Part of why it is so difficult is that these C-level executives have mastered the art of sounding good with minimal set of accomplishments. Sometimes I listen to these presentations and it feels like a solid story and presentation, but there is nothing behind their rodeo when you sit back and dig deeper. A fucking mirage.
It's not the person who does excellent work that gets promoted or climb up the corporate ladder, but the person who knows how to sell their work, as sad as this is.
I worked for a large, late stage, Softbank backed company. They brought in some C-suite execs while I was there. A CTO paid several million annually with large, public company experience. They were totally clueless, and the engineering org was almost revolting within 6 months, trying to stage a coup to the CEO. No technical experience, no leadership, installing cronies, speaking in opaque platitudes.
I'm not angry about it, though they did oversee us being on the cusp of a promising IPO to a pretty bad outcome that cost me a lot of money, but I'll say that any illusion that you have to be competent to be a C-suite exec, and any imposter syndrome I ever had, went out the window after that. Ironically it increased my personal confidence, if these idiots can do it I certainly can.
I think the old saying "nobody gets fired for buying IBM" kinda applies to some execs maybe, like nobody gets fired for hiring some stellar resume exec with lots of experience, but they may get fired for taking a chance on an upstart.
This company has uniquely terrible CEO leadership who systematically have a track record of very poorly choosing senior leadership, recklessly changing the culture and doing zero to curate innovation, people development.
All of the talent left, mostly to direct competitors who will now be super charged to annihilate them.
This May one day become one of the saddest case studies, along with how Intel has shaped up, but the damage is going to show up everywhere for years to come.
Having burned very significant energy at this company, I am deeply sad to see the most garbage humans left in charge and also deeply glad to see the talented people effusion to great roles where they will mop the floor with this company.
The interesting thing about that company is how badly it failed at filling executive roles with promotions from within OR experienced hands.
Fundamentally, the CTO failed because in their previous success, they built it from the ground-up. They had zero experience trying to take over a large org, came in like a bull in a china shop, and worst of all, made a lot of very costly, morale-destroying mistakes.
But see also the Chief Product Officer who left in disgrace or the quasi-COO who also left in disgrace. They were both promoted from within well past their level of proven competence.
The common thread? The CEO who made all of those decisions. Executive hiring requires a CEO with the ability to reflect on their personal shortcomings and those of the team. And then, they need the ability to attract and evaluate candidates. And even if they do that successfully, they need the ability to meld a group of these execs into a highly functional team.
Our CEO only had the ability to hire people he saw as junior versions of himself.
I joke. I probably wouldn't have called us "large", but otherwise your story matches my experience word-for-word, which says something about the industry...
That's because you shouldn't hire them but you should grow them internally. Outside hires for executive positions are usually a great way to de-stabilize your company, early hires tend to be loyal to the founders and if you then hire some 'suit' to sit between them and you you risk them breaking off.
So the solution to this problem is to ensure that your early hires are all top notch with the potential to eventually build out to become your C-suite, and to treat them as generously as you can when it comes to equity.
And if you're really smart you stick to that mantra: hire quality over quantity, it will allow you to push back the typical organizational struggles until you've achieved an order of magnitude or more in revenues (assuming product market fit).
It’s insane how many don’t realize this when it’s so obvious. Seen so many big shot c-levels wander in from Amazon, Microsoft and the like, institute some changes to make a mark and hit promises they made coming on, then leave 8 months or under 2 years later with the thing they were in charge of in disarray only for another to roll in and do the same.
Company I work at was almost ran into the ground until we fired all the c-levels for hire and empowered the top levels of individual contributors instead.
> ensure that your early hires are all top notch with the potential to eventually build out to become your C-suite
Are we talking about developer early hires, or sales, or whom?
The skills and character required to be a succesfull developer are totally different than whats needed for C level. Thr training required to get there is a lot. Finding the right people and keeping them is hard enough.
But all means try to grow them internally and probide training, but as a 'solution' it is not realistic.
Takeovers and special circumstances aside, "promote, don't hire externally" should be way more common and the prefered approach (imo).
I think there's a three question protocol that should work reasonably well.
Q1: Do we actually need this CxO role?
Q2: Who will report to this CxO?
Q3: Why can't we promote from the pool from the answer to Q2 instead of hireing externally?
Spoke to the founder / CEO of a wildly successful now-public (former startup) company about his exec-level hires. He confided that 1/3 of executives were net positive (i.e. should retain), 1/3 were net neutral (i.e. should be fired) and 1/3 were net negative (i.e. separate ASAP!).
Gentleman also indicated that his peers on similar trajectories were even less successful at exec hiring. So there's a point of anecdata for you: "Good" at exec hiring might just be a 33% success rate. YMMV.
That seems unsurprising. It reminds me of that bit from one of Ben Horowitz's old articles [1]:
> Things go wrong, because building a multi-faceted human organization to compete and win in a dynamic, highly competitive market turns out to be really hard. If CEOs were graded on a curve, the mean on the test would be 22 out of a 100. This kind of mean can be psychologically challenging for a straight A student. It is particularly challenging, because nobody tells you that the mean is 22.
I think a lot of people fall for this kind of fallacy (no offense meant to your acquaintance).
