Factors to be considered while recruiting CEO or Plant Head

One of the challenges for most of the promoters of the small, emerging organizations are recruiting the right person as CEO or plant head, (depends on the size of the organization, the designation terminology varies).

The real intention of recruiting to head of the organization is to bring professionalism in the organization and accelerate the growth of the organization from solo management of promoter or group of family members.

When the right person is not recruited and placed successfully *, the scenario has the following consequences in the organization.

*Here the success is the new business head settled down in the organization well and started delivering the results by taking care of all stakeholders.

1. From the business perspective, the compensation being paid to the business head becomes a liability as the business already is looking at the expenses as relatively higher, as it has not committed higher expenses as salary done earlier. 

2. When the value alignment is not there between the promoter or the new CEO or the plant head, it is going to be mentally disturbed to the promoter as he feels guilty of making mistakes

3. It signals to the organization members that no new person can stay in the organization for a longer duration and eventually complacent and superiority complex encompasses inside the organization.

From the all the perspective, in a small, emerging organization, the new CEO or plant head must be right, competent, adaptable to small organization business practices and at the same time, should lead and bring the changes in the organization as initially intended of bringing a professional outsider in an organization where it had been operated by the promoter through his/ her own way.

The promoter should have more scrutiny in finalizing the right candidate for heading the organization and take the organization to the next level.

Some of the factors to be considered while screening and recruiting the person during the interview process 

1. The organization needs DRIVER than CONDUCTOR:

Unlike large or established organizations, the small, emerging organization may not have the systems and processes established in all business activities. Also, the people in the organization are generally multitasked or multifunctional oriented, but lack of specialized, core competent in any particular function Someone has to drive to design and implement the systems and processes in the organization. Given the nature of the small business dynamics, any new system and process implementation initiative call for patience, going along with people, educating, handholding the people and relatively the effort takes time to see the result. 

The designated CEO or business head or plant head must have the aptitude to drive the change rather than the person who is comfortable to sustain and run the system driven organization. Hence while recruiting the promotor must check the person’s attitude towards the business and people in driving the change.

I had observed in many organizations, the promoter is going by the past history or the creditability of the candidate who worked in multinational, reputed organizations at senior positions. But the person seems to be comfortable in working in a stabilized environment and not comfortable in an unorganized environment. When the person is recruited, each end becomes unhappy with each other within a short time. Hence, the promoter must check the aptitude of the candidate to work as an entrepreneur in small organizations to bring the change rather than conducting the business seamlessly in an established environment.

How can it be checked during the interview process?

1. Make the expectation clear and explain the context of the difference between small and established organizational dynamics and ask for their comfort to deal with the challenge

2. Check the past work on initiating change management efforts, turnkey experiences 

3. Prompt them to share their experience in working in ambiguity environment, their success and failure stories

2. Check the Business Acumen of the candidate:

Since the new business head or CEO is expected to work at a higher level, the promoter needs to check the business acumen of the candidate in the CV or during the interview stages. Business acumen means aptitude towards business profitability, growth, and sustainability factors. Most of the people have worked in any one function and acquire deeper knowledge and experience in a particular domain. In the new position, it is expected to have both functional business acumen together. For example, one person might have solid experience in OPERATIONS throughout their career and if you expect him to drive marketing, sales, P&L, he/ she may find it difficult unless the person is open to learn quickly and adapt to the new requirement.

I know in one of the organizations, the person with strong experience in sales was made as CEO of the business, in which the engineering and manufacturing are critical functions to get more sales. But the new person finds it difficult to drive the engineering and manufacturing team and also struggles in his core sales function because of the internal environment. This scenario is not good for both people and for the organization.

It does not mean that people with a core functional domains cannot be successful in managing the business. It just needs passion, interest, willingness to unlearn and learn new things and the ability to give up some strength to gain new strength. 

Hence, check the business acumen of the candidate when you are looking for a business head.

3.Understand the background of the candidature:

During the interview, spend quality time understanding the candidate’s background in terms of family, age, the intention behind the shift to small size organization, the financial background to some extend possible. This probe will give some clarity on the person’s stay probability in the organization. 

Also, the promotor can check the person’s short- and long-term plans about his career and ask his consent to stay in the organization for a minimum of 3 years. In today’s scenario, with given opportunity, we can not force or predict the stay duration, but having an open discussion during the one to one conversation helps both to ensure continuity.

