Insights

How To Recruit Senior-Level Executives For Fast Growth

Tuesday 11 May 2021

Over the last few months, Guy and I have discussed the importance of hiring a strong management team in a new, fast-growing business.

Not only will they provide new skills that you don’t have, but they will also be able to do a lot of the tasks you can do but don’t necessarily enjoy doing. Essentially, having a good team around you means everyone is working in their own unique abilities: something that is crucial if you want to achieve high-velocity growth.

However, finding the right people in that senior management role isn’t always easy, and making a bad hire here could end up costing you a fortune. 

Bringing in an expert

 

To help provide you with some expert knowledge in the area of senior-level recruitment, I managed to have a conversation with a true expert in the field of headhunting and executive recruitment, John Wakeford, CEO of HW Global.

 

John has been in the executive recruitment industry for the last 25 years now and played a fundamental role in helping me set up the management team at Forest Holidays all those years ago.  

 

This blog is based on a fascinating conversation I had with him about the recruitment process and what entrepreneurs need to consider when looking for someone in that senior-level position.

 

You can also tune in to episode 13 of the EHE Capital podcast “Extraordinary Entrepreneurs Together” for the full conversation.

 

Look at long-term investments rather than short-term costs

 

John: “The most common theme I have seen with entrepreneurs is that they are fairly single-minded, driven, and have a very clear view of where they want to take their business.

 

However, often what they think they want in a new executive isn’t what they need. 

 

For example, sometimes they think they need an executive for today when, in reality, they need somebody who’s going to have the capacity to grow with the business. 

 

For any entrepreneur, it’s important to plan where the business is going and hire somebody who can fit with your future growth plans rather than just for today. Hiring someone because you need them quickly in the short term, instead of having that long-term vision in mind, can prove costly and often prepares you to fail.”

 

I can certainly relate to this. It’s quite common for entrepreneurs to try to find someone on the cheap rather than pay a good headhunting firm; but the cost of a bad hire may prove far more expensive in the long-run. 

 

Here is what John thought:

 

John: “I think trying to hire someone for senior management on the cheap, because of cash flow worries, is a bit short-sighted as you aren’t considering the value a good hire can add. For example, if you hire somebody with the right connections, they can raise funding and raise cash flow quickly. So yes, you might have to pay a little more for the salary, but you’ll probably get a lot more value back in the long-run.

 

I try to advise entrepreneurs to look at the value and give them a comparison, rather than just look at the headline costs, because you always get what you pay for.”

 

A non-exec role from the recruitment side

 

One of the key things that entrepreneurs have to do is to find the right people to help them, and that’s where having someone like John can really help. 

 

Someone with a huge profile of contacts and many years of experience in the industry can help you build up a team suited to you that is ready for fast growth. 

 

Someone like John performs almost a non-exec type of role on the recruitment side for the entrepreneur. The entrepreneur may have never done this kind of thing before and may make all the classic mistakes, so it’s key that there is an experienced voice helping them make the best decisions. 

 

The problem is, sometimes, business owners don’t see that. For them, it’s either doing it cheaply or doing it themselves, and often they choose the latter.

 

I asked John what he thought of entrepreneurs making senior-level hires themselves versus using a headhunter:

 

Focus on what you are great at, leave the rest

 

John: “Entrepreneurs tend to think they can do most things. I’ve got my own business, so I know the feeling! But just because I can do my accounts doesn’t mean I should – there are people out there who are better at it than me, so why not use them?

 

The main message here, for any entrepreneur, is to focus on what you’re great at and leave the rest to someone else. 

 

I spend 24 hours a day looking for great people, and I’ve done it for 25 years, so if it was easy, everybody would do it themselves.

 

Most people don’t realise that the best candidates aren’t actively looking for a new job. It’s very easy to find the best of the ones who are looking, but they might be the best of the bad, rather than the best of the best.

 

If you take a bit of time to go out there and find the best person, you will always get a better appointment than somebody who just happens to be available.”

 

I would agree with John here. This goes back to the message we have echoed in our previous blogs, that an entrepreneur can’t be a master of everything. For example, A good headhunter can also provide value in many different areas you might not be experienced in, like on the negotiations side of a hire:

 

Doing what’s best for the entrepreneur and the candidate

 

John: “A business looking for someone who isn’t actively looking for work only does so because they want that person to work for them. Whereas if I knock on the door, I want what’s best for the business AND what’s best for the candidate.

 

I can negotiate with both the candidate and the entrepreneur without any partiality to get the best deal for both parties. 

 

And that means negotiation not just on salaries, but on equities too. This can save the entrepreneur a lot of money because, sometimes, they want to give away 10–15% equity when only 1% would do!

 

It can be very easy for business owners to give away too much, so I’m there to advise them on how to get the best deal without overcommitting.” 

 

Finding the right balance

 

John: “The best deals don’t come from a position of greed. They come from a place of fairness.

 

Fundamentally, you want a new executive to be tied into the company in order to make decisions from the general perspective of the company rather than pure self-interest. 

 

However, if you start giving too much equity away, it becomes more problematic, so finding the right balance is key.”

 

It’s pretty clear that using someone like John to find a senior-level hire has a lot of benefits to the entrepreneur and can help them avoid making costly mistakes. 

 

Culture fit over sector experience 

 

However, according to John, they can also play an important role in finding people where no one else would think to look. Here’s how he described it:

 

John: “It’s quite common that people become a little bit obsessive about sector experience, rather than focusing on people’s skills and values.

 

For example, we have just hired a new COO for a national law firm who came from a retail/financial services background!

 

I think it’s far better to get somebody who’s a cultural fit, who fits with the management team, because there are many relatively transferable skills from industry to industry.”

 

John is spot on here. In my world, I always like to do what I call “the beer test” with any new hires I make. It’s a great way to test the waters and get a good feel for the candidate’s personality.

 

Just make sure that before you get to that stage, you’ve thought about how you will make your next hire, and if you can, use someone like John to help you.

 

For a more in-depth discussion on EHE Capital and recruiting senior-level management, check out episode 13 of our podcast “Extraordinary Entrepreneurs Together”. Alternatively, you can email us with your questions at gary@ehe.capital.

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