If You Haven’t Been a CEO, Can You Hire a CEO?
Board members who have educated themselves about the role of the CEO are well-equipped to make hiring decisions, even if they haven’t served in the role themselves.
The process of identifying, recruiting, hiring and onboarding a new CEO is daunting, especially for board members who haven’t been chief executives themselves. But it’s possible to recruit and hire a forward-looking CEO if you follow a three-step plan of action: recognizing shifts in CEO roles and responsibilities, identifying candidates who align with your strategic mandates and conducting a deep search for high performers who could ease into the CEO role.
CEOs in Transition
Boards should be on the lookout for CEOs who exhibit five enterprise leadership traits.
The candidate has transitioned from a self mindset to a service mindset. Enterprise CEOs rise above ego, self and ambition and commit to sustainable, shared success. The service mindset is anchored in compassion. Executives can build compassion by listening without judgment. They can generate empathy by sitting down for conversations that have nothing to do with work tasks. And they can commit to enhancing the lives of every stakeholder — from employees and C-suite colleagues to customers and the underserved.
Core question: Does the candidate show evidence of having served all of the company's stakeholders?
The candidate thinks broadly — across the enterprise and markets. Rather than just connecting the dots within an organization, enterprise leaders connect the dots within and outside the organization. Instead of focusing on the “what now” of implementation, enterprise leaders zero in on the “what next” of innovation and transformation.
Core question: Does the candidate reach beyond typical or traditional thinking and strategy?
The candidate has a track record of mobilizing courage, collaboration and a desire to build a better future. Enterprise leaders transcend their limitations. They stretch themselves — and those around them — to create new and distinctively different realities. They join forces with others to deliver change that creates a brighter tomorrow.
Core question: Does the candidate have a legacy of connecting the dots — and creating new dots — to drive improvements in life and work?
The candidate is willing to develop and share resources across the organization. Executives of the past sometimes hoarded talent and funds in fierce battles with colleagues. They built a personal track record of success, often at the expense of colleagues, customers, clients and the enterprise. Enterprise leaders take a different approach. They sacrifice their own short-term gain for the well-being of the enterprise.
Core question: Is the candidate willing to develop and share talent and resources across the enterprise to fulfill purpose and vision?
The candidate has pursued a career anchored in mission/purpose, vision/values, strategy and talent. Enterprise leaders commit to mission or purpose. They can see where an organization is headed, including how it could emerge in a best-case scenario. They build strategies to fulfill purpose and vision, knowing that human capital is the “secret sauce” to get them there.
As you meet and interview candidates, ask them to reflect on your organization and past employers:
• Purpose. How do you view our purpose?
• Vision. Assuming this organization continues to live its purpose, what could it become?
• Strategy. What strategies should this organization tap to fulfill its purpose and achieve its vision?
• Talent. What skill sets and experiences will this organization’s people need to address its purpose, vision and strategic mandates?
CEO as Workforce Champion
The 2022 Gartner CEO Survey reveals that CEOs focus on people, purpose, pricing and productivity. For the first time, environmental sustainability hit the list of top 10 priorities, while workforce moved up for the second year in a row, only slightly behind tech issues like digitalization and cybersecurity. Look for candidates who create cultures where employees want to engage, contribute and stay. And give higher rankings to candidates who can fulfill these high-priority CEO roles:
- Relationship builder. CEOs lead in building strong, trusting relationships with employees. That means open, candid communication from day one and concrete, realistic job previews.
- Amplifier. The best CEOs give employees their voice. The cost of failing to amplify is high. Employees who feel muffled stop speaking up in support of the organization. The next step is disengagement, burnout and turnover.
- Architect of quality work. Top CEOs insist on fair processes, clear goals, meaningful tasks, worker autonomy and team synergy. They’re also champions of reasonable expectations and demands to prevent exhaustion and burnout.
- Change advocate. Skilled CEOs see employees as they are, not as they used to be in past years and decades. They approach diverse generations with open eyes and a fresh outlook. They care for workers as distinct individuals, not just as members of groups or workforce cliques.
- Connector. Seasoned CEOs know how to rebuild connections with colleagues and the culture. They understand the forces that depress worker engagement — from political upheaval and high inflation to a confusing hybrid work environment that weakens bonds to purpose, strategy and coworkers. The best CEOs help workers make connections, be their authentic selves and share what unites them.
- Strategic mandate leader. Make sure CEO candidates are ready to fulfill your organization’s top strategic mandates. The following are typical board priorities:
- Talent management. Look for candidates who grasp workforce shortages and the need for aggressive, ongoing recruitment. The best CEOs are masters of human capital management, which embraces a review of competencies, compensation, performance metrics, DEI, culture, retention, and health and wellness. These leaders hammer out succession plans, build a strong pipeline of successors, and predict likely departures and gaps. Key issue: Is the candidate ready to steer workplace evolution and apply emerging best practices to talent management?
