How to hire executives

  1. Speak to subject matter experts [1–2 weeks]
  2. Choose the hiring committee [1–2 days]
  3. Draft the mission/outcomes/competencies (MOC) document [1–2 weeks]
  4. Source candidates [2 weeks]
  5. Build the relationship [1 month]
  6. Evaluate candidates [1 month]
  7. Close them [1 month]

1. Speak to subject matter experts

When hiring an exec, it will likely be outside your area of expertise. You’ll first need to get a crash course in that role.

  • What are the different types of finance leaders out there?
  • Which is the right one for us at our stage?
  • What are some good interview questions I should ask?
  • What are some common terms/jargon I should be aware of when making this hire?
  • What do you think are the must haves in this role vs the nice to haves?
  • What is the best way to close these candidates? What matters most to them?

2. Choose the hiring committee

Next you need to decide who will evaluate the candidates. You won’t usually decide on a new hire unilaterally, so you’ll need to gather input from various stakeholders.

3. Draft the mission/outcomes/competencies (MOC) document

It’s time to gather input from the hiring committee and reach consensus on what you’re all looking for.

  1. Mission: What do we need this person to do over the next 12–18 months (essence of the job in 2–3 sentences, in plain english, no jargon)
  2. Outcomes: What specific outcomes are we looking for this hire to achieve in their first 12–18 months (4–5 specific/measurable business outcomes that support the mission, ranked by order of importance)
  3. Competencies: What specific skills/experiences/accomplishments should they have? Which of these are must haves vs nice to haves? This should flow from the mission and outcomes.
Gathering input from the hiring committee on which competencies are must haves vs nice to haves.

4. Source candidates

Now that you know what you’re looking for, it’s time to get candidates in the pipeline.

  1. Reach out to your network
    This could be your investors, current employees, the subject matter experts you met in step one, social media, etc.
  2. Hire a sourcer
    This could be someone on your recruiting team or an external contractor who you can hire hourly to generate leads.
  3. Hire an exec recruiting firm
    These are firms that specialize in finding executives.
  • Exec search firms can be expensive — budget roughly a third of the candidate’s annual compensation in cash + equity, or a flat fee of about $100k.
  • In theory, they are helping you find great candidates faster, and when this works it can be well worth the cost.
  • It doesn’t always work successfully. Most CEOs I know have a love/hate relationship with exec recruiting firms and have had a few bad experiences.
  • I chalk this up to inexperience working with exec recruiting firms, and also that it is just like any service industry (the top people in the field are amazing, but you may not be able to discern who the top people are yet, and they may not be willing to work with you yet).
  • The most important thing is probably chemistry and great communication between you and the partner you’ll be working with at the exec recruiting firm.
  • You’ll need to build trust and rapport for the search to be a success. Meet with at least three exec search firms before selecting them, and really interview the partner you’ll be working with (not just the firm). Interview them like you’d interview any other employee you’ll be working with over the next year, since that may end up being how long it takes!
  • Having an internal recruiter that can serve as a liaison between an exec recruiting firm and the company will improve communication and help keep the search on track.

Are there at least three candidates in the pipeline this week that I’m excited about?

If the answer is no, that is your clue to go back to the sourcing step and get more candidates in the top of the funnel.

5. Build the relationship

Like making any hire, you’ll need to get the candidate excited about what you are building, and the idea of working with you.

  1. An initial half hour phone call (or video call)
    This is to determine if there is potential for a match, before investing more time. Get to know them, and also give a quick sell of the company/mission. A video call (like Google Hangouts) can help build a connection with the candidate even faster.
  2. An in person meeting for an hour
    Ideally the candidate gets to visit your office, to get a sense of the culture and people. Every detail in your office, from the video screens in the lobby, to the wrapper someone left on the floor are making a first impression. Put your best foot forward.
  3. Invite the candidate to interview
    Next you’ll ask them to invest time completing in person interviews with 3–4 people on the hiring committee. If those go well, you’ll also ask them to give a presentation, followed by Q&A, to the hiring committee.
  4. Have them meet with your board
    It’s a good idea to have the candidate meet with several of your board members, since they’ll be working together as well.
  5. A dinner or walk outside
    In the later stages of the process, a less formal setting can help to further build connection, as you work toward close. Psychologically, there is something good about going for a walk together — it puts people at ease, helps the conversation flow, and represents you both moving together toward a common destination together (as opposed to a face to face meeting in a small room where you are on opposite sides of the table).

