A strong executive search process is a critical component for startups looking to achieve significant growth, demanding both time and resources. Hiring success hinges on attracting top-tier talent while ensuring both an efficient and streamlined process. This guide outlines the key components needed to develop a successful process.
Begin by conducting a thorough analysis of the competencies and skills required for the executive role. Be as specific as possible about which qualifications or tactical abilities are required to do the job, as well as the ideal leadership attributes. Think specifically about tasks, initiatives, or outcomes you need this role to achieve for the business to continue driving forward and work back from there on the abilities, qualities, and motivators that will be necessary to execute those goals. Focus on what you need this person to accomplish in 18-24 months, nothing further than that. Often, we ask our companies, “What would success in this role look like a year from now?”.
Engage key stakeholders, including board members, senior executives, and relevant functional leaders, to gain a diverse perspective on the desired candidate profile. Ensure alignment on the critical areas of focus and key objectives for the role. Collaboration with stakeholders can help refine the candidate archetype and create a shared understanding of the expectations and how to evaluate candidates.
Many executive search processes break down simply because a team is not on the same page regarding what the new hire is to be responsible for. Again, have a consensus about “what would success, in this role, look like a year from now?”.
Develop a clear candidate archetype by defining the key attributes, experiences, and achievements that align with the company's strategic goals. Ask targeted questions during the hiring process to assess candidates' ability to drive success. Seek individuals who demonstrate a strong track record in relevant areas and possess the potential to deliver exceptional results. Use this and the competencies identified to create an Executive Scorecard (see Evaluating Candidates) for all stakeholders to evaluate candidates against.
Craft a compelling and inclusive role description that highlights the impact the executive will have on the organization. Focus on the strategic objectives of the role rather than overly specific requirements. Emphasize the expected outcomes and key responsibilities as well as the company's culture and values. This approach encourages a diverse pool of candidates to consider the opportunity.
When developing the profile for a role, be sure that you focus on outcomes rather than specific experience levels; for example, ‘ability to translate market feedback into an actionable product roadmap’, rather than ‘10 years building product roadmaps from market feedback’, or the like.
Overly specific requirements can cause false negatives in the creation of candidate pipelines and filter out great candidates from diverse backgrounds who are stellar, but may self-select out based upon perceptions of being under-qualified. When engaging a search firm, be very clear from the very beginning that you want to cast a wide net from the beginning of the process and have a diverse pipeline for the search.
Some candidates from backgrounds underrepresented in your industry or segment may not have as ‘obvious’ a fit on paper, but may have fantastic insights and drive for the role; ensure that a working session is part of the interview process and that every candidate is set up to succeed in this session by having a pre-session conversation with each candidate about the company’s vision, strategy, most important functional focal points and areas of improvement. This ensures that even people whose backgrounds are different will get a chance to shine, and even helps make sure that the working session is focused, intentional and truly evaluative for all candidates.
Develop a competitive and fair compensation strategy based on available market data. Consider compensation platforms, such as Carta or Pave, and compensation surveys like the Option Impact VCECS report to determine an appropriate but compelling offer commensurate with the complexity of the role. Tailor the compensation package to attract and retain top talent, considering both the cash and implied value of the equity offer today and in possible future outcomes.
Something to keep in mind: most executives have access to market compensation data as well, so they will likely know which percentile each component of the offer falls into, which makes it imperative to be thoughtful about your compensation philosophy.
Evaluating Search Firms
For early-stage companies, your hiring strategy should be two-fold: reaching out to your network for candidate introductions and, depending on the level of urgency for the role, selecting a search partner to help you with your search process.
Leverage Your Network
Utilize your investors, advisors, and professional network to identify prospective candidates whom they hold in high regard. Warm introductions are often the most influential means of engaging top-tier candidates in the recruitment process. However, it is important to strike a balance between your time investment and the effectiveness of your network outreach. While one-on-one interactions yield the highest number of leads and introductions, they can be time-consuming. Conversely, one-to-many messages may save time but are less impactful. Prioritize your strongest relationships with individuals who possess robust AND relevant networks for personalized conversations, considering one-to-many broadcasts about the role as a more passive method of surfacing potential candidates.
Executive Search Firms
When a hiring process becomes "urgent," meaning the business is starting to feel the negative effects of not having the right leader in place or the next phase of growth is getting delayed due to a lack of strategic leadership, it might be time to consider bringing in an executive search firm. Even if you have internal recruiters or a talent acquisition team, finding the right executive can be a real challenge because they require expertise in various areas like seniority, function, industry knowledge, and stage of growth. By teaming up with the right executive search partner, you'll have dedicated recruiting support from someone who specializes in finding, evaluating, and placing the perfect candidate for your specific needs.
