Is Our Organization at Risk Part Four: Do we have the right CEO?

Kristi Daugherty, CEO of Emergence Health Network

While an experienced board of Directors has an ongoing oversight role in an organization's growth and stability, it is in their choice and management of the Chief Executive Officer (CEO) that they have the greatest impact.

If this is the case, then what can we do in order to increase our likelihood of successfully finding the right CEO? This begins with a clear set of criteria. While there are many common traits shared by great CEOs, there are likely to be differences between organizations and companies and also different criteria according to the stage in the lifespan of an organization. A good board of directors will have their fingers on the pulse and recognize the need to regularly review what they are looking for.

There are some commonalities that we can discuss, apart from their ability to leap over buildings in a single bound.

image taken from executivenewswire-stantonchase.com

Start up phase

For many start ups and new non-profit organizations, the person in the CEO position is the instigator, the innovator who frequently chooses the board and not the other way around. They are people with passion, drive and with a great vision that they are determined to implement. This is a crucial phase in the life of any business or organization that requires a very specific set of skills/characteristics:

1. The ability to maintain their vision in the face of obstacles. 
2. The skill to work through ambiguity until solid operating processes are in place. At the startup phase decisions are more likely to be made "on the fly" without precedents, determining how things would most efficiently and effectively operate. This requires a CEO who is prepared to make those kind of decisions. 

   

   image taken from nerdwallet.com
   

3. A keen eye for the right staffing mix and being able to identify the right talent that fits the organization's needs. The staff who have the skills to operate within a start up situation should have initiative, intuition and the ability to work within ambiguity. Startups cannot usually command the same kind of salaries as larger companies and so the CEO and staff both need to be captured by the vision of the organization.
4. A person that is not afraid to work with risk and uncertainty. Procedures are not yet in place, precedent has not been set, networks are not yet solid. 
5. Is resilient. The first days of any business or organization are not easy and in the initial days there appears to be little return for time invested. 
6. Is creative and who is flexible enough to make adjustments as needed. 
7. Pays attention to detail because the startup phase is where the smallest details are laying the foundation for a successful, established business or organization

Growth phase

Many a great non-profit or start-up company began because someone had these skills and characteristics. But what happens when an organization becomes more established and is in a more "mature" phase? Does the CEO of an organization in this phase necessarily require the same set of skills/characteristics?

Naturally, if a startup CEO is able to transition and carry an organization forward by adjusting their style and applying further skills this is preferable. It allows for continuity and brings a wealth of experience of the organization into the growth. However, the kind of personality that establishes an organization at its entrepreneurial phase is not necessarily the same personality to enable an organization to expand into full maturity.

"Founders are the best start-up CEOs, thanks to their passion, focus and audacity. In the growth stage, however, the job of a company leader changes from inception to execution, from development to scale." Glenn Solomon, http://fortune.com/2013/03/25/5-traits-of-the-best-growth-stage-ceos/

Twyman Clements, President and CEO of Space Tango

Solomon and others have suggested a range of skills needed at this stage to which I have added some additional thoughts: There is a need for:

1. The relentless pursuit of the right team. Because the CEO needs to delegate more and more in an ever growing organization, they need to make sure that they select the right management team that can in turn select the right staff. As a company expands, this CEO may need to make the difficult decisions to change staff  to engage those who are more suited to the expansion phase, who work well within more structured and established environments.
2. Being highly focused on the goals but keeping an eye out for "side bets" or riskier projects that keep competitors at bay. This latter aspect is particularly important as the organization develops a product or service that becomes more visible and competitors seek to develop similar, slightly different products. Good CEOs need to have eyes in the side of their heads to keep ahead of these competitors. Even for non-profit organizations, keeping an eye out for similar organizations that wish to copycat their success is something of which CEOs should be aware.
3. A commitment to learning as the need grows for a wider range of skills is needed in this phase. Juggling financial needs, infrastructural development, marketing, product or service development all require specific expertise that changes for a larger organization. A good CEO will recognize their personal gaps and will seek to fill them with external expertise or with ongoing training. 
4. Building self-reliant teams. As an organization increases in size and scope then it becomes impossible for the CEO to handle every issue, put out every fire or make every decision. He/she will have set up the right conditions so that teams within the organization are able to operate with initiative and skill, taking care of the day to day operations. This frees up the CEO for more strategic issues. 
5. An ability to communicate the vision of the organization to all levels of the infrastructure. A start up CEO will often be the front person for customers or the community it targets. However, as the organization grows larger and more established (and is potentially in a range of locations), then others within the company need to be able to have sufficient understanding and communication skills to present that same vision. (This is one aspect that entrepreneurial founders sometimes find difficult because this requires some level of letting go of being the sole, central figure.)
6. Reads the environment in which the organization operates, whether that be the needs of the target group or the external economic or political environment. 
7. Ability to both work within structure and to continue to build structure all the while remaining creative to new possibilities and better ways of operating. 

