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.