Today’s CEO is tasked with balancing strategy and execution to drive shareholder value for their organization. Building an executive leadership team is among the most powerful things a CEO can do to enable success for their organization. Yet, many CEOs find themselves grappling with a sub-optimal executive hire and subsequently asking themselves, “How was this not uncovered?” The answer (most likely) ties back to a gap in the company’s referencing strategy.
So how do CEOs ensure they hire the right talent? The key is ensuring the recruitment strategy has in-depth referencing at the core of its process. Based on JM Search’s extensive history of placing key executives, we’ve established referencing best practices that can be used across search processes. When done correctly, referencing serves as the ultimate differentiator in a successful executive recruitment process. References not only validate experiences and skillsets, but offer invaluable insights into leadership style, reputation, and personality, which can make the difference in a successful hire.
Start referencing early
It is never too early to start referencing a candidate. Waiting until the tail-end of a recruitment process is one of the most prevalent mistakes made in executive hiring. Referencing late in a process can result in a bias that stems from earlier interviews. Early referencing creates efficiencies in spending time with those candidates who best hold up under scrutiny. Additionally, early referencing often results in the identification of key questions and red flags that can inform the structure of interviews, topics covered, and data points analyzed. Multi-dimensional data points around motivation and fit, which did not emanate from the candidate or the recruiter can be collected through early referencing. Ultimately, early referencing is key to a successful hire.
Develop a dynamic slate of references
References should include a combination of director supervisors, direct reports, investors, board members, and peers from both current and past positions. Service providers like investment banks and advisory firms can be valuable in some cases. By capturing references from multiple types of engagements, a wholistic understanding of a candidate can be assessed. It is best practice to identify two distinct types of references: Direct references supplied by the candidates, and indirect or back-channel references identified through search partners, board members, and investor networks.
Overweight back-channel feedback
When reviewing reference data, considering the source is vital. Were all references provided by the candidate themselves? If so, your reference data is far from complete. Reference data that comes from back-channel sources is far more valuable and insightful. A CEO or decision maker would be wise not to make a hiring decision until there are data points from back-channel sources.
To best execute back-channel referencing, CEOs should utilize the power of their networks. Oftentimes, the best reference data points come from outside of the search committee – from sources such as other team members within the company, Board Members, clients, and external partners like investment banks and audit firms. That said, it is vital to maintain full confidentiality during this process. CEOs and hiring teams must be vigilant not to breach the sanctity of a confidential process when utilizing their networks for referencing.
Focus on motivation
Motivation to make a transition is a key question to ask every single reference. Insights into the factors that are driving the candidate towards an opportunity, as well as those pushing the candidate from their current role can be expanded upon through referencing. From personnel issues to development opportunities, transaction timelines, geographic preferences and personal circumstances, references provide details that enable recruiters and hiring managers to better understand a candidate’s commitment to the search process and uncover a candidate’s true interest in the opportunity.
In today’s extremely competitive market, full of an increasing number of opportunities and record-breaking investments, emphasizing motivation during reference calls is critical in determining if a candidate is closable. Often, information shared during reference calls can provide recruiters, CEOs, and hiring managers with valuable insight—like potential for counter offers and competing offers—that are necessary to ensure the expectations of the candidate are met (or exceeded) during the offer process.
Quickly identify recurring themes and take action
Robust referencing practices often yield the identification of recurring themes, such as executive presence, relationship building capability, and communication style. Often, trends that emerge during referencing may not have surfaced during direct candidate interaction. Identifying and addressing these trends quickly—particularly those which may negatively impact a candidacy or solidify a candidacy in a competitive scenario—is critical to ensuring the right candidate is hired for the role.
Act with Urgency
The current war for top talent has impacted the speed and urgency of executive interview processes. Counter offers and competing offers have become the norm. Failing to move swiftly through the recruiting process can result in losing top candidates. Therefore, it is important to maximize the efficiency of referencing. To do so, utilize the networks of all stakeholders to build a robust slate of references quickly, commence the referencing process as early as possible, and ensure communication of reference data happens real-time so findings can be factored in by the search committee.
Each company is unique. Culture, size, stage, business model, mission, and market differentiate companies from their competitors and serve as primary factors in identifying the right executive leader. Experience in high-growth companies, successful exits, and previous tenure at best-in-class companies are attractive resume headlines but should only serve as one piece of a broader assessment strategy. A thorough and strategic series of reference calls can be a key differentiator when assessing finalist candidates. Whether a candidate is an emerging leader, an industry outsider, or has a less traditional background, referencing can uncover anecdotal evidence of why the finalist candidate may or may not be the best person for the company at hand—making it the most powerful tool in identifying the best executive to drive growth, innovation, and value for a business.
Interested in discussing a thorough referencing strategy for your organization? Reach out to me and the JM Search team to guide you through the process.