When selecting a search firm you’ll want to consider the following factors:
Search Partner & Team
What is the background and experience level of the team that will be leading your search?
Industry Knowledge & Functional Expertise
What are the specialties of the firm and the lead partner? Have they completed similar searches in the recent past? They should provide ample details.
What is their search process, how is it different, and will it ensure they effectively source and assess the ideal candidate?
References & Contract Terms
Who are their reference clients, and what are the contract terms?
Search Partner & Team
Who will you be working with and what are their backgrounds? Who is leading the search and who is playing a support role?
Success/ Completion Ratio
Industry Knowledge & Functional Expertise
What is the firm's specialty and have they completed similar searches in the past?
What is the firm’s search process and why will it ensure they will effectively attract the ideal candidate? Given that each search firm executes searches differently, it’s essential to ask for details about each search firm’s unique process.
References & Contract Terms
Who are their reference clients and what are the terms of the contract?
Service Post Completion
The overall candidate experience is crucial when hiring executives into early-stage venture-funded companies because it impacts the company's reputation, competitiveness, and overall quality of hires. By developing a thoughtful and compelling experience for all final candidates (candidates who engage with the CEO or hiring manager), you can set yourself apart from other companies and build a reputation as an employer of choice in your sector.
Why Candidate Experience Matters
Beyond the mere mechanics of hiring, candidate experience can shape a company's external reputation, competitive advantage, and long-term relationships with executives across the industry.
Reputation and Brand Image
A candidate's experience during the hiring process reflects the company's values, professionalism, and overall employer brand. A positive candidate experience enhances the company's reputation and increases its attractiveness as an employer. Conversely, a negative candidate experience can damage the company's image and make it more challenging to attract top talent in the future.
Exceptional candidates for C-level positions are often in high demand and have multiple opportunities available to them. A positive candidate experience sets your company apart from competitors and increases the likelihood of attracting and securing top talent. It gives candidates a glimpse into the company's culture, values, and how it treats its employees, making your organization more appealing compared to others.
The hiring process for C-level executives is often more complex and extensive. It involves multiple rounds of interviews, assessments, and discussions. Providing a positive candidate experience builds a foundation for a strong relationship with the candidate. Even if they are not ultimately selected for the role, they may become advocates for your company, refer other talented individuals to you, or even consider future opportunities with your organization.
Candidate Quality and Acceptance Rate
A positive candidate experience increases the chances of securing top talent. It can positively influence a candidate's decision to accept an offer, especially when multiple offers are on the table. A negative candidate experience, on the other hand, can lead to a higher candidate drop-off rate or candidates declining offers, even if the compensation package is competitive. A positive experience demonstrates that the company values and respects its employees, making candidates more likely to choose your organization.
Developing a Compelling Candidate Experience
A great candidate experience is founded on clear and timely communication, a process that centers around genuine interest in the the candidate's career goals and aspirations, a well-rounded interview process, and maintaining a positive relationship even in the case of rejection.
If a candidate is vetted by your internal talent acquisition team, your retained search partner or a member of your board of directors, the CEO or the Hiring Manager should be the initial interviewer. Do not pass this responsibility to someone else. This meeting should be 45-60 minutes long and the goal should be 75% selling and 25% assessing/interviewing which is basically testing for basic alignment with the company mission and vision (through response to the pitch), chemistry, and the high-level experience required to be considered to be a viable candidate for the role. You will have plenty of time to really dig into who they are as a leader, what they have done, and how relevant that experience is to what you are building.
By taking the time to share things such as the vision, the growth trajectory, customer testimonials, revenue growth, key partnerships, and the potential impact of the company, you will ensure that the most compelling narrative will be spread throughout the market.
Develop a personal connection with the candidate. Show genuine interest in their background, career aspirations, and goals. Take the time to understand their motivations and align them with the mission and values of your startup. Share your own journey as a founder and express how their contributions would be valued and impactful. Switching jobs is an emotional decision; unless you understand a candidate's true motivations, you risk not making a deep enough connection.
Respect for Candidates' Time
Recognize that executive candidates often have busy schedules and demands on their time. Be mindful of their availability when scheduling interviews and assessments. Strive to minimize unnecessary delays and provide timely feedback after each stage of the process.
Speed and Efficiency
Move swiftly through the hiring process and minimize unnecessary delays. High-caliber candidates are often in demand and may have other offers or opportunities. Streamline the decision-making process and communicate the timeline clearly to the candidate. Promptly provide feedback and updates after each stage to maintain their engagement and interest.