1/ You really cannot grade absolute values on a curve. As others have pointed out, your A players are only in comparison to others in your team. Maybe they are actually C players, who knows? Maybe they are A players only in the environment you created etc, etc..
2/ And a more important point is that a lot of work is being done by people that are not A players. Whom I would call net positive is only in relationship to what I can measure. I know of many people in my team who were not exceptional at software, but got things done due to building relationship with other teams, ability to see things to completion etc. I think Amazon fell into the trap that only type A personalities get things done and I see it in other places too. It is easy to see the extremes, but a lot of times the glue that holds things together is almost invisible.
It is hard to gauge value and I personally am refusing to judge anyone (to the extent possible).
I would say this is true of almost any position. Ask any manager and they will probably say this is usually how it shakes out. 33 percent of hires are A players, 33 percent are B players, and 33 percent are C/D/F players.
It is grading on the curve. An A player at one company might be a B player at another. If someone is an excellent CxO they are probably a good candidate for a bigger and better company or the CEO job somewhere else and so will leave after some time unless given large incentive to stay or otherwise have reached their career ambitions.
It's like any employee, vitality curve and all. The top 10-20% are responsible for 90-80% of positive results and the bottom vice versa while everyone in betweek keeps the boat afloat.
As long as you can identify which are which quickly and action then 33% hit rate can stack your roster pretty quick. Hiring takes time though, in most cases.
I think there’s all kinds of problems that intersect to create the problems we see with these hires:
- founders, especially first time founders, often have middling experience hiring for any role, and zero experience hiring execs.
- the absolute best execs often have no shortage of offers, and hence it can be quite hard to identify and attract these people
- founders often don’t want to pay what the really good execs are worth. Not that I’m even “really good”, but there’s a number of startups where I’ve been recruited because things are a disaster, can’t figure out how to scale the business, etc etc, and then after speaking with everyone they turn around and offer half a percent of the company, and act like they’re being generous.
- founders want to hire someone who’s the right person for the long haul, because of all of the above pains - except that those people often are accustomed to two stages ahead of where the company is now and may not be prepared for what’s required right now
And then, sure, there are the people who have failed up enough, or gotten lucky enough to win the startup lottery, and then coasted from there.
But look at it this other way - 50% of engineers are in the bottom half in skill and talent. It’s just that you do your best to optimize for the upper half, and since you’re hiring lots of them, you trust in the numbers to pay off for you. When you are hiring one, and just one, head of sales - the margin of error is really thin.
Can we turn it around and ask what we actually want from a (good) C-level. Cos I suspect it's not what most of us imagine.
At some point what we want from C-level is putting in place (bespoke) systems that achieve the "strategic" goals -
Is the monthly churn growing? Are you not able to get high touch sales to take off? Is the European product not ready?
All of those are the sort of "strategic" things people tend to hire CxOs for - but any good analyst can get you 80% of the way to identifying the problems, and then you have to pick a solution. At that point you are hiring someone for a very specific job with a clear roadmap. Maybe you can hire internally ?
Edit: on the other hand this article (from the frontpage) is an excellent example of hiring for a job, even though the person doing it is not going to be building the ditches etc. Walt hired for experience and focus on the job he wanted done. And as that job was going to have to be a negotiation with all the other agents building the park, he needed a high level advocate for the job (minimalmmosquitoes) he wanted
From this I suggest that hiring a CxO is hiring a person to act as advocate for the outcome you are hiring them for - very similar to politics
This is sort of the discussion I wanted to hear from this thread. What separates a a product manager paired with a data analyst from say, a CEO or CPO (product)? Surely the PM and DS are better armed to make decisions with data and talking to users, etc.
Henrique De Castro's hiring and firing at Yahoo is one of my best examples of this. But $60 million for a year and change of work sure is a great way to fail!
There is a video of Steve Jobs promoting an accountant or such to C-level and she tells how she grew into the job.
Why is it necessary to hire external C-levels? What do they bring to the table? Why not promote leaders from within? If you stumble upon an exceptional person who could improve the company it's still possible to hire them.
Seen it all from start ups to public. It's not every C-Level but when one does join it doesn't take long for everyone to know know they've clearly failed their way to the top.
It's striking how one will be hired to a non-traditional C-level title for a department they have no experience in and run it into the ground. I've even witnessed department leads beg not to hire one from the start and be fully ignored. I guess the fact they've been at the top for so long makes them untouchable?
What's outstanding is how often it happens and how both hiring and keeping them around never makes a lick of business sense. Even once exposed as incompetent, founders will dig their heals in and find any excuse to not bear responsibility of their bad hiring decision. They eventually leave on good terms and continue the cycle elsewhere.
1. C-level execs are given massive compensation, with the justification that a good one is well worth the price.
AND
2. There's no good objective way to measure C-level performance.
That alone should make people deeply suspicious about these compensation packages. On top of that, the best person for a given CXO job often just so happens to be a golfing buddy and/or have outside business dealings with half the board.
I'm not surprised by ambitous execs grabbing what they can, it's what they do after all, but I am pretty disturbed by how many people outside of those elite cliques will carry water for them and pretend like the C-level hiring market is some sort of efficient meritocracy.
