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August 18, 2005 CEO Roundtable Seminar |
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| How can I improve my rate of success in hiring key executives? |
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Loren Carlson with Ted Bililies |
This is the question the members of CEO Roundtable have been asking in their peer group meetings.
This is the question that was the motivation for two All Member CEO Roundtable Seminars this summer. We learned that:
You can hire "A" level executives consistently if you follow a defined process with a proven record of success.
Ted Bililies, a partner in ghSmart, led the second seminar, laying out a detailed process for hiring topperforming executives more often, reducing the very high cost of mistakes. The key is to use hard, measurable criteria and data in a methodical process. |
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The process Ted recommends is called Topgrading. It was developed over many years at GE and other large companies. Ted now uses it to help many financial services and venture capital firms select the right executives.
The focus of this seminar was on the critical steps in the process, the interviews. Ted first offered his definition of four types of interviewers:
- The Sponge – those who spend a great amount of time with the candidate in different settings hoping some key characteristics will be revealed. Usually these people are not very good interviewers and they try to make up for it by spending more time doing the wrong thing. The ‘sponge’ has the lowest rate of success.
- The Art Critic – those who look at a candidate from all directions, like a painting, to get a sense of how they feel about the person. Feelings are paramount to these people. Art Critics have the second lowest rate of success.
- The Prosecutor – those who take a very aggressive, direct questioning approach, often putting the candidate on the defensive early and not being open to in-depth discussions. Prosecutors usually have less than 40% success rate.
- The Airline Captain – those who follow a pre-flight routine of thorough checks in a defined process of obtaining and validating information on the candidate and the requirements for the job. Airline Captains have an 80% success rate or better.
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The Topgrading process has four key steps:
- Talent Review : identifying the ‘A’ members of your current team
- Scorecard: define in writing the mission for the role of every key job, the key accountabilities, and the competencies.
- Three Interviews:
Sceening Interview
Chronolgical, In-depth, Structured Interview of finalists (3-4 hours)
Reference Interview
- Virtual Bench: knowing where good talent is, inside and outside.
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 The discussion on all of these issues was open and vigorous. The members left with real tools that they can start using immediately.
In both of the seminars the key lesson is that hiring is a process that can be developed, learned and implemented. Hiring key executives is hard, but it does not have to be a roll of the dice. We can make hiring decisions from an 'informed gut'. |
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July 14, 2005 CEO Roundtable Seminar |
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HIRING RIGHT: IT’S A PROCESS, NOT A ROLL OF THE DICE |
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 Fred Foulkes, Boston University, and Paul Buchanan Barrow, Korn/Ferry International, led a discussion for the members of CEO Roundtable on the critical topic of Hiring Right. We focused on hiring senior executives.
CEOs know that one of their top responsibilities is to have the right people in the right jobs as their company changes. The right senior team is absolutely essential for small companies. Hiring the wrong executive can be very costly, even fatal, for a small company. But our chances of hiring the right person is less than 50% -- not even large companies do better than this. How can we increase our chances, our batting average?
We need to understand that hiring is a process with defined stages, techniques and tools. We need to adopt this mindset, follow the process and use the tools. We can plan in advance for senior team changes, develop our 'bench' and cultivate our networks. When we do have a crisis requiring us to fill an unanticipated opening we can implement a contingency plan that we’ve already developed.
Prof. Foulkes provided seven important decision points which we need to be aware of and consider as we hire senior executives:
- Recognize that you’re probably not very good at hiring top management - hiring in our own image or cloning is not usually successful
- You need to carefully define the requirements of the position that needs to be filled - and you need agreement from all members of your senior team on the essentials
- Decide if you have the internal resources (talent and time) to conduct a quality search or if you need to use an outside resource. If you need an outside resource you need a defined process and criteria for selection
- Define the process you will use to screen and select candidates and make sure everyone understands and is in agreement. Tip: the highest success rate is usually referrals from employees and others who know your business - including your peers in CEO Roundtable.
- Do a very good job of reference checking, usually beyond that provided by an outside resource. Often you should personally check critical references. "CEOs don’t lie to CEOs"
- After the hiring decision is made and the deal is negotiated to everyone’s satisfaction you need to have a clear, defined process for 'on-boarding' the new executive. Mistakes in first few weeks can be fatal for the new executive and for the company. It takes more than assigning an office and providing a computer!