Frequent changes at a higher level will affect the stability of the organization and slow down the progress.

4.Compatible with your organization culture

Checking the compatible with your organization culture is very tricky and the intention itself to be questioned. The new business head or CEO is being recruited to bring a change in the work culture, business practices and as a promoter, if you expect to continue the same culture even under the new business head, that will bring conflict.

But the point needs to be understood in a right, balanced context.

As an organization, you have some good practices as culture and some areas to be changed as you perceive it poor culture for business growth. Hence you need to check the compatible in some of the right practices.

For example, you are a person with soft-spoken, respecting individuals, involving all in the decision-making process, looking for the long term even loss in short term, the same thing you might have inculcated in your organization as a culture. Now check with the candidate about the compatibility on those parameters by checking his past work experience, asking him to share his approach in dealing with some challenges, narrate your recent incident and check his thought process of dealing with the incident. Those kinds of conversations during the interview process will give an idea about the personal ideology, behavior to some extent. As said, understanding the person’s attitude during the interview is very difficult and this skill needs to be learned by experience only.

The point is as a promotor, you need to check the compatibility on the values during the interview process to avoid disappointment at a later stage which is not good for anyone.

Ultimately, as a promoter or entrepreneur, you are accountable to bring the right successor to you and you want to take the organization to next level. You must be prepared enough in identifying and selecting the right candidate as a business head or CEO to your organization.

How to select the right candidate for your organization?

One of the challenges for most of the small, emerging organization is selecting the right candidate for the job and retaining in the organization. There could be many factors contributing to retaining the people, and we discuss in another forum. However, one of the typical scenario we are witnessing in most of the organization is that within a short time, say 1-3 months time, the business head and the incumbent conclude either person is not fit for the job, or the organization is not fit for the new incumbent. This scenario is more common in senior level recruitment.

A strange fact is that the business head had personally involved in shortlisting, interviewed the candidate and inducted for employment. If either one of them concludes " this is not fit for me," we can arrive a logical conclusion that " selection process needs to be improved".

Typical mistakes the business head do during the selection process?

1. On an ad-hoc basis, decide the requirement for manpower 
2. No job description or role clarity/ responsibility/accountability defined before shortlisting the candidate even though there is macro level articulation on the need.
3. Conducting the interview process  with the intent of understanding more about the  candidate's previous experience and not on verifying or calibrating his caliber is matching with the organization's prevailing business practices or the culture
4. No structured questioning to check the attitude/perspective of the candidate to solve the existing organizational challenges or issues
5. Sometimes, selecting the candidate based on the reference from a known circle or filling the position with " somewhat" fit candidates.

Impact of the poor selection process:

1. Attrition rate becomes high, and it affects the stability of the organization.

2. Business head spends his time in routine work which affects his productivity and other aspects of profitability and growth
3. Cost of recruitment keeps increasing with no return benefits.

4. The organization which has grown with old, loyal employees, the high attrition rate signals different communication among employee. Eventually lead to complacent mentality, arrogance, know it all attitude which affects speed and flexibility towards change 

5. Sustaining organization development and gearing up for next level growth with a professional mix of people will become a major challenge for the organization.

Solutions approach to improving the selection process:

As a business head, before filling and selecting the candidate, you need to be clear on the job description as follows

• Position description
• Age, Experience, and qualification
• what level of competency(Job Knowledge and Skills) you are looking for 
• what is your organizational culture and how would you like to check during the interview
• your affordable pay and structure
• Likely growth path to the incumbent and likely changes in the existing organization structure

Once you are clear on your expectation, circulate the job description to professional recruiters and get the potential candidates.

Scan through the potential people and shortlist a  few who fit into the above requirements.

During Interviewing the candidate:

Look for the attitude which is required for the position or title. Attitude can be tested by asking the following question and look at the response from the candidate.

1. Experience in handling people dynamics and his style of managing the challenges 

2. State some of your organizational scenario or challenges and ask how he would respond in those scenarios.

The quick or momentary response, to some extent, will reflect the person's natural attitude towards work and people as this help you to gauge the suitability of the person to your organization.

Also, You need to note that you are recruiting senior level people to bring a change and sustain the business growth. Hence be balance in your approach to select the person with a track record of change management and fit into your culture.

Since we are dealing with human dynamics, it is challenging to gauge people's capability and attitude in the interview time. However, having a systematic process and improving your interviewing skill will improve the probability of choosing a right people for the organization as it helps both you and the others!