- If I recommend this guy and he's at least acceptable, my network grows
- If the guy I recommend is not that good, all three will make excuses: my mate who hired him (will blame chemistry/randomness or me), the dude himself (will blame chemistry/randomness or me), and me (will blame chemistry/randomness). Since we're all adults, you can't blame someone else for your lack of due diligence, so it's a shame their styles were so different and the market turned against their brilliant plan.
- Nobody ever gets blacklisted for bad recommendations
- Everyone is complacent about who they will recommend
- My network grows, and I don't need to grill everyone. So my network grows.
Of course what this also means is if you don't happen to be in one of these networks of mediocre people, you are totally out of luck because those networks are big enough that someone will be found, just not you.
Your compensation is determined by your power within an organization, not your contribution to it.
What blows my mind is the degree to which people believe that perfect competition exists everywhere and “the market” will fix all inefficiencies.
Edit: I want to make clear that I am not denigrating the value of markets, I’m only looking to point out the idealization that exists in many people’s minds, especially as I have encountered on this exact forum.
If a CEO or other C-level sets some targets, then you’d think they would be held accountable for missing them. But from what I’ve seen, this is very rare. So the board is just as responsible for what happens as the CEO.
I have seen cases where the board holds executives accountable, and that results in a better company lead by competent executives. But that kind of accountability is unusual in small companies because the board and executives are often one and the same group.
If there’s anything I’ve learned over my career it’s that the theoretical structure of a company has no inherent relationship to reality. If the CEO, chairman and board members are all mates then they will pat each other on the back until well after the iceberg has ripped a hole in the side of the ship.
> 2. There's no good objective way to measure C-level performance.
> On top of that, the best person for a given CXO job often just so happens to be a golfing buddy and/or have outside business dealings with half the board.
> C-level hiring market [isn't] some sort of efficient meritocracy
Those 3 things aren't contradictory, they each follow from the other. In absence of an objective way to measure performance, the best thing is "I have experience with this person, and can vouch that they're good." And so it totally makes sense that this sort of network-based hiring is what we see instead of a meritocracy.
It’s game theory and asymmetric information at its finest. Throw in a healthy dose of survivorship bias, a pinch of appeal to authority, and you get a perfect recipe for astronomical out of whack compensation packages.
I am convinced that we need to move companies from effective hierarchical dictatorships to more democratic institutions. A CxO should be like an elected politician - representing some manifesto that is a coherent (!) package of measures and gets appointed maybe by an election amount employees / shareholders.
As such they need to persuade a majority of people who will supply the (human / financial) capital that their manifesto is the best option. They essential earn their way into the office.
Edit: I am also semi convinced that the hierarchical thing is half the problem. Having a single person make "the hard decisions" is usually a way to have the wrong decision made about 50% of the time. Somehow humanity has found science as good means of improving those odds. But for the sort of decisions we make in business (very little hard science) then I suspect democratic consensus might be a much better way to get a good decision.
Maybe being a golfing buddy does qualify for being a good CXO. To be a "golfing buddy", you need money and connections. Connections are important for that job, and wealth correlates with success and good finances, again important. Some of them are just born in wealthy families, but this is a positive, not a negative: wealthy family often give their kids good education, have lots of connections, and are used to being leaders. Golfing buddies also need to make good conversation, including on business topics, otherwise they won't stay buddies for long, again a valuable skill.
Being a golfing buddy certainly isn't an objective criteria, but it is not completely worthless, and it is easier to detect fakers when you spend a lot of time with them, or at least, it requires more effort from the faker. Objective criteria typically include past work, and CXOs usually have that too.
It's also pretty hard to measure the performance of software engineers at the senior level. When hiring, I don't feel like it's wrong to encourage good software engineers to refer former colleagues they think are good.
I don't see why that would be wrong for C-level executive jobs either. It's really the same thing -- trusting the opinion of people you know and think are good is a better bet than drinking from a fire hose of job applicants of widely varying quality.
At any job where your purpose is "leadership" and "impact" it is difficult to quantify success. People have tried to measure with things like OKRs, but ultimately a lot of what successful senior people bring to the table is hard to measure.
One measure of a high-quality C-level performer is the quality of their teams. The best C-level people can bring in very high-quality managers and individual contributors underneath them. Below average C-level people really struggle on this front.
Also, for some C-level roles there are good and objective ways to measure performance. For example, for a Chief Revenue Officer you have (obviously) revenue. There are a ton of confounding variables of course but in general CROs who consistently out-perform plan are better than those who consistently under-perform plan.
1. The board is constantly dealing with the CEO, and CEOs are very good at taking credit for things regardless of their actual impact. So they create a subjective impression of being very important.
2. The CEO is only one person, so throwing (say) 1% of the company's profits at them seems like a great investment for all that stuff they're "doing".
If enough boards play this game, CEO pay is driven through the roof.
This is a tough topic, in the same way that it’s hard for non-technical founders to make their first technical hire. How do you hire a CFO if you don’t even know what a CFO does day to day? Your board will likely be of help, but it’s ultimately your decision and you will earn the lumps from a bad decision.
I’d argue that it’s very hard to hire C-level executives outside of your core competency. Not that it’s inherently hard to hire at the C-level, but because it’s very hard to hire for skills you don’t have, can’t understand and can’t select for.
I think part of the reason it is so hard with C-level executives is that they are not under the same scrutiny and control as a person as the rest of the employees. Everything else stems from this: the corruption, incompetence, abuse of other employees.
