First-time founders or CEOs typically find it hard to hire the first executives to join the team. As a founder, often without deep work experience, you have pulled off the impossible and created a product or service lots of people want to use or pay for. And you did so without any fancy executive-type people from Google or Facebook, with their expensive paychecks and reliance on process.
At some point, however, you will notice that lots of things start to break down. Communication within the company gets gummed up. Various product teams start to lose coordination. You don’t have time to get every important thing done in the day, and indeed you start to run out of time to think. Your hiring process falls apart, and it takes weeks for you to follow up with candidates. Your sales pipeline is largely dependent on you and a handful of inexperienced individual contributors—and suddenly follow-through crashes to a halt. You may try to promote existing employees (who also have no prior experience) to run various areas, and in most cases this fails or does not really help anything.
Suddenly you realize that you really need someone with more experience on your team.
Hiring executives for the first time can be quite tricky for a founder. However, once you hire your first seasoned exec who works out, you will be grateful for her presence. All sorts of things will magically just get done. People will get hired, deals will get closed, process will tighten up. It can be a wondrous experience. You will kick yourself for not hiring an experienced, high-capacity executive sooner.
“Once you hire your first seasoned exec who works out, you will be grateful for her presence. All sorts of things will magically get done. People will get hired, deals will get closed, process will tighten up. It can be a wondrous experience.”
– Elad Gil
Unfortunately, things could also go badly. The executive is a bad culture fit, or is too senior for the role and spins his wheels. Time is wasted and progress lost on a poor fit—or even worse, some of the best people on your team quit when managed by someone who’s not working out.
Finding a great executive for your company can be challenging, but it’s well worth the effort. And there are some steps you can take to maximize your chances of success:
If you have a 10-person engineering team, and in 12 months it will grow to 30 people, you do not need to hire an SVP from Salesforce whose job is to manage a 1,500-person team. This person will get bored with the small job offered to her and may simply spin her wheels. She is too senior for the role.
When hiring executives, look for people who have the experience and background that would make them a good fit or hire for the next 12–18 months. Anything shorter than that and they will not be able to scale sufficiently far relative to the time it takes to hire them. Anything longer and you will over-hire and end up with someone who is a bad fit for the job.
Whatever the role, there are a few key skills and traits that you want your executives to bring to the table:
1. Functional area expertise.
- Do they understand the major issues and common failure points for their functions?
- Do people in their organizations respect their opinions and feel they can learn from them?
- Are they right for the current scale and trajectory of your company? You can over-hire for a position, as well as under-hire, given the phase your company is in. For example, do you really need to hire Ruth Porat, Alphabet’s CFO, to manage the finances of your pre-revenue 10-person team?
2. Ability to build and manage a team in those functional areas.
- Can they recruit exceptional people? Can they build a recruiting culture within their teams?
- Do they know how to motivate people in their functions? The incentives for a salesperson are different from those for a product manager.
- Can they effectively manage people from their function? Managing designers, for example, requires different approaches than managing a customer support team.
- Do they understand how to build out an organization with multiple layers if needed? How deep of an organization have they managed in the past, and how does that fit your current needs (again, think 12–18 months here)?
- Do they play well with other executives who are their peers?
- Can they put a collegial, mutually supportive environment in place for the company as a whole, as well as their function?
- Do they try to do what is right for the company even if it is not in their own best interest?
- Do they fit your culture? Each culture is unique, and like all employees, some executives fit a culture and some do not.
4. Strong communication skills.
- Are they strong at communication across the company?
- Can they consistently get other executives, and the CEO or founders, on board with team changes, promotions, road maps, goals, etc.? (Exec-to-founder communication may be its own magical art, depending on how introverted or opinionated the founder is.)
- Are they able to understand underlying issues and communicate them within their teams? Are they able to communicate to the board, external partners or customers, and other major stakeholders?
- Do they have “cross-functional empathy” that allows them to work with, and communicate effectively to, other functions they work with closely? 1
5. Owner mentality.
- Do they take ownership of their functions and make sure they are running smoothly and effectively?
- Do they own problems and solve them? Can they engage in “black box” abstraction of their functions so the CEO can engage on them, but does not need to be involved day-to-day?
- Do they understand that, as company executives, they should think like owners? 2
6. Smarts and strategic thinking skills.
- Do they think strategically and holistically about their functions? Many people don’t realize that almost every function can act strategically. It is a good exercise to ask yourself as CEO, “What does a strategic X org look like?” (where X can be HR, ops, product, etc.).
- Do they think about how their functions can be a competitive advantage for the company? Most companies are only good at one or two things, which is often enough to be successful. But companies that can tackle more than one thing well tend to outshine everyone else (e.g., Apple with hardware design, supply chain, and marketing). 3
- Are they first principles thinkers? Can they apply their expertise in knowledge in the context of your company, team, and product? Or do they just try to implement exactly what they did in their last role?
Most of the time, a founder will have no idea what to look for when hiring someone to run a particular company function. What does a CFO, general counsel, or even VP of sales really do day-to-day? How can you spot someone who is exceptional at each role? What characteristics should one type of VP have versus another? For example, how does a VP of engineering differ from a VP of sales, or even a CFO?
If you want to learn more about what a great CFO or VP of engineering does, your best bet is to reach out to people who are great at these roles and ask them for advice. Your investors or mentors may be able to suggest which companies have the best people for each function. For example, if you are hiring a CFO, go and meet three or four great CFOs at companies a few years ahead of yours or larger public companies known for excellence like Google or Netflix. What would they hire for in a CFO? What traits would they look for? What interview questions, work projects, tests, reference-checking questions, or other approaches would they take to vet a candidate in this area? For your company size and 18–month growth road map, what should you look for?
In order to get in touch with great leaders in finance, sales, engineering, and more, ask your investors or advisors for introductions. Or, you can ask the founders of other companies that are a few years ahead of you to introduce you to their CFOs or VPs of product for advice and perhaps candidate suggestions.
Once you have figured out what you want in the role, write it down and share it with the team that will be interviewing candidates for that executive hire. You want everyone to have a common view of what to look for, as well as what to select against. You can also use this as an opportunity to reemphasize the cultural characteristics the candidate must embody. Clearly establishing what you are hiring for will make a huge difference as you collect your team’s feedback and discuss candidates. It will also prevent poor hiring (or, alternatively, rejection of a great candidate) due to a lack of common understanding of what you are looking for.
Some companies are known to have turned over their entire first (and even second) executive team over time. Facebook, for example, let their first executive team go early on and saw quite a bit of executive turnover until Sheryl Sandberg and others came on board.
While you should establish processes to ensure that you have a high hiring success rate, you also need to recognize that you will make mistakes. And that’s okay—as long as you learn from the mistakes and iterate on your hiring process. I have seen too many founders take too long to make hires out of fear of doing something wrong. As a founder you need to give yourself permission to make hiring mistakes as long as you are willing to quickly correct them. You obviously cannot make too many of them, but an occasional error is correctable and, frankly, expected.
- Thanks to Mark Williamson for the “cross-functional empathy” point.
- Optimally this is true of all employees. But for executives who set the tone of their entire organization, this is especially true.
- Read the original post at eladgil.com [http://blog.eladgil.com/2014/02/6-traits-for-hiring-executives.html]. Thanks to Ali Rowghani for early feedback on this chapter.