Hiring right is important at any level of a startup. But no hires are going to make quite so big a difference to your trajectory as the people you appoint to your C-suite. Done right, a new C-suite hire will give you a valuable new ally in your mission to create the next big thing. But appointing the wrong person at the wrong time can have a devastating effect on a startup’s fortunes.
One of the most important factors in assembling your C-suite is identifying the right time for a hire. Certainly there is a case to be made for getting key talent in place as soon as you are able. “C-suites are better put in place before the company is too far into its growth curve,” says Jean Martin, talent solutions architect at CEB, the global advisory firm. The reason for this is that certain individuals such as chief finance officer (CFO) or chief technology officer (CTO) will play a key part in establishing the processes that help a company grow, meaning the earlier they come on board the more they can help shape a start-up’s future.
However, it’s worth bearing in mind that the kind of talent you might attract in the early days isn’t necessarily the kind that will be able to grow with the business. “The kind of execs you really want straight from the start aren’t necessarily the ones you can afford,” says Guy Mucklow, CEO and co-founder of Postcode Anywhere, the provider of address management software and services. Committing too early means you might end up with someone in your C-suite who won’t be able to help you deliver your vision in the long-term.
But finding the right exec at the right time is easier said than done; knowing precisely what to look for extends past merely identifying an area in which you have a leadership gap. “It’s important to choose the right C-suite executive for the stage of growth the company is in,” Martin says. “You will want to pick someone who has proven they can be successful at growing the company from where it is today to the next level.”
Knowing what to look for is only half the battle; having an idea of where to look is just as important and many founders will be asking if they should promote talent from within or look outside to find the best the market has to offer. “In my experience, an incredibly high proportion of entrepreneurs will want to hire from within,” says Jane Gomez, MD of The Supper Club, the membership club exclusively for fast-growth founders and CEOs. “They always have a look inside and assess who they can lift.” Sometimes, however, there simply isn’t the right kind of talent available and start-ups also need to be willing to look outside to find individuals who will be able to take the business to the next level.
However, no matter how much time you put into finding the right candidate, there are no guarantees that a new C-suite hire will work out. “The cost of a bad hire goes way deeper than just going, ‘well I’ve blown that agency fee’ or, ‘I’ve blown the cost of that job ad’,” says Gomez. Not only are there real practical costs to bad hires but they can negatively impact morale and present a wasted opportunity for growth based on what that exec could have achieved. “But with careful planning and foresight, you can mitigate most of that,” Gomez adds.
Once of the most effective ways of minimising the damage caused by a bad hire is having a longer lead-in time for the role – ensuring that a new exec has time to properly align themselves to the start-up’s objectives. “Onboarding a new C-suite executive is essential and can take months off their time-to-full-productivity,” says Martin.
Despite this, when push comes to shove businesses shouldn’t shy away from letting a C-suite exec go if they just aren’t working out. “Hire slow and fire quickly,” says Gomez. “If they haven’t shocked you and amazed you within two months then they probably never will.”
Filling a post
Postcode Anywhere wasn’t in a position to hire a full C-suite right from the get-go. “We’re not VC-funded and therefore we’ve had to cut our cloth to suit our circumstances,” says Guy Mucklow, the company’s CEO and co-founder. Whilst Mucklow had a strong CTO in the form of co-founder Jamie Turner, Postcode Anywhere’s organic growth has meant, up until recently, Mucklow has had to wear many hats in lieu of dedicated C-suite execs for each department.
Postcode Anywhere has learnt the hard way that hiring for a C-suite role can be a tricky business; before Christmas, it hired a new chief marketing officer to its C-suite at a cost of around £20,000. However, it rapidly became clear he wasn’t going to work out. “The objectives that I’d set for him weren’t tough enough and I didn’t manage him to those objectives tightly enough,” says Mucklow. “I realised fairly quickly that he just wasn’t delivering.” After a period of about five months the start-up made the tough call of letting its CMO go. “We’ve recruited now at actually a lower level,” he says. “It’s probably one of the best things that we’ve done.”
But it has had much better luck with other C-suite hires. “In the last six months, we’ve hired a new CFO who’s been through two buyouts, who’s got a lot of really relevant experience,” says Mucklow. The impact Postcode Anywhere’s new CFO has had on the business has been remarkable and emphasises just why it’s important to do the leg work in finding a new C-suite hire. “You just absolutely have to go out and get the best talent that there is,” says Mucklow. “There is no substitute for getting the best people.”