This is the question the members of CEO Roundtable have been asking in their peer group meetings.

This is the question that was the motivation for two All Member CEO Roundtable Seminars this summer. We learned that:

You can hire "A" level executives consistently if you follow a defined process with a proven record of success.

Ted Bililies, a partner in ghSmart, led the second seminar, laying out a detailed process for hiring top performing executives more often, reducing the very high cost of mistakes. The key is to use hard, measurable criteria and data in a methodical process. The process Ted recommends is called Topgrading. It was developed over many years at GE and other large companies. Ted now uses it to help many financial services and venture capital firms select the right executives.

The focus of this seminar was on the critical steps in the process, the interviews. Ted first offered his definition of four types of interviewers:

• The Sponge – those who spend a great amount of time with the candidate in different settings hoping some key characteristics will be revealed. Usually these people are not very good interviewers and they try to make up for it by spending more time doing the wrong thing. The ‘sponge’ has the lowest rate of success.
• The Art Critic – those who look at a candidate from all directions, like a painting, to get a sense of how they feel about the person. Feelings are paramount to these people. Art Critics have the second lowest rate of success.
• The Prosecutor – those who take a very aggressive, direct questioning approach, often putting the candidate on the defensive early and not being open to in-depth discussions. Prosecutors usually have less than 40% success rate.
• The Airline Captain – those who follow a pre-flight routine of thorough checks in a defined process of obtaining and validating information on the candidate and the requirements for the job. Airline Captains have an 80% success rate or better.

The Topgrading process has four key steps:

• Talent Review : identifying the ‘A’ members of your current team
• Scorecard: define in writing the mission for the role of every key job, the key accountabilities, and the competencies.
• Three Interviews:
  Sceening Interview
  Chronolgical, In-depth, Structured Interview of finalists (3-4 hours)
  Reference Interview
• Virtual Bench: knowing where good talent is, inside and outside.

The discussion on all of these issues was open and vigorous. The members left with real tools that they can start using immediately.

In both of the seminars the key lesson is that hiring is a process that can be developed, learned and implemented. Hiring key executives is hard, but it does not have to be a roll of the dice. We can make hiring decisions from an 'informed gut'.

CEOs know that one of their top responsibilities is to have the right people in the right jobs as their company changes. The right senior team is absolutely essential for small companies. Hiring the wrong executive can be very costly, even fatal, for a small company. But our chances of hiring the right person is less than 50% -- not even large companies do better than this. How can we increase our chances, our batting average?

We need to understand that hiring is a process with defined stages, techniques and tools. We need to adopt this mindset, follow the process and use the tools. We can plan in advance for senior team changes, develop our 'bench' and cultivate our networks. When we do have a crisis requiring us to fill an unanticipated opening we can implement a contingency plan that we’ve already developed.

Prof. Foulkes provided seven important decision points which we need to be aware of and consider as we hire senior executives:

• Recognize that you’re probably not very good at hiring top management - hiring in our own image or cloning is not usually successful
• You need to carefully define the requirements of the position that needs to be filled - and you need agreement from all members of your senior team on the essentials
• Decide if you have the internal resources (talent and time) to conduct a quality search or if you need to use an outside resource. If you need an outside resource you need a defined process and criteria for selection
• Define the process you will use to screen and select candidates and make sure everyone understands and is in agreement. Tip: the highest success rate is usually referrals from employees and others who know your business - including your peers in CEO Roundtable.
• Do a very good job of reference checking, usually beyond that provided by an outside resource. Often you should personally check critical references. "CEOs don’t lie to CEOs"
• After the hiring decision is made and the deal is negotiated to everyone’s satisfaction you need to have a clear, defined process for 'on-boarding' the new executive. Mistakes in first few weeks can be fatal for the new executive and for the company. It takes more than assigning an office and providing a computer!
• Leverage all information gained in the selection and hiring process to establish an ongoing management development plan, even for the most senior executives.

Most of us recognize that we have been too fast to hire and too slow fire. Perhaps one reason we are slow to fire is the dread of rolling the dice when we hire. As one member said, "I know the final decision will always be my gut feeling, but an informed gut is better than a uniformed gut."

The second in the CEO Seminar series on Hiring Right will be on August 18. Ted Bililies will focus on the candidate selection process and how we can improve our success rate in hiring senior executives. We will review the details of the process, the techniques and the tools.

A third seminar on Hiring Right is planned for December. The focus will be on the post hiring process – the on-boarding and the ongoing development.

About the CEO Roundtable seminars: these are added benefits for the members of CEO Roundtable. The greatest value for the members is the power of the peer groups in the monthly small group meetings.