Leadership

Hiring Right for Culture Fit

August 14th, 2024 by Amy Suitter

by Bill Benson and Jeff McGraw

If you are looking to hire individuals who will thrive in your organization, they need to have an environment that complements their style and approach to work. The gravity of culture fit becomes increasingly important when hiring leaders and is paramount if that leader is in an executive role.

Organizations will sometimes hire a new leader to adapt a culture. We often see this post-acquisition or during instances of ownership transitions. Organizations that need to change their culture due to market conditions or competitive pressure will need to consider several risk factors when approaching the change.

Failing to Consider Culture in Hiring Has Consequences

Owners, boards and top executives often favor attributes that lean toward their aspirations or a desired future rather than understanding who will successfully lead the current organization. Companies can be enamored by a person’s credentials or specific industry experience rather than a more holistic understanding of the candidate. These risk factors include the following areas:

Underestimating the Resistance to Change: Not fully understanding how current values, leadership styles and practices will react to a new approach. This can impact the effectiveness and performance of the new executive.

Misalignment of Expectations: Ownership and the new executive have conflict because they are not aligned fully on pace, methods and outcomes of changing culture. This falls into the category of “be careful what you asked for.”

Neglecting Employee Input and Ignoring Existing Strengths: This will lead to trust and morale issues which may result in losing your best employees. Listening and building upon strengths in addition to addressing needed areas of change will be more effective.

Lack of Communication: Failing to communicate the reasons for change and the role everyone will play in the change process, including the new executive, can be a critical failure point. Over-communicating needs to be the practice.

Lack of Support: Let’s assume you fully understand the factors involved in hiring your change agent. Failing to give the new executive the backing, support and time needed will hinder their ability to be successful. (See: Misalignment of Expectations.)

Understand Your Current Culture

The following diagram offered up by Harvard Business Review, and Spencer Stuart, offers 8 different organization cultures.

Lee Hecht Harrison does an excellent job giving examples and describing how these eight culture factors impact leadership activities in this article.

Hiring Right for Culture Fit: A Good Recipe to Follow

Vision and Values: Alignment in this area will ensure decisions and strategies that reflect the company’s core principles and lead to a more cohesive direction.

Leadership Style and Influence: A leadership style that aligns with the culture will resonate with and more effectively influence, motivate and retain employees.

Change Management: An executive aligned with the culture will be better equipped to lead seamless change.

Decision-Making: Culture fit influences decision making processes. The right fit will lead to someone making decisions that fit the values and be more sustainable in the long run.

Collaboration and Team Dynamics: Aligned leaders will create more harmony and an environment that is more innovative and efficient.

Brand and Reputation: Misalignment often leads to turnover and can additionally impact customer and investor satisfaction.

Long-Term Success: The right culture fit will ensure long-term success through continuity and consistent leadership.

Incorporating the right hiring specification which includes intangible “fit factors” along with effective behavioral and conversational interviews, assessments and references, are critical in identifying and selecting the candidate who will be most successful.

Check out another blog article we have on culture fit here.

Can we help you find a candidate that’s a good culture fit? Contact us.

8 Reasons For Outsourcing Your Executive Search

July 18th, 2024 by Amy Suitter

by Bill Benson and Jeff McGraw

Where do you start when you need to conduct a search for an executive level position? Do you have the internal resources to handle a project of this scope and evaluate candidates at this level? Do you need the search to be confidential?

Many companies hesitate about the cost of a fee associated with using a recruiting firm. While conducting the search on your own may save the expense of the fee, you also increase the likelihood of not finding and hiring the best candidate, which could cost you more in the long run. Networking or posting the position will lead you to some candidates and a few might even fit the role, but a thorough process led by a professional will help ensure you are achieving the best result.

Hiring the absolute best candidate should be the goal. It is about finding a transformative leader who can drive growth, innovation, and sustained success within the framework of your culture. Outsourcing your executive search with a professional search firm offers distinct advantages.

