Picking The Right Executive Team

Bill Warner Monday, August 17, 2009

Picking the right executive team is critical to a company’s ongoing success, and should be done with regular discipline. To make it even harder, the requirements for the executive team changes as the company matures. The team that started the company may not be the one that raises the first institutional round of funding, or leads the company to its first million in sales, or merges the company with another in an exit event. If you hear any of the following, beware:

  • “Products and services are everything, the business and management stuff is easy.”
  • “I will be the CEO for the long haul.”
  • “I just want people that can do the job. I don’t care about their personality.”
  • “I have some close friends and associates that will help me run the company.”
  • “Let’s fill out our management team right away so we have the experience we need.”

The mature executive team

What you would rather hear is a mature assessment of the needs of the business, and then determine what executive team is needed in order to accomplish the near term objectives of the company. If you hear people saying the following, you have a supportive and mature team:

  • “I need people that have business and management experience.”
  • “I probably will not be the CEO after our first round of funding.”
  • “Personality and ethics are very important. We have to be a cohesive team.”
  • “The best way to end a friendship is to hire them into a risky business.”
  • “I will hire the right management when I need it.”

Assessing your management team needs

In order to determine what you need for your executive team, three assessments are needed:

  • The current executive team
  • The status of the company
  • The company’s two year objectives

With this assessment and these needs understood, you can determine if the current management team has the experience and capability to accomplish the objectives that lay ahead. The management organization can be changed to realign roles and responsibilities. When additional management experience is needed, a job description can be easily written for the position that has to be filled. This description is then used to identify candidates through whatever recruiting channels are used.

As companies mature, new challenges are faced that the current management team may or may not be able to handle. As a company grows, so must its management team in order to deal with the demands of the business. The worst thing that can happen is to be led by a management team that is not experienced enough to manage the day to day issues it faces. Investors know that if such a condition continues too long, the company will lose momentum as too many mistakes will waste resources and time performing recovery actions.

The message here is that entrepreneurs must know what kinds of managers they need, and when they need them. Investors are looking for foresight of the upcoming business transitions and whether or not the entrepreneur knows the steps necessary to hire the right managers ahead of time. Unsaid has been that entrepreneurs need to pick people that will fit into the company’s culture and who are “A” players. Particularly in early stage companies, only the best talent should be employed to insure success. If you are rigorous about picking the right management team ahead of the crisis, you will have the right people to manage through the next transition.

Filed Under: Business Operations, Business Coaching & Leadership Skills



Bill Warner is the Managing Partner of Paladin and Associates, a business consulting firm in the Research Triangle Park area of central North Carolina, and is the Chairman of the Triangle Accredited Capital Forum, an angel investor network with over one hundred members throughout the southeast.

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