We have all experienced it – make a great offer and boom, and your C-Suite candidate declines. WHAT??? How does this happen?
After all, you received verbal acceptance, you checked references and the last thing you thought was that the candidate was all in – or were they? Probably not.
Most candidates juggle perceived risk when making a decision to change from one company to another. Let’s examine the three main risk factors and how to uncover, address and negotiate them before you make an offer, ensuring you a hire.
There are four areas of risk for top candidates to consider:
New Manager Risk
New Team Risk
New Product/Service Risk
In our current recruiting climate, you will need to address each one of these risks, and likely address how you plan to navigate through the pandemic. You will need to make sure your opportunity exceeds what the candidate currently has, or he/she will not move.
New Manager Risk
Most important to address is the new manager risk. Assuming you are the hiring manager – this person
is coming to work with you. You need to show them what a great manager, and great person you are. You need to build trust to the point where your candidate believes and feels that you are the very best choice they have.
It goes beyond chemistry and into work ethic, integrity, trustworthiness, ability to lead, how well you communicate.
Finally, the candidate will assess how you treat them at
every step of the way in the recruitment process. You need to make sure you are consistently sending the appropriate signals, presenting an emotionally even persona, and following through promptly on all promises.
You cannot take too much time (more than a week or two) to deliberate on whether you like this person or not, it is imperative that you perform your candidate diligence in parallel with the hiring of the candidate – or you will lose them. You, or someone on your team, or the recruiter, will need to communicate continued interest to your selected candidate every 48-72 hours.
You should ask them out socially to dinner with their spouse or significant other – so you get a feel for what they are like (and they will get a feel for what you are like) in a more casual setting. Now with only outdoor dining, this gets people more relaxed and informal, you will actually get a glimpse into who this person really is.
Your process to hire from start to finish needs to be about 8-10 weeks max. If the candidate does not feel
important you will lose them. Conveying of sense of significance to the candidate can be as simple as
thanking them for their time, following up when you say you will, and communicating next steps and timelines while they are in the process. Also, addressing any concerns you may have openly will go a long way into building trust and a strong working relationship.
New Team Risk
The candidate will need to coalesce with his/her peers – the people you already have in the company at the executive level. It is important that all key stakeholders (maybe even a customer or two) be exposed to your top selected candidate.
It would be ideal if you sent candidates in a short time for everyone to meet, and decide if they are a good “fit” – you want the candidate to also share the fit sentiment – the
team and the candidate can see themselves working together in a productive manner. Communication
styles, work ethic and stamina, alignment all need to be considered in the fit equation. It should be a
Group video interviews via Zoom/ Microsoft Teams/ etc. are growing in popularity and allow everyone to see each other’s reactions.
New Product/Service Risk
The candidate wants to feel comfortable that the product or service will perform, and that their contribution will make a significant impact on the business. Most candidates want to add something to their resume – that means that the “been there-done that” candidate is not going to be enticed unless you can offer them a skill or accomplishment to add to their CV.
For instance, a Chief Medical Officer/SVP Clinical
wants a product to go from start in the clinic until approval and market. A Chief Commercial Officer needs to have a product launch, and successful commercialization under their belt. A CFO wants to take a company public. You get the point. The CEO is a different animal, and typically loves a challenge, and wants to lead a team to develop a product that impacts the market in a way no other product has to
date, or fix a company that is under performing. The CEO will ultimately join because he/she feels that the board will support him, and he likes the product and the market opportunity, and feel like he/she can make an impact.
This is evaluated three ways – size of market opportunity, competitive landscape, and timing, is the market ready for this product/service?. Another factor to consider, is does the candidate buy in? Does your candidate think that the opportunity is real, and is the timing for this product in the market right now or soon?
Top-level candidates are going to evaluate opportunities in a way that others won’t. They are typically loyal and approach risk of change like this cautiously. Top-level candidates want to see a product through start to finish, and build strong relationships with their current CEO/ board and team. Your opportunity must be significantly improved from what the candidate currently has in order for you to acquire this talent.
A strong recruiter will assist you and inform you of what the candidate is really looking for in a new opportunity, and assist you in positioning your company as a top choice. In addition, a strong recruiter will only provide candidates that have an interest and are a good fit for you and your stage of development or growth. The recruiters also know the market and who is available and what the candidate’s motivation an appetite for change.
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 limit distractions. 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 Video meetings require more engagement than a phone call, and you see physical cues and not relying solely on voice inflections
Be prepared, organized, open
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 call what your situation at home is – ie young children, the contractor, dogs, deliveries, etc.
First Check-in, know life can be messy, create an environment of trust.
- Real-life can be messy – interruptions happen. Be yourself and be vulnerable. 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 your employees are healthy – both physically and mentally. Communicate empathy and let them know that you understand that this stay at home order is very disruptive to everyday business.
- We are all adjusting to this long term imposed behavior change – not everyone on your team will embrace the changes, and some will need more assistance adjusting. Pair people up, one adjusting well with someone who is not adjusting well, 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 & 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 adjusting to performing and executing well in a distance working 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, confusion, distress 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 we know that “this too shall pass”, we just don’t know how long it will last.
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.
When recruiting C-Suite Executive Talent, compensation discussion often 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. Even more perplexing is how to navigate the new law in California that makes it illegal to ask how much do you currently earn.
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, directors and officers insurance are all components of compensation you want to consider. You want to keep your focus on what is most important to the candidate.
One thing to also consider is your internal compensation and equity. 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. 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 the longer you chase, it just gets more out of reach.. Also, if your internal team is paid under market, you run the risk of losing them to your competitors.
Sometimes, like in startups, compensation relies solely on base and equity compensation, with limited health benefits. 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 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 higher compensation for the same work, and a stronger vision.
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, underprformer 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.
