Living the entrepreneurial dream: appointing a Managing Director

I am a slightly accidental entrepreneur I started my business as a way of freelancing as a day-rate consultant.

Living the entrepreneurial dream: appointing a Managing Director

I am a slightly accidental entrepreneur ‘ I started my business as a way of freelancing as a day-rate consultant, and then over the following 2-3 years realised that the need for commercial and strategic HR support for mid-tier firms greatly exceeded what I could ever deliver myself. A sales and marketing plan followed, then the inevitable business support functions.

Fast forward 9 years to the middle of 2019, with a team of nearly 70, and the need for a different style of leadership from my opportunistic, gut-reaction approach was clear. Snap decisions without much planning or follow through didn’t deliver the business change that we often needed, and so I took a very conscious decision to try to find someone who could lead the next leg of the journey.

With a lean central team, my business partner and I agreed to look outside the existing team to try and find our next Managing Director: a journey that many will tell you is full of potential disasters. 

We decided to go to market to find someone who could take much of the day to day responsibility for running the business, which made sense initially as an Operations Director hire, with the promotion opportunity to MD if all went well. 

The risks of hiring externally

I’ve noticed that many business leaders are delighted to tell you all about senior hiring failures, and how difficult it is to find specific director-level people to fit into your business. I’ve also had first-hand experience of seeing those people in action and being somewhat perplexed as to why they were hired in the first place. 

Why are we so good at getting this wrong, and what can we do about it?

I found reading the chapter on firing executives in Ben Horovitz’s book, The Hard Thing About Hard Things incredibly helpful before we made our senior hire. The chapter kicks off exploring why we fire so many executives, and help business leaders to reframe the question from the candidate always being the wrong fit, to understanding how the system can be designed to generate a better outcome. 

Firstly, you have to get the tasks and the person strengths right ‘ creating a really effective job spec that fits the role you need. If you define the role properly, you have a much better chance of finding the right person.  Secondly, you need to have a hiring process that uncovers these strengths, rather than finding the candidate with the least weaknesses. Selecting candidates based on a fancy CV or a great work history is completely the wrong approach in a mid-sized firm ‘ you need to hire for the size and scale that your business is, and will be, for the next 18-24 months. It is no good hiring a director from Facebook or Google if you are a £5m, 50-person firm, and need someone accustomed to the unique challenges a company of your scale has. Whilst we want joiners that are ambitious, we want people ambitious for our company, and within our business strategy, rather than someone in waiting to start their own firm, or are ego-driven. Trying to really find that person with the right skills, the right culture, ethos and approach is hard work, but it is harder and more expensive to hire the wrong person and waste six months or longer. 

Once you have found this person, you then need to pour all your energy into an organised and challenging induction. It isn’t about a glamorous first day, but it is about a planned 4-8 weeks, knowing that in that time they have the best shot at meeting the right people, understanding the business, uncovering the unique challenges of your company, and being asked to think for themselves, identify bottlenecks and ask the right questions. And it doesn’t stop there, an executive is likely to need 6-12 months of support to really be able to add the value you need them to long term.

When our Ops Director started, we had a calendar prepared for the first 6 weeks, populated with meetings with key people, set reading, loads of time and conversations with my business partner and me, and greatly encouraged questioning, interrogation and disagreement. 

A key turning point was when we realised we had certain ‘non-negotiables’ about how we ran the business. Once we made a list of these (around 10 or so), which we had learned over the past decade and were really important to us, it shifted the energy and alignment significantly.  

The Ops Director to MD route

It is easy for me sitting here, within a fortnight of the promotion under my belt to say it is all easy. It certainly hasn’t all been straightforward even getting to this point, and there have been a lot of robust conversations over the past year. It has helped the process no end that our new MD loves feedback, actively encourages plain speaking about what has and hasn’t worked and is committed to learning and improving. In fact, I’d say this is one of the core things to look for in a director level candidate ‘ someone who is humble, willing to learn and is happy to be challenged. 

We made the decision to promote Alex to MD once he had run through two rounds of business planning, had really got to grips with the business model, the budget, was showing good leadership with the team and showed true cultural alignment with us and our approach. 

I’m not saying it is all going to be plain sailing from here, but I know that we have good open dialogue, we can challenge each other, and defer to each other’s decisions with good grace. 

I feel extremely privileged that I have managed to achieve what many aspire to ‘ being able to afford, and find the right person, to take on the Managing Director’s role in the business, leaving me to remain active with the business, but not in the day to day hot seat.

Now where is that sun lounger…

Ally Maughan
Ally Maughan

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