Clear and Transparent Communication
Maintain open and frequent communication with candidates throughout the entire process. Clearly communicate the stages, timelines, and expectations of the search process, including any assessments or interviews they will need to participate in. Promptly respond to candidate inquiries and keep them updated on their progress.
Positive Candidate Rejection
Even if a candidate is not selected for the role, ensure that they have a positive impression of your company. Provide constructive and personalized feedback to unsuccessful candidates, expressing your appreciation for their interest and time. Maintain a good relationship as they may be a potential candidate for future positions or could refer other talented professionals to your company.
When conducting candidate interviews, implementing a structured evaluation process and utilizing a scorecard can increase outcomes and minimize the risk of making a mis-hire. By adhering to a well-defined assessment framework, companies can ensure a fair and objective evaluation of each candidate's qualifications, skills, and alignment with the role. This approach empowers hiring teams to make informed decisions, leading to the selection of the most suitable candidates who best match the company's requirements and culture.
Ensuring a successful hire requires a thorough evaluation framework, including assessing stable career history, seeking expert evaluations, engaging with previous customers, obtaining strong references, and conducting comprehensive background checks. These essential components help identify top-tier candidates who possess the right skills, experience, and cultural fit.
Stable Career History
Frequent job-hopping at the executive level can be a red flag. A stable career history indicates commitment, resilience, and the ability to navigate long-term challenges and projects. It also suggests that they've formed lasting relationships and have been able to contribute meaningfully to their previous organizations. This stability can translate into a long-term commitment to your organization, ensuring you reap the benefits of their expertise and leadership.
An expert, preferably someone who has excelled in the role you're hiring for, can provide unique insights during the candidate's interview. They're likely to ask pointed, role-specific questions and can better assess the candidate's suitability for the role. This evaluation can also highlight the candidate's potential areas for growth and their readiness to handle the job's challenges.
If relevant to the role and possible, talk to some of their previous customers. This can give you insights into the candidate's ability to understand customer needs, build strong relationships, and deliver excellent service or products. This customer-centric approach is vital in today's competitive business environment.
When considering potential hires, strong references, particularly from CEOs or other high-level executives they've worked with, are critical. These references can provide a clear picture of the candidate's past performance, their ability to deliver results and their leadership style. They can also shed light on their drive, determination, and ability to navigate challenging situations. If the candidate has positively influenced their previous organization and left a lasting impact, their former CEO should be willing to vouch for them.
Thorough Background Checks
Don't underestimate the value of a comprehensive background check. This process can confirm a candidate's employment history, verify their accomplishments, and potentially reveal any red flags. It can also provide insights into their work ethic, integrity, and reliability, ensuring that they are a good fit for your organization's culture and values.
Competencies for a Scorecard
When evaluating potential candidates for executive roles, consider key elements such as their ability to attract talent, achievements, networking skills, ability to hand complexity, and experience developing teams. These factors provide crucial insights into a candidate's leadership capabilities and how they will scale with your company. Remember, the right leader can set the tone for your company's culture, build effective teams, and steer the company toward achieving its strategic goals.
Ability to Attract Talent
Exceptional leaders often have a group of high-performing individuals who are willing to follow them from company to company. This is indicative of a leader's ability to inspire, build trust, and foster a collaborative environment. If a candidate has such individuals ready to follow them, it's a strong sign that they're adept at maintaining relationships and motivating their teams.
Candidates should be able to provide concrete, quantifiable metrics of their success in previous roles. This can range from increased sales figures and improved customer satisfaction rates to successful project completions and effective cost-cutting measures. These concrete figures not only showcase a candidate's accomplishments but also demonstrate their analytical skills and ability to drive measurable results.
Ask potential hires who they'd bring along to your company, and speak with some of these individuals if possible. The candidate's ability to suggest names demonstrates their networking skills and the respect they command in their professional circle. It also indicates their ability to work collaboratively and maintain strong professional relationships, both crucial aspects of effective leadership.
Ability to Handle Complexity
Evaluate the candidate's ability to handle complex roles and situations. This shows their adaptability and readiness to navigate the uncertainties of a startup. Look for examples of strategic thinking, problem-solving skills, and the ability to make sound decisions amidst chaos.
Ability to Develop Talent
A key trait of a great leader is their ability to develop talent. They should not only excel individually but also elevate the performance of their team. Leaders who mentor, inspire, and develop their team members foster a culture of continuous learning and innovation. Their ability to identify and nurture talent can significantly enhance your organization's performance.
