Whatever sector you work in, having a good CEO is crucial to the development of your business. They are in charge of making the day-to-day decisions in the company and ensure you achieve your mission.
Research shows that the actions of the CEO add up to around 45% of a company’s performance. This is why it is so important to have the best CEO for your organisation. We’ve put together seven steps to take to ensure you make the right decision:
Think of hiring a new CEO as an ongoing process rather than a one-time event. Even if your current CEO is perfect and looks set to continue in the role for many years, you should still have a contingency plan in place. The pandemic has shown that nothing can be taken for granted.
It may be difficult to raise this issue to the Board but it is worth doing. Your contingency plan should involve a suitable pool of candidates and an ideal successor. Don’t assume these things will fall into place!
Planning in advance will also give you the opportunity to develop talent within the organisation. As with most parts of business, research is key. This takes time and should be given adequate resources.
Create A Strong Succession Planning Team
One crucial step in hiring a new CEO is making sure the right people are at the head of the project.
Creating a strong team with different perspectives will allow you to pick the best candidate. It will allow you to see past personal biases and make the decision that matches the trajectory of the company.
In particular, your HR department should be at the centre of succession planning. They will have a good idea of the roles and structure of the organisation which will help you to develop an effective plan. The Chairman should also play a key role in evaluating any decisions.
Involve The Previous CEO
If possible, get the previous CEO involved in the hiring process. Of course, this isn’t always feasible if they are leaving on bad terms. However, in many cases, they should be more than happy to help support the company as it moves into the future.
If the outgoing CEO is simply moving onto another company or retiring, then they will be a useful voice in the process. They will have a better understanding of the role than anyone else in the world. Take what they have learned and use it to create a better idea of what is needed.
Even if they have not been completely successful, listening to their perspective will give a good insight into how to move forward. It may help to outline which strengths are needed and which are less important.
Establish Your Expectations
No two Boards are the same. Even in the same sector, they have different expectations, goals and challenges to overcome. Remember there is no such thing as a ‘perfect’ CEO, only the right CEO for your organisation.
For this reason, it is important to dedicate time to working out what you want to achieve. How do you want to move forward in the future? You should assess your Board governance model and the type of relationship you want to have with the CEO.
Also assess any development plans you have for the business. Your current CEO might have done a good job with the current market, but this is an exciting opportunity to make changes to how things are done.
Keep An Open Mind
Keeping an open mind is crucial throughout the replacement process. As we’ve said, it’s important to plan in advance, but this doesn’t mean setting everything in stone. Things change and you should reassess your thought process at every stage.
Do not get too caught up on a single executive. For example, a previous CEO with an outstanding personality may catch your attention early on but make sure to stay measured. Of course, personality is important, but it shouldn’t be your only metric. You need a balance of personality, skills and experience to get the job done.
Approach The Candidates In The Right Way
When approaching the candidates, make sure to outline why they would be a good fit for the position. Why should they be interested in this opportunity? You know how exciting your proposition is but they may not and so it’s important to communicate. Outline the unique selling points of the role and why you can see them succeeding in it.
From the moment of contact, your research should be clear. Include references to their previous work and make it obvious why they should give their all to get this position. The process can be time-consuming but it is worth it.
During the interview process, you should also try to get a grasp on who they are. You don’t need to hear them recite their resume (although experience is important), but get to know them on a deeper level. You may want to include more casual questions alongside the technical points on experience.
Ensure They Start Right
The process of finding a great CEO does not suddenly end when they have signed the contract. You may think the journey is over but it is only just beginning. When welcoming a new CEO to the company, make sure you start on the right foot.
Ultimately, choosing a new CEO will depend on your company. Every Board has their own priorities and plans. Above all, there should be good communication between the CEO and Board.
A Board Portal like Convene will make these relationships easier. From drafting the meeting minutes to establishing a strong audit trail, a Board portal is designed to support efficient communication. With smart features such as shared annotations, instant voting and action items, you can ensure a strong relationship with your new CEO.