Whether you’re a rookie or veteran tech executive, having the right leadership team is the difference between being stuck on first base or hitting home runs.
So how do you attract and retain the right executives? Here are some key steps I have learned in my 30 years managing executive searches for tech companies:
Hire an Experienced Search Firm
Can you dedicate an average of 300 hours and several staff to recruit the CFO you need? If you’re a start-up, do you have the experience and capacity to build a solid leadership team straight out of the gate? Then don’t waste precious time and resources. This is a multi-million dollar decision. The cost of an executive mis-hire is up to 30 times compensation. Focus on what you do best and hire professionals to find your key executives.
Scout the Competition & Their Talent
To start, you need a Talent Management expert to scout your competition. For example, we’re working with a tech firm that needs to triple in size in the next five years. We are analyzing their competitors in Europe and North America. That means building profiles on individuals in 100 companies, investigating their respective skills, experience and accomplishments, and culture fit, as well as looking at how these companies are structured.
Define Role Specific Leadership Competencies and Link them to Business Goals
A CEO needs to determine what leadership competencies are required for each role and how each executive will contribute to the business.
At Bedford, we have a unique toolkit to facilitate this process. It’s a deck of 60 leadership cards, each of which features a specific leadership competency with a detailed explanation. For example, one card’s title says ‘Dealmaker’; another says ‘Hungry for Results.’ We put these cards in front of our clients’ interviewing team and guide them towards establishing which leadership competencies are non-negotiable. In the end, eight core competencies are finalized and equally important, the hiring team has reached consensus.
Now we link each competency to specific business outcomes. For example, we had a tech company choose ‘Hungry for Results’ and I asked them to define what ‘results’ they were looking for. They agreed on an annual increase of 40% in revenue. Now we have a core competency tied to results and this is communicated clearly to candidates.
Define the Culture of your Organization
Most executive failures are directly tied to a lack of fit with the culture of the organization. You are hired for your skills, but you are fired for your lack of fit. To put it another way, “We hired your resume, but what we got is you.” We have a process for examining the Culture of Today and the required Culture of Tomorrow. This is immensely useful in determining candidate fit.
It typically takes six-eight weeks for a search firm to produce a qualified short list of candidates. This includes developing a detailed job description, target list of companies to recruit from, short list candidate written self-evaluations, resumes, customized score cards, working with the client hiring team and participating in the client/candidate interviews, references, offer negotiations and an integration program.
‘Right’ vs. ‘Best’ Candidate
I recently worked with the Founder & CEO of an early stage tech company that received private equity backing. The Founder felt the ‘best’ candidates had to come from a big brand tech firm. But that’s not what this Founder’s company is. We discussed the importance of recruiting a candidate who had worked in big brand tech, but had also been successful at several early stage firms, and a track record working with Founders. The successful candidate wasn’t from the ‘best’ tech firm, but he had the right experience and was the ‘right’ fit.
The all white male executive team does not reflect the global economy. Moreover, studies show diverse executive teams outperform homogenous ones. Many tech firms choose to enlist the expertise of search firms because we have the experience and resources to manage a much broader search with respect to diversity.
You’ve Hired Someone: Now what?
The right search firm shouldn’t just sit into the stands to observe how the game plays out after a candidate is hired. At Bedford, we provide new executives and their new firm with an integration program including a workbook. We also meet throughout the first year with the executive and the CEO or Board to provide coaching and feedback.
Searching for the right executive team is like building a World Series winning club. I have seen tech companies with the best technology, but led by the wrong CEO, burn through tens of millions of dollars and not make the playoffs. I have also seen tech companies with average technology win the World Series because they had better executive teams that executed better than the competition.
You don’t want to strike out and waste loads of money. You need to score runs when you have players on base. When a search is completed well and the right executives are hired, you stand a much better chance of being a World Series champion.