Here are eight reasons to outsource your search when the need arises:

Professionally Organize the Search: A consulting search professional will help you build the right specification, search strategy and internal hiring process. In addition, the search professional will help navigate involvement of stakeholders, internal candidates and constituent communication.
Better Candidate Pool: Executive search firms have extensive networks, research capabilities and the knowledge to access the entire talent pool rather than the 10-15% who might be actively networking and answering postings. Top talent will need to be recruited and won’t be answering postings. A better and deeper pool of candidates will always generate a better outcome. Additionally, you may want to increase the diversity of the candidate pool which can be done in a targeted way via a search firm. Recruiters may also be able to target companies that you are uncomfortable doing based on some type of relationship you have in the market.
Vetting and Discerning: Professional search firms have proven skills and methods to evaluate and assess candidates, not just for skills, but also for cultural fit, leadership potential, and alignment with your organization’s strategic goals. This added layer of discernment will lead to a better outcome and significantly decrease the risk of making an expensive hiring mistake. An executive hiring mistake is often 5 times the salary of the executive. The right fit from both a skills and intangible perspective will return the investment many times over.
Assistance with Every Step: You may not have the resources available to put the time into conducting a thorough search. The search professional will help you develop an interview guide, provide access to personality and psychological assessments, conduct references, background checks and bring other methods and tools to help you make the best decision possible. Having an experienced search professional walk through each step of the process with you is an invaluable resource.
Confidentiality and Discretion: Maintaining confidentiality during sensitive executive searches is crucial. Executive search firms provide a discreet process that protects your company’s reputation and minimizes internal and external disruption. You may have a need to conduct a quiet search while an incumbent is still in the role and the right consultant has extensive experience with this type of project.
Time and Resource Efficiency: Outsourcing your executive search saves valuable time and drag on internal executive resources that could be spent on other key initiatives. This also helps ensure you keep the project on track.
Negotiation and Offer Management: Experienced search consultants facilitate negotiations and manage offer details to ensure a smooth transition and acceptance of the position by the chosen candidate.
Long-Term Value: Hiring the right executive can have a profound impact on your organization’s trajectory. Working with a consultant that spends the majority of their time viewing and vetting top talent gives you a strategic advantage. Executive search firms help you make strategic hires that are game changers and contribute to the long-term growth and stability of your company.

Using the right executive search firm will provide a strategic advantage that goes beyond simply filling a position. WilliamCharles has deep and broad experience working across a number of different industries and sectors. We take pride in having close-up knowledge of the talent within our local markets around Grand Rapids, Michigan and Pittsburgh, Pennsylvania. We also offer capability across the Midwest and globally through an established network of partner search and recruiting firms. Partner with WilliamCharles today and let us help you find the exceptional talent that will drive your business forward.

Evolution of the CFO in Middle-Market Enterprises

May 30th, 2024 by Amy Suitter

by Bill Benson and Jeff McGraw

We have experienced a clear shift in the role of CFOs with our family owned and middle market clients. The CFO has always played a key role as a member of the executive leadership team and as a financial business partner. Risk management, cost containment, internal controls and increasing the value of the organization are typical areas of focus.

The CFO role has often been involved in strategic decisions but more as a catalyst rather than an alter ego. Today, CFOs find themselves involved in leading change, innovation, and business development decisions. One factor driving this change is the need for data and dashboards across the organization. In addition, the CFO is often at the helm solving problems and leading change, which also requires the right data to navigate successfully. This expanded role often requires transparency, more communication and emotional intelligence – (not always qualities associated with a finance leader.)

Many small to medium-sized companies have been operating fine with a controller who is more of a traditional accountant and less business focused. However, not every accounting leader is able to adapt and transition to a more conceptual and strategic role. This gap between the traditional controller and strategic finance leader becomes obvious and apparent when an organization faces a downturn, a growth spurt, or another type of change.

Here is a deeper look at what has changed in the CFO role.

Broader Responsibility Domain: While financial oversight remains a cornerstone, they now serve as key contributors to strategic planning, actively identifying growth avenues, and leveraging data for strategic insights as well as risk assessment.

Shifting Business Landscape: Middle-market companies face a host of financial and strategic challenges influenced by rapid digitalization, global economic shifts, and changing customer behaviors. CFOs must adapt to these evolving demands, displaying not only financial acumen but also an ability to pivot and drive innovation.

CFOs as Growth Catalysts: Today’s CFOs bring more than “check and balance” – they are growth catalysts. They play a vital role in shaping and executing the company’s growth strategy, proactively seeking expansion opportunities, forging strategic alliances, and overseeing financial aspects of mergers, acquisitions, and investments.

Tech-Driven Finance and Data Insights: The intersection of technology and finance is reshaping how CFOs operate. They harness advanced data analytics, AI, and automation to gain data-driven insights into the business. This empowers them to make informed decisions, optimize costs and foster a culture of innovation. Tech proficiency is now a fundamental skill for finance leaders.

