If you’re a CEO, whether at a startup or established company, one of your top priorities is to recruit and retain world-class executives to lead each of the functions of your business. Not surprisingly, hiring and managing executives is quite different than it is with entry level employees. Executives can’t be micromanaged, but they need clear accountability to ensure they achieve the results you want for your business.
Why it is important to manage executives?
Put bluntly, the financial stakes are high. Your executives are costing the company significantly more in compensation than others on your team. If harnessed well, your executive team members are “multipliers” that make everyone else in the organization flourish. However, a bad executive (or a poorly managed one) can be toxic within an organization, spreading disenchantment to everyone they touch. Needless to say, we need to manage our executive team well.
Consider the following 7 tips for how to manage executives:
1. Set clear expectations before you make a hire
One of the most common failures when making an executive hire is misalignment of expectations. If an executive is coming into the organization thinking she’ll have budget to hire 10 people and then in the first week realizes she’ll only be able to hire 2 people, that drastically impacts her operating plan. It is critical that you are upfront about the state of the business and the team, so you and the potential executive hire can ensure it’s a good fit before she signs the offer letter.
2. Define stretch goals tied to variable compensation
Once you’ve hired an executive, you need to define precise goals and objectives that they will be held accountable for. This is often a step that gets skipped and leads to frustration. You must be specific with what you want out of the executive’s department, or else you won’t likely get it.
For example, if you are hiring a new VP Engineering and your aim is to launch a new product in 6 months, that should be abundantly clear, and the VP’s compensation should be directly tied to that objective.
3. Have regularly scheduled 1-1 meetings
Similar to any other employee, executives should have 1-1 meetings with whomever they report to (likely the CEO, President, COO, etc). This is an opportunity to discuss issues, progression, and any frustrations. You may meet with your executive team far more often, and have ad-hoc 1-1 meetings about specific initiatives regularly. The scheduled 1-1 meeting should be more focused on the executive’s role and performance, and less on specific tactical things.
4. Don’t stand by if they are making hiring mistakes
Once you have an executive working productively in your organization, ideally they are “running the show” in their department, and you are checking in to unlock issues and provide clarification as needed. It’s important not to be a micromanager, especially with executives.
There is one exception to this rule: hiring. Depending on the size of your organization, if an executive is about to hire someone you don’t think is a good fit for the organization, you need to step in. It’s important to be open and honest about your concerns, and make it a dialogue rather than a decree.
5. Facilitate strong communication in meetings and writing
While I’ve stressed the importance of not micromanaging, it’s still absolutely critical to understand the status of the top objectives your executives are working on. These should be discussed in your weekly executive team meeting, and be recapped in weekly written updates. Be sure to read and respond to each executive’s weekly update and provide quick feedback to ensure they are on the right track.