Missteps to Avoid in Recruiting C-level Positions.

By Jen Sudduth 

There comes a time in the growth of every business when a founder or management team needs to hire true C-level executives who can take that strategic next step or operational piece off initial leadership’s plate. But succession planning is a tough conundrum. The following missteps can hold up a search and steer the process off course.   

Not planning for what you need or misalignment of decision makers on the hiring team.  

Take the time to decide your company’s organizational and reporting structure to know what gaps you need to fill. Determine which positions are most important, what responsibilities will fall under each role, and the configuration below each position. Include board members and any other decision makers in the recruiting process. If it makes sense, engage your current mid-level team to help determine pain points. Then, develop a framework of what you want the new C-leader to manage and a clear job description. This can be refined once the person is onboard, but alignment prior to launching the search is critical.     

Avoid common pitfalls by working backwards. 

What do you want this hire to accomplish or manage and expand upon or grow? For instance, financials: Do you need better fiscal projections? Do you need someone who can look closer at profitability, potential acquisitions, or reducing your tax burden? Research other job descriptions that fit the answers to those questions and pull relevant requirements for your role.   

Hiring “high potential” leaders instead of proven leaders. 

Some say, “I really want to find an up-and-comer, where this position is the next step in their career.” There is certainly a time and place for these types of hires, but for your first C-level hires, you need experienced leaders who have been there, done that—someone who has already accomplished what you want to achieve and who has more knowledge than you about how to drive things forward as well as how to steer through the bumps and unexpected challenges. This is especially pertinent if you have investor money backing you; you have got to get it right at the onset. Taking a risk on someone who “can” do the job without already having done the job is going to cost you time and money in the long run.   

Believing you need to hire someone from a competitor. 

Again, there are times when you must have someone from your industry, but a C-level executive should be working at a higher, strategic level where exact industry experience is not as direct of a need. This is especially true for roles that are not customer facing, such as a chief financial officer (CFO) or chief marketing officer (CMO). Not all C-level roles need to have direct industry experience; you could find someone from a parallel industry or similar types and quantity of products or service lines.   

Some parallel factors to consider:  

• Your customer’s industry: Especially for sales-focused roles, did the chief sales officer (CSO) come from an industry that sold to the same target market? Could they quickly learn your product or service offering?  

• Type of products: Do you manufacture high-volume, low-cost products? A CFO with that type of experience but different products would likely have the right competencies across multiple industries.  

If you still think you need someone from a direct competitor, you also need to consider non-compete contracts. While these may go away soon per the FTC’s proposal, they will likely still be intact at some level for leadership roles. You need to address this up front with candidates. If a candidate says they are not sure, this can be a bit of a red flag as no executive should sign a contract that they do not know what it entails. But some executives have been with a company a long time and do not have one because they joined the company at a much more junior level. Do not get too far down the hiring path without knowing what their contract entails.   

Hiring too big. 

Executives who thrive in large companies seldom do in smaller companies. The main disconnects are breadth of responsibility, pace, and ability to drive things forward. Executives in middle-market companies need to be both strategic and tactical; they must have the ability to see the vision and strategy, while simultaneously driving the execution. Execs in smaller companies also need to be decision makers and action takers. Not in a ruthless way, but they must move faster and be able to make decisions with less data and input. There are exceptions to this, but if you are hiring leaders for the first time, do not try to make that determination. It is important that the executive you are hiring has experience in like-size companies or in companies the size you want to grow into.   

Timing of the hiring process. 

A successful interview process needs to have a good cadence and not be too long. Failure to coordinate schedules and align decision makers can lead to delays. Agree ahead of time as to what the procedure will be and who will be involved. Ask the hiring team to prioritize the initiative and to block off their schedule a few weeks ahead for interviews. If your process is too lengthy, you could lose candidates actively looking for a new role. You can also lose their confidence if they determine that you are indecisive or not very interested in their candidacy.   

On the contrary, the interview process can be too short and should always be a minimum of three meetings—the first being a traditional interview in which you ask most of the questions. The next meet-up can be more of a collaborative session, providing candidates with a view of your vision and where the company’s needs lie. Then at least one more meeting after you and the candidate have had time to reflect on the opportunity so you can get into the minutia and any yellow flags, gaps, or questions. An additional meeting can be a casual dinner, or a 90-day plan presented by the executive. The objective of latter meetings is to get out of interview mode so you can get to the “real” person and an understanding of them personally. What are their values, work ethic, strengths, and weaknesses? Can you work with them day-to-day? Will they complement you, push you forward, and be someone with whom you want to collaborate? Then, conduct background, social media, internet, and credit checks for applicable positions. Cover your bases.   

Running a search can be a full-time job. The key to hitting your stride in identifying talent is leaning on those with the expertise and resources to do it more efficiently.   

Not recognizing high potential leadership within the company. 

This is not to say that you need to promote from within if the right person is not ready, but that you need to acknowledge and maintain your high potential leaders. You can put them through the recruiting process with everyone else, but it can get sticky if they are not chosen. Try to vet those candidates before you start a search so that you can get ahead of such a dilemma and address what you are seeking with them beforehand. Do not settle with an internal hire if you are not 100 percent confident in their abilities; however, if you have a current employee who is seeking promotion and more responsibility, they are worth the time it will take to acknowledge them. Be honest if you do not think they are qualified by giving them access to the job description and required experience. They will likely self-select out, but your overarching goal is to maintain a good relationship with that person for future growth.   

So many companies avoid adding to their C-level team because they cannot imagine that someone who can help elevate and drive their business is out there. But the best leaders, transformational leaders, are out there, waiting for an opportunity with a company like yours.