Finding Your Team Members
Unfortunately, good executives don't grow on trees (and you wouldn't want to hire the ones that do). Since their decisions can make or break your business, you want the best. Newspapers, classified ads and internet bulletin boards are not the way to go. And mass-market ads will attract exactly that--the mass market, people who have no other job prospects. (A skillful, former executive rarely lists themselves in the same newspaper section as used backyard grills and heavy farm machinery.)
If you have the funds available, executive search firms are a good way to go. Although they charge through the nose to find candidates, they do due diligence and present you with pre-screened candidates, so when you're running around handling the emergency of the day, they can be a huge time-saver. They also monitor the pool of executive talent and can likely reach candidates you couldn't approach on your own. Search firms may specialize by industry, function, geography and level of job, so if you decide to hire one, make sure you know what you're getting.
Networking is a time-honored way to find new hires. Let your professional and personal networks know what kind of person you're looking for. Then get one-on-one introductions, and take the candidate to lunch to test the chemistry.
When networking, avoid specific "networking forums." Go straight for what you want. If you want a law firm CMO, spend a weekend at the Legal Sales and Service Organization's Raindance conference, which attracts senior marketing folk from law firms. Network, network, network--but make sure it's targeted.
Once you've got a potential candidate, how will you know for sure they can do the job? Executives have great impact--on employees, on systems, on profits--so it's worth your time to check them out thoroughly. Call each of their references, and listen between the lines (with lawsuits today, recommendations always glow). A CFO may have embezzled from his last company, but the employer still says "They did a good job" (I swear--this is a true story). This grade inflation means you need to listen for less-than-glowing opinions. "Fred showed up and sat at his desk like a real trooper" is a sure sign that Fred enjoys taking every Wednesday off to go golfing with the boys.
When it comes time to sit down with your potential C-suite candidate, there are a few things to know that will make your job a little easier:
Make sure your candidate really knows the job. If your CMO-to-be doesn't know the difference between marketing and sales or your CFO can't tell you the difference between LIFO and FIFO, pass 'em by.
Interview for chemistry. Do you trust this candidate? Do you want to spend time with them? Believe me when I say, you don't want an abrasive team member, no matter how talented they may be. One COO I know, scared to make the hard decision, reorganized his entire company around a highly talented, incredibly obnoxious executive that everyone despised. The exec's talent got to shine--but everyone within 100 yards quietly subdued theirs.
Talk to people from your candidate's former company. Are the candidate's claims of divine brilliance reflected in what their former peers and subordinates have to say about them? Find out if they got the work done and also how they contributed to the company's culture. In a small business, cultural issues can be every bit as important as getting things done.
Always hire really smart people. Here's a good guideline to follow: Every new hire should increase your company's average IQ. That means they should all be smarter than you. Get used to it.
Look for evidence of learning ability. Will your candidate repeat mistakes they've made in the past? Or will they learn from those errors and adapt that knowledge to your company?
Use "behavior description interviewing" techniques. Don't ask about principles, knowledge or "what if" stories. Instead, ask your potential executive team member to share specific past events. Their stories will reveal their values, skills and abilities. For example, you might ask a CFO to describe a budget they set up and how they handled it when a manager exceeded their budget and asked for more.
One word of caution: Be wary of hiring friends or family members. They'll expect you to trust them and just assume they have a high skill level. What's worse, you may trust them and assume they have a high skill level without any evidence to the contrary until after you've hired them. And unless you take care to be very clear about the boundaries between friendship and work, you may find your friendship in ruins over workplace disagreements.
Making The Deal
Once you've found the executive you'd like to hire, you have to entice them to join your team. There are no standard rules for the best deal to offer them. Hourly workers may be thrilled to get cash, but executives aren't so easily satisfied. They often want stock options, exorbitant pay and an annual--or even quarterly--bonus. Since their job is to make the entire company succeed, use stock options and a bonus plan to link their income to the company's overall performance. Stock options should be aligned with long-term performance, while bonuses and profit sharing should be based on the past year's results.
Of course, not all executives crave stock. Ideally, you'd love someone capable who's happy with a challenging job and modest salary. And they're out there! Some well-qualified people care much more about family time, a fun culture, a challenging job, or being part of a world-changing effort. The more you understand each person's drivers, the more you can craft deals that satisfy them in ways that transcend mere dollars.
But no matter what you decide to offer, keep it simple. If your bonus formula requires a PhD in higher math to understand, it won't motivate anyone.
Delegating to Your New Executives
Once the new members of your team are on board, it's time for the truly hard part: trusting them. Your gut will fight you every step of the way. You'll assume your instructions are clear and misunderstandings are their fault. You'll assume when you disagree that you're right and they're wrong. But you'll sometimes be wrong. The key to successful executive relationships is changing what your gut tells you.
Remember how you interviewed for trust? That's important because once you hire an executive team, you must let them take their responsibilities and run with them. That means agreeing with them about what their roles are, what deliverables they're responsible for and on what timeframe.
It's also worth deciding in advance how you'll handle disagreements. You hired this person assuming their judgment was better than yours. So when you disagree, if you did your job right, chances are that they're right and you're wrong. Discuss early on about how you'll make the call, so you get the most benefit from constructive conflict. Just remember: If you agree on everything, one of you is redundant.
Entrepreneurship is about going for the things that are much bigger than what you could do alone. Your job isn't to reach the goal; it's to build a team that will reach the goal. If you really want to reach your goals, you'll need to bring on others to help, and creating a good executive team means knowing what you need them to do, finding good candidates, and giving them what they need to do their jobs. If you choose well, they'll be successful and make you successful as well.
Stever Robbins is an executive coach who helps people make key changes in their lives and careers. Co-founder or initial team member of nine startups over the past 25 years, Stever also brings his clients a strong background as a graduate of Harvard Business School and MIT.
Stever Robbins is a venture coach, helping entrepreneurs and early-stage companies develop the attitudes, skills and capabilities needed to succeed. He brings to bear skills as an entrepreneur, teacher and technologist in helping others create successful ventures.