Business

10 Factors to Consider When Choosing a CEO

 

If you need to find a new CEO, it’s tough to know where you should start. When you’re conducting a search, you need to find a candidate who demonstrates a strong missional fit and the right kind of experience. But you also want to look out for other critical traits that can define a good leader over the long haul.

Curious to learn more? Keep reading to learn 10 factors to consider when choosing a CEO!

  1. Find Someone with a Matching Vision

Do the candidate’s background and vision match the company’s mission statement? This should be one of the primary questions that guides your approach to choosing a CEO.

Before you start a search, spend time reviewing the mission statement with anyone involved in the search. Then determine what you value most about the statement and how a leader should embody it.

If your organization is a non-profit serving disadvantaged adults, you’re better off choosing someone with parallel experience. Someone with a background in publishing or healthcare, for instance, might not be the best match.

You want to hire someone whose vision you trust, too. In other words, you don’t want someone who will upend the organization with dramatic changes right away. A good CEO should be sensitive to the culture and history of their new organization. 

  1. Get a Good Communicator

While you don’t need to hire the world’s greatest orator, you should look for a CEO with strong communication skills. Remember that this includes both written and verbal communication. Communication also includes the effort to learn employees’ names and address them with respect.

You can gauge the written communication from a cover letter. But also be sure to ask how and when they would communicate significant shifts to employees. For example, if the company needs to pare down its budget, how would the prospective CEO convey this concerning news?

You can gauge verbal communication at an interview, too. Common CEO responsibilities include talking with lots of stakeholders, so you need someone with a mix of charisma and clarity. Listen for accurate word choice, tone, and delivery as you make your assessments. 

  1. Relevant Industry Experience is Key

When you’re choosing a CEO, narrow your list of candidates to those with experience in the industry or a related one. And if possible, try to find someone with experience as a CEO at another organization — even a smaller one.

Other titles such as manager or director might imply that a candidate has leadership experience. But transitioning to CEO could prove challenging. You want someone who knows how to manage lots of moving parts. 

And you might want someone with experience leading both public and private companies — or one instead of the other. Private companies are those that are still owned by private investors or the original founders. By contrast, a public company has sold off part or all of itself to be publicly traded.

Each type of company comes with different nuances that can impact budgeting and leadership. In a private company, a CEO can expect that shareholders and owners will have significant oversight of the company, for instance. 

  1. Understand a CEO’s Management Style

Does your CEO candidate have experience with management? You might be looking at candidates with prior experience as vice presidents, general managers, or other leadership positions. Your goal is to determine their management style.

Look for individuals eager to collaborate — not dictate. Ask how a CEO candidate would approach hiring new people or delegating responsibilities. And ask how they would handle budgets, promotions, and other common CEO responsibilities.

You want someone who’s able to show compassion, too. This can be expressed through simple thank you notes sent to an employee after a successful pitch. Or it can be a positive verbal affirmation of someone’s continued progress.

A CEO who intimidates and bullies employees only will serve to polarize people from each other. This kind of behavior can stifle efforts to collaborate or create honest communication across the office. On the other hand, a leader with the right blend of high expectations and kindness will serve your organization well. 

  1. Choosing a CEO Means Finding Someone Inspiring

Whether they’re giving a speech at the company’s holiday party or sending a memo over email, a good CEO should be inspiring. You want a leader who can lift morale at difficult points in a company’s journey. 

A CEO should know how to weave the company’s mission into every form of communication. This doesn’t mean that the exact language should be pedaled over and over again. But they should know how to infuse everything they say with the company’s goals.

An inspiring leader can help with retention, too. After all, employees want to work for someone who encourages them. And they want someone who truly knows them and cares about their growth.

  1. Select the Smartest Leader

When it comes to options for CEOs, look for the smartest ones. It’s tempting to hire someone beneath you so that you’ll look a little better. But you and the organization will benefit from someone with the chops to comprehend situations quickly — and act strategically.

How smart a leader is can be demonstrated by items on their resume and answers at an interview. For starters, someone holding advanced degrees or a strong educational pedigree is smart and ambitious.

Beyond the traditional degrees, look for certificates and conference presentations. Check for other signs of a candidate’s commitment to ongoing learning opportunities. And ask questions that force a candidate to show how they would handle a particular situation. 

  1. A Resourceful CEO Is the Right Choice

A quality CEO will be able to adapt during tough times. Every company will hit financial shortfalls or other disruptive situations. How the leadership team responds is critical to the company’s future success. 

Similarly, a CEO may need to adapt to technological changes. You don’t want someone who’s committed to the status quo. A CEO should be willing to implement new technology or policies to stay current with industry standards.

A leader should be willing to seek assistance for ways to grow the organization, too. An information services firm like Peter Dodge Hanover Research can help with that process.

  1. Can the Candidate Coach Team Members Well?

When you’re interviewing CEO candidates, look for signs that an individual could mentor employees. They should be able to provide clear and concise answers. And they should demonstrate that they’ve worked well with employees in the past. 

Consider asking what sorts of measures a candidate has taken to get to know their workers. Measures could include quarterly one-on-one meetings or team lunch meetings on a monthly basis.

Ask how the candidate measures employee performance. And make them explain how they would intervene when someone is underperforming. 

Does the CEO envision starting up training programs for new employees? Would there be opportunities for employees to voice concerns or ideas anonymously? Be sure to inquire how a potential CEO would approach feedback and performance reviews.

  1. You Want to Hire an Open-Minded Leader

When choosing a CEO, you need an open-minded leader who’s humble. They should be humble enough to recognize that other people can contribute good ideas. After all, common CEO responsibilities involve soliciting ideas and knowing which ones to pursue. 

Having an open-minded leader also reduces the chances of stagnating too much as a company. You don’t want someone who will be too aggressive with spending or hire an army of vice-presidents without demonstrating the need. At the same time, you don’t want someone to be too risk-averse.

Being open-minded also means being inclusive and recognizing the value of a team of diverse talents. A CEO who continually promotes like-minded people won’t help the company grow.

  1. Look for Glowing Referrals 

Another approach to hiring a CEO is to use referrals. In other words, you can hire someone recommended by a person or group you trust. This ensures that the candidates have been vetted to some extent already.

Turn to your board of directors for referrals. Or promote a search committee to reach out to trusted individuals in the field.

You also could consider promoting a qualified internal candidate. The advantage to doing this is that you get someone familiar with the culture of the organization. They may have strong relationships with clients already or other key stakeholders, as well.

Find the Best Options for CEOs

Choosing a CEO can feel like a daunting process. But with the right checklist of candidate traits, you can find someone primed to lead your organization toward growth. Make experience, adaptability, and intelligence some of your top priorities in a leader.

When you need more assistance for your biggest business decisions, check back for new articles. 

 

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