Using a Scorecard
After outlining your core competencies you can create a scorecard to measure every candidate against during your interview process. An Executive Scorecard Template can be found here.
Below outlines a 1-3 scoring system, where 1 indicates a high belief in the candidate's ability to achieve the goal, 2 indicates a reason to believe they are capable, and 3 signifies it's unlikely they'll achieve the goal.
Role-Specific Skills & Experiences
- Candidate has a proven track record and extensive experience in key areas directly related to the role.
- Candidate has some relevant experiences and skills, but may need further development or mentoring.
- Candidate lacks critical skills or experiences necessary for the role.
Ability to Collaborate & Lead
- Candidate displays strong leadership qualities and excels at teamwork, can bring together diverse teams, and drive results.
- Candidate shows moderate leadership and teamwork abilities, and may need coaching or mentoring.
- Candidate has poor or unproven leadership qualities or struggles with teamwork.
- Candidate's values, working style, and attitude align seamlessly with the company culture.
- Candidate could potentially fit into the company culture, but there may be some points of divergence.
- Candidate's working style or values significantly contrast with the company culture.
Drive and Motivation
- Candidate exhibits a strong drive to succeed, passion for the role, and motivation to deliver results.
- Candidate shows reasonable motivation and drive, but may need additional incentives or support to deliver optimal results.
- Candidate lacks the necessary drive or motivation required for the role.
Learning and Adaptability
- Candidate exhibits a high ability to learn new skills and adapt to changing situations quickly.
- Candidate has some learning capacity and adaptability but might require additional support or time for major changes.
- Candidate struggles with learning new concepts or adapting to change.
References & Network
- Candidate has strong references from previous employers or a notable network that can be beneficial to the role.
- Candidate's references are satisfactory but not exceptional, or their network lacks the breadth or depth related to the role.
- Candidate has weak references or a limited professional network.
Remember, the scorecard should be customized for every role, focusing on the key attributes that drive success in that specific position. Also, always consider the strategic direction of the company, and how the role and the potential hire align with it.
A candidate’s first interactions with the company sets the tone for their entire experience, and tells a story about the company work environment, growth potential and opportunities to build their own teams.
Exemplary CEOs recognize the critical importance of leadership hiring, ranking it alongside revenue growth and customer satisfaction. They actively pursue exceptional candidates, conveying a sense of honor in meeting them and genuine interest in their potential contributions. Even if a candidate isn't selected, CEOs should ensure they feel valued, attributing the decision timing and keeping the communication line open. This approach reinforces the company's commitment to attracting top talent and fostering meaningful connections with prospective leaders.
6 Stages of Closing
The process of successfully engaging and closing candidates can be broken down into six stages, each crucial for attracting top talent to your organization:
Engage the candidate in such a way that they are enamored with the origin story, vision, mission, values, product, people, and opportunities that the company has for them. This is the ‘selling’ part of the recruiting process.
Evaluate the candidate in such a way that the candidate is impressed by the thoughtfulness and rigor with which the company is building its team.
As a company executive, it’s important to truly get to know each candidate and ensure that you make each top candidate feel as if you are opening the doors just for them. Engage top candidates by text, and check in with them in real-time (coffee, meals, walks, drinks) throughout the process. Doing things like communicating customer wins and new, exciting company developments to them consistently throughout the process to sustain excitement sets great leaders apart from good ones.
Compensation should not be the first thing you discuss with the candidate, but make sure you know what market compensation is for the role you’re recruiting for before interviewing any candidates. The Lightspeed Executive Talent team can give you detailed guidance on what market compensation data is for leadership roles, and search firms with experience recruiting for these roles should also have broad data to review.
The most important factor is whether the candidate is leaning in and genuinely excited about the role. Your offer may not be enough if they have yet to buy into the vision. Once you have established the candidate’s interest, you want to know what the candidate understands about compensation in the specific type of company you are (the stage, domain, and structure). Does (s)he understand what market cash and equity compensation is for the role (s)he is interviewing for? Does (s)he understand the mechanics of equity, how the stock exercise process works, and what questions to be asking about equity compensation in general? A search partner who has developed a relationship with the candidate should be able to give you this insight but, if you are not using a search firm, ask these questions after you’ve qualified with the candidate that this is the type of company and opportunity (s)he is interested in.
Once you have determined that the candidate is one you are serious about, and have had sufficient time to get the candidate excited about your company, confirm compensation expectations with the recruiter or the candidate directly to make sure you are both spending time in the proper recruiting process. Being transparent and forthcoming with all of this information helps to develop your relationship with the candidate and engenders trust; even if it’s not a positional match, or compensation expectations are misaligned, the candidate will remember the experience positively.
