New Management

They say the third time's a charm. That's the way it worked for Nicole Geller, founder and CEO of GCS Inc., a 5-year-old temporary agency and government contracts consulting practice in McLean, Virginia. It took Geller three tries to find the right sales manager.

The first manager was too indecisive. The second manager was too corporate-minded. But Geller, 38, found the right fit the third time around. That sales manager is now the company's president, helping GCS and its 50 employees accomplish healthy sales of $4 million, and Geller couldn't be happier. The past still nags at her, however. "I feel like I failed with two people," she says. "But I learned a lot about what kind of person I really need."

Finding the right manager can be an exercise in trial and error. It's estimated that 40 percent of all new managers leave the job within 18 months, according to Manchester Inc., a business consulting group based in the Philadelphia area. Why? Often, it can be traced back to what is not discussed before the new manager or executive starts the job. In fact, the seeds of failure are usually planted within the first 100 days of a new entrepreneur-manager relationship, says Larry Stybel, co-founder of Boston-based consulting firm Stybel Peabody & Associates Inc., which runs a program called First One Hundred Days to coach entrepreneurs and their managers through the first three months of their working alliance.

Although entrepreneurs are good at setting goals and hiring for knowledge, they often forget to mention which aspects of the company should stay the same before their new managers start to put new ideas into action. "It's an incomplete package," Stybel says. "The entrepreneur hasn't brought up those 'third rail' or socially taboo issues relating to the company."

When a new manager crosses the line and tampers with a procedure or project the entrepreneur wants left alone, things can turn ugly very fast. Says Stybel, "I've seen situations where at the end of three months, both sides are no longer speaking to each other."

Lay Some Ground Rules

Prepare your potential manager by discussing his or her role as early as possible. During the interview, go beyond your goals, says Stybel. Think about the aspects of your company that are strictly off-limits to change. If this person will be managing your brother-in-law, for example, you need to work out how to navigate the situation upfront rather than leaving it until after he or she is hired. If you really like the way your customer service representatives greet customers over the phone, you'd better say so before your new customer service manager changes it. Discussing such details ahead of time will create a mutual understanding and help the manager avoid making major tactical errors.

Like a lot of other entrepreneurs, Geller assumed her new managers would intuitively understand her vision of how the company should run. So when her second manager came aboard and suddenly wanted to take a hands-off approach with customer service, Geller balked. This manager had hit on one of Geller's core issues, offering each client personalized customer service. "I really put the kibosh on [her idea]," she says. "Ultimately, it led to her not doing well and probably feeling not as empowered." The relationship was doomed from that point on, and it ended within the year.

Having learned from her experiences, Geller offers this advice: Talk about your business values, ask a lot of hard questions and listen closely. "That's where you're going to pick up on their skills and whether they can even converse with you in a way that feels professional and comfortable," she says. "Get to know them as people." By the time she hired her third sales manager, she was asking the hard questions and was more in touch with her own third-rail issues. "I really didn't get into some of the tough issues [with the first two managers]," she says. "I wish I would have because it would have given me the answers right upfront."

On-the-Job Training

Your work doesn't stop once a manager is on the job. You have to build a relationship that goes the distance.

To do that, you should start off small. Make a short list of projects and ideas you will both avoid during the first few months. Stybel suggests using the first 100 days to tackle easier problems, instead of the decisions that are most likely to cause a meltdown between an entrepreneur and a manager. "Do the doable things for immediate success," he says. "Achieve some wins." You should be talking with the manager every day, especially during the first three months.

Finally, after a few months, ask new managers what they wish they'd known about the company before they started working for you. It could be eye-opening, not to mention useful for making future management hires.