- Board composition. The best candidates grasp the need for specialized board expertise and diversity. They understand how board chairs and governance committees scrutinize board performance as they navigate board refreshment and succession. Key issue: Is the candidate ready to tap interviews, assessment tools and personal connections to secure feedback on board needs, preferences and performance?
- Strategic visioning and planning. Top-tier CEOs know how to assess and respond to strategic opportunities like mergers, acquisitions and partnerships while managing disruptors like inflation, supply chain and labor shortages. To do so, CEOs develop scenarios that assess risks and opportunities, allocate resources, align performance metrics and disclosures, and respond to changing business needs. Key issue: Is the candidate prepared to build and sustain a strong relationship with the board via open, regular communication and trust?
- ESG and stakeholder engagement. CEOs increasingly join board members in engaging with investors and stakeholders on ESG issues. They lock down ESG priorities and strategies, knowing that activists will share positions on climate action and DEI via shareholder proposals, proxy battles, litigation and the media. Boards help CEOs build value and fulfill purpose via ESG performance anchored in short- and long-term objectives and progress reports. Key issue: Will the candidate collaborate with board members to assess ESG vulnerabilities, refresh stakeholder engagement strategies and respond to surging stakeholder activism?
- Climate action and disclosure. While climate action and disclosure fall under the ESG umbrella, they warrant a separate position on the list of board priorities. As investors clamor for consistent climate disclosure, compliance with reporting requirements demands more time and resources. Boards can evaluate an organization’s climate expertise and pinpoint gaps in data. They can revisit priorities and action plans as technologies and best practices evolve. And they can join the CEO in collaborating with government officials, investors, consumers and supply chain professionals on climate change issues. Key issue: Is the candidate willing to join forces with the board to implement a plan that achieves climate change targets and objectives? Will the candidate support a custom governance model with clear roles and responsibilities for management, the board and its committees?
- Digital transformation and cybersecurity. Digital transformation hit its stride during the pandemic. Cybersecurity, data protection and technology emerged as standing items on board agendas and board education programs. Board members help track how digital technology transforms an organization and its industry, and if the organization can prevent and respond to costly, debilitating crises. Key issue: Will the candidate collaborate with the board to update a risk management framework that manages cyber and data protection risks and uses a reliable compliance protocol to report incidents?
- The evolving workplace. Boards seek the right balance between return-to-work and remote-work policies. They analyze new business models to attract and retain the best talent. And they look to the CEO to adopt best practices in training and development, performance measurement, collaboration and teamwork, health and wellness, and culture and loyalty. Key issue: Will the candidate move beyond the top-down imposition of tasks and give workers the freedom to lead new projects and shape professional contributions?
Look Broadly and Deeply
The next CEO needn’t be a COO or CFO. You might find your next CEO among the ranks of chief marketing officers, chief product officers, chief human resources officers, chief business officers, chief customer service officers, chief digital and technology officers, or chief strategy officers. And remember: New officers will take their seats in the C-suite. Look for the emergence of chief data officers, chief sustainability officers, chief budget officers, chief user experience officers, chief DEI officers, chief growth officers, chief automation officers and chief learning officers.
As you assess CEO candidates, look first at unique expertise, education, experience, awards, achievements, and community and public profiles. But don’t forget to examine organizational fit and the structure of the CEO job. The candidate should mesh with the organization’s challenges, opportunities and culture — even if that culture demands reengineering.
Because the CEO confronts roadblocks such as regulation, competition, politics and supply chain, leadership style makes a difference. While some organizations want a seasoned captain with a steady hand, others prefer a bold, swashbuckling innovator or a turnaround veteran.
Also, look at how the CEO will interact with others, including the COO and board chair. Board members need to know if the CEO will function as a stabilizer, disruptive innovator or incremental change agent — and how they’ll measure success.
In the search for CEO candidates, look at companies within industries likely to pursue partnerships and alliances. But also look at emerging, fast-growth industries like artificial intelligence, assistive technologies, online learning, cloud computing, data analytics, biotechnology, green energy, pharmaceuticals, information security, and sustainable products and services.
Forward to the Future
The path to finding the right CEO includes keen awareness of shifts in business and leadership. Seek candidates who align with your organization’s purpose, vision and top strategic priorities. They must also possess the knowledge, skill, experience and style to thrive in your environment. Stay open to new possibilities by avoiding distinctions between insiders and outsiders. Instead, choose a CEO who can rise above imperfections to steer your organization toward a brighter future.
Jena E. Abernathy is senior client partner, CEO & executive search, and healthcare board services sector leader for Korn Ferry.