Striking the Balance Between Finance and Strategy: Balancing financial stewardship with strategic leadership is an art. CFOs must maintain fiscal discipline while actively contributing to the organization’s strategic goals. This involves seamlessly transitioning between intricate financial analysis and high-level strategic thinking.

Fostering Collaborative Relationships: Effective CFOs understand the importance of nurturing collaborative relationships across the organization. They work closely with sales, marketing, and operations, to align financial strategies with broader business objectives. This collaboration fosters a culture of unity and shared goals. Finance has become every department leader’s “wingman” or more aptly put…wing person.

What Intangibles Are Critical? If you are a CFO and looking to build the right kind of capabilities…here are a few areas to focus your growth:

Business Savvy – Able to translate functional finance, HR & IT concepts to actions that support reaching business goals.
Critical Thinking – Utilize critical thinking skills, breaking down problems into components and using data driven action plans to positively impact the business.
Change Management – Bring emotional intelligence into play to advocate for change in a way that is digestible with minimal disruption. Successful CFOs are no longer command and control oriented. They need to be part of casting the vision and leading through influence.
Agile – Able to navigate constant change to develop both short term and long-term solutions. Work in gray areas and adapt plans along the way.
Team Builder – Able to build strong teams and get them focused on the right things that will drive results. Exert influence sometimes without direct authority.

Conclusion: The role of the CFO in middle-market enterprises is undergoing a remarkable evolution. No longer confined to managing finance departments, CFOs are strategic leaders driving growth, innovation, and success. By embracing change, cultivating collaborative relationships, and staying abreast of industry trends, today’s CFOs are well-equipped to steer their organizations into an exciting and dynamic future.

Hiring for Private Equity

January 21st, 2021 by Amy Suitter

Hiring for Private Equity

9 critical factors for CEOs or CFOs

By Bill Benson

The difference between winning and losing often comes down to having the right players on the team. Private equity firms have significant skin in the game and are acutely aware of the need to hire the right executives for their portfolio companies. PEG firms will typically prefer a candidate who has been part of a private equity grow and sell transaction. Candidates who have this experience are increasingly hard to find. It will likely be necessary to consider candidates who have relatable experience and the right intangibles. Here are 9 essential candidate qualities to consider when vetting your C-level executive for private equity.

1. Motivation – You need a driven candidate with a large motor to tackle the challenge and lead organization to a finish line. Money can and should be a huge motivating factor. The person who has been through repetitive sales exits may not be as motivated as someone looking for their first big win. This is not a fit for someone seeking work life balance as a priority.

2. Team Leadership – This is not an individual sport. It is critical for a team to work together to accomplish the mountain of work associated with building a platform or growth company. The right candidate will be confident without being arrogant. They will listen, ask questions and be genuine during the interview.

3. Transparent – The CEO and CFO are critical links in a flow of information. Withholding information or hiding problems will undermine confidence with sponsors and investors within the PE environment.

4. Smart – Intelligence on its own is not a guarantee of success. You will however need someone who can verbally and mentally hang with whip smart investors and equity partners. The person will need to have critical thinking capability. IQ needs to be combined with common sense and EQ. Sorry if screening by intelligence offends the egalitarians out there. PE is not an “everyone gets a ribbon” environment.

5. Temperance and resilience – It takes a level of patience, self-confidence, and open-mindedness to be highly functioning within this dynamic, team-oriented environment. Making sound decisions quickly and under pressure requires the person who can stay present during chaos. The right candidate cannot be thin skinned, easily agitated or intellectually rigid. Having failed or experienced significant challenges should not be considered a sign of weakness. Things will never go exactly as planned so you want someone who has experienced adversity. It is key to understand how they reacted to challenges they have faced.

6. Systems and Data Thinker – In a growth company environment, the leader needs to envision the company in the next state and put the building blocks in place to get there quickly. This person is often replacing an entrepreneur who did not have this capability. Having a combination of experience in larger environments as well as growth companies, is a good under pinning. More important is a person’s ability to lead by more than the strength of their personality. The right candidate will use data to make decisions, create repeatable processes and integrate with the right systems to support both the short- and long-term goals.

7. Shirtsleeve – Senior leaders in middle market PE growth companies will spend a percent of their time being “hands-on”. This is a key consideration if you are considering a corporate executive for a PE leadership role. This person will need to be ready to “zoom in” and “zoom out” to gain that hands-on understanding of progress to goal across the organization. Being able to both execute and create strategy is not part of every leader’s DNA. Many prefer to sit at a more strategic level. It is critical for someone moving from corporate to private equity to be prepared for a less cushy and resource laden environment. Being prepared to regularly communicate a “hands-on”, detailed understanding of the organization to investors will be required.