Serious red flags about C-level executives:
* Refuses to follow rules set by Security and Compliance.
* Pulls people from existing projects without talking to their managers or require work to be done without logging a ticket or whatever the process is
* Hires a lot of people that report only to the executive and are unaccountable to the rest of the organization; doesn't use any of the established hiring practices in the company.
* Ignores people they didn't hire and the deals they've made with their managers
* Mechanically imports practices and processes from another organization
* Uses arguments from authority to justify their decisions
* Behaves inappropriately in a workplace environment, including abuse and harassment
All of this is hard to define, but the point is the same standards apply to everyone. I know that as an organization grows bigger getting organizational work done becomes that much harder, but it is the executive's job to foster a good culture not bypass it or worse have habitual rule-breaking to hide more serious offenses, incompetence or abuse.
If I were a founder that needs to hire C-level execs I would also hire secretaries for them to ensure paper trails were left and processes were followed; I would want to make sure the secretaries record and ensure:
* who they are meeting and that there are MoM of the important meetings, the execs can work flexibly but they need to record their calendar. They also need to get help scheduling internal and external meetings they are required to attend
* all their requests are filed correctly
* help them with preparing reports
* file all documentation as per guidance by Security and Compliance
* immediately tell me if anything inappropriate is happening
All of these things are typically done for regular employees by their team-leads and managers. If C-level people feel like the bureaucracy is too much they need to reduce it for everyone, not just themselves. You don't need to give each C-level exec a personal secretary - a team of two (so they can also take vacations and sick leaves) is enough for the whole C-team.
Hey let’s not forget the founders who hire a buddy or two and give them C-level titles when they’re woefully unqualified for that role and proceed forever drag the company down.
I think it’s funny when half the employees at tiny startups have C-level titles.
At other companies I worked at before I got into tech, you’d just be a project manager or accountant. But in tech your the COO or CFO.
I’m not sure if it’s instagramifcation/peacocking and this is common in all industries now or if it’s tech culture where every start up is just the next unicorn-in-waiting.
I wonder about titling conventions at smaller Mittelstand companies or other places where they are content to just work and make money.
Isn't part of the problem actually that we're hiring at all for these kinds of positions? Why isn't it possible to invest in the people who already showed up and demonstrated motivation to get things done?
The cynical (but maybe also realistic?) part of me wants to say that we hire for these roles to satisfy the class of people who feel entitled to occupy them. That is, we have this big educational apparatus churning out MBAs and so we better have some place to put them.
I'm not convinced that the old stories of climbing up through the ranks somehow originated in a world that worked really any differently than the world we live in today. We've just built up a lot of momentum moving in the direction of bad business culture. But there's no real reason we can't begin moving back in the right direction right away!
Ive always wondered why executives get such generous compensation packages. Are most people unwilling to take these roles at "pretty damn good" incentives packages, so companies are forced to give "crazy lucrative" incentive packages? Are there really VPs that would pass up a CEO position if it didn't come with a 25 million golden parachute clause? If it was only 5 million, they walk?
have now encountered two C-level execs who came from big names, were airdropped into our startup, and then proceeded to completely mangle the parts of the company they ran. always takes at least a year for people to realize (i didn't realize it myself for the first one until AFTER he was fired seemingly out of the blue, and then you start to pattern match the subsequent ones. my personal reflection is this is a horrendous waste but is part of the benefit of being an early employee at a startup, that you get to see other pple's costly mistakes while having a lower stake in the cost. I didn't know to trust my instincts then, because org chart = truth when you are new to the game).
First-time founders, CEOs, and even employees should understand the playbook of the Incompetent Leader (IL).
The IL is savvy & charismatic, and excels at 4 things:
1) Feign competence
2) Create confusion
3) Buy time
4) Fail up
The IL playbook & what to do about it
The IL’s most favorite move is simple: Buy Time
The IL’s 2nd most favorite move is: Buy More Time.
After doing this a few times, the IL’s masterstroke is: Fail Up.
The IL will repeat this a few times over a 20-30 year career to reach “spectacular success”
Here’s how it works:
Once upon a time:
IL joins a new company, with much fanfare from the CEO, who really wants this to work out.
Remember, the IL is incapable of making a significant, singular impact.
IL doesn’t want anyone to know this.
So what does IL do?
IL sets the playbook in motion.
Step 1 -
IL:
“I don’t have the right people. Cannot execute without the right team.”
CEO:
“I guess that’s reasonable. Do what you have to.”
Result:
IL has just bought 6-9 months to go hire org leaders, managers, while hiding incompetence behind charisma & confidence.
[after 6-9 months]
Step 2 -
IL:
“Have a better team now. Look how well I’ve hired! But my org doesn’t have the right structure. Not aligned with new strategy, worried execution will suffer.”
CEO:
“Hmmm… fine, go ahead.”
Result:
IL has just bought 3 months to plan re-org, 3 more to let it settle
[after 6-9 months]
Step 3 -
IL:
“Okay, that reorg helped & my people are firing on all cylinders. But I don’t have enough cross-functional alignment. We need a company re-org/Need to bring those functions into my org/Need new cross-func leaders”
CEO (pot committed):
“Fine, let’s do X, Y, Z here”
[after 6 more months]
Step 4 -
IL:
“Some of my key people left because of frustration with all of this. I need to replenish the gaps. Btw, look at these amazing results last quarter!”
