When recruiting C-Suite Executive Talent, compensation comes up early. After all, everyone’s time is valuable, best not to waste it on someone who is not going to accept an offer that is not in your range. How can you tell if someone has unreasonable compensation expectations? What components of compensation should you be considering? How can you tell if your opportunity is competitively compensated? You can use a compensation survey, and in general, they are about 8-18 months behind the market.
Base salary, bonus expectations, equity compensation, 401K match (or not), sometimes car allowance, health/life insurance are all components of compensation you want to consider. You want to focus on what is most important to the candidate.
Sometimes my clients focus solely on the internal equity/compensation; if your team has been with you for several years, it can be likely that they are compensated under market. Tough to swallow, but best to know your risk internally. The market rate is your target. Trying to secure great talent on the cheap is like trying to buy a home in Silicon Valley today at last year’s prices. You might get lucky, but it is going to take you longer, and it just gets more out of reach, the longer you chase. Also, if your internal team is paid under market, you run the risk of losing them to your competitors.
Often, in startups, compensation relies solely on base and equity compensation. Others will have base pay, bonus pay, equity, and health benefits. That equity is going to be more important than cash (or so you hope). You will need to articulate the value of the shares. All seasoned executives know that equity in one company is not the same as equity in another (for example Amazon vs Bank of America). You need to understand timelines to reach these equity valuations, too. People are often trading time for equity. Candidates will want to know the details of your vision and their role in helping you maximize value.
When it comes to cash, people are no longer willing to trade cash for equity. To grow your company, it takes people who already know how to do that. These people do not come cheap – there is a saying in the horse world – and it applies to executive level talent:
If you want a horse that is fast and broke he won’t be cheap. If he’s cheap and fast, he won’t be broke. If he’s broke and cheap he won’t be fast.
You cannot have everything – so you need to think about the quality of hire and value that they will bring to your company. You also need to work on your internal equity and review annually – the last thing you want to worry about is losing someone because you are not paying them competitively.
People are your most valuable asset when it comes to getting where you need to go. To demonstrate that you value their contribution to your success, you need to pay them appropriately. If you don’t, someone else may come along and offer them more money for the same work.
In summary, you need to be competitive on cash compensation, understand the value proposition of the stock as you reach each milestone, and be generous with your team. You cannot afford a slow, bronc on your team – you need real athletes, performing at their peak to get you over the goal line. You need to be prepared to ante up, get in and play. Value your people fairly and they will be happy to build a successful company for you.
Good executive search professionals will have access to current compensation studies and will know how much a candidate is currently making before they are presented to you. Even in California, where there is a law that you cannot ask current compensation, a search person will know how to get this information. Search professionals will help you stay on top of current compensation for your teams. My clients know what the compensation levels are for each candidate we present and what components of compensation are important to the candidate, too. For example, some candidates can flex on cash compensation in favor of more stock ( note, this is some, not all, and a minority). This information helps our clients make solid offers and good decisions about candidates, and how to hire and retain their best talent.
In this digital-age leaders are already vying for attention from their teams. The digital divide has happened. People are distracted by social media, glued to their mobile devices for texts, email and calls. Now people are not even in the office anymore – no more social pressure to stay focused. How can you emerge victorious and increase both emotional closeness and engagement? Here are a few ideas:
Schedule regular communications:
- Move your 1:1 and team meetings to a video platform as video requires more engagement than a phone call, and you can see physical cues versus relying solely on voice inflections.
Be Prepared and organized
- You need to prepare for your communications – especially when you are home. Keep distractions to a minimum and know that things will come up. Tell people when you first get on the video what your situation at home is – ie young children, the contractor, the dogs, deliveries, etc.
Allow for and anticipate that there will be messes and flubs, first check-in.
- Real-life can be messy – interruptions happen. Be yourself and be vulnerable to allow your team to be open about the interruptions, be curious about their children, or pets. At the beginning of the call be sure to check in with all participants – be sure they are ok, and understand that this is very disruptive to everyday business.
- We are all adjusting to this rapidly imposed behavior change – not everyone on your team will embrace the changes, and some will need more assistance adjusting. Pair people up so they can help each other.
- Acknowledge the circumstances you find yourselves in, be vulnerable and share what you struggle with and leave room for open discussion, watch your team start to relax.
To increase collaboration, communicate plans and schedules clearly: Daily, weekly, Monthly, Quarterly
- When you communicate expectations on a daily, weekly, monthly basis – it keeps people focused on the right priorities. You establish new routines and lay the path forward, set up a path for people to follow. Everyone understands their role, and you bring teams together. We are just doing this in a distance learning format.
Identify which remote tools you want to use to communicate with your teams.