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 limit to large 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 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 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 whom 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.
You are recruiting a Vice President for a key role. You have hired a search professional because you have run out of network. The senior recruiter has met your team, understands your company goals and objectives, and pulls together a targeted position description. You are now ready to start evaluating candidates.
The recruiter shares a few diverse candidates and reviews a list of prospects, people that they plan to reach out to with your approval. You decide you like the lead candidate, at least on paper, so you call a few of your buddies to check the person out, ahead of scheduling the first interview. One of your colleagues tells you that the candidate is very talented. Another colleague has a different point of view and says the candidate is stubborn (insubordinate, difficult, etc.) You decide that stubbornness is not good for you and your team, and you decide to tell the recruiter that you don’t like the candidate after all, and you have not had a phone call with the candidate.
Now what? Well, what you have done is eliminated someone on a couple of conflicting data points, and possibly a strong opinion, not on a full capabilities assessment. You have no idea how long ago this negative review was observed, or if the candidate has grown out of this bad habit. Nor do you know if this data point came from a time that they had some personal struggles – all you know is what your colleague told you.
If the candidate is currently working – there is more liability for both you and the candidate. You are poking around in that person’s past and character, the inquiry may unintentionally put them at risk of losing their current role. Another unintentional consequence is that this could potentially start a chink in the relationship of that candidate with their current leadership team.
Backdoor references provide a very limited, and often biased view of how a person performs. One very good reason to hire a search professional is not just because you cannot find people yourself, but because you want to hire right and you need to democratize the process. Especially now, when you need to ensure you include diverse candidates. You need someone to keep you accountable for hiring the right person, unbiased, and insure you make a great hire.
There are no perfect candidates – only perfectly flawed humans with specialized skills in your industry. What matters most depends on the function and performance.
What results did they get? How did this person communicate and build relationships? Hopefully, you hire someone who is not afraid to provide pushback, feedback, and divergent perspectives. The singularity of thought kills many good products and companies. This is what diversity is all about, and you want to create the very best return for your stakeholders, diversity at the top will help you accomplish this.
True, you don’t want to hire criminals or someone who creates HR issues. Personal quirks can be accommodated. You are hiring a human being, not a God, people are going to have faults and you need to know what they are before you hire them, so you can determine how to integrate this person into the team.
A good reference provides a balanced candidate view – both strengths and weaknesses. What the candidate can and cannot do, you need to know what growth path the candidate is on, and what skills and abilities they need to acquire to move up. You want the whole picture, and that includes understanding what motivates the candidate. The best way to manage and lead the candidate, and what they excel at, in what sort of environment. You need to know what drives this person, and what makes them want to leave. You want to be sure the candidate will excel in your company and will fit in with the team. This is most essential to your company’s success.
Every one of us can behave badly, it is your job, as CEO to make sure you are not the one pushing this person out the door. It is your job to channel and focus people on what you need them to accomplish.
In short, backdoor references are not the best way to find out everything you need to know about a candidate and how they will perform for you. This form of reference checking lacks depth and balance.
Hiring a search professional and partnering with them will get you a great hire. A search professional will also provide you a diverse slate of candidates, a balanced view of capabilities and development areas for each candidate, and prevents you from any discriminatory bias you may develop as a result of performing a back-door reference, resulting in losing a great hire, too.
We have all done it. We have said, “I need to hire a _____________”. We put the word out to our network, and find a few candidates to speak with, but no one really impressed us or seemed like the right fit. We keep searching or decide to make a hire from our “ho-hum” pool of candidates because we have so much to get done and willing hands seem better than none at all. We are missing opportunities, right? Inside of us, a little voice is saying “you needed to find someone better, I don’t know if we can get where we need to go with the level of talent we have.” But it is too late, we have succumbed to the pressure of now, and have hired someone “good enough” or convenient, and three to six months later we regret the decision.
A well-defined recruiting process can extend the time to hire, but your probability of making the right hire, a great hire, is over 90%. How much is the wait of a few weeks worth to you?
Here are the components of a well-defined process:
- Assign a point person to lead and drive the search, and be the primary contact for all the candidates.
- Define your business outcomes that you hope to achieve by hiring this person. What do you hope to accomplish with this hire?
- Examples: FDA approval, Clinical study started and completed, market defined, reimbursement approved, increased sales, manufacturing operations established and running efficiently, build a company with many of these pieces plus raise funding
- Create a position description that incorporates the goals, proven abilities of the ideal candidate, and attributes you need to ensure a good fit for the current team.
- Decide where to look – Competitors, Board, Advisors, etc. How will you get candidates into your pipeline?
- Filter all candidates against the position description, and weigh out strengths and weaknesses.
- Decide who is on your interview jury, which questions each member will specifically ask, and the particular skills they are interviewing for -i.e. board members interview for leadership and fit; peers interview for skill-sets that they will interface with, and understanding of technology.
- Rank and prioritize candidates for second and third-round interviews.
- Collect and call references for finalists (min of 2 finalists, and 6 references each).
- Create a compelling offer to give to the lead finalist, deliver and negotiate.
- Set up start date and on-boarding process (first 90 days) to make sure the candidate gets all the information needed and relationships established with the current team to be successful.
Seems like a lot? There is plenty of heavy lifting and it is very important to have a well-defined process to get the right leadership candidates on your team. A great search consultant can accomplish all of this with you and add value of creating a larger pool of candidates, assisting with Board communications, managing candidate communications and expectations, and keep your lead candidates engaged and moving forward in the process.
Also, the search individual can be a good thought partner on each candidate’s strengths and weaknesses and how they will integrate into the rest of the team. Finally, a search person provides leverage when it comes to negotiation of salary, bonus etc. You will end up with a happy candidate and a satisfied CEO/Board which sets everyone on the right footing for success.