CEO to IL:
“OK let me think about it”
CEO (thinking):
Those results are due to market tailwinds & not THAT amazing
[Privately, CEO makes a call to an executive search firm to begin finding a replacement for IL]
[At the next CEO/IL 1:1]
CEO:
“It’s time to part ways”
IL (after expressing some incredulity & outrage):
“I understand. I want to do what's best for the company. Let’s work on a comms plan for my departure”
[IL or CEO send an announcement to the company reflecting, thanking, looking onward/upward, etc]
Step 5 -
(most vital move for IL)
IL (in interview with hot company Foobar):
“Here’s everything I built at previous company. Company grew 70% in my 2 yrs there despite all the challenges I faced”
CEO of Foobar:
“When can you start?”
[and THAT is how our IL fails up]
THE END
---
he continues with a "what you should do about it", which if you are still reading here at this point go give him a "superfollow" ($10/month for his product/executive thoughts, very worth it) https://twitter.com/shreyas/status/1339997399909994496
[+] [-] llaolleh|3 years ago|reply
It's not the person who does excellent work that gets promoted or climb up the corporate ladder, but the person who knows how to sell their work, as sad as this is.
[+] [-] throwfh80h82|3 years ago|reply
I'm not angry about it, though they did oversee us being on the cusp of a promising IPO to a pretty bad outcome that cost me a lot of money, but I'll say that any illusion that you have to be competent to be a C-suite exec, and any imposter syndrome I ever had, went out the window after that. Ironically it increased my personal confidence, if these idiots can do it I certainly can.
I think the old saying "nobody gets fired for buying IBM" kinda applies to some execs maybe, like nobody gets fired for hiring some stellar resume exec with lots of experience, but they may get fired for taking a chance on an upstart.
[+] [-] anonreeeeplor|3 years ago|reply
This company has uniquely terrible CEO leadership who systematically have a track record of very poorly choosing senior leadership, recklessly changing the culture and doing zero to curate innovation, people development.
All of the talent left, mostly to direct competitors who will now be super charged to annihilate them.
This May one day become one of the saddest case studies, along with how Intel has shaped up, but the damage is going to show up everywhere for years to come.
Having burned very significant energy at this company, I am deeply sad to see the most garbage humans left in charge and also deeply glad to see the talented people effusion to great roles where they will mop the floor with this company.
[+] [-] throwaway7653|3 years ago|reply
The interesting thing about that company is how badly it failed at filling executive roles with promotions from within OR experienced hands.
Fundamentally, the CTO failed because in their previous success, they built it from the ground-up. They had zero experience trying to take over a large org, came in like a bull in a china shop, and worst of all, made a lot of very costly, morale-destroying mistakes.
But see also the Chief Product Officer who left in disgrace or the quasi-COO who also left in disgrace. They were both promoted from within well past their level of proven competence.
The common thread? The CEO who made all of those decisions. Executive hiring requires a CEO with the ability to reflect on their personal shortcomings and those of the team. And then, they need the ability to attract and evaluate candidates. And even if they do that successfully, they need the ability to meld a group of these execs into a highly functional team.
Our CEO only had the ability to hire people he saw as junior versions of himself.
[+] [-] AceJohnny2|3 years ago|reply
I joke. I probably wouldn't have called us "large", but otherwise your story matches my experience word-for-word, which says something about the industry...
[+] [-] voz_|3 years ago|reply
[+] [-] lmm|3 years ago|reply
[+] [-] draw_down|3 years ago|reply
[deleted]
[+] [-] jacquesm|3 years ago|reply
So the solution to this problem is to ensure that your early hires are all top notch with the potential to eventually build out to become your C-suite, and to treat them as generously as you can when it comes to equity.
And if you're really smart you stick to that mantra: hire quality over quantity, it will allow you to push back the typical organizational struggles until you've achieved an order of magnitude or more in revenues (assuming product market fit).
[+] [-] whywhywhywhy|3 years ago|reply
Company I work at was almost ran into the ground until we fired all the c-levels for hire and empowered the top levels of individual contributors instead.
[+] [-] ClumsyPilot|3 years ago|reply
Are we talking about developer early hires, or sales, or whom?
The skills and character required to be a succesfull developer are totally different than whats needed for C level. Thr training required to get there is a lot. Finding the right people and keeping them is hard enough.
But all means try to grow them internally and probide training, but as a 'solution' it is not realistic.
[+] [-] kriro|3 years ago|reply
Q1: Do we actually need this CxO role?
Q2: Who will report to this CxO?
Q3: Why can't we promote from the pool from the answer to Q2 instead of hireing externally?
[+] [-] beambot|3 years ago|reply
Gentleman also indicated that his peers on similar trajectories were even less successful at exec hiring. So there's a point of anecdata for you: "Good" at exec hiring might just be a 33% success rate. YMMV.
[+] [-] q7xvh97o2pDhNrh|3 years ago|reply
> Things go wrong, because building a multi-faceted human organization to compete and win in a dynamic, highly competitive market turns out to be really hard. If CEOs were graded on a curve, the mean on the test would be 22 out of a 100. This kind of mean can be psychologically challenging for a straight A student. It is particularly challenging, because nobody tells you that the mean is 22.
