Hiring a CEO, Part 1: What to Look For

Some entrepreneurs, investors, or board members may think that it is necessary, in the earlier stages of a company, to hire a person with a "marquee resume" to handle the CEO duties for the company.

As an entrepreneur, you need to be sure that you, your investors and your board are fully informed of what to look for when hiring a CEO for a startup. Very often I have found that there is little understanding of this. This is evidenced by the fact that many times young companies are willing to make such a hiring decision based mostly, when it comes right down to it, on a resume.

It is important to realize that previous success as a member of a large organization does not indicate future success as the CEO of a startup. A startup CEO must be high-functioning in a wide variety of business disciplines, especially in implementing effective sales processes. (more on this last point later) Large organizations hire for specialized skills and tend to cultivate those skills. It is very rare to find someone from a large organization with deep experience in finance, sales, marketing, engineering, manufacturing, human resources, and especially in raising investment capital as a startup.

All of these functions are extrememly critical for a startup CEO, as is the ability to multitask, be highly observant, be able to make accurate predictions based on trends and instincts, be highly driven to success, and to be goal oriented. A startup CEO must be willing to handle intense situations and stress, take risks, work for years at reduced salary, jump on a plane across the country at a moment's notice, and spend long stretches on the road with little sleep. He or she must be a consumate networker, motivator, and "people person." On top of all of this is honesty, integrity, rational decision-making (as opposed to emotional), and lack of hubris.

When your young company interviews for a CEO, ensure that you ask the candidate what qualities are necessary for the position. If the candidate does not respond with the above, or something very similar, it is probably best to let that candidate learn on someone else's dime.

What a Difference a Day Makes

Let's face it, in the entrepreneurial experience, there are plenty of bad days to go around. In fact, sometimes it seems as if nothing can go right. Often, the discouraging things occur little by little and accumulate slowly over time, though occasionally building to a seemingly intolerable level.

This is where persistence and a positive outlook come in handy.

The good news is that things can turn around and the turnaround is often abrubt. It could be a beta trial that goes well and clears the path to commercialization, a key strategic partner that finally signs that contract, the large purchase order that comes in after months of delay, or a vendor who finally gets that nagging quality problem corrected. These positive developments are often the opening of a floodgate... a floodgate to your future.

Keep this in mind as you face discouragement. One day can make a big difference. I have seen it happen many times!

Sell, Sell, Sell

If you want to be an effective entrepreneur, you must be an effective salesperson.

Almost everything that you do will entail a sales effort: getting people to invest in your idea or company; getting a shop to produce your prototypes; recruiting employees; recruiting mentors; getting a loan; securing strategic partnerships; working out advantageous payment terms with your vendors, and obviously-- selling your product or service.

Nobody is born with sales process knowledge and the skills to apply that knowledge. The sales process is not taught in school. Knowledge of how to sell, how to recruit and manage a sales force and how to properly incent others to sell for you is usually acquired in the workplace.

The key is to understand that if you have not done it before, you don't know how to do it and must go get that knowledge. It is unwise to assume that you automatically understand this complex and important process just because you started a business. It is also unwise to assume that the ability to create a couple of initial sales means that you know how to extend this out to many prospects and to ramp it up "big time."

You must also have or assume an outgoing personality to be an effective salesperson.

Fortunately, you can gain a lot of knowledge by reading books on the subject, attending sales training seminars, working with mentors, etc. Please, please take the time out of your busy schedule to learn about sales if you have not previously been a salesperson and sales manager in a capacity similar to what you are attempting to do and build to.