How to find, hire and pay for great senior managers
Part two of Modwenna Rees-Mogg’s indispensable guide to securing the right people to fill your executive holes
Timing and making the hire
In the second part of Modwenna Rees-Mogg’s indispensable and frank guide to hiring senior managers, the AngelNews founder looks at the process of securing the right people to fill your executive holes
When I look around at successful entrepreneurs, it is clear that it is not just about hiring the perfect team, it’s about the order they are hired in and when they are hired in terms of the growth phases of the business.
Indeed the greatest entrepreneurs also know how to change horses mid-race too, and remove one team, only to replace it with another more suitable for the next stage of change or growth.
There are no rules in this area. Everyone will have different needs and different things to offer new joiners to the senior team at different times, but if I was forced into a generic rule, I would say start with finance and a strategic business development/chairman type, then, depending on how developed your business is, head out to find the ops and sales people, followed by marketing. HR and non-executives can then follow.
I would be interested to hear if other people think differently.
Making the perfect hire
If you look at the merry-go-round that appears to exist amongst the major quoted companies in terms of senior management changes, you can be forgiven for thinking that making a perfect hire is an urban myth. But out of the glare of the stock market, there is no reason you cannot find the right person if you adopt the right strategy.
The first step is to tightly define three things:
- The overall role required to be filled
- The specific tasks and objectives in the short, medium and long term; and
- The type of person you want in terms of attitude and personality.
Spend a lot of time on these issues before you think about talking to anybody. Pull in advice from other people at this stage who have succeeded in the type of role you would like to fill, and ask them to help you review CVs and attend interviews with your shortlist as well.
Before you “go live” with the announcement that you want to hire somebody, plan your hiring timetable and try to stick to it. It is much easier to compare different candidates if you are seeing all of them within a short space of time. Remember to treat candidates fairly and keep them well informed during the process. There is nothing more likely to get you a bad reputation than a load of non-hires who go around chatting about what a bad experience they had with you.
In the interview process, always get a second opinion from someone experienced unless you already know the candidate very well. Remember also that you may get more out of the candidate by having a number of short one-on-one interviews than putting the individual up against a large panel of interviewees who may be subconsciously more interested in jockeying with each other than finding out if the candidate is the right person. In a small team, involve more junior team members in the hiring process – after all they will have to work with the individual on a daily basis.
Fail to take up references and you will live to regret it!
Get a formal contact signed or you will live to regret it too!
Actually finding someone
Many a business starts because two mates decide to chase a dream together; many a business fails because they subsequently fall out! But PJ Darling has made a success of it, Innocent Drinks has made a success of it and therefore there is no reason why you should not do so too.
The trick to making this work is making sure that your founding team and the mates that join you in the early days really do represent a balance of the skills the business will need. Get issues about this into the open on day one and set up a contingency plan for when one or other of you may want to step down or walk away from their role, or even the business in its entirety. Bear all this in mind when divvying up the shares!
Later on, once you have some staff, I would recommend you not to dismiss the ambitious individuals already in your firm. There are good reasons why global corporates such as Procter & Gamble still prefer to hire from within. The people in your firm are already the ones with most to gain from upping their own game. If you have a talented but inexperienced individual it may be worth promoting them but at the same time putting in place a support network around them and additional training so they can exploit their potential.
However, beware from falling victim to Buggins turn. And don’t set up an expectation that time servers will have an automatic right to sit at the top table one day. Always make sure that your team know that external appointments may be made one day.
The most common route entrepreneurs follow to finding their next big appointee is to start asking around their friends, acquaintances and colleagues or even trying to spot someone from within a competitor’s firm. This can be a cheap and effective route to a great hire, but avoid becoming too informal.
Make sure you still go through the normal formal hiring processes such as CV checking, reference taking and proper interviews. Remember this route can be quite protracted and you can end up on a long journey of continually trying to find someone just a little bit better than the last person. The minute you have the resources to do so, I would recommend reaching out into your local network with a formal publicly-announced hiring process.
Whether it’s bunging up an advert on LinkedIn, putting up a card in the local post office or taking out an advert in the Financial Times or even pitching at our own Pitching for Management events, make sure that the “advert” you publish defines the role and type of person you need perfectly – otherwise you will be inundated with applications from the wrong people, which will be time consuming and costly.
Using a headhunter
Your chosen headhunter should be one of your closest advisers. He or she should have a deep understanding of your business and have your best interests at heart. After all they are working for you and not for your potential employee. However the best headhunter will also have the trust of that person too, and understand how, by taking a role with your business, it will advance their career.
So you need to put a lot of time and effort yourself into finding the right headhunter to help you and to help you make the right hire. Headhunters are often seen as an impossible expense by a cash-strapped business, but the right one is worth his weight in gold. They are particularly useful if you need to hire for a particularly sensitive role or if you are in a fiercely competitive industry where current market knowledge is a must.
Interims – the perfect solution or an expensive waste of time?
There are many occasions when hiring an interim can help a business take a great leap forward without the challenges of taking on a full time hire. Good interims will be up to speed from the moment they step foot in your company. I would recommend working closely with a specialist interim provider if you want to hire one, as they will be able to point you towards the interims who know the score. Beware hiring an interim informally – the chances are you will get the wrong person at the wrong rate of pay.
What to pay
So you have got this far and are now thrilled by the opportunity of finding that brilliant team. The only problem you have is that you have no money to pay them with.
This is where the skills of a true entrepreneur come into play. This is just like winning that first customer, or getting that supplier to give you the terms you need.
I suspect that at no time in history has there been more opportunity to hire great people on a package that suits you. At AngelNews, we suspect that the numbers of middle aged “second career challenge” individuals now run into the 10,000s. Everyone is looking not only at how they are going to pay the bills this month, but also what on earth they are going to do about their retirement, which in any case may not come until they are in their 80s.
Meanwhile, I hear that there are 84 graduates currently chasing every single graduate position available in the UK; let alone the school leavers on work experience programmes. It is the perfect time for a fast growing business to be spoilt for choice in terms of hiring, so go for it. Don’t just think about large salary requirements. Think about what else you can offer, including:
- Share options or even straight equity, with the potential for the individual to make £millions when you both sell out in five years’ time.
- Commissions and bonuses – particularly exciting for sales people and even finance people responsible for collecting monies owed.
- Quality of life advantages – flexible working hours; a quicker commute; a less hidebound working environment. This is the time to tell that tired urbanite about how much happier they will be working in the country and joining a proper community! And…
- Consider the merits of making the role self-employed, which could save you from making Employers’ National Insurance contributions.
- And last, but not least, a few words about job titles
Many entrepreneurs dismiss the importance of a job title for senior people. Bear in mind that a person’s job title will set up expectations in themselves and others. Personally, I don’t think it terribly matters whether you call someone chairman or Mr Lord High Poo-Bah, just so long as every one else (including the individual) knows what that means. But remember that as you get bigger, you and your staff will be compared with others. The wider public especially will look for easy-to-understand points of reference in your company. For this reason, if no other, don’t treat job titles as a joke.
There is a saying that the man does not make the job, the job makes the man and nowhere is this more true than in senior management roles in fast growing businesses. Just remember that today’s graduate trainee may dream of becoming your next Chief Banana Splurge Gunner, so make sure you get the role to match the title right from day one, or you may end up with mashed fruit all over your face!