- Leverage all information gained in the selection and hiring process to establish an ongoing management development plan, even for the most senior executives.
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 Most of us recognize that we have been too fast to hire and too slow fire. Perhaps one reason we are slow to fire is the dread of rolling the dice when we hire. As one member said, "I know the final decision will always be my gut feeling, but an informed gut is better than a uniformed gut."
The second in the CEO Seminar series on Hiring Right will be on August 18. Ted Bililies will focus on the candidate selection process and how we can improve our success rate in hiring senior executives. We will review the details of the process, the techniques and the tools.
A third seminar on Hiring Right is planned for December. The focus will be on the post hiring process – the on-boarding and the ongoing development.
About the CEO Roundtable seminars: these are added benefits for the members of CEO Roundtable. The greatest value for the members is the power of the peer groups in the monthly small group meetings. |
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2005 CEO Roundtable Summer Seminar |
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Dr. Jack Gill shares insights on entrepreneurial intelligence and
venture capitalists’ investment decision processes with 50 CEO Roundtable Members |
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 Boston – "Interpersonal and intrapersonal skills are likely to have a greater impact for big-time success and achievement for most people than knowledge-based skills," Dr. Jack Gill, cofounder and partner in Vanguard Ventures, told 50 members of CEO Roundtable earlier this month.
Dr. Gill said that intelligence, I.Q., and academic success alone do not predict entrepreneurial or leadership success. He cited Ronald Reagan, Pope John Paul II, Alexander the Great, Napoleon, Gandhi and FDR as leaders who excelled in interpersonal/intrapersonal skills and noted the self-made successes like Sam Walton of Wal-Mart and Wayne Huizaenga of Waste Management and Blockbuster. |
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| Dr. Gill drew upon learning theory, business leadership models, and research into intelligence, suggesting that ethics, interpersonal skills, street-savvy, the ability to engage in productive relationships, leadership styles, creative thinking, ambition, perseverance and just plain hard work are important qualities and indicators. Yet, there are no courses offered in these areas, and, begging the question if they can even be taught. |
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 Dr. Gill offered insight on how venture capitalists make their investment decisions including their role in evaluating the ability of the founders. Dr. Gill noted that most company founders have the skills of an entrepreneur, inventor, product conceptualizer, visionary, enthusiast, and motivator. They are usually not experienced CEOs and general managers, nor are they polished MBAs or especially financially astute. The job of the venture capitalist is to determine if the leadership has the "it factor," to identify the founder’s skill sets and then complement and augment those skills through new hires and executive or advisory board development. |
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 It is also imperative to have a business plan that specifies precisely how the company will use the venture capital.
Sharing his own review criteria model, Dr. Gill also confided said that he never does a deal unless he knows the leadership or there is an excellent, highly qualified referral from people he trusts: law firms, accounting firms, or friends. Dr. Gill said the quality of the reference is significant. So it behooves founders looking for funding to evaluate who they know and who they need to know. |
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About Dr. Jack Gill and Vanguard Ventures |
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 Dr. Gill is a 35-year veteran of Silicon Valley, both founding and financing numerous successful high-tech companies. He cofounded Vanguard Ventures in 1981. Vanguard’s first five funds invested $155 million in 103 startups and generated a $1.3 billion return to investors. Successes include Aldus, Advanced Fibre Communications, Ciena, EndoSonics, Endotherapeutics, Mycogen, Digital Microwave, Tut Systems, Cobalt Networks, and Indigo Medical.
In early 2000, Dr. Gill moved to Boston and joined the faculty of Harvard Medical School and is the senior advisor to the Harvard-MIT-CIMIT program. He also teaches courses in entrepreneurship at MIT, Stanford, Rice, and Indiana University. He is on the board of the Presidents’ Circle of the National Academies of Science, Engineering, and Medicine; Project Hope, and numerous foundations. |
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| CEO Roundtable brings CEOs, presidents and company owners together each month in professionally facilitated peer groups of 8 to 12 members from non-competing companies for invigorating exchanges of information, ideas and insights. CEO-Roundtable conducts six groups in Massachusetts and in New Hampshire, including general business, biotech/pharma, and high tech. For more information about CEO Roundtables visit www.CEO-Roundtables.com. |
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