- In addition to the video communications platform, you will likely also want to use accountability and project tracking tools. I use a tool called Monday.com to manage communications across distributed teams, it helps me keep track of what was said to whom, and what the next steps are. It is very simple and easy to use and comes with templates already made, including a COVID-19 communication plan.
Last but not least: LISTEN
- Listen for what is being said and or not being said. Listen for tone, tension in the voice, and word choices. Listen for hope, optimism, and despair. You need to provide leadership and comfort. Your people are scared, as we live in a highly unpredictable time. Be the light, extend hope, generosity. Communicate hope and faith – this too shall pass.
I am curious as to how you are managing through a complex and rapidly changing world, and if you have any more ideas I can share with other clients. We have no idea how long this crisis will last, or how we will finish, but then again, do we ever know what’s ahead?
Be well, I am here for strategic hires, and to help you build strong teams. Happy to just be an ear to listen, or to cheer you up. Next week we will talk about what recruiters look for in top talent, and how you use this skill to improve your hiring too.
How we conduct business, this month, and perhaps how we behave going forward is changing – radically. This includes the in-person interview. The current COVID-19 pandemic has everyone in lockdown mode: working from home, limiting or canceling non-essential business travel, conferences postponed or canceled. This may be a temporary moratorium on gatherings, but I cannot help but think that this will shift all business travel habits indefinitely. Especially if we can find ways to work around it, and still get the same or similar results. We are not ready for transporter technology, but we do have fairly robust video conferencing capabilities. Nothing beats a face to face interview, it is where you can pick up subtle cues about the person. In-person interviews also allow you to get a “feel” for what the person is like to be with. For now, it looks like we will all need to proceed with a video interview – at least to help narrow down the field of contenders. Here are a few tips on how to make the interview successful
Make sure your video and audio work – test it out at least a day in advance. You need to be sure that the video and audio quality is up to your standards, and that you can both send and receive good quality communications.
Be sure to Give a good impression – Review your background – what will the other person see besides you? Uncovered windows often produce glare, and no one wants to see the junk pile you have in your office.
Elevate your laptop or computer – Desk level is rarely going to show your best angle, test out different heights.
Attire – Avoid wearing black or white – both make you appear washed out on video communications.
Beware of delays – just like mobile phones, there can be a delay in audio and visual transmission, and it can affect your reaction time and responses. Go for a pause, before speaking, and to convey that you are listening.
Prepare – Just like an in-person interview, you want to prepare your questions and know what your goals are for the meeting.
Prepare for Awkward moments – if you feel awkward, or an uncomfortable moment arises, say something and address it. Now is the time to show your “humanness” and it will make people more relaxed, and authentic. You are trying to figure out who this person truly is, and you need them to be as relaxed as possible.
Relax and be yourself – You are looking for people who will fit into your organization, and who want to work with you – it is always best to be relaxed and authentic.
I often conduct video interviews for candidates I do not have a personal relationship with and that are located out of my current geography, and I have no plans to travel in the near term. For all lead candidate’s this practice is always reinforced with an in-person interview, after all, I do need to know who I am presenting to my clients.
I am curious to hear from you about the pros and cons of video interviews and how you are changing your business practices in our post COVID-19 world. Please call me if I can help you identify key hires for your business.
No doubt, it is a hot employment market for top talent. Salaries are increasing, traffic is worsening, top talent often has more than one choice, and is likely considering 2-3 offers at once. It is a robust climate for business. Candidates are more educated than ever. They often have unprecedented access to information about you, your technology, the market for your technology, whom you have worked with, and who works with you now.
Like you, candidates are doing their homework and are studying your team, the board of directors and investors. These “A-Listers” will also possess a strong network and will ask for input on their choice of potential employers. There are many factors in a top candidate’s decision regarding a new role. How can you influence YOUR top candidate to choose you and your company as the obvious best choice for them?
Here are 5 factors that have the most impact:
1. Your reputation as a leader
- Great people attract and are attracted to other great people. Not just in performance and results, but also in how they engage each other, lead, develop people, and treat others. Your potential total impact and your integrity matter to them. What do people say about you?
2. Your Team
- Not just the level of talent and capabilities. You want your team to welcome all new potential team members. This can be difficult for science or technology-driven organizations. Your team must possess high Emotional Intelligence – and must display this capability in the interview process. The candidate needs to feel comfortable with the entire team, even if that candidate is not your first choice.
3. Your Business Model
- Can you articulate what you hope to accomplish with your company and the impact this hire will make? Is it compelling and enticing enough that the candidate can understand your vision for the future, and see themselves as a contributor to your success? Will they be a part of a strong team and be the difference that can take you over the finish line? Strong candidates want to know that they are a part of a bigger plan, and want to be able to view themselves as an integral part of your success.
