There’s no denying that there is something exciting and crusader like about founder run small businesses taking on the big companies and hopefully succeeding. We all love an underdog and it’s been so exciting and inspiring to see so many entrepreneurs achieve great success in recent years. However, the reality is to get to this level of success, which you should all be aspiring to, things may well have to change. There comes a point where the maverick start-up needs a bit of discipline. That doesn’t mean you have to lose your culture to bureaucracy, it just means you need to start putting the right processes and systems in place that are essential for a larger business to run effectively…and that requires an executive team. So where do you start? Well, in this situation, with a view to the future.
Review your strategy
Review your company’s strategy and the ambitious goals you’ve set yourself as you need to know where you’re going in order to know how to get there. If your goal is to achieve international growth, it makes sense to bring in execs who have a proven history of building and operating internationally. Conversely if you’re pursuing regulatory change within your sector it would pay to bring someone in with the connections and clout to achieve this.
In these two situations the right execs will have completely different skill sets and networks to exploit. Therefore it’s important to understand that great C-level appointments don’t share a generic set of skills. Instead the right skill set is unique to the challenges your company will face, so skills need to be matched to your strategy and you must take a long term view. You are effectively recruiting for a future scenario, so you want the person who will be able to get you to and lead their area of operations 3-5 years down the line when your company has grown way beyond where you are today.
Change your mindset
Executive recruitment therefore requires a different mindset to regular recruitment where you are typically appointing based on the needs of the business today within defined/generic roles. Executive appointments are long term, and may involve share options as the remuneration. You are entrusting the future of your business in their hands so it really pays to dedicate sufficient resources, in terms of both time and money. In an early stage company with limited resources, spending a couple of thousand on an executive search may seem like an unnecessary expense but if doing so brings the right person on board who brings in £500k or more extra revenue, secures investment 6 months earlier or makes operational savings of £100k in their first year, for example, well I’d say that was money well spent. Your mind has to switch to value not costs.
Appointing a board is a strategic move in itself
Finally, investors invest in teams – plain and simple. It can be the wrong idea and the right team, and investment may be raised, but it will never be the right idea and the wrong team that’s funded. So if external investment is on your horizon you must start thinking about your executive team in plenty of time to ensure you have people and a plan in place by the time you start pitching to, and meeting with, investors.
If you can show key appointments have been made based on a solid understanding of the skills and experience you were missing to execute your strategy, it will go a long a way to impressing the investor. Not only does it show you really understand your business and its future needs (and what investor doesn’t want that?) but you are also being mature enough to acknowledge your own limitations. It also shows you are committed to developing your business beyond being founder-run, to one of high growth potential which would then look attractive to an investor seeking a return.
An investor will not expect you to have a full executive team in place but a few key appointments should have been made and a clear plan as to the roles you still need to fill, the skills required and a feasible timescale for filling them.
So hopefully by now you will understand the crucial role an executive team plays in the strategic goals of your company and for securing investment. In the next part of the series we will take a look at how you go about finding and securing your executives.
FWB Park Brown is an executive search company which advises and supports its clients on how to identify and recruit Board level (Non -Executive and Executive (c-level)) and Senior Management talent. The company consists of executive search professionals, researchers and administrators who have considerable experience of executive search across a range of disciplines, functions and geographies. Within each office are specialists who operate in the global energy and infrastructure sectors.