How many CEOs have been head of HR, Engineering, Sales, Marketing, Finance or Legal? Probably none. Here’s how they can overcome that and still hire good people in those roles.
By Ben Horowitz, contributor
The biggest difference between being a great functional manager and being a great general manager – and particularly a great CEO – is that as a general manager, you must hire and manage people who are far more competent at their jobs than you would be at their jobs. In fact, often you will have to hire and manage people to do jobs that you have never done. So, with no experience, how do you hire someone good?
Step 1: Know what you want
Step 1 is the most important step in the process and also the one that gets skipped most often. As the great self-help coach Tony Robbins says: “if you don’t know what you want, the chances that you’ll get it are extremely low.” If you have never done the job, how do you know what to want?
First, you must realize how ignorant you are and resist the temptation to educate yourself simply by interviewing candidates. While the interview process can be highly educational, using that as the sole information source is extremely dangerous. In particular, doing so will make you susceptible to the following traps:
- Hiring on look and feel – It sounds silly that anyone would hire an executive based on the way they look and sound in an interview, but in my experience look and feel is the top criteria for most executive searches. When you combine a CEO that doesn’t know what she wants and a board of directors that hasn’t thought much about the hire, what do you think the criteria are?
- Looking for someone out of central casting – This is the moral equivalent of looking for the Platonic Form of a head of sales. You imagine what the perfect sales executive might be like then you attempt to match real-world candidates to your model. This is a really bad idea for several reasons.First, you are not hiring an abstract executive to work at an arbitrary company. You must hire the right person for your company at this particular point in time. The head of sales at Oracle in 2010 would likely have failed in 1989. The VP of engineering at Apple might be exactly the wrong choice for FourSquare. The details and the specifics matter. Second, your imaginary model is almost certainly wrong. What is your basis for creating this model? Finally, it will be incredibly difficult to educate an interview team on such an abstract set of criteria. As a result, everybody will be looking for something different.
- Valuing lack of weakness rather than strength – The more experience you have, the more you realize that there is something seriously wrong with every employee in your company (including you). Literally, nobody is perfect. As a result, it is imperative that you hire for strength rather than lack of weakness. Everybody has weaknesses; they are just easier to find in some people. Hiring for lack of weakness just means that you’ll optimize for pleasantness. Rather, you must figure out the strengths you require and find someone who is world class in those areas despite their weaknesses in other, less important domains.
The very best way to know what you want is to act in the role. Not just in title, but in real action – run the team meeting, hold one-on-one meetings with the staff, set objectives, etc. In my career, I’ve been acting VP of HR, CFO, and VP of Sales. Often CEOs resist acting in functional roles, because they worry that they lack the appropriate knowledge. This worry is precisely why you should act – to get the appropriate knowledge. In fact, acting is really the only way to get all of the knowledge that you need to make the hire, because you are looking for the right executive for your company today not a generic executive.
In addition to acting in the role, it helps to bring in domain experts. If you know a great head of sales, interview them first and learn what they think made them great. Figure out which of those strengths most directly match the needs of your company. If possible, include the domain expert in the interview process.
Finally, be clear in your own mind on your expectations for this person upon joining your company. What will this person do in the first 30 days? What do you expect their motivation to be for joining? Will they instantly have 10 reqs to hire or will they have 1?
Step 2: Run a process that figures out the right match
In order to find the right executive, you must now take the knowledge that you have gathered and translate it into a process that yields the right candidate. Here is the process that I like to use for this step:
2a: Write down the strengths you want and the weaknesses that you are willing to tolerate. In other words, write down what you want. In order to ensure completeness, I find it useful to ask myself questions like these:
- Will the executive be world class at running the function?
- Is the executive outstanding operationally?
- Will the executive make a major contribution to the strategic direction of the company? This is the “are they smart enough?” criteria.
- Will the executive be an effective member of the team?
Effective is the key word. It’s possible for an executive to be well liked and totally ineffective with respect to the other members of the team. It’s also possible for an executive to be highly effective and profoundly influential while being totally despised. The latter is far better.
These functions do not carry equal weight for all positions. Make sure that you balance them appropriately. Generally, operational excellence is far more important for a VP of Engineering or a VP of Sales than for a VP of Marketing or CFO.
2b: Develop questions that test for the criteria. This part is important even if you never ask the candidate any of the pre-prepared questions. By writing down questions that test for what you want, you will get to a level of specificity that will be extremely difficult to achieve otherwise. As examples, below are questions that I wrote for running the enterprise sales function and operational excellence.
- Is she smart enough?
- Can she effectively pitch me on her current company?
- How articulate is she on the company and market opportunity that you are presenting to her now?
- Will she be able to contribute to the strategic direction of your company in a meaningful way?
- Does she know how to hire sales people?
- What is her profile?
- Ask her to describe a recent bad hire
- How does she find top talent?
- What percentage of her time is spent recruiting?
- How does she test for the characteristics she wants with her interview process?
- How many of her current people want to sign up? Can you reference them and validate that?
- Could you pass her sales interview test? Should you be able to pass?
(For the full, extensive list of questions, check my blog, bhorowitz.com, tomorrow.)
2c: Assemble an appropriate interview team and conduct the interviews.
The next step is to assemble the interview team. In assembling the team, you should keep two questions in mind:
- Who will best help you figure out whether or not the candidate meets the criteria? These may be internal or external people. They can be board members, other executives or just experts.
- Who do you need to support the decision once the executive is on board? This group is just as important as the first. No matter how great an executive is, they will have trouble succeeding if the people around them sabotage everything they do. The best way to avoid that is to understand any potential issues before the person is hired.
Clearly, some people will be in both groups 1 and 2. The opinions of both groups will be very important: group 1 will help you determine the best candidate and group 2 will help you gauge how easily each candidate will integrate into your company. Generally, it’s best to have group 2 interview finalist candidates only.
Next, assign specific questions to interviewers based on their talents. Specifically, make sure that the interviewer who asks the questions deeply understands what a good answer will sound like.
As you conduct the interviews, be sure to discuss each interview with the interviewer. Use this time to drive to a common understand of the criteria, so that you will get the best information possible.
2d: Collect backdoor and front door references.
For the final candidates, it’s critically important that the CEO conduct the reference checks herself. The references need to be checked against the same hiring criteria that you tested for during the interview process. Backdoor reference checks (checks from people who know the candidate, but were not referred by the candidate) can be an extremely useful way to get an unbiased view. However, do not discount the front door references. While they clearly have committed to giving a positive reference (or they wouldn’t be on the list), you are not looking for positive or negative with them. You are looking for fit with your criteria. Often, the front door references will know the candidate best and will be quite helpful in this respect.
Step 3: Make a lonely decision
Despite many people being involved in the process, the ultimate decision should be made solo. Only the CEO has comprehensive knowledge of the criteria, the rationale for the criteria, all of the feedback from interviewers and references and the relative importance of the various stakeholders. Consensus decisions about executives almost always sway the process away from strength and towards lack of weakness. It’s a lonely job, but somebody has got to do it.
— Ben Horowitz is co-founder and general partner of the venture capital firm Andreessen Horowitz.