By Brian Mitchell, Managing Partner & CEO
I work with a lot of investors seeking CEO/GM operators to lead their portfolio companies as well as those CEOs seeking key executives to take on critical leadership functions on the senior management team. The CEO for a startup is much different than the CEO of a 200M growth-stage company as is the CEO for a publicly-traded F1000. It’s very likely that a qualified CEO in one of these stage companies is not a good fit for one of the other stages. There are all kinds of factors in determining the right fit and right point in time combined with the right business model and forward objectives: public or private? Early-stage or mature? Enterprise or consumer? Tech or service? Software or hardware? Transactional or relational? Global or domestic? Sales-led growth or product-led growth? Large anchor clients or mass-market customers? Well-capitalized or on a budget? Existing brand or pure evangelism? Concentrated or distributed workforce? Open culture or political culture? Need an egg-breaking force multiplier or an EBITDA-minded number cruncher or a status quo steward who just won’t screw it up? Gaps on the current management team? All of these questions and many others go into discerning what type of leadership profile is necessary at the given inflection point and all company journeys evolve differently. I’m not going to drone on about the importance of beyond the obvious discovery questions to ensure a well-designed specification is built (though it is important), but I will illuminate these points because so much nuance SHOULD go into these processes. And upon that framework is what should be sought after without rigidity but with defined purpose. It doesn’t just happen without careful consideration before actualizing a key leadership hire. It’s also critically important to recognize that time invested up front determining what is to be solved and associated evaluative criteria will wildly reduce the time on the back end of any search process. This all correlates with an efficient process cadence and reduces the risk of flawed outcomes.
One curious variable I frequently experience is around “past predicts the future” and the concept of “skill vs. will” in establishing hiring criteria. I’m a huge believer that previously successful leaders with multiple win track records tend to continue their career with additional accomplishments. Eagles soar, that’s what they do. That said, a lot of execs can get tired or bored or frustrated or lose their edge too. I’m not talking about age discrimination here (or I’d probably be in that bucket soon too!), but determining a hire based on a previous “big name” or track record alone also brings another form of risk. For example:
- The CEO who sold his startup to Google seems ideal on paper, and maybe he is, but he now has 20M in the bank and has been enjoying the free salads at Google during his earn out for the past 3 years. Free salads are nice and so is the Google calling card. Is he truly still hungry for another grinding startup nobody’s ever heard of?
- The CRO who helped scale her last company from 30M to 150M and a six-fold multiple acquisition seems ideal to lead her next 30M company and repeat, but does she want to do that or is she now better conditioned to lead a 150M company to 300-500M?
- Taking that same CRO scenario, is she better qualified to lead the 150M company towards quantum growth or should the board/CEO go with another guy who’s done it three times previously. She’s hungry to prove herself at this next level, but the other guy has more experience. Is her hunger actually a less risky option than the guy who may not have the same fire in the belly though clearly has the previous history?
There are measures a savvy board/CEO can take in an attempt to flush out the dispositional outlook of their executive candidates. It’s important to think well beyond the potentially head-turning press release and dig in to best understand intrinsic motivations individual by individual. People’s priorities and motivations evolve. Family dynamics change. Passions shift. They relocate. Personal hobbies become more or less central as do their careers at different times. All said, I’m certainly not suggesting people’s past achievements aren’t indicative of what they’re capable of doing again and are possibly even more motivated to do so. The point is to make no assumptions and qualify until satisfied that their “past predicts the future” and while they clearly have the proven skill, they also maintain the fiery will. No shortcuts.