When you first start your company, you are the CEO of yourself, the boss of one employee. But the time comes when you start to grow. And any CEO with a growing company will need help at the top level.
As you start to scale, you may want an executive in charge of finances—your Chief Financial Officer (CFO). Perhaps you’re focused more on strategy and want someone in charge of technology—your Chief Technology Officer (CTO). Maybe you are so focused on the strategy that you need someone to manage the day-to-day—your Chief Operations Officer (COO). The C-suite effectively becomes your go-to team for solving different big-picture goals and processes.
Bringing on C-level executives doesn't require the same hiring process as with lower-level employees. They're paid more, for starters. They also bring significant experience... and baggage. While a bad entry-level employee can slow things down, a bad C-level employee can cause the business to spiral out of control. When hiring at the C-level, it is important to make the right choice.
Learn how to attract and retain top-notch employees.
Set Goals Before You Hire
Before you even start looking, identify exactly what you're looking for in your ideal candidate. C-level employees come with increased costs and they also will want shares of the business.
Come up with the metrics of success for that position. How can candidates cut down on inefficient spending, increase revenue, introduce a new and improved platform?
Understand what your goals are before you hire so that you can outline those goals into the interviews. A top-notch candidate should speak frankly about what they think they could achieve for your company. Being transparent about your goals up front will ensure that you're completely in line with your candidate.
Find A Fit For Your Business Size & Sector
When you’re hiring a C-level employee, make sure your company size, culture and sector wouldn't be an obstacle to his or her success. The CEO of a company with 50 employees has a very different role from the CEO of a company with 20,000 employees. Whatever the scale of your company, it is very important that the executive indicates he or she will work well in your company's environment.
Don’t base your decision entirely on if the candidate has experience with a business your size and your sector. Louis V. Gerstner Jr., for example, worked for American Express and then RJR Nabisco. He had zero experience at running a technology company, and yet in 1993, he was made CEO of IBM. At the time, the company nearly had both feet in the grave. In the nine years that Gerstner was in charge, the company’s market cap grew from $29 billion to $168 billion.
Do Any Current Employees Fit the Role?
It is becoming increasingly common amongst large companies to make an external C-level hire rather than promoting from within.
But if your company is thriving with a great culture and excellent employee drive, consider looking within. Culture is hard to learn and if someone at the company already gets it, having them make the jump to the C-suite could work.
Doing so can increase morale, an important aspect of company culture, and thus retention. If you take your VP of Marketing and promote her to CMO, suddenly you have an opening for a VP of Marketing. Or perhaps you’re creating two roles that will report to your CMO: VP of Brand and VP of Marketing. Suddenly there are two roles that need to be filled, which can also be filled internally. People start to get promoted, that makes them happy, and morale rises.
However, don't be afraid to look externally. Perhaps your company is comprised of a lot of young people that might not be ready for that next step. Bringing in a more seasoned executive will help to teach them the skills they need to take things to the next level.
Talk to References... A Lot
Resumes are easy to pad. Accomplishments can be fluffed. However, it’s much harder to control references. Focus most of your effort on talking to people that have worked for that executive. You might learn something interesting about them that they didn’t reveal, which could sway you in one direction or the other.
Another thing to consider is if the references can offer other referrals. The more data points you have, the better. And one point to keep an eye on is the number of people who are unwilling to offer an opinion. While many people won’t say anything negative, they also won’t provide artificial praise. If no one will say something nice, perhaps there’s something bad underneath.
Make The Hiring Process Collaborative
If you're making an external C-level hire, closely involve the employees that will report to that executive. If they are not on board with the decision, it could cause a significant amount of tension in the department. Plus, your employees will be able to speak directly to their team's goals, obstacles and processes.
Move Slowly and With Trust
At the end of the day, hire a C-level employee only if you've clearly identified the need. If your company's goals don’t call for a C-level hire, don’t waste the money, equity and time. Don’t be afraid to take your time finding the perfect C-level executive for your company.
And lastly, trust your gut. You're the leader of your business. If you can’t trust the person you’re about to hire, perhaps it’s not the best decision. You’re going to need to trust the executive to lead their department autonomously.
When you find the right one, though, it’s time to move. Make the hire, integrate them into the company, and you should start to see even greater things come from the move.
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.