[1]: https://techcrunch.com/2011/03/31/what%e2%80%99s-the-most-di...
[+] [-] vaidhy|3 years ago|reply
1/ You really cannot grade absolute values on a curve. As others have pointed out, your A players are only in comparison to others in your team. Maybe they are actually C players, who knows? Maybe they are A players only in the environment you created etc, etc..
2/ And a more important point is that a lot of work is being done by people that are not A players. Whom I would call net positive is only in relationship to what I can measure. I know of many people in my team who were not exceptional at software, but got things done due to building relationship with other teams, ability to see things to completion etc. I think Amazon fell into the trap that only type A personalities get things done and I see it in other places too. It is easy to see the extremes, but a lot of times the glue that holds things together is almost invisible.
It is hard to gauge value and I personally am refusing to judge anyone (to the extent possible).
[+] [-] etempleton|3 years ago|reply
It is grading on the curve. An A player at one company might be a B player at another. If someone is an excellent CxO they are probably a good candidate for a bigger and better company or the CEO job somewhere else and so will leave after some time unless given large incentive to stay or otherwise have reached their career ambitions.
[+] [-] badrabbit|3 years ago|reply
[+] [-] creaghpatr|3 years ago|reply
[+] [-] leaflets2|3 years ago|reply
[+] [-] sorry_outta_gas|3 years ago|reply
[+] [-] gnicholas|3 years ago|reply
[+] [-] mattzito|3 years ago|reply
- founders, especially first time founders, often have middling experience hiring for any role, and zero experience hiring execs.
- the absolute best execs often have no shortage of offers, and hence it can be quite hard to identify and attract these people
- founders often don’t want to pay what the really good execs are worth. Not that I’m even “really good”, but there’s a number of startups where I’ve been recruited because things are a disaster, can’t figure out how to scale the business, etc etc, and then after speaking with everyone they turn around and offer half a percent of the company, and act like they’re being generous.
- founders want to hire someone who’s the right person for the long haul, because of all of the above pains - except that those people often are accustomed to two stages ahead of where the company is now and may not be prepared for what’s required right now
And then, sure, there are the people who have failed up enough, or gotten lucky enough to win the startup lottery, and then coasted from there.
But look at it this other way - 50% of engineers are in the bottom half in skill and talent. It’s just that you do your best to optimize for the upper half, and since you’re hiring lots of them, you trust in the numbers to pay off for you. When you are hiring one, and just one, head of sales - the margin of error is really thin.
[+] [-] lifeisstillgood|3 years ago|reply
At some point what we want from C-level is putting in place (bespoke) systems that achieve the "strategic" goals -
Is the monthly churn growing? Are you not able to get high touch sales to take off? Is the European product not ready?
All of those are the sort of "strategic" things people tend to hire CxOs for - but any good analyst can get you 80% of the way to identifying the problems, and then you have to pick a solution. At that point you are hiring someone for a very specific job with a clear roadmap. Maybe you can hire internally ?
Edit: on the other hand this article (from the frontpage) is an excellent example of hiring for a job, even though the person doing it is not going to be building the ditches etc. Walt hired for experience and focus on the job he wanted done. And as that job was going to have to be a negotiation with all the other agents building the park, he needed a high level advocate for the job (minimalmmosquitoes) he wanted
From this I suggest that hiring a CxO is hiring a person to act as advocate for the outcome you are hiring them for - very similar to politics
https://mousetrack.co.uk/blog/mosquitoes-at-disney-why-do-yo...
[+] [-] cozos|3 years ago|reply
[+] [-] hn_throwaway_99|3 years ago|reply
https://www.businessinsider.com/yahoo-coo-henrique-de-castro...
[+] [-] sys_64738|3 years ago|reply
[+] [-] closedloop129|3 years ago|reply
Why is it necessary to hire external C-levels? What do they bring to the table? Why not promote leaders from within? If you stumble upon an exceptional person who could improve the company it's still possible to hire them.
[+] [-] 79rsgang|3 years ago|reply
It's striking how one will be hired to a non-traditional C-level title for a department they have no experience in and run it into the ground. I've even witnessed department leads beg not to hire one from the start and be fully ignored. I guess the fact they've been at the top for so long makes them untouchable?
What's outstanding is how often it happens and how both hiring and keeping them around never makes a lick of business sense. Even once exposed as incompetent, founders will dig their heals in and find any excuse to not bear responsibility of their bad hiring decision. They eventually leave on good terms and continue the cycle elsewhere.
[+] [-] rurp|3 years ago|reply
1. C-level execs are given massive compensation, with the justification that a good one is well worth the price.
AND
2. There's no good objective way to measure C-level performance.
That alone should make people deeply suspicious about these compensation packages. On top of that, the best person for a given CXO job often just so happens to be a golfing buddy and/or have outside business dealings with half the board.
I'm not surprised by ambitous execs grabbing what they can, it's what they do after all, but I am pretty disturbed by how many people outside of those elite cliques will carry water for them and pretend like the C-level hiring market is some sort of efficient meritocracy.
