The Excitement of Technology and Executive Search
Naren: Steve, you’ve been recognized as a leader in executive search, especially for tech companies. What excites you about technology and helping tech companies and founders?
Steve: Certainly, Naren. I’ve always been fascinated by technology as a consumer, and it was a natural area to gravitate towards. I started working with consumer electronics, aerospace, and defense companies, eventually focusing on early-stage and high-growth tech companies. This led me to work with venture capital and private equity firms, helping identify, attract, and retain executive talent, particularly at the C-suite level.
Search Process for High-Stakes Leadership
Naren: Let’s delve into the search process for high-stakes leadership positions. Can you walk us through your approach?
Steve: Of course. We start with a four-person team, emphasizing diversity of thought and experience. We use a unique competency-based approach, examining strategy, day-to-day execution, emotional leadership, and inspirational leadership. Clients choose two competencies from each area, leading to eight non-negotiable, role-specific competencies. We then focus on deliverables tied to these competencies, customizing questions for shortlisted candidates.
Success Story
Naren: From $10 Million to $300 Million: Can you share a success story where your approach had a significant impact?
Steve: Certainly. We worked with a venture-backed tech client aiming to grow into a world-class company. By finding the right sales leader, they went from $0 to $120 million in four years and had a successful exit close to $500 million.
Customized Competency-Based Approach
Naren: Your customized competency-based approach seems effective. How does it help clients make better decisions?
Steve: It clarifies clients’ needs and helps them articulate them effectively. We align expectations and improve selection by focusing on leadership competencies and business deliverables.
Culture and Organ Rejection
Naren: You mentioned culture and organ rejection. How do you assess and mitigate these issues in the hiring process?
Steve: We conduct a culture audit and analyze why employees stay. Understanding the culture helps match candidates effectively. We also take a video of the client talking about the business, which humanizes the profile and aids in attracting candidates who resonate with the company’s culture.
Learning from Success and Failure
Naren: Could you share an example of a situation where things didn’t go as planned, and what did you learn from it?
Steve: Certainly. Despite my reservations, I worked with a founder who insisted on hiring a candidate. The candidate’s lack of fit led to ongoing issues, with the founder continually providing more money to keep the candidate. The lesson is the importance of being open to coaching and different perspectives in the hiring process.
The Importance of Candidate Fit
Steve: So yeah, we’re dealing with people, you know, of all things, we’re dealing with people, personalities and motivations and ego and greed and all sorts of things, you know, I’m thinking about a crypto company that I was working with. And I kept saying to them because they were leaning towards this one candidate that we had not identified, we did not recommend this person, and they kept going to this person, and they kept saying this is the best candidate for the job. And we said he might be the best candidate, but he’s not the right candidate. You must distinguish between what’s right for your business and what’s best. And this client just decided I have to have the best. And as a result of having the best, it failed. When you say best on paper, it looks like the one that scores high, but it’s not a good fit for this particular role. Our issue was that this individual had never worked for an entrepreneurial company. This person came from a big corporate background and profile and had been fabulously successful in a big machine. But now he was asking him to go into a smaller company. The entrepreneurial run needed more resources and the processes he’d been accustomed to. And my direction to the client was there’s a very high propensity for failure. The first time somebody goes from big corporate to entrepreneur, think about that because we think you’re taking on a risk that you don’t need to take on.
Learning from Mistakes
Steve: Here’s a short list of people who have performed in founder-led entrepreneurial companies. They’ve all had successes. They may not have the same pedigree. They may not be as publicly known, but their track records speak for themselves. Our client was attracted to the shiny object. So the client said, no, I want that shiny object, and that’s what I will do. So they hired the shiny object, which was gone within a year. A client called us back and said, I may need to try this again and listen to you. That’s up to you. So we got it right. The second time lesson learned, our client learned an expensive lesson.
The Candidate’s Perspective
Naren: Let me switch gears for a little bit. Now, let’s wear the candidate’s hat, right? So, for example, I know a lot of founders; they do their thing, get the business to a certain level, and exit for whatever reason. Because VCs get involved and need a liquidity event, they move on. Now they’re looking for a second gig, or they could be a seasoned professional CEO. This is what they do: work for a company for several years, get it to a certain place, and then go and do it again.
Building Strong Relationships
Naren: talk about the other side of this equation because there are two parts to this equation, right? You have the candidate and the client hiring you and hiring the candidate.
Steve: Well, you know, a successful executive search has to be a win; the candidate is hiring the company, and the company is hiring the candidate when you think about it. So, we spend equal time understanding the candidate’s story, motivations, strengths, and weaknesses because it’s got to be a win-win.
Thoroughness in the Hiring Process
Steve: I’m always recommending to candidates and clients that we need to carve out some time in this meeting for the candidate to ask their questions because it’s a two-way street, and I see a lot of candidates that have, surprises, negative surprises because they assumed that there would be aspects of the job or the company that would be similar to what they’ve experienced in the past.
Deep Diving into References
Steve: I’m a big believer in doing a deep dive on references. It’s amazing to me, even today, how often a company will call me and say we didn’t do a deep enough dive on references on the last candidate. We can’t afford to get it wrong this time. So when we explain to them the type of referencing we do, we want to speak to it could be board members, peers, subordinates, or customers. We want to speak to people, you know, up and down in the organization to do references on someone. It’s really important to understand how well this person performed and how this person is thought of.
Psychometric Testing
Steve: The other thing I believe in is psychometric testing. Again, I would put at most a five or 10% emphasis on the decision based on psychometric testing. But the more data, the better; we share this information with the client and the candidate. So it’s like doing a test to understand how Naren shows up for work every day?
Conclusion
Naren: Thank you so much, Steve.
Naren: I appreciate you and your time and your wisdom, and you’ve tried to give us what you’ve learned in 30 years and 40 minutes or 45 minutes. I appreciate that.
Steve: Thank you till we meet again.
Naren: Have a wonderful rest of the week.
Steve: Thank you.