First published on LinkedIn on June 16, 2015: https://www.linkedin.com/pulse/what-people-want-ceo-hiring-andy-price
Every CEO search is a highly unique, nuanced situation. We’ve done more than a thousand of them over the decades and there were never two that were exactly the same. So what are people looking for right now? A lot of CEOs are asking us what Boards really want, beyond the obvious. Let’s explore this a bit.
What public companies want:
A good narrative. Something to tell their shareholders. More public companies are going internal, but they need to be able to defend their decisions to their shareholders by running searches, wasting a bunch of time and cycles, knowing what they want all along but pretending to be interested in a “wide range of qualified candidates”. Their Boards are paranoid of not being able to tell a crisp story about how they got to a certain conclusion that in too many cases, was pre-determined. So often, they default to the IBM equivalent big search firms who run a nice buttoned up formal process only to surface no inspirational candidate ideas, and then default to:
- Someone they know from the Board
- Someone internally
- Giving the existing CEO more time
- Chairman or Founder comes back in to save the day
When’s the last time you saw a CEO hire at a public company and said “amazing call?” About one in every 20. Maybe…Look at the aborted CEO searches all over the place. Run a 6-12 month search, leak all the names of the candidates, get some reactions, lose courage, default. Yawn. This script is getting as old as a Fast and Furious movie.
What startups want is far more interesting and complex. It’s the wild west and you’re hunting rattlesnakes in the dark with no shovel and no six gun. This is a highly dangerous activity, and has to be well thought out. What to look for depends entirely on the moment by moment SITUATION of a company. Here are 8 things people look for in startup land:
1) Immediate impact. The perceptions here are that domain relevance counts a lot so there’s no learning ramp. Even though statistically speaking, most startup CEOs who made it didn’t come directly from the domain when hired (Frank Slootman is my favorite example and he did it twice). They want someone who can hit the ground running because the company isn’t firing on all cylinders. If it was, they’d leave the Founder in place in most cases.
2) A network. They want people who can break into customers and the partner ecosystem and move the needle there, most often. Then there’s the people network for hiring needs. People want CEOs who can hire quickly out of their own network. This is good and bad. The best CEOs tend to blend their own network with fresh thinkers. Just defaulting to people you trust isn’t the right approach. The blend of “let me pick out the right performers already in the company I’m joining and elevate/celebrate them, mix in some of the people I know can do this and then go surgically acquire the missing pieces.” This is the right formula. Too many CEOs are ultimately no-ops who default only to their own networks because they need players on the field who can run the one playbook they know. That’s lame.
3) A name. Someone who is backable. People are hiring CEOs because they perceive that the person can raise the next round of financing. Makes total sense. If you can’t raise money, and can’t sell the company, you’re dead. But the best situations are where Boards have so much faith in the fundamental value of their asset, they’re looking for leadership who can go the distance vs just get through the next financing.
4) Pedigrees. This is where I really believe people are right on. Most good CEOs spent time in a quality company and really knew how to set and meet high standards. And when I say pedigrees, I’m not talking Harvard. We all know how those folks turn out in tech ;-). They typically make great VC’s but there aren’t a ton of Harvard grads running killer tech companies. A few dropouts, yes. Keith Krach is a rare exception. He is crushing it at DocuSign. When I say pedigress, I just mean they spent time in killer companies under an amazing CEO. So they at least know what great looks like. They don’t come from random, silly, small ball companies.
5) Passion. The best Boards I know are looking for passion more than anything. That internal motor. Something to prove. Sequoia, for a long time, would tell us that was their main criteria. The passion and the fire to power through inevitable flat spots and do something amazing. This view has stuck with us. We really believe it’s right on, and ultimately should be the number one factor. Sadly, it rarely is.
6) Track record of growing stuff. Have you made money for anyone before? Show me where someone backed you and was better off for it. Duh. Fewer and fewer people are laying out the naive indictments of success of the past as a reason not to pursue someone. The old “yeah, this person made a ton of money over there and isn’t hungry any more.” C’mon people, come up with some new MATERIAL. What you’re really talking about is yourself. YOU made a ton of money and aren’t hungry any more. But don’t put your own reflections onto others as a blanker statement. Every single person has a completely personal situation and some of the hardest working people I know are billionaires. They’re not sitting around on boats smoking cigars with wife 3.0 in the Greek Islands. They’re working 15 hours a day because that’s just how they’re wired. Successful people are driven. They really don’t want to fail. One of my close friends was the poster child of dot-com billionaire, 30 something excess. And you know what? Blew a bunch of money, got humbled by a failure or two and is now hungrier than ever. I’d bet on him if we weren’t such close friends.
If you haven’t been a successful startup CEO, were you at least a key player on the team who can crisply articulate your stamp on the company and its outcome? Have you been an exec in an interesting company where you disrupted someone, grew share meaningfully, etc.? Cost cutters are a dime a dozen. They should be in the deep 408 area code or on long flights west bound out of SJC, one-way tickets only.
7) Have you launched a new product successfully? Introduced something NEW? If you’re running the PC or server businesses somewhere or some old line RAID biz, or milking some license biz, you’re in world war Z and should just end your career now.
8) A plan. Have one. Build one. Get one. Generalist GM / operator types are out of favor right now. You have to have a meaningful core competency that’s marketable. Velocity selling, frictionless, SaaS, mobile, whatever. As you decide you want something, go CHASE IT. Dial in your thinking, your game plan. Don’t take the deal for granted.
There are a lot of other things people should be, can be, and are looking for in CEOs. These are just some of the dominant themes lately. There is a lot more talent out there than people realize, but now more than ever, you’ve got to customize the CEO to the situation. We call it “Full Custom Search.”