When you go to 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 to hire 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 the company is facing and what are the current strengths and weaknesses of the company?
The selection committee should strongly consider hiring 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 should a company get about making this important hire?
1. 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 analysis 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.
2. Once organizational understanding is in place the selection committee will identify the strengths the company can build on and the weaknesses it needs to correct, the opportunities it needs to leverage and the threats it needs to prepare to face. Without this transparency, the Board is in a position to create the right job description and identify the skills and experience requirements.
3. 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 about knowledge, case study, and cultural improvement examples.
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, not a specialist opinion to the company that will more likely be a change agent equipped to take the company to the next level. With the right hire, the company is positioned for what it needs. Sometimes that will be the CFO, the CMO, the COO or?