[+] [-] lordnacho|3 years ago|reply
- My friends will tell me who they know
- People are responsible for their own hiring
- If I recommend this guy and he's at least acceptable, my network grows
- If the guy I recommend is not that good, all three will make excuses: my mate who hired him (will blame chemistry/randomness or me), the dude himself (will blame chemistry/randomness or me), and me (will blame chemistry/randomness). Since we're all adults, you can't blame someone else for your lack of due diligence, so it's a shame their styles were so different and the market turned against their brilliant plan.
- Nobody ever gets blacklisted for bad recommendations
- Everyone is complacent about who they will recommend
- My network grows, and I don't need to grill everyone. So my network grows.
Of course what this also means is if you don't happen to be in one of these networks of mediocre people, you are totally out of luck because those networks are big enough that someone will be found, just not you.
[+] [-] wbsss4412|3 years ago|reply
What blows my mind is the degree to which people believe that perfect competition exists everywhere and “the market” will fix all inefficiencies.
Edit: I want to make clear that I am not denigrating the value of markets, I’m only looking to point out the idealization that exists in many people’s minds, especially as I have encountered on this exact forum.
[+] [-] doctor_eval|3 years ago|reply
I have seen cases where the board holds executives accountable, and that results in a better company lead by competent executives. But that kind of accountability is unusual in small companies because the board and executives are often one and the same group.
If there’s anything I’ve learned over my career it’s that the theoretical structure of a company has no inherent relationship to reality. If the CEO, chairman and board members are all mates then they will pat each other on the back until well after the iceberg has ripped a hole in the side of the ship.
[+] [-] LukeShu|3 years ago|reply
> On top of that, the best person for a given CXO job often just so happens to be a golfing buddy and/or have outside business dealings with half the board.
> C-level hiring market [isn't] some sort of efficient meritocracy
Those 3 things aren't contradictory, they each follow from the other. In absence of an objective way to measure performance, the best thing is "I have experience with this person, and can vouch that they're good." And so it totally makes sense that this sort of network-based hiring is what we see instead of a meritocracy.
[+] [-] koolba|3 years ago|reply
[+] [-] lifeisstillgood|3 years ago|reply
As such they need to persuade a majority of people who will supply the (human / financial) capital that their manifesto is the best option. They essential earn their way into the office.
Edit: I am also semi convinced that the hierarchical thing is half the problem. Having a single person make "the hard decisions" is usually a way to have the wrong decision made about 50% of the time. Somehow humanity has found science as good means of improving those odds. But for the sort of decisions we make in business (very little hard science) then I suspect democratic consensus might be a much better way to get a good decision.
(no this is not about decision by committee.)
[+] [-] GuB-42|3 years ago|reply
Maybe being a golfing buddy does qualify for being a good CXO. To be a "golfing buddy", you need money and connections. Connections are important for that job, and wealth correlates with success and good finances, again important. Some of them are just born in wealthy families, but this is a positive, not a negative: wealthy family often give their kids good education, have lots of connections, and are used to being leaders. Golfing buddies also need to make good conversation, including on business topics, otherwise they won't stay buddies for long, again a valuable skill.
Being a golfing buddy certainly isn't an objective criteria, but it is not completely worthless, and it is easier to detect fakers when you spend a lot of time with them, or at least, it requires more effort from the faker. Objective criteria typically include past work, and CXOs usually have that too.
[+] [-] twblalock|3 years ago|reply
I don't see why that would be wrong for C-level executive jobs either. It's really the same thing -- trusting the opinion of people you know and think are good is a better bet than drinking from a fire hose of job applicants of widely varying quality.
At any job where your purpose is "leadership" and "impact" it is difficult to quantify success. People have tried to measure with things like OKRs, but ultimately a lot of what successful senior people bring to the table is hard to measure.
[+] [-] jonbischke|3 years ago|reply
Also, for some C-level roles there are good and objective ways to measure performance. For example, for a Chief Revenue Officer you have (obviously) revenue. There are a ton of confounding variables of course but in general CROs who consistently out-perform plan are better than those who consistently under-perform plan.
[+] [-] unknown|3 years ago|reply
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[+] [-] civilized|3 years ago|reply
1. The board is constantly dealing with the CEO, and CEOs are very good at taking credit for things regardless of their actual impact. So they create a subjective impression of being very important.
2. The CEO is only one person, so throwing (say) 1% of the company's profits at them seems like a great investment for all that stuff they're "doing".
If enough boards play this game, CEO pay is driven through the roof.
[+] [-] refurb|3 years ago|reply
If you look at Pfizer’s CEO who had a total comp of $24.3M of which his salary was $1.6M.
[+] [-] unknown|3 years ago|reply
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[+] [-] hluska|3 years ago|reply
I’d argue that it’s very hard to hire C-level executives outside of your core competency. Not that it’s inherently hard to hire at the C-level, but because it’s very hard to hire for skills you don’t have, can’t understand and can’t select for.
[+] [-] dimitar|3 years ago|reply
Serious red flags about C-level executives:
* Refuses to follow rules set by Security and Compliance.
* Pulls people from existing projects without talking to their managers or require work to be done without logging a ticket or whatever the process is
* Hires a lot of people that report only to the executive and are unaccountable to the rest of the organization; doesn't use any of the established hiring practices in the company.
