If you are a startup founder or major investor, how do you find that CEO for your “Dream Team” to close on funding and kick-start your company? It makes logical sense to scour the job boards, engage an executive recruiter, or scan the networking sites like LinkedIn for a good array of candidates, and then interview the ones with the best resumes.
If that’s as far as you go, you haven’t done the whole job. In reality, none of these alternatives is as effective as face-to-face networking. There is no substitute for building your network or using your network of trusted advisors.
From the candidate perspective, the ideal CEO is much more likely to sign up for your job if he knows and trusts you, versus just meeting you through the interview process. In all cases, never lose focus on finding someone who can meet the following top objectives, derived from some advice in an article by Jeff Richards to startup CEOs:
- Build the team. The CEO must focus on key management team hires and assume a few mistakes which need to get fixed. A great hire can make a company, but a single bad one can break it. As Jeff quotes from a company Chairman, “The common elements I see in first time CEO’s: a) they don’t hire fast enough, b) they don’t fire fast enough, and c) they don’t manage their board and investors well.”
- Provide effective leadership. Remember that leadership is both upward, as well as downward to direct reports and employees. A good CEO provides leadership to the Board of Directors, company investors, and stockholders. There are several books written on this subject. A good place to start is “The Effective Executive – The Definitive Guide to Getting the Right Things Done”, by Peter Drucker. In it, he says “Management is doing things right; leadership is doing the right things.”
- Create and sell a financial model. Even with a good CFO, your CEO is the top fundraiser. It’s important that the CEO define alternatives and have a very clear view of how he will use the proceeds, including the option of not raising any outside capital at all. The CEO is the check and balance on the constant parallel pushes for more development, more marketing, and more growth.
- Craft an operational plan and make it work. Most founders are product guys. They need an operational CEO who knows the market and the marketing game. He must nail down a sales process that fits the domain and economy. This includes the tactical as well as the strategic. The CEO needs to know how to qualify and close deals, as well as who to sell to, why do they buy, pricing, and what are your strengths against the competition.
- Communicate company values and culture. Make certain you as the founder and the CEO are on the same page on mission, company values, exit strategy, and workplace model. Disconnects on how employees are treated or decisions will be made can be disastrous, especially with family-owned or closely held ventures.
Executive recruiters are the next best option if networking doesn’t work out, but find one who has long-term relationships with many experienced candidates and business executives. I have found that most startups and small businesses can’t really afford to go this route (the average fee for a CEO is in the $40,000 ballpark).
Overall, everyone favors people they already know and trust, or someone who is known and recommended by a close advisor. Sure, some CEOs are found from resumes on job sites, and relationships built from online groups, but trust and executive chemistry are hard to deduce from a resume.
So get out there and network today, so you can be one of the lucky ones who has been nurturing a relationship with some candidates before the real need arises. Your investors will love you, your company will prosper, and the new CEO will be a hero. Everybody wins.