8. Bias for Action – Choose urgency over process or empathy. The clock is often ticking toward a time frame to sell. This creates a heightened expectation around the speed of growth or cost cutting. This person will need to be collaborative and be transparent with decisions. They will need to listen and show concern for employees but also make decisions quickly and backed with data not feelings. Some highly empathetic leaders who might thrive in some environments, may not be able to make decisions as urgently as the PE owned business requires.

9. Decision Maker – We have discussed that PE firms value urgency and data. It is also important that the leader can make decisions without all the information and under challenging circumstances. Often these decisions are shrouded with urgency, ambiguity, complexity and/or volatility. This requires using a combination of intuition and facts along with a mind that is open and agile. A good rule of thumb is articulated by the US Marine Corps which they call the ‘‘The 70% Solution’. This is used for warfare and combat situations, but it also applies to business.

How to Hire Better Talent

November 23rd, 2020 by Amy Suitter

How To Hire Better Talent

Selecting the Right Candidate

Successfully finding and hiring the best people is largely based on selecting the right candidate during a hiring process. We often see postings with a laundry list of requirements relating to very specific experiences, industries or even technical requirements such as software skills. These items are typically taken right off the job description. This leads to the assumption that someone who checks all the boxes or has performed a similar role will be the best person to hire. Why is this likely the wrong approach? Let’s consider these six options.

1. What are the odds that the perfect “experience” candidate is also the best potential performer? Even if the candidate that checks all the boxes is out there, it would be like arranging the moon and the stars for that person to also be the best performer or talent available. It is very often not the case.

2. Often the job description does not address what you are looking for the person to accomplish. Make a list of desired outcomes for the prospective hire. This provides a better screening guideline.

3. What factors do you consider when you promote someone from within? Do you look at years of experience and check lists of requirements or do you consider their performance? Why not look at the same factors for external candidates?

4. You want to expand the field of candidates, not limit it. The best candidates typically evolve out of a larger pool, rather than a limited one. Despite the pandemic, we are still in a talent short market, and painting yourself into a corner with a long list of requirements will not help you hire the best person.

5. Don’t “fall in love” with a particular attribute or experience. E.g. Worked for a specific competitor or company, degree from a certain school, or other singular “WOW” factor. These biases or perceptions often have little to do with actual performance.

6. Finally, don’t disqualify a great candidate because of a particular factor. Just because you had a bad experience hiring someone from a certain company or with a certain background, it doesn’t mean that it applies to all candidates with that attribute. We all have a tendency to project our past issues forward, but it is important to stay objective and be open-minded, so we aren’t screening out someone that may be a great fit.

How to Hire Better Talent

Do you have a strategic HR function?

August 4th, 2020 by Amy Suitter

Do you have a strategic HR function?

Where is HR in your company? We often hear the euphemism “seat at the table” as a descriptive term to determine whether a human resource function truly participates in steering company strategy. Does your HR function have a “seat at the table”? The human resources function plays a key role in the operating of a company. These traditional roles include; managing policies and discipline, employee administration, benefits and payroll. They resolve people issues and support managers in hiring, training and managing labor practices. They are often the fixer of other people’s problems. They are often the advocate or voice for employees. Everyone will agree these are critical functions to do well. Many companies operate just fine with a tactical but not strategic human resources function. Many of these companies get exactly what they want and expect from HR. In order to get to the next level it is likely that a more evolved HR function will be necessary. The need might be driven by increased competition and rising performance expectations or a need for more consistency throughout an organization. Organizational development facilitated by a professional is invaluable from the standpoint of succession planning and talent optimization. Organizational effectiveness and culture leadership can make the difference in sustaining the culture of an organization through these large changes. You may need executive compensation advice, improved HR technology or a more sophisticated performance management system. In reality, you probably need it all. We will further explore by asking questions to understand your current state and then offer five characteristics of a strategic HR function

Start by asking these questions

1. Where does HR report? It is often the case HR reports to either Operations (largest number of employees) or Finance (budget or compliance reasons). Often in these situations HR is not at the decision table. You may have good reasons for your structure but HR should ideally report to the top of the house for it to carry the right strategic weight.

