The good news: Many boards are improving their CEO succession process. Companies have been motivated by either the carrot of investor confidence or the stick of regulatory pressure to focus on the future strategy of the business in determining the required skills, experience, and leadership criteria needed in their next Chief Executive Officer. The bad news: Many boards still neglect one of the most basic elements of this process – the CEO’s job interview.
Board members often conduct one interview six or eight different times, instead of conducting six or eight different interviews. As a result, the data and findings coming out of the interviewing cycle are of limited value. The same narrow lines of questioning, duplicative information gathering – by the fourth or fifth interview, the CEO candidate can feel a “Groundhog Day” experience setting in. And without assessing specific behavior patterns and experiences against the required competencies, the board can find it very difficult to accurately determine whether a CEO candidate might ultimately succeed or fail. Devastating consequences for the company can result.
Rather than make the CEO interview process a haphazard series of conversations, we recommend that chairmen, lead directors and/or committee chairs adopt a thoughtful and planned interview process that identifies a role for each of the board members. There are five best practices in particular that can maximize the effectiveness of the information-gathering and assessment. These will bring structure to the process, and will elicit the fullest picture of the candidates – and how well they are likely to handle the job.
Interviewing CEO Candidates
1) Assemble the right team
The make-up of the succession and selection committee is critical. Boards need to recruit people who are “qualified” to interview prospective CEOs – qualified by having been through a similar process in their own companies or by having extensive experience interviewing in a corporate capacity. The chairman of the committee, especially, will need some experience in CEO or other executive succession and selection; this experience can come from being a board member or a corporate officer. Diversity of experiences on the search committee is also important. A board might include a current or former CEO, CFO, and EVP of Human Resources. These different experiences will improve the collective depth of the group, as each interviewer can take a tack that is based on his or her own knowledge and experience.
2) Ask the right questions
As many board members do not have a lot of practice assessing and/or selecting CEOs, the Chairman should prepare his fellow directors for the CEO selection process. Preparation comes in the form of thinking deeply about the requirements for the next CEO and developing questions that will get beyond superficial programmatic feedback from the candidates. Socratic questioning from the interviewing team can dig into the second and third layers to truly understand the executive’s experiences and capabilities against the needs of the company going forward. There are many examples where boards have recruited the most articulate candidate with the highest profile without focusing on the real core competencies that are required to be successful.
In interviewing the CEO candidate, board members should be looking for key examples of demonstrated behavior – not a high-level overview of their perception of their approach. The key to a great interview is digging in and asking for concrete example after concrete example. We do not really care what they think; we care about what they really did. Whenever an interviewee makes a point, ask them for an example that can illustrate their point. This simple strategy adds massive amounts of data and richness to the process, and you come out of the interview with behaviorally specific examples versus what the person thought the right answer should be. The final element of the interview is to take copious notes and capture the examples so your feedback is specific and not simply your “gut feel” on a candidate.
3) Don’t repeat the same interview
Many board members interview CEOs by simply asking about the candidate’s career history. This can lead to essentially the same interview being done over and over again, becoming redundant and not allowing the board to extract the optimal information. It also creates a tiring and repetitive environment for the candidates. It is important to have different directors focus on different core competencies and create a strategy for extracting the right information. For instance, a board member with CEO experience might work to assess operating and managerial ability; a board member with CFO experience might assess financial acumen; and a board member with HR experience might assess the type of workplace cultures the candidate has created.
4) Compare notes
A frequent misstep in interviewing CEO candidates is that, due to the hectic board and C-suite schedules, oftentimes the interviews are isolated. Information may not be shared among board members until after the process is finished. If board members communicate in between interviews and provide feedback immediately after their meetings, they can give other board members important areas to probe. Areas of potential concern that surface in one interview can then be further explored in subsequent meetings — e.g., if the interviewer suspects that the candidate may not be able to make difficult people decisions or if the candidate appears to be a micromanager, or even perhaps that a candidate’s spouse may not want to relocate. Flagging these issues can alert other board members to spend additional time probing these areas in their drill-down.
5) Verify and fill in the missing pieces with references
The board should take the information obtained from the interviews to develop a referencing strategy. For instance, if a concern in the interviews arises about an ability to replace under-performing executives, this should be a key area probed during the referencing process. You can learn a lot about candidates by interviewing correctly; however, you are always going to get the best information from people who have worked with the candidate for years. The perspectives gained by board members during the interview process should always be verified with references. Also, references allow boards to fill in missing pieces related to prior career changes or times when the candidate was not successful.
The referencing process must be done no matter how well someone on the board knows a candidate. In one board recruiting situation, a number of the directors were familiar with the potential candidate, so little additional interviewing or referencing was completed. The incoming CEO ended up not being a fit with the company because of reasons that would have likely surfaced during detailed references. The referencing process should be standard in all recruiting instances. Trust but verify.
In summary, best practice in determining your company’s next CEO demands careful selection of members of the selection and succession committee, as well as careful attention to the end-to-end process. When done very well, where roles are assigned and communication is flowing, it can be a very rich process that truly examines candidates both inside and outside the company through a detailed lens. And all this planning and preparation will improve the chances of attaining the objective: selecting the best person to be the next CEO.
Stephen A. Miles is a vice chairman of Heidrick & Struggles where he runs Leadership Advisory Services within the Leadership Consulting Practice and co-author of a new book, Your Career Game: How Game Theory Can Help You Achieve Your Professional Goals. Jeffrey S. Sanders is the managing partner of the North American CEO practice for Heidrick & Struggles.