Updated: Nov 1, 2021
From Quora.com, comes this question that I answered this morning on if a company is struggling, should a CEO replace themselves? https://www.quora.com/My-small-company-is-struggling-should-I-and-or-how-should-I-replace-myself-as-CEO-Outside-or-inside-hire-Where-should-I-go-to-find-low-cost-talent
My reply: Your situation is a classic situation for small businesses described in Michael Gerber’s E-Myth Revisited and Gino Wickman’s Traction and his Entrepreneurial Operating System (EOS). In summary, “What got you here, will not get you there.” The difference in approaches between Gerber and Wickman is that Gerber seeks to train the accidental entrepreneur how to become a great manager and leader, while Wickman assumes that the start-up entrepreneur is frequently a ‘visionary’ who would be better off to find his ying-and-yang partner, “the integrator.” As a serial entrepreneur, executive coach, an EOS Implementer myself, I can tell you that both Gerber’s and Wickman’s approaches have value.
For answers to your question…. start with why? For the startup or small business CEO who is struggling…. determine to what degree your struggle is your own business model, leadership, team, product, service, competition, or even end-of-life cycle issue. Getting your company unstuck might require more than just finding a new CEO; there might be a paradigm shift that needs to occur in your business strategy, plan, and ability to execute. If you do not have an executive coach, get one: an effective executive coach can help you see more clearly the issues you are dealing with, and many times course correction can be identified without having to replace you as the CEO. Many times, start-up CEOs and small business CEOs by personality and skillset are better visionaries then they are integrators of their own plans. I suggest you read or listen to “Rocket Fuel” by Gino Wickman and Mark Winters (a former Vistage Chair) to get a thoughtful review of how the visionaries and integrators can work together to form a great company, without the visionary needing to step aside as the leader of their company.
If you decide that you truly need another CEO, then if you have talent from within that is ‘gets it, wants it, and has the capability to do it’ then you might first consider them. However, if your company is truly stuck, the solution for getting unstuck might not come from within your company. Einstein spoke about this concept when he said, ‘the level of thinking that created the problem, is insufficient to solve the problem.’ Sometimes you need outside talent to turn things around as they may have more developed skill sets, experience, and capabilities needed for your current stage of company to get you from here to there.
Should you determine to find a CEO outside of your company, I strongly suggest identifying a capable headhunter to conduct your CEO search. For you, finding a new CEO will be something you do only a few times in your career (and you will learn many lessons along the way); for the headhunter, finding a new CEO or top level executive is something they do routinely every few months, and they have greater expertise and experience to guide you in the search. And when thinking of cost to hire a CEO, the cost of making the wrong choice on your new CEO by DIY is much higher than the cost of fees paid for a headhunter.
Jim Collins in his “Good to Great” focused the readers attention to this sage axiom: “first the people, then the direction.” I would encourage any CEO to first determine if you have the right people on the bus. If the answer is no, then figure out how to go out and find the right people. As I think back on the companies that I have built, nothing ever happened of great value or significance until we got the right people on the team — then we truly moved out and executed our plans. If you cannot find the ‘right’ fitting headhunter locally, feel free to call on me at ePraxis as finding difference making top talent is something that I truly love to do.
As to your question, where should I go for low cost talent? Rather than focus on who will work for cheap, rephrase your question, where can I find talent willing to work for ‘hunter’ pay, with a modest base, and great upside for performance — and in this way you can afford truly great talent. Going for low cost talent alone is a recipe for disaster. So don’t be self-limiting, aim for the remarkable, reach out for the inspired, and put compensation behind them as a carrier with great upside, and watch your company grow.