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Executive Hiring Gone Rogue

Posted By Shanil Kaderali On April 8, 2013 @ 8:08 am In Advice and How-Tos | 23 Comments

I came across a new and hard-driving CEO of a billion-dollar private retail company who loved a CTO candidate after the first meeting. The candidate came from a top-notch external search firm. The external recruiter worked with the CEO in past and was an industry expert in retail, but not with this new industry. The CEO championed the candidate to all his reports, fast-tracked the interview process with little HR involvement, and candidate was eventually hired. The CTO lasted two weeks.

Little to no HR involvement in selecting the best outside recruiters for your company; no defined process; and when headhunters are the strategy — that’s when hiring goes rogue. I’m going to talk about how to handle these situations.

There are great external recruiters who add tremendous value to an organization. I’m not advocating against retained search professionals. If external recruiters know their market, have the portfolio of top candidates, it’s likely a good call to use them. Effective external search recruiters could be an extension of your team. Have executive/outside recruiters as part of your strategy, but they can’t be your strategy, especially with no process involved.

An effective executive hiring strategy would include:

  • Assessing the situation
  • Building relationships with your leaders internally and understanding their needs
  • Identifying the best outside recruiters for your firm — true industry experts
  • Building a business case and the right process for internal executive recruiters
  • Getting buy-in on the process (and performance criteria if lacking)
  • Partner with your HR leaders to develop an effective development-oriented succession planning strategy

Compare the CTO disaster with a Fortune 100 health care company that has a VP in charge of executive recruitment with high-skilled executive recruiters. There is a defined process with a competency model for leaders resulting in less than 10% of all senior level hires from external search. The CEO respects this VP. This VP shares exploratory leadership candidates with other leaders and drives the process so that the executive hires are done very strategically and process is well-communicated.

Now, your team (or you) may not be ready yet for C-suite hiring, so a retained firm is a good idea. Confidential positions should require a retained firm. The talent acqusition team can make an impact at the director  & VP level positions, but needs the right resources and budget to be effective, and passion for hiring at senior levels. It’s a different ball game than volume hiring or even hard-to-find complex individual contributor or manager roles.

Assessing a situation requires being objective, even clinical. What are you spending? How successful are those placements at the companies? Be honest about your team’s skills in hiring executive level talent. They may want to tackle it as they’re ambitious, which is great, but they may not be ready for it yet. Guiding them through the process makes most sense.

Create the Business Case for Internal Executive Recruiters

Forecast a budget for executive search. Then project a budget for an internal team to fill roles. Show the variance as to what you’ll save the company. Include companies you’ll need for research. Hire a sourcer if it makes sense. Hire an executive recruiter if the numbers work. Make sure the executive recruiter has the right experience, presence, and understanding of your market. Ensure they understand the strategy of the business to explain it to prospective candidates.

You have to work with your leaders to show the business case.  Make sure your boss supports this effort. There’s a lot of pre-work. Talk to leaders to make sure you know their views and see if there is openness to a different process. Be up front that you’d like to get to that point when search firms are part of the strategy but not the only strategy and explain your approach. Keep the process simple. Use panel interviews and video interviewing.

Also, work with your HR teams to build an effective succession planning strategy. In a 2011 study of 20 large organizations, McKinsey revealed that most anticipate 50 to 60 percent retirement among their management ranks over the next five years.

With respect to succession planning, employee development is absolutely vital to retaining key players. By incorporating development into succession planning processes, companies will cut preventable turnover substantially while also bolstering internal bench strength and talent pipelines. Be an advocate for succession planning and executive development and be involved in both.

The most important part: get buy-in from the executive team. Ask for a few pilot cases … a few roles. Start at the director level.

You want to get to the point where that leader trusts you. It’ll take time but be assertive and trust your instincts.  If so, you won’t likely lose any senior leaders after two weeks. Good luck.


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