What’s a CEO to Do? (Part 2)
A sneak peek into chapter two of Pam Wasley and Kristen McAlister’s new book The New Executive Search on what a CEO would do.
For part one of the series on what’s a CEO to do, click here.
Over the past twenty years, consultants have been pigeonholed a bit regarding what they do and the value they provide. The U.S. consulting industry alone is currently estimated to be $58.72 billion per year. Clearly, business owners and CEOs see value in consultants. The question is the value at the small-to-medium- sized business (SMB) level, and under what circumstances.
Traditionally, consulting has been a source for gaining outside perspective from experts through research, and assessment, and a presentation of findings, recommendations, and advice. A comment we often hear from business owners and CEOs is, “I don’t need a consultant telling me what I already know or what to fix; I need someone to come in and actually fix it.”
Promoting Someone from Inside the Company
If you are an owner, your company started with yourself and a few employees. They are loyal, conscientious, versatile, and care deeply about the success of the company. As new employees are brought on board, there are too many for one person to supervise. One of the original employees who helped train the newcomers is now likely managing them and has taken the title of office manager or operations manager. These employees being promoted typically either have very little experience managing, had very little job experience prior to joining your company to draw from, have not worked for a company larger than $10 million, don’t have the skill set for their growing responsibilities, or may easily become complacent the larger the company becomes.
One of the most common remarks we hear from business owners is, “My company has outgrown my leadership team.”
The internal promotion option reaches the first of many thresholds of a company’s growth at somewhere between $5 million to $10 million. At that point, the company typically outgrows most of the existing talent. There is still a place for the original team, but typically not at the leadership level. Some signs to look for that indicate the company has hit this point:
- It seems like every day is a routine of putting out fires.
- The same mistakes keep happening over and over again.
- When something goes wrong, there’s lots of finger- pointing, and it turns into a blame game with little or no action to fix.
- Employees start to become protective about what they do and rather than cross-training or documenting, they hoard information.
- Deadlines are continually missed, and there’s little to no follow-through.
When faced with no good or viable option, the default is often to do nothing. This is fueled by three drivers:
- Hope—the hope that the issues will fix themselves because the team cares so much and would do anything for the company.
- Overwhelm—the business owner is too busy to make a change or to start moving in a new direction.
- Fear—fear of bringing in the wrong person, fear of how the internal team will react, or fear of making too many changes.
Without fail, this option has a limited life expectancy for both the internal team and the company.
So, to recap: For what seems like as long as business has been around, boards, business owners, and CEOs have been limited to these four options for getting executive talent to help or grow their companies:
- Hire a full-time executive
- Bring in a consultant
- Promote from within the company
- Do nothing
To read The New Executive Search, click here to get the free eBook or buy it in paperback.