So if big companies have trouble, what about small ones? Unfortunately, hiring a CEO is extremely difficult for any company.
"For an early stage company, the wrong CEO can be costly," said Gordon Gould, the founder and CEO of ThisNext. "Divorcing the executive can mean wasted time, money, momentum and possibly the company itself."
So, if you have doubts about a candidate, it's probably better to wait. "To get the right CEO, it takes time," said Dipanshu Sharma, the founder and CTO of V-ENABLE. "So allocate at least three to four months for the process." Actually, his company recently hired a new CEO.
Sharma believes it is critical to hire a recruiter. "A top-tier venture capital firm recommended a recruiter for us," he said.
And the process was strenuous: "We set up a weekly call with the recruiter and the board/management. Every week we would prioritize the candidate list. After a few weeks, we got candidates that we had initial conversations with. Of those we found that matched our selection criteria, we held several rounds of interviews. In the final process, we flew them to our offices and introduced them to a broader team before finalizing the candidate."
It was also important to spend time on creating a candidate profile. As for V-ENABLE, the company focused on a CEO with:
- Demonstrated success in previous CEO roles
- Team player
- Growth oriented
- Raised capital and has experience in M&A
- Worked in wireless and has relationships with wireless service providers
"Our board and management went through several iterations to make sure we were covering the short term as well as long term needs for the company," said Sharma.
Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates DealProfiles.com.