2. Is your HR leader trusted and respected by the senior leadership team? This person needs to have iron clad relationships with the other senior executives.

3. Is HR primarily a compliance function? Are they obstructing needed change and growth? HR needs to proactively lead talent strategies to help the company move forward.

4. Can your HR Leader perform GAP analysis? Are they using KPI’s to measure success? Are they a business person as well as an HR person? Do the goals within human resources support the overall goals of the organization?

5. Do you view your HR function as modern? Do they look around the corner and at future trends? Do they embrace technology? What is the “employee brand” of your organization? What is their role in advancing the culture of the company?

5 Strategic HR Roles

1. Human Capital Expert – Maximizing the contribution of everyone within the organization. Talent acquisition and management strategies, training and leadership development, succession planning.

2. HR Strategist – Adapts both workforce and leadership structure to align with the future. Organizational development and effectiveness, measure results, survey, correct course as necessary.

3. Culture Keeper – How is the culture communicated? Are we “Walking the Talk?” Is the culture reflective of where the company wants to go? Does it represent what is “right” vs. what is expedient?

4. Change Manager – change occurs via people. Is the HR Leader the change leader (or one of them) within the organization?

5. Advisor/Consultant to CEO – Ensure HR goals and strategies are aligned with organizational goals and strategies. Key consultant and confidante within the senior leadership team.

Information from this article was a collaboration between WilliamCharles and Steve Crandall. Steve Crandall is an Executive HR professional, leadership coach and Master Trainer (L.E.T) Learn more about Steve at https://www.crandallpartners.com/principals-bio.

How to Approach Succession Planning

February 22nd, 2018 by Amy Suitter

Succession Planning

FUTURE GROWTH AND CONTINUITY

Many companies consider succession planning a key strategy for future growth and continuity. What considerations are necessary to this process? Many organizations consider succession planning to merely be an activity identifying replacements for incumbent positions. I find this to be self-limiting, and indeed, increasingly ineffective because of the fast rate of change, turnover and organizational fluidity. Instead, many organizations have developed a broader process by which a bench can be built without specifically targeting future positions. Job rotation immersions, talent utility pools, cross functional training and other activities can build the skills of future leaders without committing them to a specific function. This gives the organization flexibility for the future while giving high potential staff recognition and a challenge to develop a broader skill set.

Are you saying that there shouldn’t be specific target replacements for positions? Of course, this often makes sense. Say for instance that the Finance area has a CFO who is about to retire and the Controller, just below this position, is performing well and has the capacity to succeed the incumbent. This would seem natural and a given career opportunity for the Controller. However, in many other cases, especially regarding top management positions, it is generally unwise to predict how the future will unfold and lock in a specific transition. Unless the change is imminent, things can change very quickly and alternatives are important. Even in this example, while the Controller might be a logical successor, if might also make sense to ask, given this vacancy – is this the model we need going forward and can the Controller rise to that- if it is significantly different. Succession planning is about developing options for filling positions and development of staff which gives multiple opportunities – not locking in a particular map.

Some might be concerned that if we develop a good bench, but don’t have positions available, we may lose our good work and talent to someone else. That’s always a possibility, but not a good reason not to invest in development and career opportunities for staff. Without it, your high potential people will leave anyway because they don’t see a future or commitment to their growth. They are always marketable. So, the burden is on the organization to see to it that positions are developed, or indeed invented, to challenge their best talent.

Do these same principles apply to private or family held organizations? Yes and no. To the overall staff, the principles apply the same. For the owner(s) and next generation succession, roles of family in the organization are very different. Research shows that only around 30% of all family owned businesses survive into the second generation, only 12% will survive into the third, and only 3% make it to the 4th generation and beyond, according to JSA Advising, a family business consulting firm. While there are many reasons for this, in my experience the most prevalent are:

• Failure to accurately assess the skills, potential and interest of next generation family members.

• Failure to develop and deploy a transition plan from current generation to the next: roles, responsibilities, governance, etc.

• The mistaken assumption that the criterion for succession is being a family member. A good, but often painful exercise is to ask, “If the next generation were not related to the family, would I hire these people?”

• Failure to candidly deal with wealth and control succession, along with management succession.

Sounds like a pretty precarious environment! It can be, but doesn’t need to be. In my practice, the companies that have most successfully moved control to the next generation have done so because there was deliberate hard work and thinking on the front end, new management was qualified, committed and well trained, departing management/owners were actively willing to release the reins, and the organization was healthy enough to handle these changes.