We’ve all heard of the e-commerce giant Amazon.com. Jeff Bezos, the founder and CEO of Amazon for nearly three decades, recently handed over the CEO reins to Andy Jassy, a former protégé. Bezos highlighted that he intended to focus on the company’s long-term objectives, particularly his rocket business Blue Origin.
This is a classic example of how, as the firm progresses and expands, the founder-CEO may find it increasingly difficult to manage time for developing new products, executive hiring, and supervising day-to-day business operations.
When a startup decides to appoint a new CEO, a rigorous succession plan must be written, stating Who hires the CEO? What to look for in hiring a CEO? – meaning the attributes required in a new CEO etc.
That’s the topic we’ve devoted our article to.
Who hires the CEO?
The founders, board members, and the chairman of the board select the CEO. Often the chairman drives this process. He or she must manage and prioritize the board’s expectations, and thereafter personalize and lead the hiring process. It’s all about striking a balance, uniting behind a shared goal, and abiding by the search profile.
What to look for in hiring a CEO?
A successful CEO is defined by a number of personal characteristics. Here are five attributes to seek for in a CEO:
1. Cultural Fit: A strong CEO candidate must blend in with the startup’s established culture. The new CEO must share the company’s core values and be able to work well with other top executives.
2. Knowledge of the Industry: A candidate who has a solid awareness of your firm’s sector will already have an excellent knowledge of what your company is doing. If the applicant is also aware of the changing market, he/she would lead your organization to stay ahead of the curve. All of this experience is critical to look for in a CEO since it demonstrates that the candidate can adapt to startup dynamics.
3. Ability to Connect: When you are evaluating what to look for in hiring a CEO, remember to check the candidate’s networking abilities. A CEO with strong communication skills should be able to articulate the organization’s values, strategy, and goals clearly and effectively. He must be confident in explaining to investors and the public at large about your firm, what they are doing, and how their products/services are contributing to society.
4. Flexibility: Industries evolve as technology progresses. Whatever your business does, there will always be newer breakthroughs in your sector, and these developments may alter the industry’s direction. To keep your firm relevant, a CEO must be able to adapt to these changes swiftly and efficiently.
5. Goal-oriented: Consider how a candidate will influence your firm in the future when selecting what to look for in hiring a CEO. A CEO should not only be able to understand where the firm has to go, but also how it will get there. Your firm may continue at the top of its sector for years to come if you have a CEO who knows how to put ideas into action in order to reach a certain objective.
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As a business founder, your next quest may be how to find the right CEO, which sources to search for, and so on.
How to find the right CEO?
1. Use referrals as a starting point for CEO selection
While undertaking an executive search can be expensive, the majority of CEO hires are done through referrals – usually from your board of directors, advisory board, or investors.
2. Look for a seasoned leader and manager
When thinking about How to hire a CEO for a startup, recruit a CEO with expertise in managing huge teams and share your enthusiasm for your business and encourage her to expand it.
3. Create a board of advisors
If you want a CEO, form a governing body. Each team member should have their own set of skills such as software, hardware, finance, engineering, etc. Bring the board together and interview the CEO candidate in a group setting.
4. Perform a background check
You should conduct a background verification to assess: Is he/she capable of leading a group? Did he make an attempt to be a solo performer? The only way to tell if someone is a good candidate is to get these responses from former employers and workers.
5. Employ a Stage-appropriate Candidate
A very scholarly, introspective attitude in a startup may be catastrophic, just as a flip, carefree approach can destabilize even a million-dollar firm. As a result, hiring a Stage-appropriate individual ensures that your brand’s reputation is not harmed.
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FAQ’s
Q. Is it necessary for a small firm to have a CEO?
A. Businesses that are just getting off the ground may not require a CEO straight immediately. When your company reaches a certain point of development, you may wish to consider filling the position.
Q. When is the best time to employ a CEO?
A. When you, as a business owner or founder, wish to focus on other aspects of your organization and want someone else to execute critical business decisions, set company-wide goals, and drive innovation, consider hiring a CEO.
Q. What is the difference between a president and a CEO?
A. A CEO is usually the company’s highest-ranking employee, whereas a president is frequently the company’s second-highest-ranking employee. While both jobs have comparable tasks, a president is generally in control of day-to-day decisions and corporate strategy, whilst a CEO is in charge of overall business plans and vision, as well as being the firm’s public face.
Q. What qualities should a great CEO possess?
· Exceptional leadership abilities
· Long-term planning for the development of the company’s roadmap
· Delegator extraordinaire
· Outstanding public persona
· Ability to remain cool when under stress
Q. Why are founding CEOs preferred by some investment firms?
A. Some VC companies prefer to invest in startups that have a CEO who is also the founder. Founders symbolize the essence of a firm since they harnessed their entrepreneurial passion to build it.