4. Your brand
- Your image says everything – it gives people a feel for what it is like to work with you and a feel for how you approach people. Your website, marketing materials, slide decks, videos, etc. It may not seem all that important, but the first place people go to check you out, besides LinkedIn, is your website. It is very difficult to recover from a bad first impression. You don’t even need a lot of information, but you do need enough to describe what you are doing and why, and you need a good look and feel. It is all part of your brand, and it is what enables you to attract people who will naturally resonate with you.
- Your Physical Office Atmosphere. Fresh paint, clean carpet, and pleasant smells. This may sound very basic to you, but many office environments do not comply with this basic standard and push candidates away. Beyond the physical office, people can sense the “vibe” or “energy” of your business when they walk in the door. Be sure you hire an interior designer to help you with this. In the past, people would often give up creature comforts in exchange for cashing in on stock options. But that is not the case any longer. Great people want to work in a place that feels deserving, a place that feels “great”.
5. Your recruiting process
- When clients have trouble closing in on any candidate, let alone their first choice, it is often because there is a breakdown in the recruiting process. You need to know who the interview jury is, be able to communicate any next steps and provide an associated timeline to all prospective candidates. The experience people have with your recruiting process provides them with a taste of what it will be like to work for you.
Attracting talent is as much an art as it is a science – getting people to feel great about you, your company and your technology are all a part of your recruiting process. Think about how you can be more attractive. Your process is your tell, it is a live demonstration of how you get work done, the culture you have built or are building, and how organized and efficient you are. It is also very telling about how focused you are.
We work with companies to identify, select and hire high functioning leadership teams We specialize in placing CEOs and Vice Presidents who perform to or beyond the expectations of the board that hires them, and we guarantee it. Call for a free consultation regarding the hire of your next executive.
We have all done it. We have an opening for a key executive and get introduced to someone or meet someone at a coffee shop and think … “that’s the person for this job.” You decide to hire that individual and everything seems to work out for the next 6 weeks. But after those first six weeks, things are not getting completed to your satisfaction or someone else on the team is starting to have conflicts with that person … or even worse, you get the feeling that something is just not right. You are losing sleep, you need to make a change. You hire an executive search consultant to perform a replacement search and hope they can find the right person this time.
The search consultant comes in and does an assessment of your goals and puts together a position description that identifies key qualities, skills and performance objectives. The search consultant presents several candidates who look great on paper, but when you meet them, it’s a no-go. You just don’t feel “it”, but have trouble defining what “it” is. So the search goes on, and on and on. Six months go by and your key position still remains open. You tell the recruiter, “I’ll know it when I see it.”
Your recruiter is exasperated and they put you low on their priority list and toss you a candidate now and then. You blame the recruiter, when in fact you have given them the impossible assignment of reading your mind.
To avoid this untenable situation you need to be transparent about your company goals; the scope and size of the role and your values and culture you wish to create. This is where the fit comes in.
It’s not enough to say you want someone who is “world-class.” You need to define exactly what that means to you and how to identify it in a candidate you meet. This activity hones your ability to assess fit in candidates.
Developing a few questions to learn about the “who” it is you are hiring is the easy part. After all, you are not just hiring a skill set, you are hiring a whole person.
Clearly defining and writing down what you want, increases your chances of success by 35%. Enlisting others to hold you accountable jumps that up to 79%. Hiring a professional search consultant places that over 90%. Staying focused is tough when the business climate is moving quickly and you feel your needs changing — but the focus is essential to success in the hiring process.
Our job as a search consultant is to ensure we not only define the requirements for the position from the beginning, but to also make sure we identify and vet candidates against your culture, and team compatibility. Not to say everyone you hire will see things entirely the same way you do, but they will be able to align with you and your team, run a business with the same vigor you do, and build teams that function within the larger company.
We are happy to announce that Jeff Mack has joined Potrero Medical as CFO, as the result of an extensive search process lead by Laura Raynak. Congratulations to the Potrero Team!
Jeff Mack joins Potrero with over 20 years of experience as a senior finance leader in growth medical device companies. Jeff has served as CFO of Outset Medical where he previously lead all finance-related activities and led programs for employee engagement. Prior to Outset, Jeff held senior finance roles at Sonitus, Enobia, Volcano & Thoratec. Welcome to Potrero, Jeff!
Potrero Medical Inc.
Potrero Medical is a Silicon Valley based predictive health company developing the next generation of medical devices with smart sensors and artificial intelligence. Their mission is to help clinicians transform patient care by developing a predictive technology platform for early detection of critical illnesses. They believe their platform will provide doctors and nurses more time at the patient’s bedside and less time managing technology.
Learn More About Potrero: www.potreromed.com
Contact Laura: firstname.lastname@example.org /// (408) 399-6167