IT’S ALL ABOUT GETTING THE FIRST STEPS RIGHT

I often get asked this one question – ‘Should I hire a CEO for my business?’

My answer to this – ‘Well, for starters, you need to get your first steps right.’

There is plenty of commentary about business owners needing to reduce reliance on key people, including them as owners. This is especially the case as the business gets larger and there is a need for a greater number of people in their senior management team.

These are important considerations intrinsically linked to business value and, ultimately, the saleability of a business.

Other owners are simply at a point where they can’t do it all anymore, for whatever reason.

The answer can be for the business owner to jump straight to ‘I must recruit a CEO’. This could be closely followed by ‘I’m told I need a CFO’. I call this the ‘full-noise approach’.

But is that the right thing to do??

Well, it depends!

Even the well-intentioned owner needs to be aware of what they are committing to and what their business is really ready for – the next logical step. For some, instead of becoming the first step towards better management of the business and increasing business value, a full-noise approach ends up becoming the first step towards failure in most businesses. Done poorly, it ends up being a very costly exercise with no actual benefit to the owner. In fact, it could be argued that some owners end up in a worse position.

The point isn’t to simply hire senior management. It is to hire them with a purpose.

Hiring senior management isn’t going to solve all your problems magically. You need to introduce them in a way where it doesn’t appear like you’re not leaving the charge of your business, but you’re getting them to work with you. You don’t want to give the impression that they’re working against you.

I have had business owners who’ve complained to me about hiring general managers and how it’s failed as a strategy for them. The reasons for that are often pretty simple – they haven’t worked on the intermediate steps, they haven’t established the right kind of reporting structures for their business, and they haven’t figured out how often to meet with their new hire to properly guide them. Or it could be that their own actions as owners are in conflict with what they are asking the CEO or CFO to do.

So, the challenge or the first step for these private, growing businesses is to identify and bring on board the people who will actually help grow their business.

They also need to be recruited into the right environment. There has to be a match between the current management structure and capabilities, your priorities and actions as an owner and what you are asking the new recruit to do. There is no point in hiring a top-flight CEO when the business is not yet equipped to provide them with the right platform to build from. And that assumes they would take the job on in the first place.

Some might ask – well, do businesses need to hire CEOs or CFOs? The answer is yes and no.

Yes, because you need someone in that position, and no, because you need to help them get there instead of just hiring a CEO and throwing them in the deep end. No, business owners can’t do it themselves, they need to hire someone to do the job of a CEO, but they need to do it the right way.

My recommendation to my clients – Do not go full noise from Day 1!

Doing this lessens your chances of success instead of increasing them. Recruit someone who can grow into the desired role – e.g. a General Manager or Financial Accountant - because it isn’t about the end goal but the first steps you can take and how you progress on that path.

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