Wednesday, February 12, 2014

6 Traits To Look For When Hiring Executives

Hiring executives (VPs, COO, etc.) is one of the harder things for an entrepreneur to learn to do.   Hiring the wrong person can cause a mini-disaster at the company.  It often takes longer to spot a bad executive hire.  During that time, the executive can mis-set direction and start to degrade the culture or output of an entire functional area of your company.  Selecting for a common set of traits can go a long way in minimizing the likelihood of a bad executive hire.

When hiring an executive, I would suggest optimizing for the following traits:

1. Functional area expert.
  • Do they understand the major issues and common failure points for their function?  E.g. where does customer ops often keel over with scale and how do you intervene early?
  • Do people in their org respect their opinion and feel they can learn from?
  • Are they the right person for the current scale & trajectory of your company?  You can over hire for a position as well as under hire given the phase your company is in.  E.g. do you really need to hire Patrick Pichette, Google's CFO, to manage the finances of your pre-revenue 10 person team?
2. Ability to build/recruit/manage a team for their area.
  • Can they recruit exceptional people for this function?  Can they build a recruiting culture within their team?
  • Do they know how to motivate people in their function?  The incentives for a sales person are different from those for a product manager.
  • Can they effectively manage people from their function?  E.g. managing designers may require a different mix of approaches versus managing a customer support team.
  • Do they understand how to build out an organization with multiple layers if needed?  How deep of an organization have they managed in the past and how does it fit your current needs[2]?  
3. Collegial.
  • Do they play well with other executives who are their peers?
  • Do they set a collegial, mutually supportive environment in place for the company as a whole as well as their function?
  • Do they try to do what is right for the company even if it is not in their own best interest?
4. Communication
  • Strong communication across the company
  • Ability to get other executives and the CEO or founders on board (exec-to-founder communication may be is its own magical art depending on how introverted the founder is)
  • Ability to understand the underlying issues and communicate them within their team.
  • Ability to communicate to the board, external partners or customers, and other major stakeholders.
  • Has "cross functional empathy" which allows them to work with, and communicate effectively to, other functions they work with closely.[3]
5. Owner.
  • Has ownership of their function and makes sure it is running smoothly and effectively.
  • Owns problems and solves them.  "Black box" abstraction of their function so CEO can engage on it, but does not need to be involved day to day.
  • Understands that as a company executive they should think like an owner [1].
  • Culture fit.  Each culture is unique and like all employees some executives fit a culture and some do not.
6. Strategic & Smart.
Many people don't realize that almost every function can act strategically.  It is a good exercise to ask yourself as CEO.  What does a strategic X org look like? (where X can be HR, Ops, Product, etc...)
  • Thinks strategically and holistically about their function.
  • Thinks about how their function can be a competitive advantage for the company.  Most companies are only good at one or two things.  This is often sufficient to allow them to be successful so they don't strive to get better where they are weak.  Companies that can tackle more then one thing well tend to outshine every one else (e.g. Apple with hardware design, supply chain, and marketing).
Pro Tips
If you have not hired an executive for a specific functional area before, you can do the following homework:

  • Find the best people in the industry for the position you are hiring, and ask them for the specific traits you should look for.  E.g. when hiring a CFO, ask the best regarded CFOs for their advice in what to look for in a CFO.
  • Talk to other CEOs who have recently made a similar executive hire.  How did they go about the process?
  • Engage a search firm.  Often a search firm will help you find a strong set of candidates for executive hires.
  • Ask your board members for help in terms of the job req, contacts to pursue, or interviewing the candidates for a function - especially if the board members has had past operating experience in the function, or has worked with an excellent set of executives for the function in the past.

Thanks to Ali Rowghani for early feedback on this post.

Notes
[1] Optimally this is true of all employees.  But for executives who set the tone of their entire organization, this is especially true.
[2] "Current needs" is usually the next 12-18 months for a high growth company.
[3] Thanks to Mark Williamson for the "cross functional empathy" point.

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