At the top of the hierarchy, there are all kinds of leaders from all sorts of backgrounds. But typically in a world of shareholder returns, ROE, ROA, capital ratios, and expense ratios, the corner office is often a numbers expert, usually from the CFO ranks. Is this leadership succession the best thing for an organization? The people answering this question are the Directors on the Board.
How should a CEO/President be chosen?
As an organization starts the process of hiring a new CEO, they should start with strategy and KPIs. What is the organization trying to do in the next 3-5 years? What are the Key Performance Indexes the company is using to measure success? What are the threats and opportunities, and what are the current strengths and weaknesses of the company?
The selection committee should hire to its weakness, not to its strength. They should also seek to employ the leader that will bring a new view to the company’s business model, culture and methodologies; leaders that will inspire change, improved execution and heightened engagement from employees and customers (“The definition of insanity is doing what you’ve always done and expected the results to change.”)
How can a company get make a better critical hire?
- Before creating a job description, discover what the organization needs. Not just from the view of the balance sheet and income statement but holistically. Start with an in-depth analysis of company performance in sales, marketing, operations, logistics, compliance, employee satisfaction, and customer service. The study should be brutally honest in determining what is working well, what is broken, and what are the current threats and opportunities. It is recommended the committee hire an outside strategist to take them through this analysis process.
- Now the selection committee can better match the organizational needs to the skills and experiences of the candidates. They also are better equipped to ask the most meaningful questions to learn the relevant knowledge, expertise, and cultural needs of the organization.
- Then the selection committee should look closely at the cultural attributes of the organization. They need to select a candidate that will embrace the mission, vision, and values of the organization. Choosing a person that is a bad cultural fit will do more long-term harm than choosing a person that is lacking on a few skills. Skills can be learned but how a person aligns with the mission, vision, and values is an inherent part of their character and not likely to change.
Through this analytical selection process, using real organizational needs and strengths as the measure of the candidate, the selection committee is more likely to recommend a renaissance person that can bring a holistic leadership view to the role that will more likely be a change agent equipped to take the company to the next level.
With the right hire, the company will know what it needs, sometimes that will be the CFO, the CMO, the COO, or?