I am the owner of the company that I have been running by myself but I have decided to hand this role over to the executive management. How do I choose the right person?
It was easier for the generation of our grandparents. They chose a good and decent person whom they have known for years, who went to church every Sunday and obeyed the ten commandments. The owner and director of the company was respected and his word was sacred. However, rules, values and the demographic distribution started to change in the ’60s of the 20 century. Companies started to look for ways how to evaluate and compare candidates suitable for the job. The first evaluation tools appeared and companies become too dependent on some of their modern versions.
While considering these evaluation tools, it is important to realize that some of the most successful business leaders today would have never gotten the job. They would be marked as “too risky”. Some of the most iconic CEOs such as Sergio Marchionne from Fiat, Kenneth Frazier from Merck, Marry Barra from General Motors or Larry Fink from BlackRock wouldn’t pass. What I am trying to say is that we “choose “and get the executive management we are prepared for. Not financially but psychologically.
Thus the biggest challenge is not to select well but to be mentally prepared. This leads to your own satisfaction, company’s development and also successful job and company handover. To do this, I recommend the following 5+1 key principles.
- Clear vision. What I want to do with my company, what the result should look like in a couple of years, what risks am I willing to take.
- Definition of your real needs. How senior my management should and needs to be? Do I need a “Ferrari” manager or is decent “Superb” enough?
- Understanding the personality on the other side. Instead of spending time on CVs, it is important to pay attention to values, convictions, behavior and attitudes of your future CEO. You need to evaluate whether your choice is right, not for you but for your company.
- Patience. A promising manager whom you already see as your successor refused your offer. However, he might change his mind in the future. Choosing the right person does not mean searching and selecting a person who solves your current problems but defining your future needs that predefine qualities and characteristics of people in your portfolio.
- Creativity and experiment. For example, Warren Buffett invites his future CEOs to dinner with their wives. He claims, thanks to his wife, he knows the quality of his future CEO.