A great CEO is a juggler of many traits that need to change over time according to the developing needs of an organization. Transitions are particularly difficult, notably between the start-up phase and an organization in full maturity. If you engage people of passion and commitment to get something up and running it is not easy to ask them to let go of their "baby" in order to make way for a new set of skills. At the same time, it is great for those same CEOs with particular expertise in startups to realize where their greatest value lies, that they might find greater fulfillment in finding their next project, their next mission.

The need for succession planning will be dealt with in a later blog because the same principles apply to all key positions within an organization.

Other interesting links to look at this topic:

https://hbr.org/2011/10/the-art-and-science-of-finding-the-right-ceo
http://www.businessinsider.com/traits-of-the-best-startup-ceos-2014-3
http://www.investopedia.com/financial-edge/0911/top-qualities-of-an-effective-ceo.aspx

Is our Organization at Risk, Part Three: 7 ways to assess our Staff Recruitment practices

image taken from Kaizen Recruitment Solutions

Recruiting staff is such a critical organizational function in the survival of any organization. Get it right and your organization moves forward, flourishes and grows. Hire the wrong staff and it is one of the quickest ways to failure. There is a whole multi-billion dollar business that has been created just around this function. And yet there are no guarantees and we have still not developed the perfect recruitment process. For many smaller organizations or entrepreneurs there are limited resources to access all of the latest recruitment tools. Cost is a significant factor in recruiting. What are some of the foundational principles to maximizing our hiring success rates to enhance our organizations?

1. Staffing levels and skills identififed match organizational needs

Many new organizations make a mistake in not having contained within their initial operational plan the skill sets and staff hours that they will need to function effectively. This lack of planning often continues as an organization grows or changes. It is a delicate balance to know exactly when to increase the number of staff hours to cope with increasing workloads: not too soon so as to place an unnecessary financial burden on an organization but also not too late so that it burns out existing staff because of overwhelming workloads. Forecast budgets that do not show ongoing implications of staffing levels place an organization at great risk of falling into debt.

A thriving organization has a detailed staffing plan that contains job descriptions and person specifications that are skills as well as task based, that establish how many staff are needed at any point in the development of the organization. Details of staffing requirements will be reflected not only in the current annual forecast budget but mapped out over the longer term if needed.

Evidence: A staffing plan within the overall business plan; job descriptions and person specifications for each position including board and management; forecast budgets clearly showing expected staffing expenditure; project plans show longer term implications of staffing changes.

2. Recruitment processes are appropriate to the size and budget of the organization.

There is no one recruitment process that is effective for every type of organization. Smaller organizations may find greater value in using word of mouth to find the right skill set whereas larger organizations may choose to use a recruitment agency to reduce the volume of work that can be generated from a large recruitment campaign. In the current employment environment, organizations can make the mistake of not reviewing all possible recruitment sources such as social media (LinkedIn), job boards or universities.

One of the greatest challenges is in finding the right pair of hands into which to place the responsibility for managing the recruitment of new staff.  Some may automatically turn to a line manager with little experience in recruitment purely because of his/her role but there may be other staff members or even a committee of staff members or board members with a combined skill in staff hire. For nonprofits, this may be an opportunity to seek out volunteer expertise that may be brought in specifically for this task.

A thriving organization will have a clear understanding of its budget and particularly of the ratio of recruitment dollars to the overall labor costs. Where the use of professional recruiters is just not an option because of cost then an organization can reduce its risks by organization-wide discussions on the skills needed and an assessment of the organizational culture to be taken into consideration. An organization that functions well will not underestimate the value of its current staff in informing the recruitment process.

Evidence? Recruitment budgets, written recruitment process, evidence of current staff input in staff meeting minutes, emails, board meeting minutes

image taken from jcsolutions.com

3. Good recruitment processes have an initial process for screening potential candidates

A potential risk occurs when too much recruitment time and budget is allocated to managing the wider pool of candidates. There needs to be a rapid, initial screening process that eliminates unsuitable candidates and leaves a more manageable pool for more detailed assessment. This risk is particularly great when there is no measurable and clear job description against which to measure applications. Being able to speedily and efficiently eliminate resumes that just don't make the grade will ensure that resources are spent at the right end of the process. It would be useful in the longer term to maintain some kind of record of how long this initial screening process is taking so as to monitor if too many resources are being expended in this stage. This would also form budget forecasting and time allocation for future screening of candidates.