6. Evaluate candidates

Steps 4, 5, and 6 sometimes blur together. You are doing a dance back and forth between finding candidates, convincing them to join, and evaluating them, at the same time.

  • During sourcing
  • Interview scorecards
  • Presentation to the hiring committee
  • The roundup (hiring committee voting and discussion)
  • Reference checks
  1. [10 minutes] Tell us about a challenging project you worked on. How did you work with the team (both up, down, and with peers) to make it a success? Teach us a counter-intuitive lesson learned during this project. What would you do differently if you had to do it over again?
  2. [5 minutes] How would you grow your team from 20 to 200 people? How would you change the org structure during that transition? How would you hire and retain the right people during this growth?
  3. [5 minutes] Share a bit about yourself, your strengths/weaknesses, and your passions in life. Help us get to know you personally.
  4. [10 minutes] Q&A
A hiring committee rounding up in Genesis — one of our conference rooms.
  1. The hiring manager
  2. The CEO (or a founder)
  3. A bar raiser

Under no circumstances should you skip backchannel references when hiring a senior candidate.

You’ll need to look for people they’ve previously worked with, through your network, while being cautious not to create any issues with their current employer. This can be tricky, but it is worth the effort. For example, you can ask a trusted reference whether they would be willing to keep a call strictly confidential, before revealing a candidate’s name.

  • If you’re not a hell yes, you’re a no. You should be raising the bar at your company with every hire you make.
  • Ask whether this hire raises the average at your company. Or put another way, ask if this person is in the top 20% of people we could hire for this role right now (the italicized part is key, because you probably can’t get anyone you want for any role).
  • You should feel genuinely excited to have this person start work on Monday. If you’re not excited, you’re a no.
  • Hire for strengths against your MOC competencies, not absence of weaknesses.
  • Hire based on your company values (this is what creates a strong culture), but also be open to (and seek out) people who are different than you.
  • Especially for executives, imagine how you’d feel about this person hiring the next five people at your company without your input. Imagine how you’d feel about them representing the company externally, or giving a presentation to the whole company. If any of these make you uncomfortable, you’re a no.
  • Is this person much better than you in at least one area? Did you learn something from them during the interview process? These are the hallmarks of a great candidate.

7. Close them

If the hiring committee gets to a yes and the references check out, you’ll need to construct an offer for the candidate that is compelling.

  1. Speed
    This shows the candidate that you really are interested in them and differentiates you from competition.
  2. A good offer off the bat
    This builds trust and shows you value them.
  3. A sense of belonging
    The people they’ve met during the interview process should continue to stay in touch with them via email, in person chats, etc. You may want to connect them with board members or investors to help sell the opportunity as well. Let them know this is a place where they are respected and have friends.

Conclusion

It’s a lot of work to recruit great executives! Most of my exec searches have taken between 6–12 months, although I’ve seen others do it consistently in about 3 months (this is where I’d like to get to next).

  • Being afraid (consciously or unconsciously) to hire someone more senior than yourself.
  • Beginning to source candidates before the role is clearly defined (the MOC document).
  • Drafting the MOC yourself without getting input from the hiring committee.
  • Voting yes on a candidate because you urgently need someone in the role, but you’re not truly excited about this particular person.
  • Hiring executives too early — before you’ve really hit a period of growth.
  • Hiring executives too late — after you’ve grown beyond your team’s current skillset (you’ll know you’re here when you’re consistently reacting to challenges, instead of getting ahead of them).

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Brian Armstrong

Brian Armstrong

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Co-Founder and CEO at @Coinbase. Increasing economic freedom in the world. Join us: https://www.coinbase.com/careers