Hiring a New CEO: Did the Right Person Get Cast Aside?

July 13, 2015

hiring a new ceo

Boards of directors make high-risk leadership decisions all the time, but never more so than when they oversee the recruitment of a new CEO. Ideally, a board finds someone who honors the past, oversees the present, and guides the organization deftly and successfully into the future. It’s a tall order, and just as many boards get a CEO hire wrong (or somewhat wrong) as get it right.

If we look at the past, we have examples to point to. Brief CEO tenures in corporate history include Douglas Ivester at Coca-Cola, Leo Apotheker at Hewlett-Packard, and Fritz Henderson at GM. There is great risk that the wrong person will be hired–setting the company back rather than moving it forward–and boards know it.

There is even risk in hiring someone pretty good when great might have been available. A risk that is often overlooked or even invisible, in fact, is the risk of rejecting the right person. In the early stages of recruiting, search committees and consultants eliminate candidates because of biases or beliefs that may have nothing to do with past or potential future performance.

How is an organization to know? How can a board and/or hiring authorities make sure that the right executives are being included as the list of potential CEO candidates is whittled down?

Assessing the “Why” of Leadership

Adopting a comprehensive and thorough assessment process is one necessary step for all boards and search committees. There are boards that prefer to rely largely on candidate interviews and leaders’ reputations. The question is, can interviews provide the information needed to validate that the person is right for the present and future? Can biases and beliefs be managed to allow for proper and fair assessment of candidates?

Interviews are well suited for exploring a person’s experience, skills, and knowledge. Just like pilots should know how to fly, CEOs need to know how to run organizations, and interviews can bear this out. But other questions that need answering include:

  • Does the person have the leadership competencies to excel in the new role they are seeking?
  • Does the person have negative or derailing behaviors that emerge in certain environments and could inhibit success in this role or company?

These questions require assessing attributes such as personality traits, cognitive abilities, and motivational factors–“why people do what they do.” This is where the over-reliance on interviews is risky, even with “deep dive” methods that probe the decision making that leaders have exhibited throughout their careers. The best interviewers struggle with identifying the “why” of candidates’ career and leadership decisions.

What’s needed in addition to great interviewing, therefore, are competency-based and psychometrics assessments—and they should be given to leading candidates earlier in the hiring process rather than just the chosen candidate towards the end. As they begin looking for new CEOs, boards need to identify the leadership competencies that they believe capture successful performance for their organizations.

Psychometric assessments (such as those provided by Hogan Assessments–with whom my company works–and other well-known providers) can link attributes to competencies, which in turn helps to predict job performance more objectively. These competencies can be tied to those that a given organization holds in high regard, thus ensuring that assessment tools are helping to find the right fit for a specific company or organization.

Supporting, Not Replacing, Instincts

Assessments provide qualitative and quantitative information to support instincts and intuition. This is important: I am not suggesting that boards or organizations discount their own gut reactions to people they are interviewing. Rather, my recommendation is that each board keep an open mind about–and not rule out–individuals who might not fit the mold of what they believe their ideal CEO to be, but might in fact have the potential to be a great CEO if given the chance.

So, yes, hiring the wrong CEO is a critical and sometimes even fatal mistake for a corporation or other organization. But there is also tremendous risk in eliminating the right person even before she or he gets a fair shot.

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About The Author

Richard Metheny heads the Leadership Solutions practice for the executive search firm Witt/Kieffer. He assists organizations with leadership assessment, succession planning, onboarding, and executive coaching and development.

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