Choosing a Leader: Developing Your CEO Search Criteria

Choosing the next CEO of your company is a decision which, naturally, requires careful planning and consideration. It is the person who will set the strategy and vision of the business, overseeing and orchestrating its execution.

Ideally, you would have a clear CEO succession plan in place by the time the incumbent CEO was ready to leave. On the whole, CEO tenures are shortening and turnover is increasing. In the UK, for example, the average tenure is one of the shortest in the world at 4.8 years.

Getting Started with your CEO Search Criteria

Identifying, assessing and ultimately hiring a CEO is not something that you are likely to do frequently in your career and the pressure to choose the best person for the job can be enormous.

Our biggest piece of advice would be to keep asking yourself the question, “Why are we hiring this person?”. What is it that you want them to do and what competencies and leadership behaviours must they have to achieve your company’s goals? Developing your CEO search criteria will help to clarify these thoughts.

Also, from the outset, know that compromise will almost certainly be necessary.

It is difficult to find the ‘perfect’ CEO candidate. Most company leaders and boards of directors will want someone who has both role and industry experience, e.g. a successful CEO of a company very similar to their own. This will likely be difficult to accomplish because that particular candidate will need persuading of the merits of making a lateral career move rather than seeking a position at a larger company or in a new industry.

However, it is still important to involve board members in developing your CEO search criteria. Their experience and sector knowledge will provide valuable insight into how the new CEO will fit into the long-term vision of the company. When in the role, the successful candidate will have to work closely with the board to execute their strategy.

What’s more, you will need to discuss and clearly establish the responsibilities of the CEO before beginning the search. This might seem rather obvious, but the role of a CEO can be remarkably hard to pin down and varies from company to company. It can also change over time as the organisation’s goals and priorities evolve.

Once the parameters of the role have been established, you can work backwards to discover exactly what skills and experience you are looking for.

Internal vs. External

Frequently, the decision about whether to promote an internal candidate or conduct an external search comes down to a question of continuity vs. change.

If your company is in need of a shake-up, an external candidate is probably your best option. They will bring a fresh perspective to any challenges, unburdened by the ‘that’s how we’ve always done things’ mindset. With no loyalties to employees, departments or projects, they are more likely to take a bold approach and introduce essential reform.

By choosing to look outside the company, your options greatly increase. This is a major benefit if you require a very specific set of skills or experience.

On the other hand, an internal hire brings with them a wealth of knowledge about both the company and the industry. They’ve not just read up on the company and asked a few questions; they’ve lived and breathed it. They’re already well-accustomed to the challenges the company faces and may present very practical solutions as part of their assessment. With an internal promotion, there are also fewer concerns about whether the applicant is a good fit for the company culture.

Generally, employees will look more favourably upon an internal candidate. It gives them greater hope for their own career progression and signals a commitment by the senior leadership to nurture and promote talent.

Further Considerations for Developing your CEO Search Criteria

  • If your company operates in multiple countries, any potential CEO should have experience working internationally. They need to be aware of how a company functions across borders and how differing laws, regulations and trade agreements can impact the business. 
  • Industry sector knowledge is a clear requirement for any potential CEO. They should be able to outline their vision for the company by highlighting where opportunities lie within the sector and where you can positively respond to competitor actions.
  • Try to remain as objective as possible throughout the entire process. The current CEO may have made their own recommendations or there may be a preferred internal candidate, but you still need to assess them in line with your company’s goals. There’s little point in developing your CEO search criteria only to then ignore it for the favoured candidate.

 


Next Steps?

Defining your CEO search criteria is the first step in a long line of activities to ultimately secure the next leader of your business.

If you decide to go externally in your search, where will you find them? Once they’re identified, how will you present the opportunity and make it enticing enough for them to want to be included in the process?

Then, once you’ve got a group of potential leaders lined up, how will you assess them?

Exploring the true competence of people is just one component of our global search capability – which identifies, engages and assesses remarkable individuals for a range of leadership, technical and commercial roles.

To help you with the assessment stage of your search, take a look at our leadership assessment formula below presented by 6 Group’s Managing Director, James Beazley.

 

< 

Industry news & insights

View all

Contact us online

 

The Warrant House
1 High Street
Altrincham
Cheshire
WA14 1PZ
​​​​​​​England

Telephone: +44(0)161 926 4320

Suite 6
1329 Hay Street
West Perth
WA 6005
Australia

Telephone: +61(0)8 9476 3600

Suite 216
791 Town & Country Blvd, Houston
Texas 77024
U.S.A

Telephone: +44(0)161 926 4320