Enter into the contract negotiation process with enough knowledge of what the candidate wants to successfully obtain a signature. This process starts when you get to know the candidate as a person, as well as a business leader and develops during the courting process so that if the candidate does not get hired, they are impressed enough by the company and process that they refer top talent to you.
When you deliver the offer, ask everyone who has met with the candidate during the process - including even Board members who have not met with the candidate - to call, text, or email the candidate to congratulate them on the offer and express their excitement about having them on the team.
Once the contract has been signed, help the candidate resign from a current employer (if necessary), bridging the gap between that resignation and joining your company, and (carefully) sharing relevant documents so the candidate can keep the new challenge in mind during the interim period. The goal here is to ensure that the candidate joins excitedly and does not get poached during the interim period.
Company Selling Points
While compensation is a strong selling point, many additional factors appeal to executive candidates that you should emphasize during the interview process. These include:
Show how they'll work in a stimulating work environment with a great team. Make it personal; have several examples of ‘great humans’ with personal stories of accomplishments, triumphs, and hobbies.
The Problems & Challenges Ahead
Expose them to the projects and challenges you have in the company. Many executives are drawn to new domains that they have yet to learn from previous experience and/or are interested in, and want to work on complex, challenging problems. They also may want to apply their knowledge from earlier roles with this particular CEO because they recognize the company's problems and have the toolbox to address the issues (sometimes those tools and principles aren't the ones you need, but they have the adaptability to adjust).
For early-stage companies that interview candidates for their first executive role, this could be an excellent opportunity to participate in the company's success, coach and mentor others on the team, and take on new responsibilities in a leadership environment. They will also get very valuable exposure to Boards of Directors and Advisors that will serve them the rest of their careers.
Offer to provide references from existing employees, board members, or advisors who can vouch for the company's culture, work environment, and leadership. Positive testimonials and endorsements from trusted individuals can provide reassurance to the candidate. If the candidate is significant enough to introduce to a trusted customer who will rave about you and help you close them, that tactic can be powerful; only use that very sparingly and for candidates who will have a truly transformative effect on the company.
Onboarding sets the stage for a new executive's success within the company. It involves welcoming, integrating, and supporting executives as they transition into their roles. Here are some key guidelines to ensure a smooth and onboarding process:
Preparation & Planning
Start the onboarding process before the executive's first day. Develop a comprehensive onboarding plan that outlines the key objectives, milestones, and responsibilities for at least the first 90 days.
Assign an Onboarding Buddy or Mentor
Designate an experienced employee as an onboarding buddy or mentor to help the new executive in acclimating to the company's culture, processes, and team dynamics. This support system can provide valuable insights and guidance during the early days of ramp.
Clarify Expectations and Goals
Clearly communicate the expectations and objectives for the executive's role within the first week of starting. Align their goals with the company's overall strategic vision to ensure a shared understanding of priorities and deliverables. We suggest adding these goals to a shared doc that can be referenced throughout the ramp up period.
Provide Resources and Tools
Ensure the executive with has access to all the necessary resources, tools, and information to perform their duties on Day 1. This includes access to relevant documents, systems, and data that are essential for decision-making.
Introduce the new executive to the company's culture, values, and norms. Arrange meetings with key stakeholders and team members to build critical relationships and ensure the executive has met leaders across the entire organization.
Regular Check-Ins & Feedback
CEOs should aim to check-in with the new executive weekly for the first month and bi-weekly for the next 90 days. This will ensure the executive is never left without context and is starting to develop plans that are in-line with the broader organizational goals. Encourage open communication to ensure they feel supported and valued.
Flexibility and Adaptability
Be flexible in adapting the onboarding process based on the executive's unique needs and circumstances. Tailor the approach to fit their background and experience. Continuously evaluate and refine the onboarding process based on feedback and results. Identify areas for improvement to enhance future executive onboarding experiences.
In addition to the guidance above, here is an Executive Onboarding Template to help streamline your onboarding process.
Assessing New Hires
Assessing the success of new hires can present challenges, as their performance may be influenced by various factors. While they may excel in the core competencies outlined during the interview process, shifts in company goals or cultural misalignment may impact their effectiveness.
To ensure accurate evaluations, it's imperative to establish a consistent measurement framework while remaining flexible in assessing the candidate's fit within the organization. Regular check-ins with executives and close partners during the first six months are essential for monitoring progress and addressing any issues that may arise.
For more information about performance management, check out our guide here.