Healthcare Musings October 2011

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The Most Important Thing a CEO Must Do – Part One
by Jim Gibson

Jim GibsonOctober 2011 -  It seems that every couple of months I read someone, usually involved with early stage companies, commenting about the top priority of the successful CEO.

The most recent example was a story on Inc.com about Kevin Ryan, founder and CEO of Gilt Groupe, a company he started in 2007 that now has 850 employees and $500 million in sales. He observed that finding good people is the most important thing a CEO must do. Only a month or two earlier, I read the same thing from a healthcare investor. And I’m sure I’ll read it again sometime soon.

I happen to agree … but then again, what recruiter wouldn’t? Seriously, think about it. For any company to get off the ground and achieve sustainable success, it needs a few things: a product or service; a market; capital; people; and some luck. The one that’s non-negotiable is people. Without good people, nothing else matters. But if your product, service, or market is wrong, good people will figure it out and correct it. They will move the company past the proof of concept stage to attract investors (if desired). They can even cause lucky breaks.

In my other writings, I’ve argued for the second most important job of the CEO, building a culture where good people can excel, be inspired, and become fiercely loyal. But that is second to finding and attracting good people in the first place.

So, what’s the secret? How does one do this?

It depends on a few things: the size of the organization; cash flow; the position; and the amount and type of experience required, to name some.

These variables usually dictate the tactics of finding and attracting talent, but being guided by the right philosophy is just as important. Successful CEOs seem to know that they need to be always recruiting, not just when there is an “opening.” These CEOs are interested in finding the best talent and then figuring out how to use these people. They also tend to have a strong bench of potential replacements, allowing them to promote people up the organization. Replacements are sometimes existing employees and sometimes potential new hires. The enlightened CEO that builds bench strength is less likely to be caught off guard with an urgent need to fill a position when someone leaves the organization. Similarly, strong performers in such an organization are not held back and denied promotions for want of back-fill replacements.

When our clients realize this, they usually sign an agreement on the side (in addition to the agreement governing specific searches) that enables us to float interesting candidates by them despite no open position.

With that in mind, some of the more effective ways of recruiting talent are:

  • Networking – one’s own contacts as well as those of investors, customers, and employees.
  • Employee Referral Program – the reward should be substantial enough to be a real incentive.
  • Consultants (1099 Contractors) – get to test drive a potential hire, with little of the risk.
  • Interns and New College Graduates – get them while young and inexpensive and mold them.
  • PR – attracting potential employees is only one benefit of a higher industry profile.
  • Local Associations (e.g., Tech Associations) – many have career development as an interest.
  • Hire an Internal Recruiter – proceed with caution; not a sure-fire solution.
  • Engage a Search Firm – only at the right time and for the right position(s).

If you as a hiring authority have not engaged a search firm or recruiter in the past, it may seem a bit unnerving. You and your CFO, if you have one, probably get recruiter calls every week, if not every day. They seem ubiquitous. Some sound better than others, but they still mostly sound more alike than different. How do you tell them apart? Engaging a search firm is a significant financial investment, so how do you pick the right one and ensure a good return on that investment?

In next month’s article, I’ll discuss the single most important thing to look for when selecting a search firm.

About Jim Gibson

You can reach Jim at (203) 431-1536 or jim@gibson-consultants.com

 

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