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As companies grow they naturally need more executives to manage a growing number of employees and an increasingly complex business. A seed stage company of 10 people probably doesn’t need a CFO or Head of People. A Series A or B company with 100-200 employees probably does. In many companies, when growth is happening quickly enough, existing employees cannot just be promoted into those positions because the organization is growing faster than most individuals are capable of developing. In these cases, companies need to hire externally.
External hiring is an inherently risky process because it’s impossible to know with 100% certainty from an interview process whether someone will be a great fit. This is doubly true with more senior roles, because those roles also impact so many others within the company. Bad hires at the senior leader level can set a company back inordinately in both time and money.
The tale of organizations that bring on external leaders who have ended up not working out is as old as time. Remember when Pride Rock brought in Scar as their new leader? Or when the Donner Party agreed to listen to James Reed? Or when the Red Sox hired Bobby Valentine? In case you’re not familiar with Disney movies or the Oregon Trail and you aren’t a Masshole, suffice it to say that none of these leaders worked out well. But what causes these seemingly great hires to end up being bad fits? And how can a founder or CEO avoid leadership hiring failures?
Transplant rejection and how to avoid it
In medicine there is a concept called “transplant rejection”, where a patient is given a new organ but their body does not take to it and ultimately attacks it. The same applies to leadership hires. Some leaders, even if they appear perfectly capable during an interview process, end up being wholesale rejected by the organization they join, and are unable to get meaningful work done.
It is easy to spot transplant rejection happening, sometimes before the new leader even starts. Soon-to-be direct reports might have lukewarm reactions during the interview process, or during your check-ins with them after the new leader joins the company. Other leaders may have similar reactions, or express active concerns about this new person who has joined the organization. Your new leader themselves might even communicate concerns, such as that they’re unhappy with the way that things work in your organization, or they don’t feel like they can get much done. Once these things have occurred, it may be most beneficial to simply cut your losses by asking this leader to leave. The reason is that it can be quite difficult to shift an entire company’s perception of a new leader because you’re now having to force acceptance of them. But prior to this rejection starting, there are a number of things that can be done to avoid it by laying the appropriate ground work.
Communicate the need for the role
You as a founder may be acutely aware of the fact that your organization needs a CFO, COO, CMO, VP of Operations, CHRO, etc. But that doesn’t necessarily mean your employees are. In a previous role, in one of my customer experience teams, it became clear to me as we grew that we had great people managers but were lacking an operational skill set that was needed to help the org scale the right way. I opened up a Director of Operations role and explained to my direct reports that we would be hiring this person and that they would be reporting to this new leader. What I failed to realize until I checked in later on with these team members was that they had absolutely no idea why this person was necessary, and had taken my opening of this role as an implication that they were not performing to my expectations. In reality, this couldn’t have been less true. They were performing so well, building their teams so quickly, that I needed help managing what had become a very large organization. We were too big for me to dedicate the necessary time to each of these functions myself. Once I created some space to explain that and answer questions they had, they then understood that this role was truly going to be useful in the organization.
Involve the right individuals in the interview process
I think it is a best practice and an absolute must to have a leader be interviewed by not just the co-founders and board members, but also their peers and direct reports, possibly even reports two levels below them. I have found that some leaders can talk a big game to the right senior audience, but have a difficult time building relationships with their direct reports, and also are not always the best stakeholder managers outside of their own team. The individuals best equipped to snuff that out are this potential leader’s peers and people who would be reporting to them. A leader who is able to get the buy-in of their future coworkers and effectively communicate a vision will perform well with these team members. By getting people in these roles involved at the interview stage, you allow them to become advocates for this new leader rather than forcing them into just accepting this person.
Create a learning-focused onboarding process
With the pace of growth at many startups, by the time a new leader joins it is likely well past the time they were actually needed. Many leaders therefore join early stage companies and see tons and tons of stuff that needs to be urgently changed or fixed in some way. If they’re coming from a more established company, as is often the case, they’re used to a lot more structure, programs, and policies being in place. So their reaction to seeing all the stuff that needs to get done is to semi-panic and just start hacking away. The problem is, this reaction has a strong chance of leading to transplant rejection. Team members who wouldn’t recognize this leader if the leader ran into them in the street are suddenly being dictated to or told that their work needs to be done differently. A recipe for cultural disaster.
To avoid this situation, you as a manager can take ownership of their onboarding process and communicate really clear expectations about what their first few weeks should entail. Instead of immediately focusing on what needs to get done, ask them to only focus on building relationships and understanding what everyone does and how it all fits together. And then make sure to check in on how that’s going, often. Even if you’re clear as day with these expectations, many new leaders will still want to scratch the itch to fix things. Consistently reminding them over the course of the first few weeks what they should be focused on and removing all possible pressure to deliver will result in them spending time understanding and connecting instead of doing, which will in return result in this leader being far more likely to be accepted into the organization.
Build and agree on clear development plans for impacted individuals
Hiring a new leader can potentially displace an existing team member or reduce their opportunity for upward mobility. If an individual in the team has taken on this role’s scope in addition to their own, they might be disappointed to not be asked to apply to the new role themselves, nor be given the opportunity to take on the additional scope permanently. Other team members may have applied for the role and not gotten it, and other senior leaders may have been hoping to be asked to take on the additional team as part of their own scope. In either case, these team members will likely be unhappy about the worsened long-term growth prospects, and be naturally colder towards a leader they see as taking up their space and taking away their opportunities.
The best way to avoid this is to have a clear development plan for all of the individuals potentially affected by the hiring of this new leader. This development plan should clearly note where there are opportunities for them to grow into still (perhaps a team that will be built out in the near future that needs a leader), and also what they can do to continue developing in their current role to be better prepared for future opportunities (perhaps improve their communication skills with company executives). It will also help to note where this new leader is strong and can help this person develop in those areas. This way that individual will see the new leader as an asset, and also will see that there are other ways to take on more responsibility and grow over time despite that leader coming onboard.
tl;dr
The best external executive hires can fail to be impactful if not appropriately set up for success both before they’re hired and once they are onboard. You as a leader must take action to ensure your new leaders have the greatest chance of success in their new roles. Make the necessary preparations to get their team and the company onboard, and also ensure the new leader spends most of their initial time in the role building strong relationships and understanding what everyone does and why.