Evidence: Job descriptions identifying key skills for measuring resumes, assessments of time taken for initial screening process.

4. Sound organizations use a range of more detailed assessment processes of potential candidates

A survey carried out by Bersin and Associates in 2011 (https://lnkd.in/e66Eyav)  found that 2/3 of those businesses surveyed used no real assessment process in selecting candidates. Assessment processes included behavioral or skills based assessments and reference checks.  There is a mistaken belief that all assessment tools are expensive and require considerable expertise to implement. However, there are some excellent resources that can be found online that can assist. Where you cannot afford a standardized test to administer there is room for creativity in creating a practical test for each of the candidates that relates specifically to the work they will be doing. This requires some advance preparation but would enhance your ability to determine their suitability under some realistic circumstances.

Evidence? Completed assessment questionnaires, written reporting on any practical tests completed by applicants, reference to assessment questionnaire results in either final interview questions and/or decisions about applicants.

image taken from employers.glassdoor.com

5. Determining "cultural fit" will form part of an excellent recruitment process

We are becoming more aware that it is not just about a candidate having an appropriate skill set but whether they are a "fit" into the organizational culture. The wrong staff member with the right skills can upset the apple cart and create emotional havoc within a stable team. This is difficult to assess if we are not self-aware. What exactly is the culture within our organization? Often in small organizations it is the hiring managers who will make the judgement as to whether a person will make a good fit. As organizational culture is generally a group concept it is recommended that more input is received from a wider range of those who will be directly impacted by the new recruit. This is equally important for accepting volunteers.

Evidence: Organizational cultural assessments, staff meeting minutes, interview panel notes, recruitment processes showing introduction of candidates to potential colleagues. 

6. Finding a balance between a fair, consistent interviewing process and being creative

Firstly, might I put in a plug for a panel of interviewers rather than a single person doing the interview. A panel provides the opportunity for someone to observe candidates while questions are being asked (their body language, voice tone, answers to questions), provides multiple points of view to get a more complete understanding of the applicants and can encourage a robust, more objective decision making process.

I have been in the panel for many shortlisted candidate interviews in which the panel sat down and created a tightly consistent list of questions to be asked in exactly the same way for each person to ensure fairness and to avoid a failed candidate appealing the decision. On the other end, I have also witnessed very adhoc interviews that were all over the place without any structure.  Somewhere inbetween is an interviewing process that asks probing, open-ended questions that enable candidates to truly express themselves while having a relatively consistent structure and scoring process to fairly assess them against each other.

A great interviewing process will be based on a clear understanding of what you are looking for and an agreed score card that will assess each individual on a range of criteria. By the end of the interview process, a good scoring process should be able to differentiate between candidates who are relatively closely matched on a number of criteria.

image taken from joeburridge.com

Panel members should be able to discuss and share their findings, not just hand over score cards. This can be done at the end of each interview (particularly if interviews are not on the same day) but preferably during a time of review after all applicants have been interviewed. This is when great analysis can be made not only of each individual but also to measure one against another.

Evidence? Interview questions and notes, score cards for each individual candidate. There should be a recruitment file maintained for each position filled which includes such data.

7. The recruitment process is not complete until the right candidate has accepted the job offer

This may sound obvious but I have witnessed the whole recruitment process fall over because at the very end a candidate is chosen, all of the unsuccessful candidates were notified they did not make it and then the successful applicant turns down the position. This is a matter of timing. Once a decision has been made, contact the successful applicant in the first instance to offer them the position, be patient a little more until they actually sign on the dotted line and then return to those who were not successful to inform them.

In the recruitment process you may have had difficulty in choosing between 2 or maybe even more candidates. You may have considered that more than one person could have been great assets to your organization. At this point, add those who were unsuccessful to your "talent pool", let them know that you might consider them for a future position and find some way to maintain contact.

Evidence: , letters to candidates both before and after the interview processes, minutes of recruitment meetings.

Recruitment is a make or break organizational function. You may believe that you have the greatest product, service or cause in the world but only the right people to represent you to the wider community will make your vision and passion a reality, no matter the size or nature of your organization.