One of the most challenging decisions a business owner can make is hiring a new CEO. Before choosing a new business leader, you must consider if the person has the proper skill set, fits your company culture, and works well with your leadership team. Maxim Gorin will go over some common mistakes business owners make when hiring a new CEO and how you can avoid them.
Not The Right Fit
Hiring a CEO who isn’t a good fit for the company is a business owners’ biggest mistake. If the potential new hire doesn’t share company values or culture, you could risk eroding employee engagement and customer trust. If you’re unsure, do some research and ask your leadership team about their thoughts on the new CEO. They will be able to tell you if they believe the person would be a positive addition to the company.
Unrealistic Expectations
When it comes to hiring a new CEO, business owners often have expectations about what that person can do for their company. Some business owners expect that the new CEO will come in and turn their failing company around overnight. This thinking is unrealistic and could lead to mistakes when hiring your next CEO. In contrast, others think they can install a CEO with no experience into an already successful business to see if it works better without them there. If the CEO doesn’t live up to expectations, it could damage both of you, your company, and your employees. Make sure that when hiring a new CEO, you are realistic about what they can do for your company, so you don’t set them up for failure.
CEO Too Radical
When a new leader comes in, they will want to stamp things by making changes that might not be what the previous person would have done. However, some CEOs go too far with this idea, causing confusion and frustration among employees who are now suddenly entirely different procedures. If you’re hiring a new CEO, make sure that they don’t want to do anything too radical and keep your employees on board with the changes they’re making, so it doesn’t lead to a lot of tension and conflict.
Company Culture Change With a New CEO
If your company is like most, the employees and leadership team have helped to shape its culture. When a new CEO arrives, that person brings their own set of values and beliefs that might not always align with the previous leadership, which could cause confusion and even resentment. If you’re hiring a new CEO, make sure that they understand the company’s current culture and implement changes over time to build trust and buy-in as they move forward. At the same time, the CEO must work closely with the leadership team to remind employees that a change in leadership can mean changes in company culture, so be prepared for and open to it.
Difficult to Find a Qualified Leader
Hiring a CEO is no easy task. Not only do you need to find someone with the right skill set for the job, but you also need to make sure they’re qualified to handle the responsibilities that come with it. It is even more challenging if you’re looking for someone with a lot of experience or already in a CEO position. It can take months, if not years, to find someone like that, which means you’ll be without a CEO for some time. When hiring your next CEO, make sure that they are ready for the challenge and have all of their skills in line so that you don’t find yourself without someone to run your company. Finding someone who has the perfect combination of education, industry experience, and interpersonal communications skills will be no easy task, so don’t be discouraged if it takes time to find the right person.
There are No Long-Term Guarantees
When hiring a new CEO, there’s always a chance that they might not stay long-term. In fact, according to studies, around one-third of all new CEOs leave their position within 18 months of being hired. Searching for a CEO is a costly process for a company. If you’re looking to hire an outsider, make sure that you have a plan for leaving the company and are prepared to deal with the consequences. If you’re thinking about hiring an outsider for the job, know that there’s no certainty they’ll be around to see their work come to fruition.
To avoid these common mistakes of hiring a new CEO, business owners and their board of directors need to establish a plan and be clear on the kind of leader they want in this position from day one. While culture may change with a new boss, a company’s vision should remain steadfast by establishing strong leadership practices early on.
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