I spent a lot of time over the holidays plonked on an outdoor sofa under the trees, catching up on my reading. If there’s one thing I wish to do a lot more of in 2017, it’s just this – read, plonked on a couch! New year’s resolutions aside (sadly, these don’t last much beyond the second week back at work), I was inspired by some great books and reviews, including a really interesting study on CEO appointments, documented in the Harvard Business Review.
Without a doubt, one of the most challenging tasks of any board is the appointment of a CEO. Regardless of whether the organisation is a public, listed corporation or an NPO, getting this appointment right matters MUCH more than most. Which is not to say that good CEO appointments always result in thriving, growing businesses. For sure, there are times when – even under the watch of a good leader – organisations blow up in some way or another. But at least there’s a fighting chance. When the CEO appointment is poor, well, that’s most likely a disaster waiting to happen.
Let me be clear – there is a difference between a good leader, and a good appointment. And this is where the key to a great CEO appointment lies.
Firstly, not every good quality candidate is the right one for all organisations. That’s obvious, right? Otherwise, a board, nomination committee or recruitment panel could just take a look at a bunch of great CV’s, verify the accuracy, and ‘boom’, an appointment is made!
We all know that it just doesn’t work like that – mostly because of a few key variables, which are critical to get right (well, as right as possible, considering their somewhat fluid and subjective nature).
Coming in at number one, the most obvious of all: FIT
I could write reams about this point alone, but it is really important that the board has a very deep discussion about what this ‘fit’ is, how it should be displayed and demonstrated in behaviour, how it shows up in values, and how the board will be collectively assessing this somewhat elusive but critical variable. This is NOT something to be handed over to a psychometric assessment! Yes, assessments can be helpful as a management tool, but if these tests offered perfect science, then we would have absolutely NO mis-hires, and no poor appointments.
Then, a close second: An acceptance of imperfection.
I have seen on so many occasions great candidates being declined because someone on the board was ‘uncomfortable’ about something that a candidate said or did, or that came up in a reference or one of the aforementioned assessments. Now, I’m not for one minute suggesting that compromises should be made about key elements of skill, experience, or even personal qualities (see my note on ‘fit’ above). But when candidates are excluded for unspecific, random, or non-critical reasons (ie, they’re not perfect in every way), that just leads to a long and winding road of indecision and frustration.
Thirdly, to support the above, point 3: Clarity around the key elements of success in THIS role.
My wish for 2017 is that all boards spend as long as it takes to formulate their key success criteria for the leader that will be appointed to the CEO role – at this point in the company’s history. This should NOT be a shopping list of qualifications (few of these matter at this level, in any case) and general skills that any leader should have. Rather, the board should have a really good understanding of what specific skills and experience are essential to ensure the success of this company – bearing in mind its unique challenges and opportunities.
In essence, a successful CEO appointment is hugely dependent on the quality of time spent amongst board members gaining the clarity that forms the foundation of the brief for their key appointment. The thing we hear most frequently is that boards can’t find the time to have these quality conversations.
In my view, if you can’t make the time, it’s not worth the bother.
So, my next wish for 2017 is: Make the time!
Just putting it out there.