Leadership/Management

What to Look for When Hiring a CEO

 

As a three-time CEO and now director on a number of boards, I can attest that directors have learned a lot in recent years about hiring chief executives. For one thing, they’re trying harder to promote from within, rather than hiring charismatic, but untested CEOs from the outside. But sometimes an external search is necessary, and boards have to try to build a consensus on the specifications being sought. While there are many quantitative measurements, such as stock price history or background experience, the attributes that may have the greatest impact on a candidate’s potential success are softer, qualitative ones. That’s why directors need to be able to assess a candidate’s passion and strength of convictions, as well as his or her ability to lead.

I should acknowledge that I am by no means perfect in this regard. Case in point: I sat briefly on the HealthSouth board. Although CEO Richard Scrushy was impressive and forceful, there was something about him that raised my antennae, but I never pinpointed what it was. I now understand that the charismatic “star” CEO leadership style is inconsistent with developing an open environment and an empowered management team.

We did a better job of paying attention to the softer skills at Lucent Technologies, where I was also a board member, when we decided to recruit Pat Russo. Knowing that Lucent was going through significant upheaval and needed a high-integrity, inspiring team builder to stabilize and rebuild, we emphasized those soft values of leadership. And that’s what they have now in Russo, as CEO.

Wiser for these experiences, I’m convinced that one absolute key in assessing a candidate is the social interaction that directors have with him or her. It’s a mistake to hire a CEO solely on the basis of formal presentations and discussions. After all, leadership is a collection of personal behaviors, political and people skills and judgment-and much of that is typically suppressed in formal settings.

In social interactions, it’s easier to ask open-ended questions such as, What are you proudest of in your career? or What was the most difficult challenge you ever faced? A director with a well-trained ear can then discover whether the candidate thinks in terms of building teams to accomplish objectives or is a lone ranger.

I also think it is crucial for directors to conduct some background checks themselves, rather than relying entirely on others. These sorts of conversations often produce new insight into a candidate’s personality. You can hear the nuances in pregnant pauses that aren’t always apparent in a preference write-up. It’s not that I don’t trust the executive search firms that typically handle this work. It’s just that they obviously have an incentive to close the transaction through a hiring decision, rather than prolong the debate.

By having both formal and informal contact with a candidate and being directly involved in checking references, directors stand a much better chance of understanding the skills he or she offers. Consider what leadership means: To inspire people to follow you, you have to demonstrate they can trust and believe in you, that the values you communicate are ones they can and should believe in, and that you have integrity and judgment. There’s no way to analyze those qualities on a spreadsheet.

Here are some questions to consider when measuring these “softer” characteristics:

  • Has the candidate demonstrated the ability to lead and develop talent?
  • Can this leader energize others? Is he or she comfortable delegating power?
  • Does this leader hold his or her team accountable for delivering on promises and specific performance?
  • Does this leader share information, resources, praise and credit?

Going into a search, the board must have a shared view of leadership, and directors must agree on how much change they want; a search can be crippled from the start if some directors fear the new leader will change things too drastically. But if directors can agree, and if they are sensitive to the softer attributes, they can make a decision that will benefit the company for years to come.

Betsy S. Atkins, cofounder of Ascend Communications, is CEO of Baja Corp., a venture capital firm in Coral Gables, Fla.


Chief Executive

Chief Executive magazine (published since 1977) is the definitive source that CEOs turn to for insight and ideas that help increase their effectiveness and grow their business. Chief Executive Group also produces e-newsletters and online content at chiefexecutive.net and manages Chief Executive Network and other executive peer groups, as well as conferences and roundtables that enable top corporate officers to discuss key subjects and share their experiences within a community of peers. Chief Executive facilitates the annual “CEO of the Year,” a prestigious honor bestowed upon an outstanding corporate leader, nominated and selected by a group of peers, and is known throughout the U.S. and elsewhere for its annual ranking of Best & Worst States for Business. Visit www.chiefexecutive.net for more information.

Share
Published by
Chief Executive

Recent Posts

How To Reconfigure A Traditional Industrial Giant For New Era

Johnson Controls CEO Oliver has led a corporate transformation focused on making buildings greener.

14 hours ago

Rachel Barger, Cisco’s Senior Vice President of the Americas, Encourages Us to Always Keep an Open Door

In this edition of our Corporate Competitor Podcast, leadership speaker and storytelling expert Don Yaeger…

3 days ago

Boards May Need To Reevaluate Their Idea Of Acceptable Risk

Boards are being held to a higher standard regarding risk. A more thorough strategy may…

7 days ago

CEOs Can Become Afflicted With ‘Boreout’ Too

If you're experiencing burnout not because you're overworked, but because you're underinspired, it might be…

7 days ago

Why CIOs Should Report Directly To The CEO

When companies elevate the role, they reap significant benefits. Here are five critical ways it…

1 week ago

New-Era Koppers Keeps Staying Ahead Of The Game

CEO Ball has led early decoupling from China and diversification that ties into today’s infrastructure…

1 week ago