When your startup or small company hits a growth stage, it can be tempting to hire executives with the most dazzling resumes to lead the charge. But beware: Candidates with experience at large corporations who apply for small or startup businesses can be a poor fit.
“I can’t tell you how many times I have talked to an entrepreneur who, when they were on the verge of making their first senior executive hire, would reference their candidate’s prior big-name employer or the big-name school they graduated from,” says Jim Schleckser, CEO of the Inc. CEO Project. “As soon as I hear something like, ‘They worked for IBM’…alarm bells start going off in my head because those are the wrong things to be looking at—at least as far as job qualifications go.”
There are several theories on why “seasoned” executives aren’t always the best fit for startups. Schleckser attributes it to big-time executives having lost their “working manager” skills.
“What works well in a big company often just doesn’t translate into a growth company—where quick decisions and taking action is far more valuable than scheduling meetings and delegating tasks, which is how you are taught inside a big company,” he writes.
Another theory research suggests is a fascinating psychological curveball: The more power a leader holds, the less self-aware they are. In fact, one study found that, relative to lower-level leaders, higher-level leaders more significantly overvalued their skills. The pattern exists for 19 out of the 20 competencies the researchers measured, including emotional self-awareness, accurate self-assessment, empathy, trustworthiness, and leadership performance (all necessary for growth-stage leadership). According to Tasha Eurich, Ph.D., who studied the phenomenon herself, warns that “experience” isn’t what it appears to be.
“Studies have shown that people do not always learn from experience, that expertise does not help people root out false information, and that seeing ourselves as highly experienced can keep us from doing our homework, seeking disconfirming evidence, and questioning our assumptions,” she writes.
So how can you spot the right leadership material without getting distracted?
- Schleckser recommends these tactics during the interview process: Ask questions about leading teams rather than entire companies, ask about specific projects they are proud to have been involved with and listen for indications of a team player (using “we” instead of “I”), and then ask them how they would fix a problem (whether real or hypothetical) and listen for actual solutions.
- Understand that the type of leadership you need depends on what growth stage your company is in. As Ali Rowghani, CEO of Y Combinator Continuity, explains, “A Phase 1 startup CEO is the Doer-in-Chief…delegation should not be a word in your vocabulary,” he says, adding, “as a Phase 2 CEO, you need to transition from Doer-in-Chief to Company-Builder-in-Chief.”
- Make sure the executive understands what they’re getting into. If there’s no American Express Platinum Card that comes with the package, be sure to mention that. This classic Harvard Business Review article offers other things to mention, including the need to solve challenges on their own and make quick decisions.
The bottom line is not to consider hiring a leader simply because of where they’ve been. If they’ve done great things elsewhere, it’s entirely possible they may be great for your company, too. But it’s just as likely that they’ll prove to be too inflexible and, perhaps, incapable of succeeding in your environment. Ask the right questions and vet them carefully.