PUTTING THE SADDLE ON THE RIGHT HORSE

Stanley H. Davis, Standish Executive Search
Kathryn B. Earle, Touchstone Advisors of Cohasset

When a new venture is just a twinkle in their eyes, most business founders don’t realize that their leadership assets likely won’t meet the eventual needs of their expanding enterprise.

At founding, the owner’s most critical asset is himself. He’s the leader of an embryonic enterprise where the primary capital is his ideas, expertise, creativity, commitment and time. As potential customers, suppliers and investors become interested in the founder’s budding venture, he’ll need to extend himself and engage other people and capital. If he hasn’t before, this promising entrepreneur begins to wonder how big this venture might become, to evaluate what he needs to know but doesn’t, and to consider what his journey from simplicity to complexity may require.

The founder’s recognition that he or she is not an expert in all things – financial, commercial, technical, operational and strategic – brings the realization that some specialized help will be needed. In the venture’s early years, an experienced bookkeeper in the family and a salesperson from down the street may suffice. Continuing success will require additional expertise and, eventually, seasoned managers to oversee and lead varied functions.

Each business stage – conception, launch, growth and maturity – demands different leadership traits; and the need for great leadership transcends changes in ownership or structure. Interest from a potential suitor or the opportunity to acquire another business won’t wait if you don’t already have the right leadership in place. What does this right leadership look like?

1. To begin, when you’re a $10 million business, don’t bring in $10 million talent. Your growing enterprise is already operating at that level. The right leaders are not there for the ride. They’re there to prepare and lead the company into territory that they already understand. They’ve learned from their ‘beginner mistakes’ elsewhere.

2. Don’t settle for talent that’s “good enough for now”. “Now” is temporary. Mediocre talent will generate mediocre results, and mediocrity is not an asset. In fact, select leadership team members who, in their expertise, are better than you are; who will complement and extend your own skills and experience and stretch you to be the best business owner you can be.

3. As a leadership team begins to take shape, make sure that in addition to their business acumen they also fit with you personally, with the culture you want to build, and with other leaders already on board. The multiplier impact of a cohesive team, compared to a collection of individuals, is stunning.

4. Assure that your leaders are organizationally committed, goal oriented and selfless enough to get the best from one another and to hire others of equal talent. (‘A’ players hire ‘A’ players; ‘B’ players hire ‘C’ players.)

5. In your hiring, don’t focus on pedigree (e.g., family or educational background; appearance; impressive yet unrelated activities) but rather on relevant and quantifiable accomplishments, how they were achieved and under what circumstances.

6. Choose leaders of whom you’ll be proud. The value of your business, throughout its life, will be substantially bolstered by the caliber of your leaders. They’ll be evaluated by prospective investors and bankers, and by customers and suppliers who may be considering a long term relationship with your company.

7. At each stage of your company’s growth, be ready for the business and personal challenges that will come with needed leadership transitions. Map out the changes and the essential transfers of responsibilities beforehand. Build a supportive consensus with your internal team and your external stakeholders. Prepare yourself for some difficult changes to your own role.

8. Remember that for any change, acknowledging the need may be the most painful element. It’s not easy. If it seems easy you may have placated yourself with a simple adjustment to your business rather than stepping up to the need for a more substantive change.

9. Prepare to pass the CEO saddle to an even more qualified candidate. If the company’s success exceeds the founder’s ability to manage it well, sustaining the enterprise may depend on honest self-assessment. In our work with one successful business owner who was recruiting his first non-family executives, he observed that his “business got bigger and more complex than we know how to manage”. This was a clear sign that his business was succeeding.

Will you know when your growing business reaches one of those inflection points, when it may have outgrown its current leadership? You may not want to deal with it. You may not even want to acknowledge it. But you will know it. A courageous, insightful and timely response will greatly increase the likelihood of your venture’s continuing success.


Stanley Davis is the Founding Principal at Standish Executive Search.(www.StandishSearch.com). He can be reached at sdavis@StandishSearch.com

Kathryn Earle is the principal executive leadership and business organization consultant at Touchstone Advisors of Cohasset (www.TouchstoneCohasset.com). She can be reached at kathryn.earle@touchstonecohasset.com