* Ignores people they didn't hire and the deals they've made with their managers
* Mechanically imports practices and processes from another organization
* Uses arguments from authority to justify their decisions
* Behaves inappropriately in a workplace environment, including abuse and harassment
All of this is hard to define, but the point is the same standards apply to everyone. I know that as an organization grows bigger getting organizational work done becomes that much harder, but it is the executive's job to foster a good culture not bypass it or worse have habitual rule-breaking to hide more serious offenses, incompetence or abuse.
If I were a founder that needs to hire C-level execs I would also hire secretaries for them to ensure paper trails were left and processes were followed; I would want to make sure the secretaries record and ensure:
* who they are meeting and that there are MoM of the important meetings, the execs can work flexibly but they need to record their calendar. They also need to get help scheduling internal and external meetings they are required to attend
* all their requests are filed correctly
* help them with preparing reports
* file all documentation as per guidance by Security and Compliance
* immediately tell me if anything inappropriate is happening
All of these things are typically done for regular employees by their team-leads and managers. If C-level people feel like the bureaucracy is too much they need to reduce it for everyone, not just themselves. You don't need to give each C-level exec a personal secretary - a team of two (so they can also take vacations and sick leaves) is enough for the whole C-team.
[+] [-] datalopers|3 years ago|reply
[+] [-] pneumatic1|3 years ago|reply
At other companies I worked at before I got into tech, you’d just be a project manager or accountant. But in tech your the COO or CFO.
I’m not sure if it’s instagramifcation/peacocking and this is common in all industries now or if it’s tech culture where every start up is just the next unicorn-in-waiting.
I wonder about titling conventions at smaller Mittelstand companies or other places where they are content to just work and make money.
[+] [-] davesque|3 years ago|reply
The cynical (but maybe also realistic?) part of me wants to say that we hire for these roles to satisfy the class of people who feel entitled to occupy them. That is, we have this big educational apparatus churning out MBAs and so we better have some place to put them.
I'm not convinced that the old stories of climbing up through the ranks somehow originated in a world that worked really any differently than the world we live in today. We've just built up a lot of momentum moving in the direction of bad business culture. But there's no real reason we can't begin moving back in the right direction right away!
[+] [-] namecheapTA|3 years ago|reply
[+] [-] doctor_eval|3 years ago|reply
[+] [-] swyx|3 years ago|reply
Shreyas Doshi calls this the Incompetent Leader (https://twitter.com/shreyas/status/1339997380335128576), which i will quote below for the twitter allergic (it is a better framing than I can ever come up with):
---
First-time founders, CEOs, and even employees should understand the playbook of the Incompetent Leader (IL).
The IL is savvy & charismatic, and excels at 4 things: 1) Feign competence 2) Create confusion 3) Buy time 4) Fail up
The IL playbook & what to do about it
The IL’s most favorite move is simple: Buy Time
The IL’s 2nd most favorite move is: Buy More Time.
After doing this a few times, the IL’s masterstroke is: Fail Up.
The IL will repeat this a few times over a 20-30 year career to reach “spectacular success”
Here’s how it works:
Once upon a time:
IL joins a new company, with much fanfare from the CEO, who really wants this to work out.
Remember, the IL is incapable of making a significant, singular impact.
IL doesn’t want anyone to know this.
So what does IL do?
IL sets the playbook in motion.
Step 1 -
IL: “I don’t have the right people. Cannot execute without the right team.”
CEO: “I guess that’s reasonable. Do what you have to.”
Result: IL has just bought 6-9 months to go hire org leaders, managers, while hiding incompetence behind charisma & confidence.
[after 6-9 months]
Step 2 -
IL: “Have a better team now. Look how well I’ve hired! But my org doesn’t have the right structure. Not aligned with new strategy, worried execution will suffer.”
CEO: “Hmmm… fine, go ahead.”
Result: IL has just bought 3 months to plan re-org, 3 more to let it settle
[after 6-9 months]
Step 3 -
IL: “Okay, that reorg helped & my people are firing on all cylinders. But I don’t have enough cross-functional alignment. We need a company re-org/Need to bring those functions into my org/Need new cross-func leaders”
CEO (pot committed): “Fine, let’s do X, Y, Z here”
[after 6 more months]
Step 4 -
IL: “Some of my key people left because of frustration with all of this. I need to replenish the gaps. Btw, look at these amazing results last quarter!”
CEO to IL: “OK let me think about it”
CEO (thinking): Those results are due to market tailwinds & not THAT amazing
[Privately, CEO makes a call to an executive search firm to begin finding a replacement for IL]
[At the next CEO/IL 1:1]
CEO: “It’s time to part ways”
IL (after expressing some incredulity & outrage): “I understand. I want to do what's best for the company. Let’s work on a comms plan for my departure”
[IL or CEO send an announcement to the company reflecting, thanking, looking onward/upward, etc]
Step 5 - (most vital move for IL)
IL (in interview with hot company Foobar): “Here’s everything I built at previous company. Company grew 70% in my 2 yrs there despite all the challenges I faced”
CEO of Foobar: “When can you start?”
[and THAT is how our IL fails up]
THE END
---
he continues with a "what you should do about it", which if you are still reading here at this point go give him a "superfollow" ($10/month for his product/executive thoughts, very worth it) https://twitter.com/shreyas/status/1339997399909994496