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Nine Leadership Hiring Mistakes CEOs Make

hiring mistakes

There’s been a lot of talk about hiring issues, both from the company and candidate side. These hiring mistakes occur throughout the whole journey. We can talk all day long about the terrible candidate experiences and terrible company experiences. Candidates ghosting, arriving to calls/meetings late, lying on their resumes, etc. Companies ghosting candidates, taking 8 interviews over 12 weeks for a $50k a year job, trying to find that needle in a haystack candidate by tomorrow, you name it.

I’m not going to talk much about those horror stories, rather, looking at some of the hiring mistakes that I’ve seen occur regularly that can be prevented with a better plan and thinking through the position with more clarity and preparedness. Hiring mistakes will inevitably happen, but trying to minimize them is the key.

Hiring leaders becomes much more important as these hiring mistakes have ripple effects throughout the entire organization. Leadership hiring requires much more clarity in the role, the resources supporting the role, and how the role interfaces with other parts of the organization. Much more risk in these hires…but also much greater reward.

Here are 9 hiring mistakes I see being made by CEOs and companies regularly…in no particular order.

Hiring Mistake 1 – Hiring the player/coach

The decision to hire a leader is often met with budgetary constraints. Growing companies want a leader that can build the team AND do the contributor work. Think about software developers…they want CTOs that can code and lead. Rarely do they do both well. This is common in sales leadership positions and it’s one of the most impactful hiring mistakes. Simply put, you are overpaying for entry-level work, and under-investing in leadership work. For the player/coach, there’s always a consideration of time…do I spend time building the pipeline, or spend time coaching the team members? There’s no right answer, but this split-time work devalues each task when both are needed equally.

Solution: Stretch your dollar and resources and don’t hire a leader until 100% of their time can be dedicated to coaching their team. Prepare cash flow to support the leader until you can afford it. Build the machine from the bottom up so you can afford the leader.

Hiring Mistake 2 – Hiring the leader and getting out of the way

Often the decision to hire a leader is so the CEO can spend more time on other things. This makes sense, that’s what happens when you grow and need to optimize. But there’s certainly a line between autonomy and support. I’ve seen CEOs hire their teams and they become unavailable or have limited availability for one on ones and meetings. This doesn’t empower your leader, it cripples them.

Solution: Be engaged during onboarding and stay engaged afterward. Onboarding is all about support and direction, so be present to advise. A bad employee onboarding experience can lead to quick turnover, so be active throughout. Stay engaged with the leader as they will often need your time, counsel, advice, and leadership to be successful.

Hiring Mistake 3 – Not resourcing the leadership position properly

Hiring leaders isn’t about just budgeting for the position (salary, bonus, loaded costs). Leaders need resources to help get the jobs done. This includes things like technology, professional development, staff, consultants, training, memberships, etc. Companies in growth mode need to think about scale, and scale is different than growth. Scale is growing faster than the investment in resources and to do that, process and technology are needed. Often advice is needed to construct processes and build technology. The leader you hire doesn’t know everything, remember that. They too need support, guidance, and insight.

Solution: Cash flow forecasts are your friend, so looking at how much cash is needed to invest in hiring a leader and over what period of time will ease this burden. I tend to want to look at 12 months ahead of a leadership hire and about 2x-3x the leader’s salary (not including staff growth) over the first 12 months. This gets a leader in the door and enough room to learn the business and decide how to expand and optimize.

Hiring Mistake 4 – Misaligning title with responsibility

Similar to the player/coach role, but too often a VP or C suite title is given when the core work is leading front-line employee teams. If a VP isn’t leading other leaders, they just simply aren’t a VP. Title them correctly (manager or possibly director depending on if they have peers or not) and align the compensation to their core responsibilities. A VP or C suite shouldn’t be doing individual contributor work. They also shouldn’t be doing front-line leadership work either. It diminishes the importance of the role and creates a career path that’s limiting. Avoiding this hiring mistake is necessary when preserving cash flow.

Solution: Title the roles properly that align with the core responsibilities. If you are hiring a leader to lead front-line employees, they are a manager or director. Give them a growth path into director/VP as the team and responsibilities grow. Hierarchy is important to the extent of defining roles and responsibilities, not egos.  

Hiring Mistake 5 – Hiring the best-performing contributor to lead a team

Obviously, you want to promote people from within, and learning the right skills is important. But the pre-requisite for a leadership position isn’t goal attainment in their contributor role. The skills needed to be the best customer success manager aren’t the same ones needed to lead the team. Core competencies from leaders require the ability to coach the team, train the team, and support the team. Not be the doer who gets the job done. Yes, the leader needs to help educate their team and teach their team to do the job, but execution and outcomes are often interdependent.

