role of the CEO to ensure that the right executives and managers are in place, and that they know what to do and how to do it. When the CEO finds themself stepping in to do the job of an executive leader, there is probably a problem.
Most of us are guilty of hiring too fast and firing too slowly. Once someone is onboard, we all have heart and know how disruptive it is to the individual and the company to make changes. Our first instinct is to help the individual overcome their challenges, plug the gaps, pick up the slack, or whatever it takes to foster success. To be honest, we pride ourselves on making good decisions and having good judgement about people, so it is hard to admit we may have made a hiring mistake. The problem is our procrastination takes a lot of time, and often in a growth environment, that is the one thing we never have enough of.
Similarly, as companies grow, the challenges change. An executive who was great at an earlier stage of development may not be great when things get bigger and more complex. Like a snake that sheds its skin as it grows, often executive teams have to go through the difficult process of reshaping and replacement as the company grows to the point of needing different skills and capabilities. A great executive from $0 - $20M may not have the skills to get to $50M and beyond, or to get there in the most expeditious way. The challenge for the CEO is to know when it is time to make a change, even though the company owes so much of its success to the individual who helped get it to where it is.
Making these difficult decisions about hiring and firing is one place where an effective board can be very helpful. As a group of involved but external individuals, the board can provide a unique perspective. The CEO should continuously inform and consult the board regarding the effectiveness of the executive team. A healthy ongoing dialog can be very impactful. I am an advocate of the CEO presenting an executive scorecard at every board meeting. A simple ABC grading or a more sophisticated 9 box analysis, or just a discussion of each individual is an important element of every board meeting. During the CEO and board-only time, there needs to be at least a brief review of the exec team. Over time, this simple review step will begin to highlight issues and weaknesses, and add perspective. It forces the CEO to look beyond the day-to-day and honestly see where executive team strengths and weaknesses lie. Trends will emerge and become actionable.
Malcom Gladwell wrote a book titled “Blink” that in essence says we typically know what our decision is in the blink of an eye, and then we spend a lot of time gathering evidence to support our view, all of which leads to our original conclusion. This is true for terminations and hiring decisions. In terminations, it is more of a switch that flips at some point when the CEO recognizes there is a problem. In their gut, they know the outcome, but they are not ready to admit it. The result is we take too long gathering evidence to prove our Blink decision to ourselves. This leads to the problem of firing too slowly.
On the other hand, we hire too fast. It will never be possible to be certain about a candidate’s long-term success during the hiring process, but we can improve the odds by taking the time to do it better. Hiring is where the concept of “Blink” fails us. We know in a blink that we have the ideal candidate, and too often we spend the rest of the process gathering evidence to prove it. This is our downfall. We need to remain impassionate and objective and paranoid. Consider every hire as if a wrong decision will lead to the worst possible outcome, because it probably will. We have to overcome our natural tendency to look in the mirror and hire someone just like us, but the challenge goes much deeper. We have to create objective criteria and be honest with ourselves about how each candidate meets the test. Instead of a ‘blink’ decision, we need to listen to the small voice that may be expressing caution, or we need to respond to our blink reaction by focusing on gathering evidence that we are wrong, instead of evidence that we are right.
I advocate creating a tough scorecard and being a harsh grader when evaluating candidates. Write down the criteria for a successful candidate. At a minimum, the list should include elements that identify: leadership, industry expertise, operational excellence, strategic thinking, problem solving, interpersonal behavior, executive presence, and communication skills. Determine what it will take to be successful and do your best to objectively score each candidate.
In a typical hiring process, a bunch of people interview a candidate, and often they ask very similar questions. After a couple of meetings, the candidate refines their answers and everybody sees the same strengths (and weaknesses). It is much more effective to focus each interviewer on a specific topic and ask them to go deep instead of wide. Five interviews should add five pieces to the puzzle, not five versions of the same piece.
People decisions are among the hardest choices a CEO has to make. There are lots of experts and papers and books that talk about how to improve the probability of a positive hiring outcome. The important thing is to make a plan and follow it with clear objectivity. Hiring an executive is not a time for surface interviews and gut reactions. A CEO should engage board members to provide objectivity and experience evaluating executives. Most board members have been to the movie many times and can predict how it will turn out. Use their experience. Avoid the Blink that is in all of us.