Hiring a CEO (chief executive officer) for your company may be one of the most important decisions you will ever make for your business. Whether you need a prominent name to brand the business or seek a successor to the original founder, the CEO must be able to wear many hats.
He or she will be the public face of the company in good times and bad. He must be able to engender loyalty from stakeholders and inspire good work at all levels. She must be able to delegate responsibility wisely, and yet roll up her shirt sleeves with the rest to the team when necessary.
You may not be able to find all of these characteristics in one person, but you should keep all of the following elements in mind during your search. The relative weight of these various skills will depend on the goals of your company and your selection of candidates.
A primary requirement for a successful CEO is that they have a vision for the company. Other team members may concentrate on the day-to-day, but a truly inspirational CEO will have a vision for the company that she will keep foremost in her mind to always guide the ship.
The company leader should be able to articulate the company’s goals and values. He should also be able to represent those values in his actions, words, and initiatives.
If you are choosing a successor or your board of directors is conducting a search, the primary requirement for the new leader is that they share your vision for the company and demonstrate an ability to make that vision a reality.
Having a vision for the company’s future is not enough. An effective leader must be able to develop, articulate, and implement a strategy to achieve that vision.
Strategy is a concept best understood in military terms. The Allied forces had a strategy to beat the enemies in World War II by preventing the spread of the Axis powers. They accomplished this strategy through varied tactics such as invading North Africa, bombing Germany, and protecting China from Japan.
A good CEO should be able to develop a strategy that enables your company to prosper and grow. The strategy must take into account market conditions, economics, competition, and available resources.
The role of the CEO is to drive the strategy throughout every aspect of the organization. It must come through clearly in company communications. It must be clearly enunciated in management protocol and hiring practices.
3. Management Skills
Often the most successful CEOs gain reputations that are outsized or eccentric. Think of Steve Jobs or Elon Musk.
However, most successful CEOs are masters at management. No matter what their industry, they seem able to coordinate the actions of hundreds if not thousands of employees towards a single goal.
This is not usually the top skill of a loner or mad scientist. Usually, a CEO is good at speaking to people, from boards of directors to stockholders. They are good at building relationships with leaders in the industry, in government, and internally.
Candidates may have an MBA, but often top management skills are earned through hard experience. A great CEO candidate will have been in the trenches. They may have guided companies through reorganizations, product launches, investigations, and lawsuits.
Management requires prioritizing and delegating. Most micromanagers are not great CEOs. When hiring a ceo for your company, look for a leader who can recognize talent and delegate authority to people most suited to the job.
CEOs don’t always have to be best at everything, but they need to be able to have positive working relationships with others who are the best in their respective fields.
It certainly helps if your CEO has excellent communication skills. Strategy and vision are not much use if the leader is unable to communicate them to their staff.
CEOs are often the official and unofficial spokespeople for their businesses. The press will seek them out for public statements. Investors will expect regular updates on the state of the company. Employees will look to the CEO for motivation, encouragement, and direction.
Now a CEO may get support from a Communications Director or team, but they will often need to be the mouthpiece and face of the company. Their name and picture may even appear on the website, brochure, and in the lobby!
A good CEO will be able to communicate as easily with a government investigative panel as they will with employees or bankers. Often they project an air of confidence that inspires others.
5. Knowledge of the Company
Sometimes a great leader has come from the bottom up in a company. It’s not just in Hollywood where you hear how a former mail boy has become president of the business!
Working one’s way through the ranks gives one knowledge of all levels of the company. It can provide a clear view of what works and what needs to be improved. It can also confer authority: people will respect the leader’s ideas for the company when she has been there a long time and understands its culture and goals.
Sometimes companies choose a CEO from the outside. This can also be effective, as they can bring an outsider’s eye and fresh ideas. However, they should still have a deep knowledge of the company they are being chosen to lead, from its finances, star players, and special challenges.
6. Track Record
While you are interviewing potential CEOs, ask for evidence of their successful leadership efforts. Have they helped companies through bankruptcy? Have they grown companies from 3 to 100 employees?
They do not need to have been CEOs before, either. They just should have some track record of leadership. Maybe they started an initiative at their former company which proved hugely successful. Maybe they launched their own business which was bought out for a vast sum of money.
Maybe they have successfully raised funds for a non-profit, or they were a high- profile elected official who passed meaningful laws.
Many professional backgrounds can provide the leadership capabilities necessary to help a company grow. Some of the most successful CEOs come from humble backgrounds like farms or the military.
7. Personal Passions
Warren Buffett loves making money. Hayes Barnard is committed to solar power. Elon Musk is fascinated with space travel. Bobbi Brown is passionate about colors and beauty. Bill Gates wants to improve public health and fight world hunger.
These successful entrepreneurs have translated their personal passions into success and profits.
One differentiating quality to the most successful CEOs is that they do not do what they do simply for the money. They are inspired by a higher goal.
Whether it is economic equality, conservationism, or female empowerment, look for a leader who shares your company’s ideals. Personal passion is often the key ingredient that takes a business from good to great.
You need a leader who is all in. You want someone who is willing to put in the work … even when the going gets rough.
Applicants may demonstrate their commitment in different ways. They may base their increases in compensation on company performance. They may agree to move across the country to be located at the company headquarters.
You may want a written commitment in terms of time: no one wants a CEO to get situated and then leave in six months. You may also want your potential leader to agree to a non-compete clause so they do not leave you for a competitor if things do not work out.
A company exists within a network. It must coordinate with other companies like suppliers and customers. It must comply with relevant laws, and support its community.
It’s no surprise that sometimes companies hire former bankers, lawyers or government officials to act as CEOs. People in these professions often have wide networks of people to whom they can turn for advice and support when necessary.
If your company wants to expand and requires financing, it’s useful to have a former private equity manager in the C suite. If your company is under investigation, a leader with a background in law or government may be knowledgeable about how to mitigate risk.
If you are launching a product or defending a class action suit, your CEO may become the public face of your company, They may give statements to the media, or appear before Congressional committees.
You want your CEO to represent you. When hiring a CEO, remember that they need to look and sound the part. Look for someone who can be cool under pressure and make a good impression to the wider public. Some even end up on the company packaging!
11. May Not Solve All Problems
Even the savviest CEO may not be able to solve all of a company’s challenges single-handedly. Leaders most effective when they can collaborate with the talent at their disposal, and lead the company as a whole towards success.
Hiring a CEO: The Key to Your Company’s Success
Hiring a CEO will be one of the most consequential decisions your company will ever have to make. Whether you choose a long time employee or a brilliant outsider, make sure you are on the same page in terms of priorities, goals, and culture.
While there are many factors to consider when hiring a CEO, look for a chief executive officer your team members respect and will want to work for. Make sure the chief executive officer will fit with your company’s approach to business, management, and communication.
For more tips on succeeding in business and company leadership, keep checking back for new articles. Visit the Business section of the Everything Entrepreneur Blog to learn more about hiring and company leadership.