Solution: Hire on competency, not on performance. This should be true in every position, but when making the leap from contributor to leader, there are far heavier weighted attributes and characteristics that are more important than past successes in contributor roles. Don’t overvalue this too much and focus the hiring decisions on competencies. Assessments can help with this, but also vetting skills like peer coaching and assisting, desire to help (servant leaders), effective communication, and coachability are great indicators of leadership success.

Hiring Mistake 6 – Hiring for experience

One of the common hiring mistakes is this overvalued attribute, often being a checklist item lacking anything actionable. Hiring for experience often comes with higher costs, lack of coachability/change-resistant, limited perspective (counter to diversity program often resulting in bias!), and even burnout. It’s often just a way to pre-screen candidates and eliminate people easily.

Years of experience – Will the candidate be better versed in certain skills or competencies if they have 10 years of experience vs 5 years of experience? How can a hiring manager differentiate between these situations when they don’t know the style and effectiveness of the company(ies) the candidate worked for previously? Is 10 years of experience working for a terrible company with ineffective training and unsuccessful results better than 5 years of experience for a great company with excellent onboarding/training/coaching programs with wildly successful results?

Industry experience – Similar to the above, but what skills or competencies are gained from a candidate inside the industry? If anything, it helps speed up onboarding. I can also see some very niche (emphasis on VERY NICHE) industries or buyers that may require industry experience. Outside of that, if you can’t teach employees about the industry, you need to rethink your training practices. Short rant – don’t even get me started on how useless SaaS experience is…SaaS is a business model and a technical development model, not an industry!

Solution: Focus on the skills and competencies needed and assess those. Dig into what are the key outcomes of a candidate working in an industry or experience that you want and how those will contribute toward the candidate’s effectiveness. Don’t use this as a requirement in hiring. Replace years of experience and industry experience with core skills and competencies, then assess for those during the hiring process.

Hiring Mistake 7 – Lack of clarity in outcomes

It’s easy to create a basic job description with responsibilities. It’s hard to evaluate whether those responsibilities are being carried out effectively. This is one reason why candidates fail in their roles. Even for sales leaders, you can assign a quota to the team, but that’s only one piece of the job they are doing. Marketing, revenue operations, and customer success leaders become a bit more convoluted in terms of outcomes.

Solution: When you create a job description, create KPIs along with it. Even if they are rough guidelines, at least have an idea of the end in mind. What determines success in the first 90 days? First year? Are these SMART (Specific, Measurable, Attainable, Relevant, Time-bound) goals? That’s a starting point. From there, align the responsibilities to these outcomes. What inputs help drive the outputs? Think through this ahead of hiring and you’ll hedge your bet with more successful outcomes.

Hiring Mistake 8 – Using gut and intuition

Interviews are about conversations and rapport building. They are also about trying to connect on somewhat personal levels. Good conversation, good stories, likeability, relative experiences, and the like, are all things you look for in an interview. But does likeability overpower job fit? When using gut decisions or intuition, you can quickly find yourself using confirmation bias throughout the interview. Your gut and intuition can easily be influenced by pre-existing opinions about a candidate.

Solution: Use a standard scorecard process that incorporates a wide degree of evaluation. Create this framework ahead of time and have everyone follow it. Outline what you want to hear from candidates, how you evaluate success, how you evaluate job fit, any assessments and outcomes you want, etc.

Hiring Mistake 9 – Not involving your team

You don’t need to go at it alone, even as the CEO. Hiring leaders is one of the riskiest things to do. Make a bad decision, and you risk your other team members leaving as a result. The amount of damage that can be done when hiring a bad-fit leader can often be exponential. Leaders often interact with other leaders and teams throughout a company. Naturally, there are plenty of people and teams that are at risk when there’s a bad fit hired into a leadership position. Hiring leaders from the CEOs perspective only will often negatively impact the other team members who work with that leader. As a result, you want to make sure you have their buy-in during this process.

Solution: Engage other leaders (cross-functional and other C suite) and team members in the interviewing process. It’s helpful to include one or two of the direct reports of this leader as well. You don’t want to isolate the team by going rogue and it’s important that their feedback and presence is involved in the process. Share the scorecard you put together from the previous step and work with everyone to help them understand what you want in this role, what you don’t want, things to pay attention to, etc. You will need to train these team members properly, but ensure you are receptive to their feedback as well. Doing this also helps avoid hiring biases that may be conscious or unconscious.

Wrap Up

Hiring mistakes happen, the key is to reduce as much as you can and hedge your bet. The best way to hedge against bad hires is to have a good plan outlining some of the tips above.

I love a good debate and am happy to talk shop and hear other perspectives. Reach out and let’s discuss!

Ed Porter | Fractional CRO