Staff turnover is an unavoidable fact of life at every level, including the C-Suite. Every person in an organization will move on eventually—even if that person is the CEO.
Losing a mission-critical leader, such as the CEO, CFO, COO or CHRO, can be a major blow to any organization. But it can also be an opportunity to bring in a fresh face with new ideas. A great executive hire can transform an organization's fortunes, such as when Howard Shultz took over a struggling coffee company called Starbucks, or Apple’s risky decision in 1997 to rehire Steve Jobs as their CEO.
Executive recruitment is a high-stakes hiring decision, with consequences for the whole business. Having the right hiring process is essential, and that begins with asking the right questions.
Important questions to ask when a key person leaves
The departure of a senior leader is a rare event. Each case is unique, which is why it’s so important to have clarity about the details.
If you work with a consultant specializing in executive search, they’ll start by asking some key questions about the current situation:
1. Is this a planned separation?
Leadership turnover is sometimes foreseeable, for example when a board member retires. If so, then the departing leader might play a substantial role in finding and onboarding their own replacement.
If the departure is unplanned, such as a resignation or termination, then things can get a little more complicated. You may face tight time constraints, and the old leader might not be as involved in finding someone to take their old job.
2. Do we need to protect confidentiality?
Significant changes in leadership can have a serious impact on the rest of the business. Employees, investors and customers might be worried about your company’s future direction, especially if it’s an unplanned departure.
If so, then you may need to conduct your search discreetly. One way is to work with an external consultant that specializes in high-level hiring. They can source and screen candidates without alerting your internal hiring team.
3. What’s the timeframe?
Executive search is an important process, so it can take a long time. However, many organizations might find themselves under pressure to announce a replacement as soon as possible.
When talking about recruitment timeframes, it’s good to have milestones. Be clear about things like when you’re announcing the change, whether you’ll appoint an interim leader, and how long you can function with an interim replacement.
4. What’s the succession plan?
Every business should have a succession plan, especially for planned transitions. Ideally, you should have an internal talent pipeline with adequate leadership training.
However, your leadership plan might not produce the ideal person for the job. It’s important to take a balanced approach: weighing up the preferred internal candidates against qualified external applicants.
5. Who will lead the selection process?
CEOs are usually responsible for replacing their fellow board members, while the board applies the new CEO. However, this doesn’t mean that they are responsible for the selection process that brings in the best possible candidates.
It’s essential to have clarity about who is responsible for executing the selection process. This might be a senior leader, an HR leader, or an external executive recruitment consultant.
Five steps to find your next mission-critical hire
Executive recruitment is not unlike regular hiring. You follow all the normal steps: sourcing talent, screening applications, and running a selection process.
The main difference is that you’re not just hiring to meet the company’s strategic needs. You’re hiring someone who will shape strategy and lead your company to success or failure. Here’s how to approach an executive search:
1. Create a selection committee
High-level recruitment involves a team of people, so it’s important that they’re onboard and understand their roles. Your selection committee may involve:
- C-Suite leaders: Board members will have the ultimate say in the selection process. They may also play a role in candidate selection, and they can often help source talent through their professional network.
- HR leaders: The local HR team can assist with the important tasks in your search process, such as arranging interviews, facilitating communication and issuing a formal offer to the chosen candidate.
- Executive search consultant: Third-party consultants will often work on a retained search basis. This means that they focus on filling a single vacancy and remain involved until they have successfully filled the position.
Executive hiring involves a lot of cooperation. It’s important that everyone involved knows their roles and understands the goals.
2. Manage communications
Major leadership changes are a big deal. They result in a lot of conversations, both internally and externally, and it’s important to manage this dialogue. Some things to consider are:
- Public communications: Customers and investors may have questions about how the leadership change will affect your business. It’s helpful to have messaging clarity on key events, such as when the leader is leaving and when you expect to nominate a replacement.
- Internal communications: The team will also have questions, and some may have concerns about their own roles. It’s helpful to share what you know and to offer reassurances on things like your ongoing commitment to DE&I.
- Candidate communications: Most candidate communications will happen on a one-to-one basis. It’s a good idea to ensure that everyone is on the same page when you talk about your company’s strategy, values and goals, especially in relation to the leadership hiring process.
Regular meetings or a group Slack can help everyone stay connected, which is helpful when you need to synchronize the timing of announcements.
3. Review the position requirements
Senior leadership jobs can’t be planned in the same way as regular roles. The new leader will bring fresh ideas and their own approach, which may radically change the way your company works.
That’s why it’s important to be clear about the type of leadership you require. Some questions for the selection board to discuss include:
- Near-term priorities: What are the most urgent issues facing the company? If you’re facing challenges, you may need a reactive leader who can put out fires. If you’re growing, then you need a visionary that can pursue exciting opportunities.
- Long-term strategy: Your current strategy will also indicate the ideal type of leader you need. For instance, if the plan is a major digital transformation initiative, then you need a tech-minded leader.
- Values and culture: Senior leaders play a huge role in the way companies live their values. This in turn will influence the organizational culture, which is why it’s crucial to find a leader that “gets” your company.
Applicants may surprise you, offering a fresh perspective that you hadn’t considered before. But it’s helpful to have a fundamental understanding of the type of person that your company needs.
4. Evaluate internal and external candidates
Companies should have an internal talent pipeline with a leadership training program that delivers quality candidates. If you work with an outside recruitment specialist, they can help you source talent from further afield.
Ideally, you should look at a mix of both internal and external prospects. When assessing them, keep the following in mind:
- Balance insight with perspective: Internal candidates have the advantage of knowing how your company works, but external candidates know how other companies work. When comparing candidates, try to balance internal insight with external perspective.
- Look for objective feedback: An executive search consultant can offer their unbiased opinions on all candidates. They can help strike a fair balance between internal and external applicants.
- Manage internal candidate expectations: Internal applicants may feel that they’ve “earned” a shot at one of the big jobs. It’s important not to make promises before a final decision, and to be sensitive about how you communicate an unsuccessful application.
Communication is essential during the screening process. Make sure that each candidate understands where they are in the process and what will happen next.
5. Make an attractive offer
Once the selection committee have identified their ideal candidate, it’s time to discuss terms. Negotiations are complex at this level, with compensation packages that involve a diverse range of rewards.
Some tips for creating the right offer include:
- Be clear about what you’re willing to offer: Executive compensation can go into high figures, especially if you’re competing against other companies. It’s a good idea to have clarity on your maximum limits before you start negotiating with individual candidates.
- Set clear terms for performance-related rewards: Much of an executive’s compensation is tied to performance, with bonuses on offer if the business meets certain goals. It’s important to talk about the metrics behind those goals so that the new executive understands their targets.
- Get an expert to draft your offer: It’s a good idea to speak to a compensation consultant before finalizing your offer. They can help you benchmark salaries, define bonus structures, and create an attractive offer document.
In executive hiring, the offer may involve a lot of back-and-forth negotiation. It’s helpful to have an executive recruitment consultant on hand to help you manage this process and advise on the best way to secure your chosen candidate.
Find your next superstar executive
Executive recruitment is a make-or-break decision, which is why it's so important to have the right advice.
Helios HR has been helping companies in the Greater D.C. area to find leaders for over 20 years. Our executive consultants work on a Retained Search basis, which means an intense focus on finding the right leader for your company.
Book a call with Helios HR and let's talk about finding your next superstar executive!
