3 Steps To Internally Recruiting Your Next CEO

Our executive recruiting firm regularly receives inquiries from the executive recruitment staff, including internal management recruiters, from many engineering, scientific, IT and technical oriented companies looking to replace their top executives including Chief Executive Officer (CEO). These executive recruiting assignments are usually caused by either the current executive: a) being promoted b) leaving for another, better opportunity or c) being fired due to not doing a satisfactory job. As a result, many companies often believe that recruiting an outsider is the best answer.

Unfortunately, this is not always the best solution for technical, scientific, IT or engineering driven companies. As a rule of thumb, it often takes a new executive, especially a CEO, 6-12 months just to get acclimated to the technology. Even if they come from a direct competitor, there is still a long learning curve.

Therefore, it is often best to focus your executive recruitment efforts on internal candidates. Microsoft’s recently completed five-month search to replace Steve Ballmer as CEO highlights this practice.

Microsoft will soon name Satya Nadella as their next CEO. The 46-year-old, Indian born, insider is a 22-year Microsoft veteran. Though their executive recruitment team, led by John W. Thompson, had considered many internal and external candidates including Ford’s Alan Mulally, they decided upon Mr. Nadella who is now in charge of Microsoft’s technology to run corporate computer servers and other back-end technology.  They are also considering having co-founder Bill Gates resign as chairman to mentor him in the areas where he is weak, including never having run a company.

This process exhibits three steps you can follow to internally recruit your next top-level executive including CEO.

First, have your executive recruiters recruit the best talent possible. Mr. Nadella owns masters degrees in both: a) computer science from the University of Wisconsin and b) business administration from the University of Chicago, two premier U.S. institutions. It often takes a lot more time and effort to secure the cream-of-the-crop, but in the long run, research shows that they will perform better and be a lot more profitable for your organization.

Second, groom and quickly advance star performers. Once at Microsoft, Mr. Nadella advanced every few years. He worked on a wide range of Microsoft products and projects including Windows, Office suite of PC applications, Microsoft’s Bing search engine, its SQL Server database and a cloud server called Azure, whose technology underpins Microsoft’s own online services and is also used to run computing operations for other companies. In the process he headed up a software division with about $20 billion in revenues. All these Microsoft career advancements provided him a wide depth and breath of experience, contacts, a thorough understanding of the Microsoft corporate culture and many chances to take risks and be judged by the results of those risks.

Finally, mentor your star performers. No one can possess all the skills and experiences you desire. Especially at an engineering, scientific, IT or technical firm, where technologies are rapidly changing. Therefore, it may be better to start with a solid base, like Mr. Nadella, and provide mentorship, like Bill Gates, to polish their weak areas. This can provide your executive recruitment process with a star performer ready to step in when your next executive opening arises.

Remember, it is common belief that executive recruiting outside your organization is the best answer. However, as Microsoft showed, following a long-term, three-step internal recruiting process can provide your company with a much better outcome. Start by having your internal management recruiters and outside executive recruiters recruit the best talent available. Then groom and quickly advance star performers with an ever-increasing array of assignments designed to: a) increase their exposure to your organization and b) allow them to take a lot of risks and be judged by those risks. Finally, provide them mentorship whenever possible. Make available a past, retired CEO to answer questions and train them on areas that they may be weak.

This “inside” solution to executive recruitment may provide your engineering, scientific, IT or technical oriented company a quicker and better long-term solution.

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