Founder to CEO Transition: How to Hire Your Replacement
Editor’s note: This is the third post in a series aimed at founders who are considering hiring a professional CEO to run their company. The author, Ori Eisen, is a member of Georgian Partners’ Advisory Board. As the founder of 41st Parameter, the leader in online fraud intervention, he underwent the transition from founder to CEO himself prior to selling the business in 2013. The previous post in the series was on roles and responsibilities in making the decision. Or, if you missed it, start at the beginning with our first post in this series on the founder to CEO transition.
If you were seriously ill and needed the best doctor to treat you, how far would you go to find that person? What would you do and who would you let help you with your search? The short answer is that you’d probably do whatever it took to find the right doctor, including asking the smartest people you knew for help doing so. After all, for something that important anything less just wouldn’t be good enough.
The same is true when it comes to hiring a professional CEO.
You made the decision to look for one because you know that while just about anyone can get by running a company with five employees, when it comes to scaling a business and turning it into a world-class powerhouse you need more than just luck. You need a proven operator with the experience it will take to navigate your business to greater success.
Partner with a Professional
I can’t stress enough how important it is to partner with a professional headhunter to help you find the right person. A good headhunter will not only help you identify great candidates, but also push you to better understand what your criteria for success are. Next, he or she will help you evaluate candidates based on how well they meet those criteria, preventing you from getting caught up in other subjective factors that really don’t matter.
Take your time to select a recruiter and don’t be in a rush to start the search. You want to feel comfortable with the recruiter and have a good rapport with the person to ensure a successful outcome. A good rule of thumb to follow when deciding whether or not to work with a particular recruiter is to imagine being on the fence about hiring a specific candidate. If you found yourself in that position, would you seek out, listen to and respect the recruiter’s advice? If not, it’s probably not the right person.
It’s also important to remember that you get what you pay for, so don’t skimp on fees. If you’re more focused on saving money than finding a great CEO, consider delaying the search. After all, if you can’t afford to work with a recruiter, chances are that you won’t be able to attract a great CEO.
Once you’ve found a recruiter, it’s also important that you give that person a thorough brief on what you’re looking for and what you have to offer. Without lots of information, the recruiter won’t truly understand the opportunity and be able to sell it effectively to great candidates.
Finding the Right Candidate Takes Time
After you’ve landed on a recruiter and got the process going, don’t make the mistake of hiring the first candidate you meet. You’ve got to talk to others no matter how much you like the first one, in order to gain some perspective on your options and how personality, style, values, chemistry and other factors differ from candidate to candidate.
That said, keep in mind that in general it should take no less than 60 days and no more than 180 to find the right candidate to become your new CEO. If after 180 days you and your board still aren’t happy with any candidates, try taking a break from the process. You can always return to the market later when different candidates become available.
It’s worth noting that there are a number of possible scenarios you might encounter while searching for a CEO. For example, the first candidate you meet may in fact turn out to be the one, though you may not realize it until six months into the process. Another common scenario is for a search to become tiresome because it feels like no candidate will ever fit the bill. In those cases it’s important be patient and to let yourself focus on growing the company in the meantime while also creating some space for the process to unfold.
Another scenario that you might run into is being in the final stages of due diligence with a great candidate only to have another great candidate emerge on the scene and throw the whole process upside down. When this happens there are two possible outcomes: The first is that this new “dark horse” candidate is actually your champion and has arrived just in time for you to change course. The second outcome is that this candidate isn’t what you really want and only appears to be a good fit. It’s up to you to figure out which situation you’ve got in your hands.
Hiring a new CEO isn’t an easy process. However, with the right approach and the support of a trusted recruiter, you’ll dramatically increase your chances of achieving the desired outcome.
Like what you’re reading? Check out the next post in this series around the founder to CEO transition, which focuses on what can go wrong and how to fix the problems.